Compensation Communications

Author: Joseph J. Martocchio, Professor Emeritus, University of Illinois at Urbana-Champaign

Communicating with employees about compensation can help:

• Educate employees about the underlying philosophy and all the elements of the compensation system, as well as expected changes;
• Ensure employees know how their pay is established (e.g., based on professional credentials and relevant work experience) and possibly increased over time (e.g., adjusted according to level of job performance and/or the cost of living); and
• Motivate employees to perform their jobs to a high standard.

The following chart lists various types of communications about employee compensation and details their purpose, audience, content and suggested methods of delivery.