I remember the first time a manager told me not to expect much in the way of a merit increase. Do you? I’m not sure at what point I picked my jaw up off the floor, but his level of discomfort matched my level of shock. Not ‘much’ of an increase? Seriously? What have I been working so hard for?! This situation (which significantly affected my engagement) could have been easily avoided.
Managers, listen up, I’m about to tell you how…
Explain your organization’s compensation approach.
Do you have the information you need to have these discussions with your employees? Talk to your employees about the company’s compensation methodology and why they have chosen it. What factors contribute to your company’s EVP? From an employee’s perspective, one of the most frustrating parts of receiving unfavourable information is when the messenger can’t explain the reasoning. Make sure you’re informed.
Define how pay is linked to individual performance.
Do your employees understand your base pay and bonus structure? Help them understand how they can influence these awards. For instance, identify which goals are directly linked to their individual bonus. This should be crystal clear when you agree on their objectives at the start of the performance process. The clearer the link between performance (individual and corporate) and pay, the lesser the chance of a surprise during regular compensation discussions.
Remind your employees what’s included in their Total Rewards.
Cash is just one piece of your employee’s Total Rewards package. Remind them of their crucial other benefits they receive that they may have forgotten about. You’ll be surprised how much impact those non-cash awards can have (such as gym memberships, childcare vouchers, tuition reimbursement, etc.) Have you spoken to your employees about the professional development or mentoring opportunities available to them? These programs not only provide a growth opportunity for your employees, but direct benefits to the organisation and those working around them as they apply what they learn to their day-to-day work.
Put yourself in the driver’s seat
These conversations don’t have to be painful if you have the right information at your disposal. It’s time to move beyond the default models, expectations and practices of the past. Look at developing a roadmap for attracting, retaining and engaging your high-value talent (see the Willis Towers Watson 2016 Global Talent Management & Rewards and Global Workforce Studies for an example). Ensuring clear communication at the start of the process, and throughout the goal setting journey, will reduce the chances of surprise reactions in the future.
If you haven’t done it yet, reach out to your employees to understand what motivates them. Don’t wait any longer, now is the time! The more frequently you engage with your employees, the more you’ll understand how to best retain your top talent. You may find you’re able to engage and reward your employees in ways that don’t require spending any money.