Performance reviews and compensation are naturally linked – both are important contributors to employee satisfaction and retention. For many companies, compensation adjustments and performance reviews go hand-in-hand, but decoupling these conversations is actually more productive for employee growth.

There are two main reasons why you should consider discussing compensation and performance independent of one another:

Employee Frame of Mind

Whether it’s expecting a pay raise or requesting one, salary discussions put employees in a defensive position and this creates anxiety and stress. When employees are feeling tense and anxious, they’re hardly in a frame of mind to receive performance feedback. Removing compensation from the conversation allows the performance discussion to focus on learning opportunities and career development.

Employee Competitiveness

Holding performance reviews and compensation reviews at the same time can create an unhealthy competitiveness among employees. Rather than employees focusing on their own professional development, performance reviews become about comparing salary increases among peers. This is not productive for company culture or employee morale.

If you want employees to be more receptive to performance feedback and less anxious about compensation discussions, creating more transparency and publishing career progressions can start you in the right direction.

Be Transparent

Whether it’s once per quarter, every six months, or once per year, all employees should know when compensation discussions will occur. It’s important not to let the topic of compensation creep into performance discussions and salary conversations should be scheduled at least a few weeks apart from performance reviews. By keeping the two conversations distinct, employees will be able to focus on feedback and professional development while understanding when they’ll have time to talk to their manager about compensation.

Create Career Progressions

By creating and sharing professional development paths, you can help your employees understand potential role and salary progressions. This sort of framework outlines different career paths, the skills required for each, and the compensation progression. Providing this structure removes any mystery from compensation discussions and can reduce employee anxiety.

When performance reviews are tied to compensation, it can be difficult for both employees and managers to focus on anything except money. Removing compensation from the equation allows everyone to focus on the true purpose for performance reviews – employee development and growth.

Sincron HR Software

Using the Sincron HR platform HR managers can create and customize performance evaluations then implement and track their success. In addition:

• • • HR managers can include a 360-degree evaluation into an individuals employee evaluation process
    • HR managers can assign individual development plans (including training) during the evaluation process to address areas of concern
    • The new HR Essentials platform is now available for just $2/month per employee
    • Training and tech support (call, text, video library, etc.) is included

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