Keys to drain the drama from employee compensation conversations

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

With conversations about employee compensation, follow the process to reduce your stress levels

We’ll talk about a year where things are going well first. We’ll follow with an employee compensation conversation where you have to have a no raise, what do you say to people? And if you’re unfortunate enough to have to give people cuts, what do you say there?

An average raise.
If you want to drain the drama, you want to have a good employee compensation conversation, just make it quick and follow this format, “Congratulations! Your new salary is $58,500. That’s an increase of 1.5%, which puts you – or keeps you, in the fourth quartile among the highest paid of anyone we have in your salary grade. Keep up the great work.”

Young high performers
Now, let’s talk about it again. Let’s go back on the same thing. Let’s say we got a younger person that’s lower in their band, “Congratulations! Your new salary is $39,500. That’s an increase of 5%, which is the maximum we’re allowed to give in a calendar year. It puts you for the first time, by the way, in the second quartile, which means you still got a lot of room here to grow.

The more interesting game for you is advancement. “We’re working on you as a candidate for a higher office so that means you’ve got even more upside with your salary in the future. Keep up the great work.”

Poor performers
Or you could say to somebody, “Bob, I need to tell you, you’re not getting your salary increase this year because of the performance we’ve talked about in the past. I didn’t want to avoid having this conversation because I just want to make sure that you know that we have room for you in our system to receive more money but your performance didn’t merit it.”

So, that would be an employee compensation conversation you have with somebody on that bottom, you know, 10% that you’re telling they have a problem.

Okay, so that’s the normal template when you have money and to have conversations based on that little formula

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