Employees have certain expectations when it comes to salary. While a company may not be able to meet all expectations, creating a culture that addresses issues related to pay can positively impact employee engagement and retention, as well as recruiting and hiring.
Job site Glassdoor shares the following tips to help employers manage salary expectations.
- Determine your approach. It’s up to you to develop an approach for salary transparency that reflects your organization’s values as a business, your commitment to your employees, and your desirability to candidates. How you handle offers, promotions, yearly increases, bonuses, equity, and benefits affects perceptions about your company and contributes to employee satisfaction.
- Don’t shy away from talking about compensation. Reinforcing that you embrace transparency and encouraging direct conversations about pay and overall compensation can help drive differentiation for your employer brand, and attract and retain top talent.
- Be consistent. A deliberate, structured approach to compensation reflects your company’s place in the employment market. Defining 1) a company philosophy of compensation and 2) your approach to individual compensation will allow you to communicate a consistent message to candidates and employees. This consistency helps to eliminate confusion and can minimize emotional reactions to pay decisions.
- Set your budget. Some companies choose to set an annual company-wide budget for promotions and/or raises. Others give managers a budget to distribute to their staff for all increases including promotions, market adjustments, and merit adjustments. Consider how you will include employee raises and bonuses in your annual company budget.
- Frame discussion to focus on total rewards package. Total compensation is more than just base salary. To help manage discussions with employees who have questions about pay, frame discussions in context with your company’s total rewards and compensation strategy. Be sure to reinforce this early, regularly, and openly. If your company pays below the median on standard pay scales, a strong benefits package can help you attract talent.
- Treat employees as individuals. Employees have different needs and values. Determine what is most important to each individual. Is it flexibility? Time off? Career progression? Feedback? Base salary? Use salary conversations and one-to-ones as a time to engage in a more meaningful discussion with your employee in order to drive deeper engagement and a more healthy and meaningful relationship.
- Benchmark pay regularly. Take the opportunity to review each individual’s current compensation in their department and among people with similar work experience to make sure it’s appropriate in today’s market. Do this at least once per year.
- Clearly explain the pay and promotions process. If someone is fairly new to your company, share details on how the performance review and pay raise process works. If an employee has been with the company through performance reviews, leverage this as an opportunity to create a development plan with your employee to ensure they understand the path forward and upward.
- Show that you embrace transparency. With 90 percent of job seekers saying that it’s important to work for a company that embraces transparency, according to a Glassdoor survey, it’s essential to include employee engagement in your efforts to become a more transparent organization.
- Take advantage of employer resources. Information at Glassdoor and other sites can help a company stay up to date on compensation trends.