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98 Retaining Top Employees

Appropriate sider sharing with them the
Communication results of your benchmark-
Only you can know what ing exercise. After all, these
constitutes “appropriate communica- people will be most directly
tion” of compensation packages with- affected by the compensa-
in your organization. Organizational tion plan and they deserve
attitudes vary from the completely
an individual explanation of
secret to 100% transparent. In my its implications.
experience,the more open the com-
munication about compensation,the Show Demonstrable
higher the retention. Secrecy breeds Results
distrust and,as we’ve noted,distrust
breeds turnover. As you conduct the sur-
veys detailed in the sec-
tion above and compare the outcome of the new compensation
plan against the targets you’ve set, share the results with all of
your employees. If your new plan has resulted in a 13%
increase in sales or the launch of a new product, tell everyone.
Success is great for retaining employees!
Deal with Both Risk and Reward
For your compensation plan to gain credibility, you must deal
with both successes and failures. If, for example, an employee
is simply not responding well to the new plan and is missing his
or her targets for incentive payments, don’t decide to pay that
employee anyway. That would cause employees to discount the
whole plan. Remember the fourfold need to be fair, to be clear,
to be consistent, and to honor the plan. Just as it would be
wrong not to pay what an employee earns, it would be wrong to
pay what an employee does not earn.

Don’t Make It Only an Annual Ritual
Find reasons to discuss and trumpet your compensation plan
(and its successes) at odd times in the year. If you celebrate the
plan only in a paragraph in the annual report or a one-hour
review at the management retreat once a year, you’re under-
playing the value of this exceptional retention tool and under-
mining its impact on retention.