How to Help Employees Understand Their Compensation

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Welcome to Aeqium's Compensation Playbook Series! 🎙️ Today’s episode features a dynamic conversation with Eleanor Quinn, Senior Director of Global Compensation at Novavax. With a wealth of experience in total rewards, Eleanor shares invaluable insights into how organizations can elevate their compensation communication strategies to meet the demands of pay transparency and employee expectations.

This episode covers:

• How pay transparency legislation is reshaping communication priorities
• Building executive alignment to drive meaningful change
• Empowering managers to effectively communicate compensation decisions
• Creating cross-functional teams to enhance communication impact
• Practical tips for measuring the success of compensation education initiatives

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Transcript

Peter: Hey, everyone. Welcome back to the latest episode of Aeqium's Compensation Playbook Series. Today, we are really fortunate to have Eleanor, Senior Director of Global Compensation at Novavax, joining us to talk about an evergreen topic: communicating total rewards and compensation to employees.

Eleanor, thanks so much for being with us today.

Eleanor: Thank you, Peter. Thanks for having me. Really excited to have this conversation.

Peter: So, I'll just kind of jump into the questions that we had for you today. Obviously, as I kind of alluded to there, communication is always a topic on Total Rewards professionals' minds and has been for a long time. Anything that you can kind of think of or point to or anything that you've seen over your career that has sort of changed in that space or increased focus on it or made it more challenging? We'd just love to hear how you think that's changed over time.

Eleanor: Well, I, you know, I don't feel like it's been the focus of compensation for that long, but of course, I've been doing this for about a quarter of a century now. So, I do feel—I'm delighted, right—to see what has been happening over the last five to ten years in terms of really increased awareness in terms of how, you know, really thoughtful, effective compensation education can really translate to, you know, increased value proposition and all that good stuff.

You know, when I and a lot of folks started out, there was a lot of opaqueness, right? And sort of black boxness around compensation, you know? And so folks that have been doing this for a while, I mean, this feels like a more recent change maybe to them, but a real welcome one.

I think it's fair to say when you look just sort of across all industries, obviously there are some early adopter industries that are representative of being more proactive and have come to this party a lot earlier and started this party arguably. But I think when you look kind of across all industries, you can say that legislatively, a lot of this is being prompted by just jurisdiction by jurisdiction, all these dominoes that are falling.

In this country, I think we've got another five states that are going to enact pay transparency legislation similar to what we've seen in other states, the Washingtons, Californias, Colorados. I think it's Illinois. Anyway, there's five of them coming up in twenty twenty-five. And those dominoes are just going to continue to fall. And obviously, then we have the big mama in terms of EU pay transparency coming.

But, you know, I think it's very—you know, a lot of us work and have had the pleasure of working for very progressive companies that have been really ahead of this and ahead of the game. But I was just reading a pretty recent Aon published survey that was saying, you know, about seventy-five percent of U.S. companies are still woefully unprepared, you know, for meeting their just requirements, right, threshold requirements.

So I guess that's important to sort of see is that sometimes we sort of are in our bubble and think, oh, this is old news, but it's not for a lot of companies, right? And a lot of us are still working in organizations that are on that spectrum, but maybe not where we'd like to be in terms of progressive pay transparency and compensation education.

Peter: Yeah, it's like pay transparency is kind of forcing the need to up your game on communication. Even without the transparency, it's important, but maybe you didn’t have the time to focus on it or you weren’t thinking about it as much until pay transparency forced it.

Eleanor: Well, and let’s get real too. I mean, a lot of it depends on where your executive mindset is on the topic, you know, and so, you know, that sort of gets into a lot of needing to sort of know and understand early where they are, right, in terms of that. And that’s not just your CEO. I mean, that’s your executive leadership team in terms of what—you know, where do they sit on increased transparency and education?

You know, as part of that pre-gaming, what do they know? What don’t they know? You know, all of this is going to help sort of inform your view because before you can really make any meaningful progress, right, you’re going to need to get that buy-in and do that really essential pre-gaming, you know, at the executive level.

Peter: That’s a great point and actually kind of feeds into one of the next questions that we have for you, which is, hey, if you do have the focus, whether it be from pay transparency or because you know it’s important that you want to get working on improving your communications of total rewards, where do you start with that? You kind of alluded to the executives here and they’re obviously one stakeholder. You can think of managers, you can think of your HRBPs and then the employees. Where do you start in there?

Eleanor: Yeah. I mean, the executive team will be a very early group, right? Because you’re going to want to know sort of where they stand on things, where they are, what their position is before you get much further sort of out of the gate. But then it is sort of—it is about building your village, right?

