Salary reviews – without the pain

Do your line managers dread doing salary reviews with their employees? Do they go in half-expecting a dramatic outburst from a person who thinks he’s been stiffed? If so, you may want to introduce them to the MULA method for salary reviews. (The acronym is pronounced like moolah, as in money.)

Here’s how MULA works:

Market rates – align with them
You may rely on formal salary surveys of your industry and/or geographical area. Or you may conduct an informal survey among your peers at non-competing organizations. Either way, it helps managers be seen as fair if they can tell employees that the proposed raise is in line with what others in their situation are getting.

Unlink pay and self-worth
Sometimes, an employee does a great job but the company’s results don’t justify the kind of raise she – and the manager – think she deserves. If this is the case, managers should say that to the employee, to minimize the damage to her sense of her own value.

Level with employees
It’s easy to explain why an employee got a generous raise. But when the raise is small or absent, managers may be tempted to gild the lily. They shouldn’t. A manager could say something like: “Alice, I know a 1% raise doesn’t seem like much. But the fact is, you didn’t get promoted this past year, and that makes it hard to give you any more.”

Anticipate next year’s discussion
Managers should lay down markers about what the employee can expect the next time they have this conversation. The manager in the example above could go on to say: “If you do get that promotion in the next 12 months, you can expect closer to 7 or 8% a year from now.”