Five things to absolutely avoid with employee compensation

by on June 16, 2009 · 0 Comment POSTED IN: HR Info Center

What not to do with employee compensation

  1. Don’t link performance directly to base employee compensation.
  2. Don’t try to tie a performance evaluation from last year directly to this year’s salary administration. If you don’t regret it today with everybody, you’ll regret it eventually with everybody because each individual eventually gets to a point where that doesn’t work anymore. You can not make it so, I don’t care how hard you want it to be that way. It doesn’t work. What you’re going to find is traditional evaluations are going to, take you down a path of no return.

  3. Drop the connection between this year’s employee compensation over last year’s performance rating.
  4. Get rid of the rating entirely. And you know, talk to them about pay and reference to the market and performance as the third factor.

  5. Don’t discuss individual employee compensation to peers.
  6. Don’t tell one person what somebody else gets. Don’t engage in a conversation where they come in and speculate or they supply data on what their colleagues are getting. And don’t let them put up on the wall or in the internet everybody’s salary. That’s just not cool. It’s not kosher. There are people who can reverse engineer your system. But I wouldn’t engage in those kind of conversations about compensation and salary

  7. Don’t promise what you can’t deliver with employee compensation.
  8. Don’t tell people you’re going to do things for him next year and you’re going to do this kind of deal. I had a manager get in big trouble the other day. I was talking to a CEO and we were doing a coaching session, preparing to talk to them. One of the things he was unnerved by was that his vice president had promised this really elaborate very high percentage increase to a direct report without getting permission. He came to the boss and tried to pass it by him. And the boss says, “No, we’re – not in this environment, I can’t do that.” The vice president had to ultimately tell him that he’d already committed which lost him major, major brownie points. Believe me. Don’t commit to something in the future, unless you know you can deliver on that. And don’t lie to employees when they’re young.

  9. Don’t tell them it’s their last year’s performance that got them this year’s pay when they’re young
  10. That little white lie will eventually come home to roost.
    Edited remarks from the Rapid Learning Institute webinar “How to Drain the Drama from Salary Reviews: A Conversation Roadmap” by Gary Markle

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