July and August are naturally popular months to conduct performance reviews – and unless you have managed to shift perceptions in your business, with performance reviews come an expectation of a salary increase.
This can leave businesses in a tricky position. A performance review doesn’t have the same effect when the employee is waiting to find out ‘how much’. Whichever way it goes, it’s likely to overshadow and relegate the content of the conversation.
So, decouple your performance reviews from your salary conversations, and ensure your remuneration review strategy is fair, robust and realistic by following these three key steps.
HR teams should start planning and having conversations as early as possible. This involves talking to managers about any roles that had a notable change and allowing enough time to benchmark to the market. Your planning should also include:
- Setting deadlines and communicating these to managers
- Allowing time in your plan to follow up and ‘vital’ conversations
- Communication strategy
- Ensuring everyone in the business is aware of the process, including your team
- Encouraging managers to be open with employees regarding their remuneration and be transparent with market data if available.
Consider creating a table template that aligns how individuals have performed, with their position on your salary bands, in the context of what the organisation can afford to pay. This will create a strong basis for leaders to make fair, equal and informed salary decisions.
Again, a simple tip; however, you would be startled by the statistics on how many errors are made in the remuneration review process in organisations each year. It is HR’s role to ensure that everything and everyone has been covered. Check, double check, and then check again all documents, letters to be issued, and notifications to payroll.
It is important for all employees to be educated and involved in the remuneration review process, and all employees should also receive a review letter, even if the employee is not receiving an increase.
This shows consistency but also makes sure the employee understands the reasoning behind not receiving an increase and provides a record of the review. HR should follow up with managers to ensure that all letters have been distributed.
The most critical (yet most commonly overlooked) aspect of a successful salary review process is not just managing employees expectations, but more importantly: their engagement in the process.
Once you have an approved remuneration framework for making decisions, this should be transparently communicated throughout the organisation.
If your people are confident in the process they must undertake in order to receive a salary increase, both leaders and HR team can manage their expectation and perceptions regarding fairness in the process. This has a huge impact on employee satisfaction and performance.
Engaging employees in the process by incorporating a self-assessment, and multiple opportunities for open feedback and discussion, and transparency regarding timeframes are simple actions to ensure a higher rate of engagement and successful completion of the remuneration review process.