?? It's Spooky Season in HR ??

That special time of year when compensation, benefits, and performance management collide.

The leaves are turning, pumpkin spice is back, and your HR team is about to enter one of the most hectic and, let’s be honest, absurdly stressful times of the year: the fall HR trifecta. Yes, we’re talking about open enrollment, year-end compensation reviews, and the cherry on top, performance management.

The fall, when these three crucial processes collide, creates a perfect storm of confusion, tension, and sometimes just plain old miscommunication between HR, employees, and leadership. Why do we keep doing it this way? Why do we pile everything into one season like holiday shopping at the last minute? Despite best intentions, it feels like the HR world clings to this chaotic tradition. But we’re not here to simply bemoan the situation—we’re here to break down the key tensions, sprinkle in some best practices (and bad habits), and highlight the absurdity of it all with a touch of light sarcasm.

Let’s dive into where compensation and benefits collide, why the timing of open enrollment and performance management doesn’t help, and how we can (maybe) get a little better at it—statistically speaking.

The Tug-of-War Between Compensation and Benefits: What Employees Want vs. What Companies Offer

1. Immediate Gratification vs. Future Security

Here’s the first tension: compensation is immediate, while benefits are for long-term security. This is a classic case of short-term versus long-term satisfaction. We all know that salary is something employees can enjoy right now (who doesn’t like to see a little more padding in their paycheck?), but benefits like retirement contributions, health insurance, and wellness programs are often appreciated much later—if at all.

Fact Check: Nearly 60% of employees say they'd prefer a salary increase over benefits. However, studies also show that employees who are offered comprehensive benefits packages tend to have higher job satisfaction and are 32% less likely to leave their jobs.

But here’s the kicker: during open enrollment, employees are asked to focus on their benefits—choosing health plans, deciding how much to contribute to their 401(k)—while at the same time, they’re gearing up for performance reviews that determine their compensation. Talk about cognitive dissonance. Should they focus on saving for the future or pressing for that raise they deserve?

Solution: Be transparent and provide total compensation statements. If employees can see the full value of their benefits and salary combined, they might not feel like they’re choosing between the two. But let’s be real: they’ll still want the raise.

2. The Pay-Perception Gap: Why Employees Don’t See Their Full Value

You know what’s fun? Explaining to employees that while they didn’t get a huge salary bump, their benefits package is worth thousands more than they think. Spoiler: they don’t buy it.

Compensation is easy to grasp—it’s right there in the paycheck. But benefits? Not so much. They’re often tucked away in HR portals, invisible unless someone gets sick or retires. And therein lies the frustration: employees often undervalue their benefits because they don’t directly see them. This perception gap causes tension and frustration, especially during open enrollment, when employees have to select benefits they don’t fully appreciate, while performance reviews stoke expectations for immediate pay raises.

Fact Check: Studies show that up to 80% of employees don’t fully understand the value of their benefits packages. That’s a lot of confusion floating around HR’s inbox.

Solution: Total compensation is a good start, but it’s not enough. Continuous education on the value of benefits is key. Maybe a shiny benefits dashboard with visuals and graphs would help too—just saying.

3. The Never-Ending Customization Battle: You Can’t Please Everyone

Then there’s the constant battle for customization. Compensation can be pretty flexible—merit-based raises, performance bonuses, etc. But benefits? Not so much. Companies usually offer standardized packages because it’s easier to manage and predict costs. Unfortunately, that doesn’t sit well with employees who have different life circumstances, ranging from young workers who don’t care about retirement to employees with families who need robust healthcare coverage.

During open enrollment, HR teams face the unenviable task of trying to offer something for everyone, knowing full well they can’t actually make everyone happy. Younger employees might want more flexibility and remote work benefits, while older employees might prefer better healthcare and retirement options.

Fact Check: 70% of employees say they’d be more likely to stay with a company that offers customized benefits, yet only 36% of employers actually offer flexible benefits packages. Go figure.

Solution: Flexible or “cafeteria-style” benefits plans allow employees to choose the benefits they value most. It’s not perfect, but it’s a lot better than trying to fit everyone into one mold. Because no, offering one dental plan doesn’t count as customization.

We know, it's a scary time of year. We think that means we should take a look at the status quo. Next week, we'll dive into why you might want to consider not running Open Enrollment and Performance Management in parallel.

Stay strong HeRos!