Compensation

4 Lessons From Kimley-Horn on How To Pursue Pay Equity

2024-11-12T07:00:34-05:00

Here’s how this award-winning workplace built a compensation strategy to compete in an increasingly complicated business environment.

What do employees consider “fair” when looking at compensation? For HR leaders today, offering a competitive package requires a more comprehensive approach than in years past.

“When I began my career in HR, it used to be enough to just pay really well, or have a cool culture,” says Lori Hall, director of human resources at Kimley-Horn.

Not anymore.

“You have to provide meaningful work experiences; you have to be willing to train and develop employees; you have to be cool and fun,” she says. “You have to do it all.”

Kimley-Horn knows a thing or two about creating a winning workplace culture.

The engineering consulting firm with more than 7,500 employees was No. 30 on the Fortune 100 Best 카지노 커뮤니티 추천 to Work For® List in 2024 and the No. 38 large company on the Fortune Best Workplaces for Women™.

What helps the consulting firm based in North Carolina be so competitive against the best workplaces in the country?

To start, they have a robust and thoughtful approach to compensation that ensures nine in 10 employees (91%) say they are paid fairly. To understand how impressive that number is, consider that the average across companies on the 100 Best list in 2024 is only 75%.

Learn strategies from other great workplaces at the For All Summit™ April 8-10 in Las Vegas!

What does ‘fair pay’ look like?

Kimley-Horn’s approach to compensation is guided by two principles, Hall says.

“First, we want people to live comfortably,” she explains. That means ensuring employees can retire when they want to retire and have the means to live a full life here and now.

The second principle: being competitive when offering total compensation. “We want to be fair in our base compensation,” Hall says. “We have a really robust retirement plan. We have a really robust incentive compensation plan, and we have a bunch of extras from profit-sharing contributions to our renown red envelope days.”

To ensure that this plan is fair and competitive, Kimley-Horn has been willing to make changes and bring in external expertise when necessary. As its workforce has become more specialized and complex, compensation has had to adapt.

“For a really long time, we were predominantly civil engineers,” Hall says. “Now we have civil engineers, planners, electrical engineers, mechanical engineers, people with history backgrounds, people who do forensics.”

This diverse workforce has required the company to get more sophisticated in its compensation strategy.

Different employes have different needs

What does it look like to meet the diverse needs of different generations in the workforce, for example?

Recent college grads, for example, have different needs than more established professionals with a bigger collection of assets. “They’re buying a car; they’re finding an apartment; they’re building their professional lives and their personal lives at the same time,’” Hall says. “Salary is very important to them, whereas if you’ve been around for a long time, you have more of a long-term perspective.”

To address this difference, Kimley-Horn has thoughtfully considered how to prioritize salary in the total compensation package for younger employees. The package is rebalanced over time to focus on retirement or incentive opportunities for later-career professionals.

How to build trust in compensation philosophy

It’s not enough to have a competitive total compensation package. You also must communicate thoughtfully and meaningfully with employees about their pay and your compensation philosophy.

“We talk about it regularly,” says Hall. As a built-in component of several company-wide training programs, employees can ask leaders direct questions about pay and bonus structures.

The team also regularly collects feedback from employees in exit interviews, stay interviews, and career check-ins.

To ensure equity across the company, there are formalized review layers around salary and bonus awards. Regional HR teams review a master list of all salaries in each region where the company operates and, working with the company’s affirmative action officer, the team analyzes pay parity by gender and minority status. If disparities are found, corrections are made.

For bonus awards there are four levels of review, from direct manager up to a companywide analysis, to ensure that what can feel like a subjective judgment has met rigorous standards. The process, which Kimley-Horn completes twice a year for its two separate bonus windows, takes two months.

Tips for others

How might this approach adapt to other companies? Hall and Kimley-Horn offer four lessons:

1. Don’t be afraid to ask for help

Hall says the need to bring in external experts and resources to inform their decision-making became undeniable after one annual review process four years ago.

“I felt like we were just not as sharp as we needed to be,” she says. “We needed to go ask someone who knows what they’re doing for help.”

The team has gone on to engage another consultancy for additional perspective and continues to try and learn more from others.

2. Lean on your survey tools

The Great Place To Work® Trust Index™ Survey offers invaluable data for understanding the employee experience, Hall says.

The team brings together survey data with other key metrics like turnover, as well as stay interview and exit interview data to develop guidance for senior leaders to make big decisions.

3. When making change, double down on transparency

“We probably err on the side of over-communicating when something different is going on,” Hall says.

When consultants were brought in to analyze and provide guidance on Kimley-Horn’s compensation philosophy, the team was careful to communicate the “why” behind the changes it made.

“When people understand the why, even if they don’t love all of it, they understand its importance to the business and to them, they’re better able to move on,” Hall says.

4. Don’t expect perfection

When making changes to the employee experience, whether its compensation or something else, it’s crucial to continue to listen to employees.

“It’s not all going to go perfectly,” Hall says. “We’ve actively solicited feedback from lots of people around the company to say: ‘What's working? What's not?’”

When you can admit that you don’t have all the answers, but show your effort to engage on hard topics, that builds trust.

“We want feedback and we’re willing to do what we need to do to get better,” Hall says.

Why and How Great Workplaces Are Embracing Pay Transparency

2023-04-24T07:00:00-04:00

Three ways to get started on your journey towards more equitable pay practices, and why it matters so much.

“Am I paid fairly?”

That’s a potentially expensive question for an organization’s people to ask. Most workers would demand to be paid the highest end of a salary range if they had access.

