It’s almost the most wonderful time of the year: increase time!
That’s right! After the winter holidays have passed, many organizations — organizations that operate on the calendar year — have restocked coffers and fresh budget. And that means managers and HR teams are ready to spend that money on salary increases.
January is increase cycle time, and though some organizations start and end their fiscal year in June, the New Year is when most employees will expect some sort of annual salary increase.
But if you’ve been waiting to talk compensation with your employees until this specific time of year, even if you’re planning a healthy increase, you might have lost their confidence. The trick is not to wait for an increase cycle, but to be transparent about salary, pay ranges by profession, and communicate compensation plans continuously throughout the year.
PayScale’s research has shown that keeping your employees informed through “open and honest” discussions around pay is “more important than typical measures of employee engagement, such as career advancement opportunities, employer appreciation and future enthusiasm for the company.” In other words, “if you don’t communicate to your employees that they are being paid fairly compared to their talent market, they may leave.”
The simple act of regularly talking about compensation outside of just increase cycle time — even if it has little to do with a promotion or pay increase — is well-received by employees. So much so, in fact, that communicating compensation can mitigate the effects of low pay; PayScale’s data show that even when an organization pays under market rate, but openly and honestly communicates the reasons behind that lower compensation, 82 percent of employees report job satisfaction.
Want to learn more about how to have fair, modern and transparent conversations around pay? Check out our budgeting how-to whitepaper.
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When do you talk about compensation with your direct reports? We want to hear from you. Share your thoughts in the comments.
Image: Morgan Sessions/Unsplash
