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Talking Money: The Compensation Talk

 

 

Beyond all of the necessary and worthy talk about subjects such as employee engagement, career coaching and professional development, one of the key discussions that managers will have to have with their reports is on simple compensation. Certainly for new managers this can amongst the most difficult subjects to talk about with staff. It might be a straightforward figure, but naturally it means a great deal to both the organisation and the individual.

 

Be prepared

 

Most organisations have a time during the year when everyone knows salaries are reviewed. Employees will, therefore, come to these meetings expecting to talk about cash, and it is important, as a manager, that you aren’t unprepared for this moment. You should have an understanding of the wider market and how your organisation’s compensation compares with others. You need to also know your team and the individuals within it – being aware of who is exceeding expectations and who isn’t pulling their weight. You must also be fully up-to-speed with your organisation’s strategy and budget for the next year – is there money available or are raises simply not possible?

 

Be confident, but be realistic

 

For the employee, the compensation talk is amongst the most important parts of any appraisal process. It is crucial, therefore, that you appear actively involved in the process and are willing to own the final decisions you give on pay. You should be positive in praising employees who deserve it, and be confident when explaining your decision on pay rises. At the same time, you should be careful to avoid raising expectations by promising things that aren’t necessarily attainable. A passing comment made about “more budget available next year” may well be understood as a hard and fast promise of a bigger increment within a year.

 

Make it an ongoing process

 

If a compensation talk raises questions and queries, be sure that you follow up on them with the employee in question. Also be sure that performance-related meetings throughout the year are designed to demonstrate how an employee can put themselves in the best position when it comes to talking about compensation. While their every action should not be money-focused, it is helpful for them to see how their performance can contribute to compensation considerations throughout each working day.
 
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