Pay transparency laws have many organizations scrambling to adjust how they talk about compensation. But even without the legal mandate, pay transparency can be a good idea for building trust with employees.

“I think we're not educating enough about the journey,” says Pat Wadors, chief people officer at UKG. Wadors addressed the topic of pay transparency on the Great Place To Work® company culture podcast, Better.

Explaining the difference between pay equity and equality is essential in these conversations.

“If you say, ‘Look, overall your earnings are equal to or greater than your peers. Even though your base pay might be lower, you’ve had these other opportunities to earn capital, to earn better for your family’ … And then people go, ‘I get it,’” Wadors says. “Transparency unlocks so much.”

Rising pressure

Even without broadly adopted pay transparency laws, many organizations are already seeing increased scrutiny over pay. Websites like Glassdoor and Salary.com are providing potential employees with salary information.

Wadors argues that employers should get in the game to help employees understand the complicated picture of compensation that isn’t captured by these free online tools. “Is it just base and bonus? Is it base, bonus, and equity? … You don't know the data that goes into these anonymous websites.”

What does it look like to educate employees about their pay?

Tech firm WP Engine is relying on tools like Pave to help explain to employees the full value of their compensation, from base pay to incentives and stock.

“We rolled out a valuation slider in Pave,” explains Priya Bhavsar, senior director of total rewards for WP Engine. The slider offers a clear visual so employees can view the potential valuation of their equity — and understand what they might leave on the table if they leave the company.

Focus on managers

Prepping managers to talk about pay is essential when rolling out pay transparency policies.

“Some managers are uncomfortable with difficult development conversations, so they're going to be uncomfortable with difficult pay conversations as well,” Bhavsar says. “But it's exactly the same thing, because your pay is representative of your performance: how qualified you are for the job, how you're growing in your role.”

WP Engine has offered managers guidance on:

How pay practices work
Overall compensation philosophy
How pay is determined
How to make pay decisions
How to navigate pay conversations

Bhavsar sees discussions about pay changing in the same way performance reviews have changed, with a one-time, annual review being replaced by frequent, periodic discussions.

“You’ve got to talk about it,” she says. “You’ve got to get comfortable with it. You’ve got to put it out there. We have educated employees that want to know more. They're asking for more.”

Wadors says managers must be engaged to create accountability and fight bias in compensation.

“If I see a bias towards high ratings for X population and Y on the other side, I'm going to go hold up a mirror,” Wadors says, as an example of how to engage leaders around pay. She asks, "Is this what you meant to do? Because one could interpret the data this way. Is this what you want me to see?"

Nine out of 10 times, the manager has no idea, Wadors says. “I don't tell them how to fix it. I ask them, how do they want to fix it — and then it gets them into problem solving. And then we co-create an amazing opportunity.”

Rewarding top performers

While pay transparency has obvious potential to increase pay equity, some worry that these policies will dampen the ability of top performers to negotiate higher salaries. That’s why HR leaders like Wadors are making it clear: Pay equity doesn’t mean you pay everyone the same.

“People bring different skills and experience to the table,” she says. “There are nuances to that. There are different compensation plans in every company.”

Bhavsar sees where the concerns about less differentiation come from.

“If you're trying to roll out pay transparency for greater pay equity, you're going to have less differentiation in pay — potentially,” she says.

However, she argues that pay transparency also opens up a different kind of conversation about pay and fairness. “The whole purpose of it is you explain how pay is determined,” she says. “You then explain that no two people have to be paid the same, because if someone is more qualified in their job-related skills; has higher competencies for the role; and has higher impact, contribution, and performance, they can be paid higher.”

Getting started

Pay transparency isn’t something you can roll out overnight. For WP Engine and Bhavsar, the journey to pay transparency has had many stages and has taken 18 months of work behind the scenes, with months of work still ahead.

Here’s what you need to get started:

1. Research pay benchmarks in your sector.

Potential employees have access to all kinds of data online. You must be ready to answer their questions.

“You have to stand behind the market data you use, how you design your pay ranges,” says Bhavsar. “And you have to be willing to say, ‘OK, we believe in our employee value proposition, we believe in our pay practices, and we are going to be transparent about it.’”

2. Consider how employees will use pay information.

Employees aren’t just interested in the pay range for their current role. They also want to know how they can move up in the organization, or how a promotion could affect their income.

Bhavsar gives the example of a software engineer who wants to become a senior engineer. If they don’t know the pay range for that new position, will they have an open dialogue with their manager about promotion readiness? Or, will they answer that recruiter call that is transparent about salary ranges?

WP Engine’s solution is to share the pay range information with employees in the relevant job family. “We plan to share any range that's in your job family, if that's part of your development,” Bhavsar says. “And we’ll also share the range for any internal opportunities that you may be qualified for.”

3. Embrace transparency as a company value.

“Don't just make it about pay,” Bhavsar recommends. Instead, think about how you can be more transparent around all aspects of the business to help employees be essential business partners.

What that looks like for WP Engine: “We're having greater transparency on where we are as a company, what our business results are, what our goals are. And we are encouraging managers to be more transparent in their career development conversations with employees.”

And for leaders afraid of telling employees too much, Bhavsar advises they get out of their comfort zone. “It's not oversharing; it's actually just sharing.”

Thinking about adopting pay transparency?

Find out how your employees feel about their experience at your company, and become eligible for our Best Workplaces™ lists with Great Place To Work 카지노커뮤니티™.