Effective pay transparency relies on employee trust and engagement. Fortunately, it's possible to cultivate trust, effectively navigate change management and prepare for the future stages of pay transparency. Here are some expert insights from ADP's Jason Delserro and Deb Hughes.
Some employers worry that elevating pay transparency will cause employees to quit. It's likely some will. But in organizations where trust is established in the culture, the change is unlikely to spark high turnover.
The trouble is that trust is lacking in many organizations. According to the Edelman Trust Barometer, almost one-third of employees don't trust their employers. This figure might seem problematic, but it's crucial to remember that effective leaders can cultivate trust and improve organizational culture.
With pay transparency initiatives forthcoming — as state and local governments roll out new legal requirements and employees increasingly expect more pay transparency — organizations with lower levels of trust may struggle. An essential best practice for navigating the complicated waters of pay transparency is cultivating and protecting employees' trust simultaneously.
Jason Delserro, Chief Global Talent Acquisition Officer at ADP, and Deb Hughes, Senior Vice President, Transformation Communications and Change Management and HR at ADP, shared their valuable insights into the role of trust in pay transparency initiatives.
Understand the relationship between trust and pay transparency
Trust is the key to effective pay transparency because of the correlation between trust and high levels of employee engagement. Likewise, low engagement is linked with low trust. Edelman Trust Barometer research found that nearly all engaged employees trust management, while less than half of disengaged employees feel leadership is trustworthy.
When it comes to these initiatives, managers are likely to avoid conflict in an environment with high levels of trust.
"Change management is really about trust," says Hughes. "Pay transparency, of course, is very critical. Never take changing people's titles, where they sit, or what they are paid. Those are things that most people really care about. Your actions relative to pay transparency have to be aligned with your culture and how your organization usually shows up. If you live up to those expectations — when you lead with integrity as your top value, [it fosters trust]."
Build trust through daily interactions
There are many levers for building trust among employees. For most people, trust accumulates (or erodes) over time based on their daily experiences with managers and colleagues.
"If people feel valued and their interactions across the company are consistently positive, that creates a culture of trust," Delserro notes. "Great culture is formed over millions of positive interactions and happens over an extended period of time. The best defense for leaders is to focus on ensuring their employees feel valued, not to steer them away from looking at pay transparency."
If your organization has a toxic work culture, leadership must work hard to turn things around. But it is possible to build trust and psychological safety and work toward a more inclusive culture where employees are more likely to be resilient and take changes in stride.
Design pay transparency communication that bolsters trust
While many leaders think of this challenge solely as a compliance issue, Hughes warns that this is just the beginning. "We're not going to stop rolling out pay transparency only in the areas where it's required by law," she says. "It's not going to stop there. It's going to keep growing, and it's going to grow globally. Our employees will want to engage in these conversations no matter where they live and work "
Accordingly, leaders should instead think of compliance as the first phase and work to manage those changes while simultaneously preparing for what comes next.
For most organizations, this means paying extra attention to their communication — from the tone and format of job postings and internal communications to the conversations managers have with their teams. Above all, leaders must ensure their pay transparency communication is consistent and authentic while considering their workforce's emotional and psychological needs.
Incorporating pay transparency into organizational culture
It makes sense that people are nervous about what pay transparency means — and that they have a lot of questions. They may wonder how the practice will affect them in their current roles and in their career paths within the organization.
It's crucial to meet people where they are. When rolling out or expanding pay transparency initiatives, invite questions and concerns and address them with compassion and understanding. In doing so, leaders can cultivate trust, boost engagement and integrate pay transparency into the organizational culture in a healthy way.
Visit ADP.com/PayTransparency for insights on changing legislation and talent implications.