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. As such, 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, and expectations can be managed, prior to any conversation about compensation.

 

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 such as 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 in order to understand where they are coming from, what their concerns are etc.

 

There is often a lot to be gained by managers who are curious when it comes to having tough pay-related conversations. For example, they might learn that an employee feels that their job has not been correctly benchmarked against competitors or the wider market.

 

Often, a challenging conversation around salary and bonus will require a follow up meeting, giving managers an opportunity to come back with more facts and secure a positive outcome with the employee.