No doubt about it. Money is the single most emotional topic in any workplace.
But often, it isn’t the size of a raise that causes anger, tears and resentment on the part of the employee. Trouble starts when managers fail to educate employees about how salaries work and how the decisions about compensation are made.
So to avoid Big Drama at that next annual review, you might want to try the M.U.L.A. model. (moolah – as in money).
First, explain that the employee’s salary is based on M – the going Market Rate for the position in your region. By providing this information, you show the employee that his/her salary is competitive, that your process is transparent and that you care about being fair.
Next comes U – where you Unlink the employee’s pay from their self-worth, making it clear that their base pay is influenced by forces that have nothing to do with the quality of their work; things like overall company performance, industry market forces and the state of the general economy.
Then, employ L. This is where you Level with the employee – telling him or her the unvarnished truth about how their individual performance affected the raise they got. For example: “You got a big raise because you took on more responsibility,” or, “You got a lower raise because product defects in your department have soared.” L indicates that a raise is related to the employee’s individual effort and engagement, and helps head off feelings of victimization or entitlement.
Finally, there’s A – where you Anticipate the next discussion; setting the stage for next year’s salary review by giving the employee realistic expectations going forward. You may, for example, tell an employee that if their performance continues to go well, they could be in line for a promotion by the next review.
Using M.U.L.A. lets facts fill the space that might otherwise be occupied by emotions and the drama that often accompanies them. It also allows the manager to control the dialogue about pay and puts the employee on notice that the best way to get more money for themselves is to do more for the company.
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