For Palo Alto Networks and its Senior Director of Global Compensation, Ilene Milne, pay equity means more than increasing employees’ pay. The ex-Google-led cybersecurity group minimizes gaps—and costs—with a unique, dual approach: (1) it pays “salary for role,” with differentiation only on bonus and stock, and (2) it accounts for “comp profiles,” in which an employee’s circumstances (e.g. a recent grad, a new parent) affect their total compensation.
As someone with a passion for creating comp programs that are competitive and fair, Ilene shared creative thoughts and insights throughout our latest webinar with our own Charlie Franklin.
Although the discussion centered on how to use offers to advance pay equity, Ilene and Charlie covered more than a few interesting topics.
The broader the perspective, the better the outcomes
The conversation started with Ilene explaining how her broad experience helped bring the foundational clarity she still relies on today.
Over the past two decades, Ilene has found herself in the driver’s seat during some of the most turbulent events shaping the HR world we know today.
Ilene finally joined Palo Alto Networks just two months before the California CCPA went into effect. Shortly after, she and her team started the next pay planning cycle, along with refining the job architecture and remapping internal job families.
Step by step to full pay transparency
As a firm believer in pay transparency and someone who has seen its success first-hand, Ilene was intrigued when she discovered some PAN leaders weren't on the same page.
“A conversation arose about our pay transparency, job codes, levels, and expectations… The response I received was positive, except for the transparency part. I was really surprised, not going to lie." - Ilene said.
Even though she understood how important pay transparency can be, especially in terms of supporting internal mobility and engagement, Ilene realized that - sometimes - it might be better to pace the change-making process.
“Now, I look at it and understand it wasn’t a ‘forever no’. It was a ‘no’ for where we were at the time. And I think it will soon become a ‘yes’.” - Ilene explained.
Everything, all at once
One of the positive aspects of Palo Alto Networks is its strategic flexibility. However, this can also be 'terrifying':
“You have to figure everything out and try to change some things at the same time. Our CEO wanted us to rethink how we approach comp.” - Ilene stated.
Ilene’s team started to think about the different groups of employees and how the company might want to compensate them differently - both through short and long-term pay and incentives.
“At the time, PAN was about a 14,000-person company, doubled in size over the last few years, and it had a very strong pay-for-performance culture. So, changing some of it would be a big, big deal.” - Ilene said.
The team started to think about implementing the long-term strategy in several steps - starting with the focus on narrowing the internal pay range, which was quite big at the time.
Will assumptions survive market conditions?
Charlie emphasized how vital it is to communicate significant changes to employees, enabling easier acceptance, before adding:
“We want to isolate the driver of base salary from performance and make it more of this structured, opinionated view of the business. But we need to know whether those fixed values are actually going to survive market conditions.”
During these big changes, it’s important to think hard and long about whether you can freeze a top performer’s pay just because they’re paid above the new internal standard for the position.
Pay equity is a “huge driver” of change
“When you think about salary for a role”, started Ilene, “In the ideal world, it sounds great. And if you’re a small company, maybe it will work because it becomes a part of your DNA from day one.”
“For us, pay equity is a huge driver.”
Ilene explained that PAN sweetens base salary with three different “flavors” of short-term comp incentives. Some of their employees are not eligible for a higher equity reward but all are eligible for an annual bonus.
The role of job offers in advancing pay equity
“We need to ensure that our offers are bringing people in - but that they are not messing up our pay equity.” - Ilene wanted to emphasize.
She believes that the offers must be not only fair but also consistent.
Her team is looking into different tech solutions to help them achieve this goal in the most efficient way possible. Ilene shared that her team is comparing insights from their high-volume jobs and coupling them with the real-time offers data provided by Compa.
“One of the things we implemented because of it is that if a person’s offer is above our internal standards, additional people within PAN have to approve the offer. If it’s above the high end of our range, whether it’s equity or salary - our Chief People Officer has to approve it.” - Ilene revealed.
“Having access to this real-time data helps us be confident in saying whether we can “close” a candidate with our initial offer - or not.”
To discover more insights revealed during the interesting webinar with Charlie and Ilene, watch the full recording here.
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