Hold an Efficient Conversation about Salary Compensation

by on June 11, 2009 · 0 Comment POSTED IN: HR Info Center

Salary Compensation Conversations for All Employees

Now, let’s assume you’ve got a salary compensation system and its time to implement it. It’s important to know exactly what you want to say to all these people.

Start with a congratulations. Unless you’re zeroing somebody out, say something nice to the person. Tell them this year’s salary compensation and the percentage increase from the previous year. Suppose you’re talking to the older employee who’s in that upper range where you can’t increase their salary compensation much more:

“Congratulations. Your salary compensation for the year is $59,500. That’s an increase of 1.5% which keeps you in the 4th quartile among the highest paid of anyone that we benchmark ourselves against in our industry. We pay you at that level because of your outstanding effort and your wonderful contribution. Keep up the good work.”

How is that bad? How is that going to disillusion somebody? How can they argue with that? They may not stand up and go, “woo hoo, 1.5%” but what you’re telling them when you communicate this way is you value you everything you’re paying them, not just this year’s adjustment.

On the other hand, consider the younger employee with lots of room for growth:

“Congratulations. Your salary compensation is $36,200. That is an increase of 5% which is the maximum adjustment we can have in a given calendar year. And it put you for the first time in the second quartile. Still below midpoint. As you know we’re talking about you for advancement opportunities. If that happens, you’ll have even additional room for growth beyond what you already have in the level that you’re at today. We appreciate everything you’ve done for us. Keep up the good work.”

Now, if you have somebody where you’re just looking at him and you’re telling him, “I am not satisfied with your job performance.” Then certainly you ought to talk to them too. And here’s the notion on what you do there:

“John, I need to tell you that this year, there will be no increased salary compensation for you. I suspect you knew that was coming. I just want to sit down and make sure that you know, this is the time of year we communicate these things and that is the case for you. Your salary is frozen because – not because you’ve run to the end of what we can pay you at your level but because we’re not happy with the level of contribution that you’ve been able to put forward. I know you’re working on it and I want you to continue to continue to work on it. And I hope next year at this time, we can have a more positive conversation.”

You ought to talk to all of your employees and make it a point, even with those that are not getting any adjustment, to let them know and to underscore the reason behind that lack of adjustment to salary compensation.

Edited Remarks from “How to Drain the Drama from Salary Reviews: A Conversation Roadmap” by Gary Markle

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