And your executives are part of that village, and the rest of your HR teammates are part of that village. And so it’s almost sort of a similar exercise too, right? Where are they sort of in terms of understanding, accepting, thinking it’s a good idea? Right. Because if they don’t think it’s a good idea, you need to know that soon so that you can start to transform their mindsets and evangelize them a little bit, too.

You know, they’re going to be part of your—they are—they’re an essential part of your village, right? So you want to make sure that you’re building that out, you know, early and in always—always renewing, right—that relationship because it’s a long-term one and it has to—you know, the work is relentless, you know. Once you start this journey, you’re always needing to do it, you know. It’s like a workout, right? You don’t go to the gym once. You go to the gym on a regular basis, you know—in theory. I don’t go to the gym.

Peter: [Laughs]

Eleanor: But part of that village building is, again, yes, the executive level, but also I would always recommend curating a team—a management team throughout the organization that you start to get to know really well. You need to make this a diverse team. And by that, I mean, you don’t just pick on the managers that you know are fun to work with and they already get it and they already know comp. You know what I mean? You also want to pick those ones that are, frankly, your opponents, right? And you want to sort of know those ones that are difficult to work with as well as, you know, yes, seasoned managers, but also brand-new ones too, right?

So you need to get sort of this really good cross-functional and cross-level and background mix to kind of get this group together because you’re not going to really—you’re not going to be able to see everything through just your lenses, right? And you’re not going to be able to see everything just through executive lenses or through the managers that are fun to work with, right? You really are going to need to get that comprehensive view that you can’t glean until you get a really good village together, right? So, you know, of all of those—of all of those people.

Peter: That’s such an important point and reflects on a lot of the conversations we’ve had about achieving goals within the Total Rewards and compensation field. I feel like executive alignment and stakeholder alignment come up almost every time for very good reason.

Extending from there, if you are trying to put together advice for someone who’s thinking about getting their communication education program together, in addition to stakeholder and executive alignment, what are the other things that you’d recommend to them in order to be prepared to be successful there?

Eleanor: You know, I mean, it depends. I want to be clear that it’s not limited to just the executive—well, I guess you’re answering it with the stakeholder alignment, right. These are sort of multilevel.

I guess what I would urge folks who are trying to get sort of a program off the ground is recognizing that there’s a lot of stuff in our world that makes perfect sense to us because we are rewards practitioners. And I don’t think you can ever underestimate how mysterious and unknown that is to the average employee, you know?

And so, you know, this—I'm hesitating because like this really does become sort of a full-time job, but as much as you can get out there and really understand how much do your employees understand or don’t understand these things is really the only way to be able to start to get an idea of how to create solutions that are meaningful, right?

And so, you know, we’re data freaks, right? We’re rewards practitioners. We like statistical data. So sure, you can run your engagement surveys and ask questions, and that’s really, really helpful. Although, I think maybe cynically, we always say, well, if we ask, “How’s your compensation?” everyone’s going to say, “I always want more duck.”

I guess my mind is that I’m really focused on educating and scaling and skilling up managers, right, to be able to make effective reward decisions and be able to effectively communicate those rewards decisions because, you know, I—and I’m sure a lot of folks listening to this, you know, have or are working for organizations where there’s just a lot of like managers going, “Well, I don’t know why you got this. HR just told me to give you this sort of stuff.”

And so there’s a lot of sort of just like, “Not me” kind of, you know, accountability. And if we don’t really move the needle on managers really getting it and understanding it—not just for their employees but for themselves too, right—there’s no skin in the game for them, right?

And then they’ll just continue to be like, “That’s not me.” And to be honest, you know, if you have a manager like that, you’re not necessarily thrilled about that because you sense that your manager doesn’t really know what’s going on.

So I really do focus on training and skilling up the manager, right, to make those decisions, to be able to answer those questions, to be able to proactively build that confidence with their direct reports that, like, “Yeah, I know what I’m doing, and I’m making effective pay decisions for you that are aligned to performance or equitable or fair and the right thing to do.”

Peter: That makes so much sense. I mean, questions are going to go to the managers, right?

Eleanor: Right. And if your manager is like, “No, no, no, go talk to HR,” how much are you going to really, frankly, respect that manager, right? In terms of like, “Oh, this person really knows what they’re talking about.” And more importantly, that person is really going to go to bat for me, right? And going to make sure that my contributions are meeting out into, you know, applicable rewards, right?

