What happens when employees don’t understand how their pay works? They disengage.
For more than 30 years, compensation strategist Scott Trumpolt has helped organizations untangle the knot between performance, pay, and purpose. He has worked with companies across North America, Europe, Asia Pacific, and the Caribbean, designing systems that do more than distribute money; they build trust.
According to Trumpolt, compensation is often misunderstood by leadership teams. It’s not just a line item or a legal obligation; it’s a cultural signal.
“Compensation, as important as it is in terms of a true reason why employees leave an organization, is not among the very top reasons,” he says. “It’s more about that relationship with their immediate manager. They’re having that lack of engagement.”
In other words, the danger isn’t necessarily how much someone is paid. It’s whether they understand how their pay works, how they can grow it, and what that says about their future.
Pay Transparency Is About the Journey, Not Just the Number
Many companies treat compensation as a static figure: here’s your role, here’s your range, end of story. But that misses a deeper opportunity to drive engagement and performance.
“It’s not just knowing what your job gets paid in the marketplace,” Trumpolt says. “It’s how do I grow my pay over time?”
He points to the concept of career architecture, a structured way to show employees how they can progress within a role or across functions. One organization he worked with implemented such a system after internal surveys revealed people didn’t feel underpaid; they just didn’t know how to advance.
“They focused on the concept of getting employees to understand that pay and career development are directly linked in the marketplace,” he says. “After a couple of years of implementing this, their employee engagement levels went up in those specific categories.”
It wasn’t about posting salary bands. It was about mapping a path forward.
Warning Signs That Your Pay Strategy Isn’t Working
How can leaders tell if their compensation system is actually hurting engagement? Trumpolt points to two clear signals:
High-performing employees are voluntarily leaving.
Internal surveys show low scores in compensation-related areas.
These red flags don’t always mean people feel underpaid, but they often feel disconnected from the process.
It Starts With Philosophy, Then Adds Flexibility
According to Trumpolt, smart compensation begins with a clear pay philosophy. Does your company aim to pay at market median or above? Do you prioritize base pay or variable incentives? These choices shape everything else, from structure to retention.
But flexibility is also key.
“Each job has its own unique market value,” he says. “Some roles you want to pay higher than market. It’s about providing business flexibility.”
That flexibility, however, only works when it’s grounded in strategy and supported by communication.
Pay Transparency Laws Are Raising the Bar
As more states adopt laws requiring salary ranges in job postings, many companies are scrambling to adjust. Trumpolt believes this legal shift is a turning point.
“It’s a wake-up call for employers,” he says. “Since they have to post these ranges, they have to get their internal house even more in order.”
Why? Because employees, both current and prospective, will start asking smart questions. If three team members with similar experience and performance are scattered across the range without explanation, trust suffers.
Trumpolt recalls seeing this firsthand: “They had been there for a while, they were good performers, but they weren’t being paid appropriately for their level of contribution.”
The issue wasn’t the range. It was the inconsistency in how it was applied and explained.
Managers Make or Break the Message
Even the most thoughtfully designed compensation system can fail if managers don’t know how to talk about it.
“They need tools to understand how the employees’ pay links to this idea of career development and how that fits into the business need of the organization,” Trumpolt says.
Too often, managers default to vague justifications like “This is what our budget allows” or “Everyone’s getting 3%.” Instead, Trumpolt encourages conversations that are forward-looking and specific: what the business needs next year, how the employee can grow, and what that growth could mean for their compensation.
“That is the essence of what I think employees are looking for. How do I fit into this company’s vision on a longer-term nature instead of it being very tactical?”
In the end, Trumpolt says the real value of compensation lies in how it’s used, not just what it costs.
“Every one of your programs has to be looked at in terms of what this does to strengthen the employee engagement factor,” he says. “Because strengthening employee engagement is going to get the business results up.”
Leaders who treat compensation as a strategic lever, not just a compliance exercise, can create workplaces where people understand not just what they earn, but why—and, more importantly, how to grow.