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Dear Workforce How Can Managers Deal With Appraisals With No Merit Pay

They should be candid about the company’s performance and try to focus on issues besides compensation that are of importance to employees.
June 13, 2002
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Related Topics: Performance Appraisals, Dear Workforce
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In recent talent-management research, we have found for most exempt employeesthat "employee learning" and "the ability to communicate well withsupervisors," outrank compensation as reasons why employees stay with theircompanies. Of course, the validity of this research will be tested in a downmarket. All indications show that not having these performance and developmentdiscussions will virtually ensure that employees will leave.

That being said, the conversations will be difficult. Be up front about thecompany’s performance and the HR issues that drove the decision concerningcompensation increases: businesses can’t raise their fixed costs (i.e., salaryincreases) unless company performance improves. In terms of the actualperformance discussion, the old tried and true factors still are appropriate: beprepared for the meeting, give specific, balanced behavioral feedback (includepositive and improvement examples) and focus on learning and developmentopportunities. Remember, this meeting could sway an employee to stay with yourcompany or go elsewhere.

SOURCE: Todd McGovern, associate principal, compensation practice, BuckConsultants, Chicago, Illinois, Jan. 25, 2002.

LEARN MORE: "Master the Compensation Maze"

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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