The Compensation Discussion Scenarios in One-to-One Communication

"If robbers ever broke into my house to search for money, I would search with them too". 

Quote from here.

Well, you would not want your compensation to reflect the quote given above, especially in the event of an economic downturn.

Communicating effectively is paramount when discussing changes to your compensation or one of your employees’ compensation. As uncomfortable as they may seem, compensation discussions are inevitable. Hence, it is better to be prepared for such eventualities.

In the next video, let’s hear from David as he explains how to effectively communicate during compensation discussions. 

As a manager or decision-maker, you can keep the following points in mind.

1. Decide a number that you would want to offer the candidate.
2. Be prepared with a rationale for the decision.
3. Give the candidate some time to overcome the initial surprise.
4. Enable the employee to accept the number by aligning their goal with the common goal of the organisation or team.

While it is a good practice to start with a number in order to have a fruitful discussion with the employee, it is also necessary to ensure that you support the employee in the right way to accept the compensation. In the next video, David will shed light on some of the good practices that one should follow to communicate effectively during compensation discussions.

You can consider the following dos and don’ts for leading a compensation discussion as a manager.

Do’s:

1. Make it clear that you value the employee. This will create a better connection between you and them and will likely be taken in a constructive manner.
2. Explain your decision. Providing an explanation with strong reasons adds strength to decisions.
3. Rehearse what you need to say. Practice makes your communication perfect.
4. Anticipate the employee’s reaction. This will allow you to be well-prepared for the discussion.

Don’ts: 

1. Do not wait until the end of the year or until the performance review to talk about compensation with the employee. 
2. Do not be surprised when an employee gets upset.

Being empathetic and compassionate will allow you to understand your as well as the other member’s concerns and needs. This understanding is crucial in working out a common goal or decision.