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How to master compensation within your organisation

By Lucy Gilmore, UK HR Lead at Lattice

August 19 2022 - For people managers these are unprecedented times. The UK is currently facing its worst cost-of-living crisis in decades, inflation is reaching record heights and not to forget the high turnover of employees caused by the "Great ReShuffle" which has put increasing pressure and the spotlight on businesses to get their compensation offering up to scratch.

Despite all the increased focus on flexibility and culture, pay is still the paramount consideration for employees when it comes to staying or moving jobs. Our research showed that 60% of employees expect a pay rise more than once a year.

For people managers this is a critical time, to attract and retain talent. It will be key to find solutions that meet the compensation expectations and needs of employees, whilst also being sustainable for the business in the long run. However, to get the right solutions in place, we first need to understand; how employees currently feel about their compensation and what they really want?

Understanding employee sentiment on compensation

To understand what is driving employees’ motivations when it comes to compensation and how leaders can balance these expectations with shifting business needs, we investigated what’s most important to employees when it comes to the conversation of compensation.

Understandably, with the worsening economic crisis, many employees feel that their employer must step up and take decisive action. Despite 53% of employees feeling the cost-of-living crisis should be one of the important factors considered within a compensation review, only 26% of employees noted that this was currently a consideration in their company’s compensation review.

Moreover, while previously, an annual raise might have been considered the norm, our research identified that employees want more frequent and higher raises. Nearly 30% of employees said they were looking to be evaluated for compensation increases every 3-6 months, assuming good performance, while 47% of UK employees would need a pay rise of at least 4-5% to feel their work was being valued adequately.

Bias within the compensation process

For employees, there is also a feeling that bias continues to reside in the compensation review process. 51% of employees felt there is still bias around gender, age, race or other factors regarding how companies conduct performance and compensation reviews. Of these, 36% say their companies are not doing enough to address it.

For any progressive company, this should be a cause of concern. And investment in technology will be crucial to spotting and addressing pay gap equity here.

Transparency needs to be top of mind when it comes to compensation

Employees value when their employer is honest with them and when they provide transparency for decisions made. Our research found that 64% of UK-based employees want more transparency from their companies around pay practices.

There needs to be a cultural shift whereby the stigma of talking about pay openly is removed. Many companies’ compensation packages are already in the public domain however, more needs to be done to ensure that discussing compensation openly becomes the new normal.

To ultimately build a culture of openness and transparency within your organisation, it’s crucial to start listening to employees and understanding what matters most to them. Utilising engagement and eNPS surveys can help organisations create a consistent feedback channel and better understand how employee sentiment is changing.

However, collecting the feedback shouldn’t be the be all and end all. Businesses must harness the insights they collect to make significant changes in a timely manner. By seeking out opinions and actively listening to employees, businesses can drive value-based compensation decisions and build a better company culture founded on openness and transparency.

A move towards a 'total rewards' compensation package

It’s important to reconcile that not every organisation can offer every single benefit possible or provide pay raises at the snap of a finger. However, by actively listening to employees they can create benefits which matter most to their employees. After the pandemic, where many organisations kept to a hybrid-working model, softer benefits promoting office culture became less important for employees.

So how do organisations create that sense of belonging, community and ultimately drive commitment that money can't buy?

Well, many companies are transitioning towards a "Total Rewards" rewards model. This is where organisations provide their employees with a "holistic value proposition", which incorporates different benefits, development and training opportunities and flexible working options. Total Rewards Package can take different forms and shapes such as mental health support, childcare support, financial wellness resources, unlimited holidays etc.

Essentially it is about creating a well-rounded and meaningful benefits package and tying this in with a healthy workplace culture, which can often be an effective substitute for higher pay. Especially when working in an environment that doesn’t align with a person's values and goals, where it can quickly become unsustainable, despite how good the pay may be.


With there being no signs of the current economic climate improving soon, we will see more employees looking to their employer to provide appropriate support. For companies trying to emulate or trump what competitors are doing when it comes to pay, things can quickly get out of hand. Instead, the key to effectively balancing the needs of the employee and the business's priorities will come down to effective engagement and listening tools and then using the insights gained to create a thoughtful, tailored approach to compensation packages.



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