Whether you have a regular compensation conversation cycle coming up, or you want to be prepared for any questions from your employees about pay, use these best practices to communicate compensation with empathy and expertise.

Use proactive communication

Depending on how transparent your organization is able to be, it's worth considering a company-wide communication about compensation this year–especially if the rewards you're able to provide are dramatically different than what most employees may be expecting. If employees are given advanced notice about the outlook of the company's performance and financial health, they're less likely to be negatively surprised down the road–and will be better equipped for one-on-one compensation discussions.

If your organization has a compensation philosophy that employees may already be familiar with, frame this year's changes as still in support of that value statement. And, while compensation statements for individuals take time and planning to send out, proactive communications will enable you to let employees know they're on their way.

Prioritize people managers

Managers will be on the front lines when it comes to employees' questions and concerns about their pay – and they're also your biggest resource when it comes to having conversations about compensation across the entire organization. Ensure your people managers are ready for these discussions with the knowledge and details they need around any changes to rewards this year, as well as the communication skills that will help make these meetings as successful as possible. Leverage frequent, helpful messaging to managers that provide resources, clear do's and don'ts around how to answer compensation questions, and any other details they may need to make these conversations productive and positive.

Acknowledge total compensation

Often, employees don't see the full picture of their compensation from the company beyond the number they see on their paycheck. As you move through these discussions around pay, be sure to acknowledge the bigger picture of each employee's holistic value at the organization – including company-paid medical premiums, shares of stock, 401(k) match amounts, paid time off and sick leave, and anything else that's part of true total compensation. Total compensation statements can help map out these details too, though they take time to prepare and send out; make sure your people managers are able to speak to the different elements that go into an individual's compensation package.

Consider non-monetary rewards

If your organization operates under a "pay for performance" philosophy, it may feel most true to your company culture to find a few non-monetary ways to reward your high performers, and reinforce the company's appreciation for their hard work this year. If it's a realistic option for your company, consider adding these perks to your rewards lineup in place of a year-end bonus:

• Access to digital programs, especially wellness or well-being focused options.
• Raffles and prizes, which can boost morale as well as drive excitement around tangible gifts.
• Additional time off for individuals, or more observed holidays on a company-wide basis.
• Adjusted work schedules to promote work-life balance and demonstrate an empathetic point of view.

The way you communicate about compensation changes with your employees will be largely based on your specific business case – if your organization has seen positive growth in this "new normal," you'll likely take a different approach than if your business has seen financial challenges.

No matter the scope of the changes you're implementing this year, your candidness and transparency with employees is crucial for establishing trust and strengthening the connection between the business and the individual. Clear and ongoing communications, with a keen focus on training your people managers, are the strongest tools you have in making the end-of-year compensation cycle positive and empathetic, even if the year has been a difficult one.

Michelle Sedlacek is director of people at GuideSpark, a change communications platform.

Read more: 

• Employers see a future of flex work and hybrid compensation models
• Redefining compensation strategies in the remote work era
• Employee raises and bonuses are returning in 2021