Master the Pay Transparency Conversation

The biggest trend in 2025: Pay transparency is non-negotiable.

This is no longer a theoretical debate. It is impacting year-end bonuses and salary reviews, and leaders need to be prepared. The conversation is not ‘if’, but ‘when’. Here is how leaders can prepare to answer the difficult questions:

1. The Bonus Mystery. Why is my bonus this amount? Many companies do not have a clear formula, or are reluctant to share how it was determined, which causes confusion instead of increasing engagement.
   

2. The Salary Secret. How was my salary increase determined? Leaders must understand and be able to explain the process that was used to determine the increase.
   

3. The Pay Equity Question. Why am I paid more or less than someone else on my team? This is the core of pay transparency. Without a clear compensation philosophy and framework, employees may have less trust and engagement in the organization.

I have seen this handled in different ways in organizations. Those that were ready with answers to ‘how’ and ‘why’ questions had more confidence when responding to employees and were able to better articulate their rationale and philosophy. This gave employees more clarity on why they were viewed as a top performer or what they needed to do to improve.

This approach turns a dreaded conversation into an opportunity to build trust, retain, and engage your top talent.

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