Scott Trumpolt: Pay Transparency, Career Architecture, and the Behavior Behind Profit

Welcome to the Behavioral Profit. I'm Debbie

Longo, Executive Behavioral Coach. This is the

show where we look at how behavior drives performance,

decision -making, leadership, and ultimately

profit. Each episode focuses on the real dynamics

happening inside organizations, what people do,

why they do it, and how small behavioral shifts

create measurable business results. If you care

about your alignment, accountability, engagement,

and growth, you're in the right place. Today,

my guest is Scott Trumpholt. Scott is a compensation

strategist with over 30 years of experience helping

organizations turn pay systems from black box

into a clear driver of engagement, trust, and

performance. He works at the intersection of

behavior and compensation where expectations

enter a line or quietly break down. Scott is

the managing director and principal consultant

of TrumpBolt Compensation Design Solutions, advising

organizations across multiple industries and

global regions. His work focuses on pay transparency,

career architecture, and strengthening the partnership

between managers, employees, and human resources.

Scott also has a book, The Fragmented Consultant,

which reflects the evolution of his professional

journey. Scott, welcome to the Behavioral Profit

Show. Thank you, Debbie, for having me on and

giving me an opportunity to meet with your listeners

and your viewers. Yes, you're welcome. OK, so

I have five questions. The first one is compensation

is often treated as a technical HR function,

but you approach it as a behavioral system. From

your perspective, what behaviors are most affected

positively or negatively and how pay structure?

are designed? Sure, it's an excellent question.

And I would first have to say that compensation

is generally viewed as a very technical area.

However, it is in human resources for a reason.

It's not like accounting. It's not like finance.

You're dealing directly with individuals, their

livelihoods, their professions. And historically,

of course, compensation has been something, as

you mentioned, very much in the black box. Very

transparent. I know we'll get into some of the

other questions on transparency. However, I think

it's important to your question to mention the

fact that when you're looking at pay structures,

it's very important not just to have a pay structure.

In other words, one of the big mistakes that

I see happening is that it's just a bunch of

numbers. Yes, we can say to individuals that

you're paid. based on the competitive marketplace,

and you're put into a pay grade that resonates

with that market value. But there really needs

to be connection if we're going to have it more

transparent. The best pay structures that I've

seen, the kind that I develop for my clients

because it's what they ask for, is really one

that is linked to what I call career architecture.

So career development. What is the next step

in the employee's career? How does that fit within

the structure? So it's really linking the idea

of career development and pay structure compensation

together. And when you do that, that opens up

a new opportunity for greater transparency and

also the type of dialogue that managers are gonna

have with their employees. So that's very important.

It can't stand alone. That's the bottom line.

A pay structure can't stand alone. It needs to

feed into something more dynamic. and more linked

to the human being and the individual. And so

that's crucial. That's the biggest piece of all.

