HR professionals preparing merit compensation increases can’t forget to train the managers who will dole out those increases, according to one pay expert.
HR and compensation teams often consider many factors in calculating raises, such as market conditions, individual eligibility, promotions and more, according to Sean Luitjens, vice president for product strategy at Salary.com. But by the time the decisions make it down to managers, the message is “Hey, you get 3%,” he said in a Feb. 26 webinar.
Managers often fear saying the wrong thing, but training and documentation can help them answer employee questions that may arise, he continued.
Training could take the shape of office hours during which managers can ask questions, or it could be practice runs through these conversations.
And for documentation, a one-page summary of the employer’s compensation philosophy with a few talking points explaining the rationale behind it can be helpful, Luitjens said.
Employers may not be able to anticipate all employee questions, but they can train managers on FAQs; Luitjens offered three examples and described considerations for HR teams aiming to help managers answer these questions.
Why was my raise only 3%?
If an employer communicates that merit raises will be in the 3% range, “almost nobody thinks they’re getting 3%,” Luitjens said. “Everyone thinks they’re better than everybody else.”
This is where the one-page employer philosophy can be helpful. This can address how the employer’s budget influences increases and show how an employee’s increase wasn’t decided in a vacuum, especially if an employer uses a pay-for-performance merit range.
If an employer uses a merit matrix, this document can explain to managers what that is and how it works. “The more you can provide them with data, the better,” he said.
It’s crucial, however, that the messaging is aligned with leadership’s message, Luitjens said: “If the leadership message is ‘we pay for performance,’ and all of a sudden you have to send out a note that says ‘we only pay by position and range,’ then that’s a gap that’s going to be a problem for the manager to have to communicate during the merit process.”
How was this decided?
Beyond individual performance, managers also may need to discuss the broader trends that shaped an employer’s compensation budget.
Many, however, struggle to explain market position, Luitjens said, and they may avoid conversations about how the company is dealing with equity. But having data-based conversations can head off speculation, he said.
External data, explained confidently, can be great, according to Luitjens. And when it’s coupled with internal data on positions, ranges and averages, individuals see “that there’s actually data backing up the decision, and it doesn’t become something they think is very personal.”
What do I need to do next year?
Managers also should be prepared to answer questions about what an individual can do to receive a higher increase next year, Luitjens said.
Employees want to be in control of their future, so managers should be ready to pivot into a development plan — both for underperformers and extraordinary performers, he said.
Forward-looking dialogue, especially when speaking with individuals receiving some of the smallest increases, can reduce defensiveness, he continued.
If HR provides managers with clear development-planning prompts, he said, it helps everyone involved focus on the positive and the future.