3 steps to better salary conversations with your staff

 Payrise talks can be tricky. Everyone knows money matters, but many people feel awkward discussing it.

In fact, salary and compensation are top drivers for attracting candidates, SEEK’s Laws of Attraction data reveals. Yet, according to recent SEEK research, just 33% of employees feel confident negotiating salary with their manager, and only 41% feel confident asking for a pay rise.

So, as an employer, how can you make pay rise conversations more comfortable and constructive – for both parties? We asked Career Coach and founder of Relaunch Me, Leah Lambart to share three strategies to enable more transparent and productive salary discussions. Here’s her advice.

  1. Explain how salaries are determined

    It’s good practice to fully understand how salaries are determined within your organisation, Lambart says. Outlining the factors such as industry benchmarking, tenure in the role and company performance can help people better understand how their salary is calculated. In many cases, it isn’t just dependent on individual performance.
  2. Equip your team with the right information

    As a manager, it’s important to be open and transparent with your team regarding what’s required of them to secure a pay rise. This could include meeting Key Performance Indicators (KPIs) or adding value to the organisation outside of your direct role.

    Lambart says it’s important for employees to understand what they need to do if they wish to receive a salary increase. This open conversation can include recommendations and actionable steps towards improving performance. Even if your employee doesn’t secure a pay rise, a constructive conversation like this can strengthen the relationship and avoid any misunderstandings.
  3. Explore other ways to make people feel valued

    If it isn’t possible as a manger to offer your direct reports a pay rise, there are still alternative ways to ensure they feel valued. SEEK research reveals that the top three benefits outside of salary nominated by Kiwi employees are: 
  • Increased leave
  • More flexible working arrangements
  • Reduced working hours

    Every employee will have their own priorities, so as a manager you can take the time to understand what’s most important to your team. For example, it could be additional annual leave, salary packaging or providing financial support or leave for professional development.

Lambart says that although salary is hugely important to many employees, feeling valued and appreciated can be equally important to others. Remembering to thank people for their contribution, providing regular feedback and being respectful of people in the workplace are all additional factors that lead to employee engagement and fulfilment in the workplace.

Source: Independent research conducted by Nature of behalf of SEEK, interviewing 4000 Kiwis. Published April 2024.

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