Implementing pay transparency: Five things you should know

Rooted in the company’s core value of authenticity and entrepreneurial spirit, G2’s chief people officer Priti Patel ’14 MBA is pioneering a new era of pay transparency.
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Kellogg
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Kellogg alumna Priti Patel stands on stage smiling and raising her hand in celebration during a corporate event. The G2 company logo is visible on a large screen in the background.
Education around the “what” and the “how” of pay transparency are critical for success, says HR expert Patel.

Last year, Mercer’s Global Pay Transparency Report that found only 19% of U.S. companies have a pay transparency strategy in place. However, a majority of the companies surveyed planned to share pay information in the future and acknowledge employee expectations for transparency. 

“Many companies have good intentions, but there’s a significant gap between intention and implementation when it comes to pay transparency,” observes Priti Patel ’14 MBA, the chief people officer of software marketplace G2. “As someone who’s been through this process, I understand why.”

Last year, after a three-year implementation, G2 joined that 19% and rolled out its global pay transparency strategy. “All G2 employees worldwide now have access to their market-aligned career level, career path(s), and the market-based pay range for their role,” Patel explains. We recently sat down with Patel to learn about G2’s pay transparency journey and her key learnings.

You completed the rollout of global pay transparency at G2 in 2024, recognizing the growing expectation for openness in the workplace. What are lessons learned from this experience?

It was a long and challenging journey.  It was G2’s biggest ever people-related project, with many expected and unexpected hurdles — a true test of agility. The process was a testament to G2’s core values of authenticity and entrepreneurial spirit and its commitment to building an equitable workplace, aligning with the company’s foundation of transparent information and trusted data.

Since the rollout, my team and I have reflected a lot on what went well and what we wish we knew going in. For those who are considering pay transparency or in the early stages, there are important five considerations:

  • First, leadership buy-in across the organization is critical. HR drives the process, but input from leaders is essential, especially because they are the ones leading the compensation conversations. You will need input from leaders to help you verify career levels and pay data, and help ensure that ranges are mapped correctly.
  • Second, pay transparency is a spectrum. It’s not just a “yes or no” but a range from full opaqueness to complete transparency. Determining where you are and where you want to be is crucial. You also want to make sure you are aligned with your compensation philosophy. 
  • Third, it all starts with a global career leveling framework. A clear framework linked to external labor data allows for reliable compensation data and benchmarking. It’s also essential for a growing workforce, providing clear career pathways. If you don’t have one, you must build that first. 
  • Fourth, education is key. Compensation is complex, and managers need education on how pay ranges are built and used. Our HR and L&D teams were involved from the start to ensure everyone was brought along.
  • Finally, pay transparency is not a silver bullet for compensation. Don’t expect all compensation-related concerns to disappear overnight. But what it does do is enable clear, honest, data-driven compensation conversations.

What impact have you seen on employee engagement?

Don’t expect an immediate increase in your engagement scores. Pay transparency doesn’t mean all employees will be satisfied with their compensation. In fact, it may cause the opposite if they find themselves on the lower end of a range (and this should be something HR and leaders are prepared for.

But without pay transparency, compensation can only be discussed in vague terms, and employees will turn to unreliable data on the internet. With pay transparency, leaders and managers are empowered with data to show market competitiveness and can speak to specifics about what it takes to earn more.

Pay and compensation is a tough topic. How do you navigate this will also build transparency?

Compensation is ultimately about money, and for many, money is an uncomfortable topic. Compensation is also very personal. What you earn impacts your livelihood, lifestyle and security. 

Another reason it’s difficult to talk about compensation is the way that employee compensation is determined, which sometimes is not easily explained. It comes from a complex formula of benchmarking, job leveling and calibration exercises that even those in HR and experienced managers find hard to fully understand. 

Compensation is hard, even hard for those of us in HR. Unsurprisingly, people managers often don’t feel prepared or confident to talk about compensation. That’s why when rolling out pay transparency, your HR business partners and learning and development teams will be your two most necessary stakeholders. 

There has to be a lot of education not only about the what but also the how — how market data is used, how pay ranges are built, how compensation is determined, etc. This will help build trust, credibility and ultimately buy-in from your employees. 

How can you measure the success or effectiveness of pay transparency?

It’s important to emphasize that pay transparency isn’t about immediate employee satisfaction. There’s a learning curve to understanding how compensation is determined, a shift in culture to talk about pay more openly and honestly, and establishing the regular process of benchmarking. 

I think the most important metrics right after rollout are around understanding and adoption. As part of our regular employee engagement survey, we asked our people if their manager has shared pay transparency information with them and if they know where to find their compensation information. Then, as pay transparency takes root within the organization, you can survey and measure the workforce in regards to compensation, total rewards, and trust in the longer term.

Ultimately, this is a longer-term investment and big decision that depends on leadership buy-in, alignment with values and culture, business goals and priorities—just to name a few. But as Mercer states in its report, pay transparency is not a passing fad but an increasing expectation from candidates and employees. In other words, all signs are pointing to pay transparency not being a matter of “if” but “when.”

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