Employers Showing Total Compensation, A Good Idea?

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I don’t think so. My former employer recently instituted a policy where they would provide a sheet that detailed your total compensation for the year included with the raise (if you got one) for the upcoming year. The sheet broke down everything the company paid to employ you and it included your salary, education reimbursement, medical/dental/etc insurance, Medicare, social security, and perhaps some other stuff I forgot. Some feel that this was done so that the employee would fully understand how they were really compensated but I think it’s an insult to come right out and put it on a sheet, essentially saying “hey, be grateful we pay for all of this.”

Why? Well, the only legitimate “total compensation” value that anyone cares about is salary + education reimbursement, if you plan on going to school. The company has made no bones about the fact that they’re doing this to show employees how much they’re being compensated but a fair number have left the company for more pay. The only problem with doing this is that it doesn’t accomplish anything and can only bother people.

Anyone deciding to leave a company for greener pastures won’t forget to include education reimbursement because they are well aware of how much school costs and how much the company is paying for them. By putting that value and the cost of doing business, insurance and payroll taxes, you’re just telling your employees that they should be grateful because insurance and payroll taxes are relatively static and universal. Your payroll taxes will be the same regardless of your employer and your insurance will likely be very similar as well, certainly not a significant difference at least at our age.

So when an employee sees this sheet that says their total compensation amount is X and that’s a significant increase over their salary, wouldn’t the employee feel insulted? “Don’t leave for another company and a potential raise, stay here because you really make 30% more than what it says on your paycheck?”

What do you all think?

{ 28 comments, please add your thoughts now! }

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28 Responses to “Employers Showing Total Compensation, A Good Idea?”

  1. Miller says:

    I agree with Tool. I’m really insulted with the total compensation sheet I get, but I don’t find it helpful. If I’m looking to leave jobs, in my offer I’m likely to get a new salary… not another full up total compensation sheet. So it’s a useless comparison.

    And the comparison is all that matters (to me). How much am I getting? Do I more or less medical with company x or y for comparable coverage. Those are the questions. Maybe this sheet attempts to answer that, but without identically structured sheets from other companies, its just not useful.

    Maybe it answers some curiousity questions I had, but that’s it. Big freakin whoop.

  2. Scott says:

    People that have expensive health care costs in my opinion typically need to (1) live healthier lifestyles and/or (2) stop having kids. My health insurance costs me $50/month and nearly all of that is going to subsidize some other irresponsible person as I use very very little each year (one doctor’s visit constitutes one too many). Yeah, yeah, I’ll get old one day and need the insurance money then, blah, blah, sure – but I still don’t feel like paying it now.

    Same goes for car insurance (and all insurance for that matter) – a total rip for those of us who are responsible.

  3. JSH says:

    I was reading one of Walter Williams’ books this weekend and ran across a reference to a similar total compensation form. This one has a political agenda (which I happen to agree with).

    “The Right To Know Payroll Form helps employees be better informed in the democratic process by shattering the myth that taxes, regulations, and mandates on businesses do not affect them personally.”

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