Managing Employees Salary Expectations
It’s an unusual employee that is happy with the salary they are earning. Most employees look for more, just as companies look for more revenue. How do you handle the employee’s expectations around salary and still manage the finances of the company?
Expectations are based on communication. If employees expect a raise once a year, and if this year cash is tighter than usual, communicate before the normal review period so employees know what to expect.
Employees talk to each other about salaries, even if you have a confidentiality policy, so you need to be prepared for any disparity in salary for individuals doing similar roles.
If you are a company that has annual company-wide reviews and distribution of increases, as a manager you will have a certain percentage to play with for each of your members. It’s challenging to divide the bucket of available cash among your team members. Performance is always the driver in distribution, though keep in mind that your high performers don’t usually work alone as they usually require the support of their team members.
I found this post on SmartCompany.com.au “Employees asking for more money? How to manage expectations”:
But while it’s an exciting time for high-performing workers, the pay review period can often be a complicated and delicate process for managers and employers. So what is the best way to handle a pay rise request?
Salary is one way to compensate an employee. If you want to increase revenue, then offer incentives as a way to recognize performance. If you decide to have an incentive program, be clear on what deliverables each employee will have to complete and how it impacts the overall growth of the business.
Compensation is important in keeping talent, though it’s not the only aspect for keeping an employee. Statistics show that the relationship between the manager and the employee weights a lot in the employee’s decision to stay or leave a company. Another important ingredient is whether the employee finds the work interesting and challenging. If so, they are not likely to move so quickly.
Be well,
Pat
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