Another thing, too, that I got out of what you

were saying is the communication and communication

in a positive way. So it's about the person,

the employee is receiving the HR function, whatever

that might be. Right here we're talking about

pay structures, but there's all different HR

functions. And how does the boss or whoever is

giving out these documents or however they're

given out, how are they presented? And are they

presented positive or negative, or are they presented

in a fair way? And also, how do they think that

the person's gonna take it? going to accept it

because a lot of times it's obvious if everybody

else if there's a new employee and they want

to pay her five dollars an hour and everybody

else gets twelve dollars an hour and they want

her to sign this contract is that fair. and a

lot of times it's just a matter of not only common

sense but i want to be able to do the right thing

as a boss or an executive and i wanna know how

do i do it ethically how do i do it honestly

i don't want to think about if i pay this employee

less money and they produce for me then i'm gonna

make more money because i'm paying them less

money there's a lot of things that. I could think

of, but the way that you presented it and explained

it was very, very good. I really like that. The

next question is you've said that pay transparency

can either build trust or create tension depending

on how it's handled. What are organizations missing

when they treat transparency as a compliance

issue instead of a leadership tool? Well, that's

the way it's been in the past. So the dynamic

is shifting now. The dynamic is changing. by

the fact that a lot of states, not all of the

states, but a lot of the states are instituting

pay transparency laws where you need to post

the pay range. But unfortunately, it's just a

number on a piece of paper. And if someone from

the outside is looking and they are someone that

is interested in possibly joining this company,

the first thing they're going to wonder is it's

going to ask more questions because it's going

to actually require that more questions be asked

that are answered. Because what you're doing

is you're posting a pay range and the person's

going to wonder where they're going to fall within

that pay range. So that's the first issue. Just

looking from the outside. The good news is, is

that because of these pay transparency laws,

while they themselves, the laws, as I've talked

about on other podcasts, those laws themselves

may invite more questions than answers. It is

making companies take a really close look from

an equity pay perspective on how they're paying

different individuals based on the job. And that's

really good. A lot of companies have been doing

this for some time, but now these laws are accelerating

that to make sure that people are paid equitably

to your example of someone getting paid less

money. Well, there has to be a specific justification

that's linked with the job. So that's the first

piece of it. But to the main core of your question,

which is about this feeling of this is compliance,

this is uncomfortable. The dynamic has to shift

because ultimately, what we want pay transparency

to do is to not disengage employees, but actually

engage them. So how do we do that? First of all,

you talk about the human resources, human resources

role really needs to be focused on. developing

the tools that a manager can grab onto, but it's

the manager who's going to have the conversation

with the employee. That's the most important

person in the employee's work life. That's what

has been showed in employee engagement surveys

over and over again. So that's the key relationship

we've got to build on. So let's take an example

that can resonate with your viewers and your

listeners. Individual goes in for their annual

merit pay review based on their performance of

the past year. This may be the only opportunity

right now that they have to talk a little bit

about compensation with their manager. And the

manager might say, and let's say that this individual

is paid well above the market for their job.

Maybe they had been there for several years.

Maybe they're a top performer and they've been

getting regular increases. But suddenly, during

the merit pay review, the employee goes in there.

They understand. They've learned through the

grapevine, or it's even been posted, that we're

going to have a 3 .5 % merit pay budget. And

that employee has a 2 % merit budget given to

them. And they ask their manager, I don't understand.

We've just had a review. Apparently, I'm a really

good performer. And I've been here for five years.

And why am I only getting two percent or two

and a half percent instead of three and a half

percent? Typically what the manager will say

is from a compliance issue, from a compliance

standpoint, they will say to them, well, you

are paid above the market according to what we've

learned from. And then they just leave it at

that. And that's why you're getting two percent

short to the point. Unfortunately, the employee

goes away. feeling less valuable and perhaps

even less linked to the organization because

they're doing everything that's required of them.

Well, what's the solution? The solution is in

the dynamic of the conversation and what is said.

This is not flowery words covering up a problem.

The idea is that the manager says, you are well

paid for your role. And that is an indicator

to us that you should be ready. for the next

step in your career development. Currently you're

an intermediate level cost accountant. Now these

are what is required for becoming a senior cost

accountant. And you're meeting a lot of these

requirements already because you've been here

for five years, you're a top performer. The reason

you're paid above market and it's not that you're

paid too much. The answer is you've mastered

this role. So how do we strengthen you and get

you to the point where you're promoted very soon.

Maybe that individual is ready right now. So

the manager needs to shift that dynamic from

you're getting paid well to you're getting paid

well for the job you're doing right now, but

as higher level jobs pay more in this organization.

And we can see that you've been here for five

years now. You're a top performer. You are ready

for the next step. And then it becomes It takes

the defensiveness and it starts to build a little

bit of trust because now management is looking

how can this individual better serve the business

model, which that manager is responsible for.

