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How transparent are your HR programs?

While transparency is usually the best policy, every organization is different

By Brian Kreissl

It’s really interesting how different organizations vary in terms of their degree of transparency with respect to certain HR policies, practices and programs.

While much of these differences relate to organizational culture and values, some also relate to the overall employment value proposition at the organization in question.

While every organization is different — and employers have legitimate reasons for varying in their degree of transparency — an emerging issue surrounding corporate communications both internally and externally is the feeling organizations should attempt to be as authentic and transparent as possible. This is largely a result of the rise of social media, even when using such vehicles to communicate for business purposes rather than for purely “social” reasons.

Younger people, especially, now expect to be given the straight goods when dealing with companies. This has obvious implications in an employment context, several examples of which are outlined below.

Compensation structures and philosophies

In one organization I worked at, compensation structures were so transparent people could easily estimate roughly how much anyone below the executive level was earning. Grade levels were included on internal postings, and anyone could look up salary scales — which included minimums, maximums and midpoints — for each grade and geographic location. Employees even knew and largely understood the implications of their own compa-ratios, which were communicated to them during base pay reviews.

Some organizations take this further by publicly communicating their compensation philosophy or strategy, even externally. While there’s generally less of a problem in communicating such information with respect to the overall compensation mix or if the organization’s overall philosophy is to lead the market, companies that make a conscious decision to lag the market are obviously much less likely to be transparent.

In many unionized organizations, the degree of transparency is so great it’s possible to know exactly how much someone is earning based on their job classification and seniority. That's because such information is contained within the collective agreement, which is public knowledge. Therefore, in such a case, the degree of transparency is generally not part of any deliberate decision on the part of the employer.

In other organizations, compensation structures aren’t communicated to employees at all. And sometimes managers don't even know their direct reports’ grades or bands, compa-ratios or the minimums, maximums or midpoints associated with jobs. As a manager, not knowing such information must seem a bit strange.

Open versus closed succession planning

Another area that varies widely across organizations is the degree of transparency surrounding succession plans and the results of top talent reviews. While there is some debate about the merits of open versus closed succession planning systems, the prevailing philosophy is transparency is preferable to secrecy.

For example, if someone knows she is considered top talent or has been chosen as a successor for a senior leadership role, knowing such information is likely to help retain and engage that person. It also sends out the message her hard work and perseverance has been recognized and will be rewarded.

Nevertheless, this strategy can backfire. Some employees let it get to their heads when they find out they’ve been identified as top talent. They may then decide to take their foot off the gas pedal in the mistaken belief they can do no wrong.

It can also be incredibly demotivating to other employees who aren’t considered top talent. And in some cases, it can be demotivating even to high flyers themselves — especially if there are no suitable senior vacancies available in the near future or the organization isn’t providing those people with any meaningful development opportunities.

Making complaints to an official body

For obvious reasons, most organizations aren’t keen on including information in a policy that says, in effect: “Here’s how you can sue us.” However, human rights legislation in some jurisdictions actually requires organizations to include information on how to make a complaint before a human rights tribunal.

In the absence of such a legal requirement, however, this may not be advisable. Yet, including such information in an employee handbook may help foster an open and transparent culture in which dignity and respect for all employees is paramount.

Where such information is included, it is always preferable to have an internal dispute resolution mechanism set up to deal with such complaints so they don’t have to go outside the organization — at least not in the earliest stages. Another argument, of course, is employees can easily find out how to make a complaint anyway through an Internet search, so providing such information isn’t likely to hurt.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at mailto:brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.  

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Brian Kreissl

Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.
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