Talent Management - January 2009 - (Page 24)

How to Have the Money Conversation Alison Avalos Why are conversations about pay so difﬁcult? Could it be that employees always are expecting more than they receive, or that sometimes managers wish the news was better? In many cases, the approach to these conversations needs to shift to be successful. The goal is not just to get through the conversation and deliver a number, but to deliver a message. The message will vary from company to company, but its focus should always be on the complete value of the total rewards package and how the employee can drive some of those rewards with performance. Talent managers play an important role in communicating pay increases. Sure, they need to inform employees about pay adjustments, but it should be done to intentionally help the employee recognize the value in the entire total rewards package. the compensation philosophy will allow it, share the method of calculation or determination for the reward. Be sure to avoid technical terms, as the employee may not understand what you’re saying. Make sure the communication style is relevant and appropriate for the employee. They have a right to understand pay actions. • Be familiar. Talent managers should know their organizations’ total rewards packages inside and out. That includes all of the value those packages offer employees in cash and noncash compensation, especially when ON THE WEB pay increases are lower than For a “Total Rewards Inventory” normal or nonchecklist, visit www.worldatwork.org. existent. • Be conﬁdent. Stand ﬁrmly behind pay-movement decisions, but don’t be arrogant. If an employee disagrees with the award and sees the manager doesn’t fully support it, the employee may be demotivated. • Focus on value. If the pay increase is not performance-based, emphasize the employment value proposition rather than deﬁning the pay increase as an entitlement. • Be sensitive. But do not apologize for personal situations that may contribute to the employee’s pay-action expectations. • Expect questions. The economic situation plays a signiﬁcant role in compensation conversations. When employees hear about a mild 3 percent pay raise for example, they immediately think about health care-cost increases, inﬂation and/or fuel prices and realize, in many cases, they will be taking home less money. As these questions arise, it’s important for talent managers to remember the purpose of pay increases is to be competitive in the labor market and reward performance, not to keep up with inﬂation. Alison Avalos, CCP, CBP, GRP, leads the surveys and research team at WorldatWork. She is a former HR practitioner. She can be reached at editor@talentmgt.com. If employees truly value what they get in return for their time, effort and talent, they will be motivated not just to show up, but to perform well. They also will be less likely to jump ship if this happens to be a year when pay increases are minimal or nonexistent for the company. Why? The value in the work relationship for the employees translates to loyalty, which is a strong retention strategy, especially in tough economic times. Here are a few simple techniques managers can employ to make pay-related communications run smoother. • Be prepared. Understand the compensation philosophy, including whether the company operates with a closed or open compensation system. Is it willing to share pay grades and details about how pay decisions are made? If not, the manager’s communication angle may need to shift. Is the goal to be competitive with the labor market in terms of pay, or is the total rewards package so robust the organization can pay below market and make up for it with other rewards? These approaches may be the justiﬁcation for the size of a raise, and the manager must be armed with this knowledge. • Be strategic. But be strategic in terms of thought process. Be natural in word choice. If 24 talent management magazine www.talentmgt.com http://www.worldatwork.org http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - January 2009

Talent Management - January 2009 Editor’s Letter Contents Human Performance Leading Edge Learning Connections Integrate Web 2.0 Into the On-Boarding Experience Show ’Em the Money: Compensation Trends 2009 Transition at the Top How Hollywood Manages Talent and What You Can Learn Get the Most Bang With Limited Training Bucks Life After Layoffs Attract Specific Talent Groups Performance Management: Its Time Is Now Helping the Helpers Advertisers’ Index Editorial Resources Full Potential

Talent Management - January 2009

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