They're obviously ready for the next step. And

when they do take that next step, then they will

actually be underpaid in their new market value

for the job and will have additional opportunities

to grow their pay over time. So you're resetting

the clock. and you're giving them something to

strive for and to shoot for. So that's the big

difference. That's how you shift from compliance,

which is not engaging to the employee, and shifting

it to something like I'm talking about, like

career development, that's linked to the market

value of their job so they understand that connection,

that promotes engagement. Yes, that was very

good. That was very interesting to me that also

I understand everything that you said and you

made a lot of good points about how a company

can be transparent and you mentioned legalities

and being positive and talking about that they

can get a promotion right and all these different

things. And these are all very, very important

things. And like we talked about, am I presenting

it in a positive or negative? way. For me, it's

all about the presentation, especially if somebody

is not familiar with what you're going to say.

You're presenting a new thing, different things

like that. They're in a negative view or people

say negative things to them or whatever it is.

But here's the thing. The ultimate thing for

me is that this is like a checker because I have

a law and I have to be transparent and the law

says this and that. And as a business owner,

I want to do these things, obviously, right,

because I want to follow the law. But the ultimate

thing is that I shouldn't have to worry about

following a law because I shouldn't have to worry

about as a business owner whether I need to be

transparent or not, because my business already

runs like this. So I want to follow the law.

Like I said, obviously. But I don't want anybody

to ask questions. I don't want to have an employee

or anybody that works for me in a position where

they're asking questions and they're researching.

What is the law? How is this company being transparent

and how they're not being? How can I approach

them? I want to be completely 100 % honest and

I want to I want my employees to be in a situation

where they are extremely happy every single day

to go to work. And this is not even something

that they think about. So they're treated 100

% fairly. And if they ever have a question, it's

automatically taken care of with no problems

at all. And the response will always be positive,

okay? So I don't want it to come to that. And

I understand what we're talking about here. And

this makes a lot of sense. And this is something

that business owners really should really focus

and think about. But again, if it's all positive

and there's no room for error, right, then there's

no reason to approach any of this besides the

fact that I have to create the documents because

it's the law. So obviously we will do it. Yes,

it's about. Managers, I've talked with so many

managers and CEOs, and they're always looking,

they're not so much focused on the new laws in

the states. I'm not saying they do what they

need to do, but there's not so much focus on

that. They're looking at ways to accelerate employee

engagement. So from a human resources standpoint,

and this is new, this is really from the past

few years, I would have to say, that human resources

needs to look at all the services we provide

and do a better job of linking it to employee

engagement, whatever that means, and then have

it measured and to be able to show the results.

So we're moving into... new territory because,

as you say, we have these laws in some states

that require, but all the laws say is you got

to post a pay range. That's all it says. So it's

not giving the employees much information, but

as you stated, employees have the ability to

go out online and to see how much their job pays.

Now, granted, these are free sources, and I could

get into a whole argument about there are a lot

of different criteria to how you measure. A jobs

value in the marketplace but we're not gonna

focus on that at least in this podcast but just

to say they're going to be inevitably asking

questions. Anyways so we need to take this as

an opportunity. Because things are changing with

AI because of social media and it's against social

media has been around for a while now but AI

is breaking out more and more. And now we have

these laws that are relatively new. Not all the

states have them, but a number of them do, and

it's growing. So this is a new challenge. We're

in new territory, and that's the point that I

have here. So I'm looking at this as an opportunity

to make it a more engaged workforce by who they're

talking to about compensation. And again, they're

not going to be talking about compensation. to

fellow employees, to what they make and things

like that. But there are going to be times during

the year where they are going to talk about compensation,

like their merit pay process. They're going to

want to know, why did I only get a 2 % increase?

And all of these different factors are giving

us an opportunity to rethink the dynamic and

how we talk to employees about compensation,

which is the example I gave with the merit pay

review. The next question is, there's often a

disconnect between human resources, managers,

and employees when compensation conversations

happen. What needs to change behaviorally for

those conversations to become productive instead

of uncomfortable or avoided? Well, that's the

example I just gave you is a perfect example.

And it's shifting that dynamic from compliance,

again, as we were talking about. to more of an

employee engagement perspective. And also the

dynamic of go talk to human resources. The employee

is gonna feel less comfortable talking to human

resources than they are to their own manager.

