Keep your conversations about salary compensation short and effective

by on June 22, 2009 · 0 Comment POSTED IN: HR Info Center

Structure your salary compensation reviews around these five elements

If ever a discussion ought to be short and positive, it’s the one you or your managers have with employees about their annual raises – or lack of same. Almost never do you want it to turn into a negotiation. So how do you say what needs to be said, allow for an appropriate response, and get on to other business within five to 10 minutes? Here are five elements that most effective conversations about annual salary compensation revisions will contain:

  1. The salary amount. Unless there’s no change, start with: “Congratulations, your new salary is $X.” If the person isn’t getting any raise, make sure he or she understands why. Examples could be budget, downturn in the economy, or poor performance. (Ideally, performance and salary compensation are kept separate.)
  2. The percentage increase. Follow up by stating the size of the raise the person is getting. It’s important not to invert steps 1 and 2, by the way. What you think of a person is better measured by the total amount you’re paying her than by annual raises, which may fluctuate for reasons having nothing to do with performance.
  3. A relevant comparison. You might tell an experienced employee that he or she is in the top 15% of all people who do the kind of work he does. For a newer employee, you might focus on the fact that the raise puts him in the second quartile – 25% to 50% of all comparable people – and emphasize the room he has to grow.
  4. A quick assessment. For the veteran, this could be something like: “We’ve done this because of your outstanding contribution and hard work.” For the relative newbie, it might be: “If we work toward promoting you and you earn the promotion, you’ve got even more upside.”
  5. An encouraging conclusion. “Keep up the great work,” or just “atta boy” and a pat on the back bring the salary compensation discussion to a positive end.

Source: “Salary Talk: How to Discuss Pay So Employees Feel They’re Treated Fairly,” a Rapid Learning Institute webinar by Gary Markle, 2/15/07.

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