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Should you talk about compensation at the performance review?
It’s an age-old debate.
Should compensation changes be revealed as part of the performance review discussion? After all, they’re both very connected. So why not talk about both so the context for the compensation piece is most clear?
On the flipside, if compensation is going to be discussed, will everything leading up to it (i.e. the performance part) seem like only noise?
I admit that I’ve felt very strongly both ways over the years… it’s been sort of like an argument with myself over time! But I think I’ve decided, once and for all, how I feel.
Separate them.
The performance conversation is just too important to risk distraction.
In addition,
- Tell employees that they will be separate – so they aren’t disappointed when the topic isn’t addressed.
- Make sure they know the intended outline of the performance review discussion in advance so that they can be prepared.
- Make sure the meeting is a discussion and not a dissertation. Dialog is critical for the meeting to be effective.
For more on the topic of employee communication, see my recent article Touchpoints, The Key to Your Employee Experience.
Steve,
I’m arriving at the same place you are with the performance / compensation discussion. I’m working on a total revamp of our performance review process to be one that is 25% retrospective around goal attainment and behaviors/competencies and 75% around setting/achieving new goals for the coming year and professional development conversations. What is your recommendation for setting up the compensation discussion as a separate conversation – the tie-back, the timing, etc.