Fair compensation can be one of the trickiest topics in the workplace, even though wages are the main reason why so many people go to work on a daily basis. Even so, bringing up the subject at the office can lead to a lot of uncomfortable conversations, so it is understandable that small business owners want to avoid these discussions.
However, there are several tips and tricks out there that can make the process much easier. And, with a clear understanding between supervisors and employees, the financial plan won't be strained by a misappropriation of funds. In order to get started, here are a few tips and tricks to talk to employees about compensation.
Bring up the topic early
While the idea of talking about money with staff members may seem worrying, it is one of the most important steps a company can take each year. Without these talks, business banking may fall off track quickly.
According to Inc. magazine, the best thing to do is to discuss compensation early and often. For example, the possibility for bonuses, raises and other perks should be outlined at the beginning of each year, and brought up again periodically after several months. All new employees should also be aware of the options available to them. Ignoring the topic of pay can make it more awkward when the subject is approached, so frequent discussions will remove some of the negative aspects and make each conversation easier.
Don't combine with other evaluations
Compensation may seem like a good topic to merge with other conversations – like those about performance – but doing so can actually backfire on a small business. Instead, these discussions should be kept separate.
Tim Low, vice president of B2B marketing at PayScale, explained that compensation and performance are linked, but they shouldn't be covered in the same meeting, according to the Harvard Business Review. Instead, it is best to tackle each one individually. The evaluation that talks about achievements and growth can come first, followed by the one that covers payment and any potential raises. This way, there is less confusion or room for misunderstanding that could arise from a joint meeting.
Overall, every talk about compensation should be prefaced with the employee's value, HBR noted. Doing so can make it clear that regardless of the discussion about salary, each staff member is a trusted and respected part of the organization.