It’s time to roll out a new compensation plan to your team. And money is a highly charged topic of conversation around the water cooler. So, if you don’t frame that conversation thoughtfully, expect some pushback.
WHY THE CONTEXT OF CHANGE MATTERS
Change isn’t easy for most people. As humans, our behavior is dictated by our subconscious habits for 95% of all our conscious activities.
Unless you have a compelling reason beneath the goal you seek, otherwise known as a compelling why, significant changes in your behavior won’t happen.
While the “whats” that you want may be clear, without the “whys” behind them, change is more like a “nice idea” than a real likelihood. “Whys” are fueled by the positive feelings they evoke while “whats” are just another item on the never-ending to-do list.
How does that all translate to rolling out a new compensation plan?
COMPANY AND TEAM MEMBERS REQUIRE ALIGNMENT
If you can get your company why and your team members whys aligned across most of the spectrum, your work ecosystem fosters and demonstrates connection.
And, this connection exists because of trust and vulnerability.
Once a team connects vulnerably and trusts each other, each member feels included. This naturally leads to feelings of safety. When people feel safe and secure in their workplace, they will exchange feedback between peers and with their leaders openly.
In this type of workplace, where a team’s core values match the company values, crucial conversations get to be easier, even when they are about hot-button topics like money.
TRANSPARENCY ABOUT THE NEW COMPENSATION PLAN IS KEY
Be open and supportive of honest feedback when it comes time to introduce the topic of a change to compensation.
Framing benefits makes a big difference.
How will the team, the company, and the clients you serve benefit from this new compensation plan? Without this type of context, it’s easy for some to fill in the blanks with “worst-case scenario” thinking.
And, if others on the team feel uneasy with change, they can easily fall victim to the same. Because humans are wired with a negative bias, it’s important to help reframe the negativity if you want the transition to go smoothly.
BE PROACTIVE TO DISPEL REACTIVITY
New compensation structures should be brought up with your team for discussion long before you make the decision to implement the change.
You may have already decided to alter how people are compensated, and that’s perfectly fine. Just finding out the objections they might have well in advance of the new plan rollout can make it easier to find solutions to lower or dispel their resistance.
To get buy-in and for your team to feel like they are part of the process, communicate your plans early and often.
NEW COMPENSATION PLAN MEETINGS
When and how often to have meetings about your new compensation plan is important to consider. Ideally, a two-month lead time is best.
Provided you hold weekly team meetings, discussing one aspect of the new compensation plan at a time before the rollout works very well.
Be sure to open the discussion up to things like new tools you’ll use for time or performance tracking, key performance indicators, and any other technical information.
Even more important, open the meeting for two-way feedback. This allows you time to address questions about how the new compensation plan impacts your team and what changes they can expect as a result of adopting it.
Finally, having one-to-one meetings with each team member regularly before, during, and after the roll-out will make the transition easier. Doing so provides you with real-time feedback on whether the shift is successful and what you can do to improve upon it.
ONE-TO-ONE MEETING CRITICAL TALKING POINTS
Your job is to make sure each team member understands your new compensation strategy. Include whether your strategy is based on pay grades, performance, industry alignment, or bonus structures.
Make sure each of your team members knows when pay adjustments can be expected.
The clear direction you give to your team members on how compensation decisions are made builds trust. In other words, when base salaries, raises, and promotions are given, explain the criteria so they can drive their performance accordingly.
Remember to keep your discussion both simple and personal.
Explain the facts in the easiest way possible, but be sure to address how the team member can benefit. This allows you to identify opportunities they have, to praise their performance, and to reinforce their strengths and achievements.
HOW TO KNOW THAT YOU GOT THIS CRUCIAL CONVERSATION RIGHT…
If you frame your new compensation plan rollout properly, here are just a few improvements you might notice:
- Team members can set realistic expectations about what they can do to improve their compensation as well as the pace at which they can expect their compensation to grow
- A jump in motivation for individuals to meet or exceed stated goals and objectives
- Feeling included in the new compensation rollout process as well as safe to provide feedback about the plan itself
- A better understanding of company strategies, priorities, and goals
- Leadership appreciation of the achievements, successes, and dedication of individuals on your team
YOUR PLAN DELIVERED WITH CONFIDENCE
A new compensation plan rollout doesn’t automatically have to be met with resistance.
Observe these guidelines to ground the highly-charged energy that too often surrounds compensation conversations.
- Share the company context or “the why” for the change
- Be honest about the need for this change and how it affects each team member
- Welcome varying viewpoints and encourage honest feedback
- Meet early and often to educate the team and set expectations