My journey to ensure fairness (and introduce a bit of transparency) in our Compensation & Benefits policy
Time to talk to you about one of the first big HR topics I decided to tackle when arriving at Wave: our Compensation & Benefits Policy (yes I like starting easy).
As all my previous managers will tell you, fairness in compensation is definitely a hobby-horse of mine. I believe in hard work and meritocracy. Therefore I strive for fairness. I don’t want to pay well - or at least not only. I want to pay fairly. And for me, that’s really what’s most important and makes the biggest difference.
I noticed pretty early that, regarding compensation, there are two different kinds of people (yeah I like putting people in a box, remember that I’m an HR, awful by nature):
Oddly enough, I’ve noticed a pretty strong correlation between these 2 behaviors and gender… but I digress.
My point is that I really hate rewarding employees based on their negotiation skills (except if it’s a job requirement of course) or on their background history. Having worked for a well-paying company may indeed impact your compensation standard, but it doesn’t necessarily mean you’ll perform better than others - sorry to have to say it ??
How it looks to manage compensations when you don’t have a compensation policy…
If you don’t have a proper system to manage compensation decisions, it always ends up the same way: during the interview process, you ask the candidate about his/her salary expectations, and this creates a first bias because our minds naturally associate a higher cost with higher quality. And as long as the number they’ve pushed isn’t too far from what you had in mind, you tend to head in that direction when you make the offer. Sometimes you’re lucky enough to have some compensation benchmarks allowing you to check if the requested salary is relevant or not. But again, if you haven’t defined a compensation policy and especially the market range you want to target, what use are benchmarks that generally show a fairly wide salary range?
Don’t lie, I know you’ve probably found yourself managing compensation like this at some point in your career. I know I have and I’m pretty sure we all have.
All of this leads to a situation where you have employees, who are basically doing the same job but who are paid differently and it’s hard to truly justify why. A posteriori, we often evoke that they have “different experience”, but deep inside ourselves, we know it’s not fair.
For the same job and the same position, I wanted to have employees paid the same. And most of all, employees who feel they are being fairly rewarded.
Of course, when you talk about fairness, all employees are like “Yeah I want fairness”. But the truth is that when it comes to their personal situation things can get a little more complex… It often sounds more like: “Yes, fairness is great, but I expect that you’ll take my specific personal situation into account, please and thank you, otherwise I won’t really feel that it’s fair” (by the way Albane wrote a great article related to that topic , a definite must-read).
So at least I wanted to build something I was convinced was fair.
And just in case this isn’t already hard enough, we also had to deal with international employees. How can you define the right salaries for people working in different countries or continents in a fair way? Based on French standards? Based on their local employment rates or cost of living?
If you’ve never had to think about this yourself — and I certainly envy you, because this alone gave me some pretty incredible headaches — I’ll save you some time by sharing my conclusion: there is no perfect option.
None of them provide only advantages (costs for the company, competitiveness in all countries, 100% fairness). So the only real solution is to choose the best option in your situation and stick to it.
All of this is to say that I deeply believe your best bet is to define and structure your compensation policy and processes pretty early in the game.
What we did to overcome it
Sooooooooooooo. In August 2022, when most of the company was enjoying their well-deserved vacation (and I had just come back from mine ??) I set about defining our Compensation & Benefits policy foundations.
I started with our main principles (which is related to what Figures calls the Compensation Philosophy - though unfortunately this amazing article on the process hadn’t been published at that time ). Since I’m a big believer in weaving in a company’s Core Values whenever possible (and I’ll get back to that in another article), I based my Compensation & Benefits principles offof ours.
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From there, “all I had to do” was roll out those principles into a concrete policy for each Compensation & Benefits component.
Among other things, we decided to build a real Salary Grid (my personal dream since I started my career in HR) accessible to everyone.
In this grid, I didn’t want to have a range. I believe that a range completely defeats the purpose of fairness. How to decide who’s at the bottom and who’s at the top of the range? Again, it would have been about negotiation skills or background.
And of course, we used Figures (which is truly one of the most comprehensive HR tools created in the last decade - and I promise I haven’t been paid to say so) for our salary data benchmarking.
Overall our compensation framework is structured in the following way:
? If you’re interested, you can actually take a look at our Compensation & Benefits Policy , which we’ve made public ツ
Let’s talk about the implementation
While I found that writing the policy was much easier than expected, even if it took me most of the month to put it together, communicating it to an entire company is something totally different. Especially when it’s about compensation. We decided to do an all-hands company presentation in September to really take time to explain our methodology step by step, and share the reasoning behind it.
I knew I did my best to build something coherent and fair and was 100% aligned with the final result. But I have to admit I was quite stressed about the release. Not only because I dislike public speaking but also because I was afraid of the team's reactions.
In the end, the presentation went quite well, and we moved on to it’s implementation.
After the general presentation, each manager met with their team members to discuss the level at which they felt the employee was at, and if applicable, the impact the new grid would have on their current salary.
We had 3 different possible scenarios:
We also had to manage the situation for future employees we had hired before the policy implementation, but who hadn’t necessarily joined the team yet. In these cases, the same basic rules applied.
I have to say, I was pretty happy to announce to a future employee that we had reviewed his salary even before he arrived. Usually, I leave the good news to the managers, but just this once, I was thrilled to be the messenger.
Since then, we’ve been living with our new policy quite comfortably, giving us structure and rules to refer to in almost any situation.
But of course, sometimes it can be hard to stick to the rules. We’ve had a few very strong candidates with current compensation that’s totally off our grid. Understandably, they weren’t necessarily ready to review their lifestyle, but believe me: it’s no easy task to stay strong when you’re faced with managers or recruiters who desperately and need to close a position and have fallen for a specific candidate. But I know that if I make an exception, just once, the entire process and the trust we all put in it, will fall apart.
At the end of the day, I know it’s impossible to please everyone when it comes to compensation. We all want more, whatever our current situation.
But with the system we’ve put in place, I can sleep soundly knowing that Wave offers compensation for its employees that is maybe competitive but above everything is truly fair.
CTO @ lifen
1 年Brilliant !
? Senior Talent Leader ? I connect innovative tech companies with the right candidates ? Tech - Product - Data ? RPO & Success
1 年This was a huge milestone and another great HR initiative that helped me ease the conversations with candidates too. They loved seeing the salary range on our job postings and the entire salary grid I was sharing with them in our candidate kit!
ICF-Certified Coach (ACC) | Facilitator | Personal Growth & Professional Development | Joy & Wellbeing Advocate
1 年I'm loving these articles Raphaelle LEPRINCE! Thank you for writing and sharing.
Executive Search | Fractional TA | Culture Advisor
1 年I was just wondering the other day when your next piece was going to come out. I loved this post - incredible story about building something to be incredibly proud of - well done, Raphaelle! "if I make an exception, just once, the entire process and the trust we all put in it, will fall apart"
????Gestionnaire de paie ? Rigoureuse / Organisée / Autonome ?? "???? ??'?????? ?????? ?????????? ?????? ???????????????? ???? ???? ???????? ?????? ????? ???????? ????????? ?????? ????????"
1 年Thanks for sharing your adventurous journey ! I really think that 21st century HR should all look like this.