The bottom line is that employees have more expectations around compensation altogether, informed or not. While some organizations may have relied on old customs around compensation discussions, in which pay was considered a “confidential” and therefore undiscussed topic, those days are gone. And when employees are not satisfied with what they see, when they perceive unfairness around their compensation, negative sentiment can spread quickly.
As a critical for-instance, employees care about performance-based bonuses — and to retain top talent requires that companies have the flexibility to move beyond the usual half-yearly and yearly performance review to provide those spot bonuses for exceptional work — or that eleventh-hour push a team made to reach the finish line on a key project.
Any issue affecting morale and engagement is contagious today — and has consequences. 56% of U.S. workers said that other employees quitting their jobs prompted them to consider quitting as well. Given the prominence of compensation in terms of the top reasons to leave a position, not instituting a better compensation plan could result in increasing resignations.