Talking about money with your employees can be uncomfortable. Even when you have good news for an employee, discussing pay can be difficult. An employee’s performance is inextricably linked to their salary and bonus. However, discussing the two together can lead to the employee focusing only on the conversation about pay. Managers should discuss performance in a separate meeting prior to any discussion about pay or bonuses. This ensures that both conversations are heard clearly by the employee. Expectations can then be managed, prior to any conversation about compensation.

Tough conversations

When a salary and bonus conversation gets tough, it is often because an employee is not getting the information they need or the manager feels that they can’t answer certain questions. Managers need to have key information to hand for the meeting. For instance pay scales for the various roles across the business, details regarding potential for pay increases or promotions and any other key information such as company performance and how this has affected the salary and bonus figures this year etc.

If a salary and bonus conversation is not going well, managers should spend more time listening to the employee. They will then be able to understand more fully where they are coming from, what their concerns are etc.

Managers who are curious when having tough pay-related conversations will often gain more insight. For example, they might learn that an employee feels that their job has not been correctly benchmarked against competitors or the wider market.

More often than not, a challenging conversation around salary and bonus will require a follow up meeting. This gives managers an opportunity to come back with more facts and secure a positive outcome with the employee.

We have a great Business Bitesize that can help you have those difficult conversations. If you would like to have a chat about your business give us a call on 01332 292022 or drop us an e-mail.