Pay transparency: seven lessons

Employees are rightly demanding more transparency and openness around rewards, and we at JTI UK have long wanted to rise to the challenge. But we also knew greater disclosure comes with risks.

If we were going to be more transparent about rewards, the HR team, along with our line managers and employees, needed to be well prepared.

As far back as 2018, we started upskilling our line managers through educational presentations, teaching them about how we approach rewards, evaluate jobs and benchmark pay.

This was followed by the launch of a new rewards hub in June 2021, providing employees with a one-stop shop for all rewards-related information.

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We then delivered training to all UK employees between September and December 2021 to ensure everyone understood our rewards principles and pay structures before making compensation data available on 1 March 2022.

The compensation data we provide shows employees their position grade, their position within their pay range, and the minimum and maximum earnings within their grade.

12 months on, reward transparency has been a fantastic, and at times eye-opening journey for us. These are the lessons we’ve learned.

Think empowerment first

So much of the pay transparency debate is framed as being about the disclosure of data, but simply giving people data isn’t useful. To truly empower employees and allow them to take charge of their careers, we must help them connect the dots between their performance and the rewards they receive.

That’s why we decided to show employees not just their salary band, and the minimum and maximum pay available within that band, but also be open about the impact performance can have on rewards received.  

Annually, we now share and talk with employees about where they are positioned on our Talent Matrix, and how performance can impact their pay. This has unlocked some great conversations about career development and is helping employees understand what they need to do to reach the next level.

It’s not just about pay

It’s easy to get hung up on salary alone, but you could be missing out on a much wider conversation about reward. It’s one of the reasons we prefer the term ‘reward transparency’ over ‘pay transparency’.

Our reward transparency push has created valuable new opportunities for us to talk to our employees about the full reward package we offer, including benefits, recognition, wellbeing, learning & development, long- and short-term incentives, as well as base salary.

We’ve also started talking much more openly about our Special Achievement Awards, which are awarded for outstanding performance. Previously, these awards were rarely spoken about, but we now actively highlight them to employees and explain what it takes to get one.

Make sure you’re 100% confident in your data and processes

Once you go public with reward information, employees will inevitably have questions. We knew we needed to be ready to explain why a role was evaluated in a certain way and how that decision was made – and we needed to support line managers in handling potentially uncomfortable conversations.

Before launching our reward transparency hub in March 2022, we performed a full review of all roles, ensuring the organisation structure was correct and we had up-to-date job descriptions on file. In doing so, we paid extra attention to any roles we knew had previously been pinch points or the subject of debate.

We also delivered an extensive training programme, educating all our UK employees on our reward principles, explaining how roles are evaluated and benchmarked, and deepening their understanding of our pay structures. This was supported by dedicated FAQ and guidance documents for employees and line managers.

When we surveyed employees after the sessions, we were delighted to find that 70% said they now had ‘lots of knowledge’ of reward transparency.

Keep it simple

To get everyone on board and keep them engaged with our reward transparency journey, we knew we had to avoid HR jargon and technical talk. We focused on using clear and simple language to explain key concepts, and bringing the policy to life with examples and case studies.

Most employees are unlikely to be interested in an abstract debate about the pros and cons of pay transparency. They’ll want to understand – in concrete terms – what data you’ll share with them, and how they can use that data to shape their careers.

People will talk (and that’s a good thing)

Since embarking on our own reward transparency journey, we have occasionally been surprised by how open some of our employees have chosen to be with their colleagues. Information gets around – fast.

Be aware that your reward transparency push could spark a much wider conversation about pay within your teams than you might have intended. But this shouldn’t be seen as a problem.

Be flexible and take on board feedback

As a result of our reward transparency push, all JTI UK internal job adverts now include the position grade.

Interestingly, this wasn’t part of the original plan. We’re a global organisation and our reward transparency programme is led by our global teams. Job adverts weren’t on the global roadmap for the first rollout, but we quickly realised we needed some flexibility to accommodate local market feedback and priorities.

During our UK training sessions, employees told us position grade information on job adverts was a priority for them and would make them more likely to apply for an internal role. Within a couple of months, this information was added to our job adverts.

Go for it – and don’t treat it as a ‘one and done’

There’s no question about it: reward transparency can seem daunting. We certainly had a few jitters within our own organisation before going live with our policy.

But the backlash some feared never happened. We’ve not suddenly had scores of demands for pay rises, screaming matches over pay discrepancies or a mass exodus. Employees consistently tell us they value our openness on a sensitive subject. Thanks to our extensive training programme, line managers also say they are much more confident talking about rewards.

And we’re not finished yet. We’ve always been clear that we don’t want reward transparency to be a ‘one and done’ initiative. It’s an ongoing journey. 

To keep the momentum going, we have continued to communicate about reward practices, reminding employees of the information available to them. We also plan to create dedicated learning modules and training materials around reward transparency for new starters.

We continue to evaluate opportunities to become even more transparent. For example, we know many employees want to understand more about pay information and grades of other roles, including their line managers, and we’re actively exploring options for sharing this information in the future.

We are absolutely certain: demand for greater openness and transparency isn’t going anywhere. That’s why we see reward transparency as playing a big role in future-proofing our organisation and ensuring we remain an employer of choice.

And, ultimately, it’s the right thing to do.

Victoria Hounsell is reward director at JTI UK