Now true, the manager needs some education points

and that's really the focus of where human resources

effort should lie in preparing the managers and

giving them the tools not to... disregard their

role but to strengthen their role so their human

resources is viewed more as a strategic partner.

Instead of the employee, because again, a lot

of employees will think human resources, they

might let me go if I say certain things. They

don't feel comfortable. They feel more comfortable

talking to their manager, but their manager may

not be armed with the facts that are necessary

and the approach. that will work. And so the

example I gave you is one that hits right at

your question, which is how do we reduce this

uncomfortable feeling between manager and employee?

I mean, we can say to the employee, don't go

to human resources, but if they go to their managers,

it's got to be irrelevant. It's got to be a worthwhile

conversation. And so this is the shift I'm talking

about in human resources. in terms of providing

tools and becoming a stronger business partner

and not just stating rules and regulations and

telling managers what they need to comply with

because that's a one -sided conversation. I hope

that helps. Yes, that was very good. Thank you.

One of the things I got from that is, like I

said, there's no reason for an employee to be

upset or be uncomfortable or to even think to

go to human resources or have any issue at all.

But obviously that's a process and that doesn't

happen right away. So just as a side note, the

human resources today that have happened have

been in the jobs that I've worked at is they

have therapists, they have drug and alcohol counselors,

they have rehabs, they have a lot of things,

a lot of other resources besides somebody going

to human resources. about an issue or something

that they have, especially that's something that's

behavioral, other than a policy or something.

But to me, those things, they would be uncomfortable

talking to a manager and they would be comfortable

talking to human resources. Because I want to

have a middle person. This is kind of like to

me like. an advocate kind of thing. I want to

have like a middle man, somebody that either

doesn't work for the company or somebody that

doesn't take sides. And that is the ultimate

comfortability for me because human resources

is going to defend the policy of the company.

The manager is going to defend their department,

right? Or their organization. So there's no middle

person. That's the whole thing. And this is another

thing, too. To me, that is very important because

I want the employee to be comfortable with whoever

I'm having the conversation with. What you're

talking about, though, is, like you say, Human

Resources has these specialists for drug and

alcohol counseling, those type of things. Are

you saying there should be a person for compensation?

that is outside of the company? There, yes. There

can be anything. There could be a counselor that

focuses on that, okay? There could be anything

that a company is having an issue with. They

can go to this person who's a middle man who

doesn't have a agenda, a hidden agenda or something.

and they could talk to this person comfortably.

And this is just another thing that I'm bringing

out. It kind of has to do with your question,

but the point is that when I do these things

that it doesn't create any friction. I might

not want to go to the manager. I might not want

to go to the human resources person, you know?

What if I don't want to go to anybody? You know

what I mean? Then I'm just going to wind up probably

getting fired. And that's going to be a real

issue because then I have to go find another

job. So where is the connection? We see where

the disconnect is, but how do we solve this problem?

What's the ultimate goal in making the proper

connection where the person doesn't get to be

just not happy or they don't get their questions

answered and that employees start to get fired

and start to quit because of these reasons, which

I know has happened. That's not a good situation

for the company. Because nobody's going to want

to work there then. Also, I think that as far

as compensation, the other things you talk about

drug and alcohol counseling and some of the other

things, that's issues that are affecting in the

workplace, certainly, but it's not something

that the manager and human resources have direct

control over. That's why they and they don't

have the expertise. But in terms of this, there

has to be a dialogue at some point between the

manager and the employee for it to be effective.

