HR Pulse - Fall 2007 - (Page 29)

for health care workers, and the hospital industry has rarely been perceived as a top-paying sector. However, shortages of key staff (especially RNs) has caused a natural upturn in compensation. RNs have become increasingly accustomed to “open-book” disclosure and discussion of compensation, and have moved from hospital to hospital in pursuit of higher wages. Finally, the Internet enables immediate salary comparisons. While it could be debated vigorously that web sources (such as Salary.com) are or aren’t reliable or valid, nevertheless they are immediately and widely available to “the average person,” and are a force to be reckoned with in closing deals with candidates for recruitment. One way to look at all this is that, if nothing else, as top leadership’s compensation is inevitably becoming more and more transparent, the logic of secrecy in compensation becomes more and more questionable, if not unfashionable. So, the remainder of this article will assume that operating a more transparent compensation system will ultimately happen, “whether we like it or not.” But it might also confer a competitive advantage on a health care employer. What strategic objectives might be attained? 1. Trust I recently worked with a hospital client who operated one of the most transparent health compensation systems I’d ever encountered, with extensive affirmative communications and an “open-door” approach to pay. Time and again, leadership in this hospital cited the attainment of a strategic objective from this approach: employees tended to find leadership more credible and thus more trustworthy as a result of being very forthright about pay. How important is it that employees trust their hospital’s compensation process? Here were some of the correlated outcomes with this employer. Remember, correlation does not, in and of itself, create a case for cause and effect; any or all of these outcomes could be created or caused by other factors: • A low RN vacancy rate • Relatively low rates of employee turnover • Measured employee satisfaction with compensation ran higher than benchmark results • All despite the fact that this hospital was not by any means the “market pay leader.” Managers in the hospital generally reported, anecdotally, that employees in this hospital trusted leadership. A big factor here is also that employees don’t feel that they’re being treated like children who cannot be reciprocally trusted with “dangerous information.” Trust is created when we decide not to insult another’s intelligence, and try to maintain an adult-adult, not parent-child, relationship. In other words, we can lead this process with our approach to compensation, or we can continue to imply that our employees are untrustworthy children. 2. Staffing Advantage Employees are often your most effective recruiters—or the opposite. When a colleague asks one of your employees, “I’m thinking about coming to work where you work—how is the pay there?” You do not want the employee’s response to be, “We’re not allowed to discuss pay.” In today’s talent management, so much emphasis is placed on creating a positive brand identity for your organization as an employer. Help your workforce become more fluent in (and supportive of) your brand identity by making them as knowledgeable and comfortable with your compensation process as you can. Again, there are two distinct dimensions to this: having your existing workers “selling” your pay itself, but also “selling” the trust that they have developed in your organization and its leadership. 3. Business Literacy For a long time, the non-health care sector has migrated away from base pay maintenance to more incentives and layers of variable pay. The value of this type of approach is manifold: it reduces a degree of business risk and, much more importantly, creates commitment to the organization’s overall success. Educating staff about compensation can be a key step in increasing staff business literacy. Admittedly, many health care workers are committed to their professions for reasons far beyond money. However, few health care workers are completely insensitive to the organization’s obligation to provide high-quality health care to patients while being careful stewards of the costs as paid by patients. Operating a transparent compensation process models financial knowledge and sensitivity at all levels of an organization. What are the Downsides of Migrating to a Transparent Compensation Program?” It would be wonderful to say that there are no downsides, but that would be naïve. Here are some of the disadvantages of operating a transparent program: • Managers tend to like discretion, and resist being hamstrung by rules or policies. If your compensation program reserves discretion for managers, then that discretion must be (transparently) communicated to all staff. Be aware, though, that many employees equate manager discretion with inequity, whether that label is deserved or not. • If trust is saying what you are going to do, and then doing what you say, then a leader’s relative ability to adjust compensation to rapidly changing circumstances9 might be 29 HR Pulse Fall 2007 http://Salary.com

Table of Contents Feed for the Digital Edition of HR Pulse - Fall 2007

Contents Executive Director’s Letter President’s Message HR Leader Profile: Lisa McDaniel Spotlight on Community Citizenship Culture of Engagement How Transparent Should Healthcare Compensation Be? The Value of Assessment Testing in the Recruitment Process Technology Dramatically Changes FMLA Compliance Creating a Magnetic Culture™ Taking It to the Hill: An Advocacy Update 401(k) / 403(b) Fee Lawsuits – Are You the Next Target? Compensation Offers – A Better Process Find It Again Pulse Points Who, Why and Where Conference Highlights Schedule at a Glance Keynote Speakers Social Events Conference Sponsors Exhibitors Index to Advertisers

HR Pulse - Fall 2007

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