Talking Points to Ease End-of-Year Compensation Discussions
That time of year is almost here – performance reviews and compensation discussions. I know that most managers (and employees) dread these hour long rites of passage. You may be asking; do I have up-to-date data to benchmark my compensation levels? Does my budget accommodate increased salary ranges for employees I want to promote? Are my base salaries competitive? Is my incentive package motivating my employees to exceed my expectations? Here is a short checklist to build the framework for your compensations discussions:
- Benchmarks are based on actual job functions – not on job titles
- There is no one-size-fits-all solution – compensation benchmarking depends on the philosophy, culture, and client experience you are trying to build strategically
Compensation Pay Ranges:
- 25% – new hires and novice employees
- 50% – seasoned and experienced incumbents
- 75%+ – highly experienced incumbents you deem as experts
- Base salary is fair compensation for an employee’s role and responsibility based on market value for the position
- Revisit base salaries ongoing and adjust as needed with market changes and cost-of-living adjustments
- Incentive compensation is paid for meeting or exceeding stretch goals
- Show employees how the incentive is a financial partnership between them and your firm
- Everyone should participate
Remember the end of the year is the perfect time to revisit your firm’s human capital strategy and to make sure that you have programs that develop and retain your talent.
Lastly, make your performance review and compensation discussions lively and engaging. No one really likes talking money, but it is the reason we all get up in the morning and go to work isn’t it?