However, To your point about the awkwardness,

one of the questions that I get too is, well,

what about the employee? The employee needs to

take some responsibility as well. And going in

and asking their manager and saying, I want more

money, just like that. That's the kind of thing

that's gonna make all the parties uncomfortable,

just leaving it at that. I think what I always

counsel employees about directly when I get this

question is approach it from a career development

perspective. You work in a company with a lot

of different departments, and while a manager

is not going to know, outline your whole professional

career within that company, you can work with

them to find out what the next immediate step

is in your career. That's the way to approach

a manager, because it takes pay out of the equation

for the moment. But the idea is that from The

next step in their career is ultimately going

to lead to more money. So they're going to achieve

their goals. But I think if the employee can

show that type of focus and approach saying,

here's the skills that I want to focus on to

grow myself in this organization, and then align

that from the manager's perspective, OK, this

is what the business model says we need to use

the next step. That takes money. And when they

do these things, then they become an ideal candidate.

to make more money within the organization. So

you're taking money out of the equation and no

employee should feel uncomfortable if they're

having regular meetings with their manager to

talk about career development. This should not

be awkward and it should not result in things

being taken the wrong way. But if you go in there

and talk directly about that you're dissatisfied

with your pay, you've got to turn it around and

turn it into a positive. So that's the, I don't

think you're going to see a Outside it's an interesting

concept, but I don't think you're going to see

a totally outside objective person. I will say,

however, that a lot of companies use people like

myself to perform that role because one of the

reasons that they like to turn to me is just

not because of my expertise. And I'm not just

talking about myself, but I'm talking about other

compensation consultants is they do provide that

objectivity. So I have clients. that oftentimes

the internal manager will say, I would like to

pay this. And immediately human resources reaches

out to me and asks me to do an analysis of what

that job is worth. If they have someone that

they're hiring for the organization, the person

meets that job. But what should we pay them based

on their background, their skills and experience

that will be engaging to them that makes sense

given their background? Because not everybody

comes in saying, with the same set of skills.

They all meet the basic requirements, but where

do you go from there? So the type of objectivity

that you're talking about, it's true. That employee

won't be talking to me directly, but that's what

many companies do is they reach out to get that

objective opinion from the outside, and then

they factor that into their thinking. It's just

not visible to the employees. The most that the

human resources might say is we have a market

-based approach here we pay based on the value

of the job. But it can be interesting for them

to know that it's beyond just words on a piece

of paper. This is one of the ways we approach

it to be more objective. Because I, on the outside,

I don't work specifically for the business, nor

do I work for the employee. I'm not a recruiter

trying to get them the best rate. I don't get

anything like that out of it. I'm just simply

looking at the market, not the individual, and

then eventually we'll pinpoint how that individual

fits within that scheme. So it kind of is being

done what you're talking about, but not directly.

That was good. Thank you. Next question. You

work with organizations across industries and

regions. Are you seeing patterns in how newer

generations of employees respond to compensation

systems compared to earlier ones, particularly

around engagement and compensations? expectations.

Most definitely. We would not be having these

new laws if there wasn't a push by the latest

generations saying that I feel disengaged at

work. And when they probe, because most companies,

when you think about, you've heard of these top

100 companies to work for, top 50 companies to

work for. One of the reasons that they have this

distinction that I have found is because they

score high on their employee engagement score,

something that can be measured. And businesses

are interested in that because if employees are

engaged, you can draw a link to better business

results. So in terms of the newer generations,

management is picking up on what is being said

in the employee opinion surveys, and it also

translates not only within companies, but also

from the outside. There were never any laws other

than certain laws about if you need to pay overtime

for employees, those kinds of laws. But in terms

of transparency, it was very much a black box.

But in the latest, I see this so much when I'm

working with companies in different industries.

They will ask me, okay, I understand that you're

going to build the pay structure for us. I understand

you're going to build the career architecture

for us so we classify jobs properly and pay people

appropriately. But how does this lead to employee

engagement? And so that gets factors into the

design, like I said earlier, about the pay structure,

linking it to career architecture, career development.

So the role of HR human resources is shifting

again. And it's the newer generations that are

providing that impetus. The first thing that

I thought about is why are they disconnected

to me? That's an obvious answer They spend their

life on social media. I've spent their whole

childhood. Basically. I spent my childhood riding

a bike and Associating and with my friends. I

know me too. Well, there was no internet obviously

there was no cell phone The point is that that's

the way that it is now. And the thing is, unfortunately,

the human resources, because this is what we're

talking about, or really any organization has

to change based on the demands of the behavior

of what the employees, the next generation, the

newer generation is acting. Yeah, exactly. You

made a very good point there, Debbie. about how

we grew up. And it's not that suddenly these

newer generations say, hey, I want to know more

about how my pay is arrived at. It's not that.