So I think that’s really important. And to that point, I’ve not yet succeeded, but I’d love to see one day a question on an engagement survey that says something to the extent of, “As an employee, how well do you feel like your manager communicates and understands rewards?” You know, because wouldn’t that just be an extraordinary bellwether, right? To be able to, for us to be able to say, “Oh, okay, this is the work we need to do to continue to educate and skill up our managers, right?” And because again, they’re part of that village, right? How do we get them on the bus so that they now see that this is their key role, right?

Peter: It’s so clear to me that you can’t do it without the managers that even hearing your engagement survey idea, I’m like, “Well, how are the employees even going to know if the managers are doing a good job of communicating comp?” Right? You know, their whole lens of what’s going on is going through that manager, and if they don’t get it, how can you ever expect to get it to the employees?

Eleanor: Yeah, I think though, that—I mean, even, you know, I don’t know, because I mean, I can’t not see it through my biased lens of being a rewards practitioner. But I have to imagine that, you know, if I’m asking my manager, “Why did I get the increase that I got or what?” and they just keep coming back with, like, “I don’t know,” or “It’s out of my control,” or, you know, they’re shrugging their shoulders—something is not right there, you know?

Peter: What do you think—and I had a conversation with someone else about this recently—what do you think about creating channels for direct communication between employees and the comp team to give you that direct signal?

Eleanor: Yeah, you know, that’s a really interesting one. Immediately, pros and cons, right? You know, I do conduct a lot of direct training and communication with managers. Right. But I would never want to necessarily supplant that managerial relationship. And so I tend to put my and my team’s energy in terms of supporting and scaling up that manager.

That being said, I mean, I’m not opposed to having a conversation. And, you know, in my current company, in past companies, you have more of a direct channel, you know, there’s a, you know, a comp email box or, you know, whatever that case may be.

I think that the—I don’t know, not necessarily like peril, but I think, I guess one of the risks of having that direct communication is that then, you know, are you taking your eyes off ensuring that that manager is really that seen, trusted point of contact for the employee, or does it, you know, unwittingly sort of create a circuitous situation with it, especially if they don’t like the answer or, you know, they don’t—you know, of the manager.

Well, maybe I’ll just go, you know, to try to create some sort of oppositional response relationship. We’re trying to sort of, you know, create an improved understanding and capability throughout the organization, right?

Peter: I think you hit the nail on the head. It’s like, there are definitely risks there, but there’s this attractive element of, “Hey, we hear it directly from the employee’s mouths.” Is the message really making it all the way down? So there’s something to balance there for sure.

Eleanor: Yeah. It goes into actually one of the next questions that we have lined up, which you’ve already partly answered here. I’ll just see if you have any other thoughts on it, which is, okay, so you’ve started working on your communication initiative. How do you measure how effective it is or whether or not it’s working?

Peter: And I heard engagement surveys, we’re hearing kind of talking to managers, just curious if you have any other thoughts there.

Eleanor: Yeah. Well, I mean, again, you know, as much data as you can source, I think, you know, it’s going to be helpful. And so, you know, to that point, you know, there—when we think about, you know, key processes that drive rewards, like, you know, like your annual compensation planning, you know, you know that you’re leaving gas in the tank for things like post-mortem analyses.

If you’re rolling out a compensation or retention program, are you doing the work years later to really tie out your numbers and be able to measure the efficacy of that retention scheme or that merit cycle? I think a lot of times, understandably, we’re all exhausted after efforts like that. But while that is still fresh, I think it really is critical and important to conduct those post-mortem analyses.

And again, I don’t know, you know, how much appetite there would be for like a full-blown data survey. So I think you might need to rely on more anecdotal measures from a realistic standpoint, you know, whether that would sort of be like focus groups. And again, I think that’s starting with HR, right?

And then maybe again, your pilot manager group, and then it is maybe just selecting, you know, a random assortment of folks, you know, to try to get that information. For something like a retention scheme, obviously, your measurement is the retention, right? Are they still here? Are they doing that, right?

And again, that’s really important that we’re doing it, that we’re closing the loop on that because we’re investing so much time on the front end—designing, selling, enacting, doing this. And then if we’re not really closing that loop, we’re missing that opportunity to, one, to say, did we hit the mark or not? And then hopefully we did hit the mark because now then we can use that win to secure future approvals on future plans, because now you are coming with a very data-driven proof that what you’re doing was effective and it worked. And so then you can build off of that success much more easily than if you’re not even looking at those numbers and running that analysis.