It's just that they're being bombarded with informational

resources like we never were. And naturally,

that invites questions. And it's not going anywhere.

And so this idea of keeping compensation in a

black box, it's slowly unraveling a little bit,

you still need to protect the confidentiality

of the company and the decisions they make. But

how we respond to those needs and one of the

things that I'm trying to get across in the podcast,

whatever podcasts I do, it's how we respond.

Those issues are going to be there. It's how

we respond to them that matters. And we're moving

in that direction. I agree. And this is all stuff

that I teach. How do I respond? Because anybody

could say anything, but it's perception. How

do I think? How do I act? And how do I respond

to these things? So there's a lot of good things

here. So the next question is the last question.

You released the book, The Defragmented Consultant

on Amazon. Looking back on your career, what

personal or professional shift most changed how

you approach your work today? Well, the big shift

was really about 13 years ago after working in

corporate for about 18 years. And it was really

just I was working over in Germany at the time.

And it was just a realization to myself that

I was spending too much of my time not doing

even though I was working within my profession.

I was not spending enough time doing the things

in that profession that kept me sharp that I

enjoyed as a professional. And so I wrote this

book, The Defragmented Consultant. which is available

on Amazon in a variety of formats. And the reason

I did it is partially as a outreach to the many

corporate individuals out there who have developed

skills and talents over time. But as they've

grown in the organization, they found that they're

doing more people management, they're doing more

paperwork, they're doing more administrative

activities, and they've gotten away perhaps a

little bit from what they really love to do.

And so I talk in this book about my journey,

but also try and give a lot of personal guidance

in all sorts of areas. Sometimes if you pick

up a book on being an independent consultant,

they'll stress certain things that you need to

do to set yourself up. It's very technical and

a little bit remote. And I tried to make this

more about covering the things that will change

as you become an independent consultant yourself,

because you're really bringing your work life

and your personal life together into one. And

these are the kind of issues. And I wanted to

explain this idea of defragmentation, how you're

working as a power, as a force of one, and you're

going to have a lot of demands on your time and

responsibilities. So how do you take what happened

in the past and go through a process of defragmenting

and pulling out only that which is going to make

you work optimally? So that's some of what the

book is about. And it was really necessitated.

I didn't write this at one point. I wrote it

over a period of 12 years because I wanted to

really see if my initial ideas five or six years

down the road were still correct or not. So it

was basically that fundamental shift in that,

hey, I want to spend the rest of my life doing

things that make me engage. Employee engagement

starts at home. And although I enjoyed my corporate

career and the people I met, I felt 13 years

ago it was important to go out on my own and

spend my whole time devoted, especially now where

I see an opportunity, a chance for human resources

and in my field to impact employee engagement.

That's really what was the trigger for me. Yes,

that was good. Thank you. This is a very interesting

conversation we had and I hope. a listener or

whoever can relate to this will get something

out of it. Scott, this has been a grounded and

necessary conversation. Compensation touches

trust, motivation, and identity at work, and

your perspective makes it clear that when organizations

get the behavior right, the numbers follow. Thank

you for bringing clarity to a topic that's often

avoided or oversimplified. For listeners, if

this conversation resonated, you'll find Scott's

work and resources linked in the show notes,

including his website and LinkedIn profile. If

you found value in today's episode, follow the

behavioral profit on your preferred platform

and share it with a leader or business owner

who needs to rethink how behavior shows up in

their systems. Until next time, stay aware, stay

intentional, and keep building profit through

behavior. Thank you, Scott. Thank you for being

on the show. Thank you, Debbie. Again, thank

you for the opportunity to address your viewers

and listeners.