Peter: A hundred percent. And I really like the idea of pairing looking at the retention analysis with the focus groups, right? Because if you’re just looking at retention, is it that your comp program’s not right? Or is it that you’re not communicating it effectively? But if you see the numbers and then you’re having the focus groups, it feels like that really drives it home.

Eleanor: Right. Yeah, that’s a good way to put it. You’re sort of pairing it together, right, in that. And I think that has been oftentimes the missing piece. I think, you know, you’ve got a lot of brilliant rewards practitioners creating wonderful programs, but, you know, if they’re not being effectively communicated, taught, you know, absorbed by the recipient, understood, you know, then ultimately it is a failure—as much as I hate to say that—even if it was brilliant design.

Peter: I also think the focus group concept that you came up with here might have actually just answered my previous question a bit too, or solved the problem of direct communication with employees. Because if you set up the focus group with a random assortment of employees, it feels like you avoid the possibility of it being kind of a complaint-to-the-comp-team channel, you know?

Eleanor: Well, you know what, though, Peter, that’s probably inevitable. So I do think—well, meaning that if you are going to get a group of people together, I mean, you cannot control every constraint, right? And so, again, you could be asking questions to drive it. But, you know, because frankly, this is not a model that is necessarily that common, right?

I think that folks, you know, when they’re in an environment where they’ve got, you know, a professional de facto expert, you know, expect for the conversation to be potentially pretty wide-ranging. And so to that point, you’re going to need to be prepared with some pretty deft facilitation skills, right? To make sure that kind of, you keep everything sort of on track and maybe that sort of, you know, at the outset, sort of setting some ground rules but then be prepared to kind of recalibrate them because, you know, every group that I’ve run like this—I mean, I actually dig it, right? Because you never know, and, you know, it’s fun.

But as long as you’re making sure, you know, that it stays on track and that it is healthy and productive, right? Because, you know, to get real, compensation is very personal, you know, and it’s emotional. And even when you’re training managers to be thinking about their employees, they’re thinking about themselves too, of course. We need to keep that in mind and be ready for that.

Peter: That’s a great point. You mentioned merit cycles as being a good time to think about both the focus groups as well as just the kind of post-mortem retrospective. This is definitely a topic that I think is probably top of mind for a lot of people at this time of year. Do you have any specific recommendations for someone who is going into a merit cycle, going into comp planning at that stage, to make sure that the communication on the other end turns out successful?

Eleanor: Yeah, you know, it is—you know, understandably, you know, there’s a lot of attention paid to the lead-up, right? And just so many steps to do to make sure that, you know, your data is audited, it’s clean, your system is working right, you know, everything is going right. But really, you know, really keep zooming back to the big picture and to the full—you know, the full landscape, you know, soup to nuts of the process.

I think it’s very understandable that we sort of reserve and expend the most energy at the outset of it. But really, this has to be something where, again, we’ve left gas in the tank for the later stages because they’re critical, right? I mean, it’s literally the thing that finally the employees are going to see, right?

And if there’s where we’re falling down, then again, could be brilliant. And then all the way to the end, it’s kind of like, you know, you’re in a restaurant, you have a wonderful time, but then the server takes forever to get you that check. And that’s the last thing that you remember, right? Is that, you know, that sort of recency bias is there.

So, to that point, you know, consider if you haven’t already that you’re doing a pay discussion training with your managers as the lead-up activity to being able to release those compensation statements or those merit award letters, right?

So that it’s not just the information is correct and it’s right and whatever, but also you’re really increasing the qualitative power, right, of that. And then you’re arming your managers, right, with getting better at communicating this information, right? Which again, is building their stock in their employees’ eyes, right? In terms of like, “Oh, my manager really has it together and like, you know, I get it, I understand it, cool.” You know, you’ve got a much better shot of that, you know, if you’re investing in sort of the later stages of your process and not—you know, I get it, because I’m exhausted too—but it is being able to make sure that you’re reserving the right levels of energy throughout the process, and particularly at that end when you just want to see the backside of it and you want to be done with it, you know, making sure that you’re seeing it through to the literally the employee part of the experience, the pay discussion and understanding what their rewards are and how they were linked to that performance. And then the post-mortem, right? What went well? What could go better? What do we need to do to continue to cycle improve here?

Peter: Yeah, some super relatable emotions and I think some great advice too. So again, Eleanor, I really appreciate you taking the time today. I think that’s all the time that we have for this conversation. Really appreciate the thoughts. Would love to have you back in the future.

Eleanor: Sure, sure, Peter. This was fun. Thanks a lot for having me. Appreciate it.

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