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Leading Through Transparency: Pay Raise Conversations Unveiled

Finding Balance in the Tough Conversations

Imagine you're sitting in a meeting room, and across the table is a team member whose eyes are filled with expectation. They're hoping for a higher pay raise than you’re about to offer. Or perhaps, during a casual chat over coffee, someone hints they deserve more than the standard annual increase. Sound familiar? You're not alone. Handling pay raise discussions is a delicate art, one that many leaders in the tech world are continually refining.

Understanding Expectations vs. Reality

Here's a common scenario: It's performance review time, and you've just offered a team member the usual 3% raise, in line with your company's norms. However, they were expecting the maximum 5% increase. Before jumping to conclusions, it's important to understand their perspective. Is it a feeling of being undervalued, or perhaps a misalignment in understanding what "exceeding expectations" really means?

Several years back, I encountered a team member upset about not receiving the maximum pay raise. His view was simple: "I did everything asked of me; how could I not deserve more?" This moment of clarity highlighted a crucial lesson — I had not repeatedly clarified that meeting expectations is not the same as exceeding them. The difference is about going above and beyond, whether through additional projects, writing knowledge articles, or leading training sessions.

The Power of Communication

The 'Rule of Seven' tells us people need to hear a message at least seven times before it truly sinks in. This principle is incredibly relevant when discussing something as sensitive as compensation. Realizing my team member's misunderstanding of how raises were determined led to a broader communication strategy within my team. By adopting the 'seven touches' method, we ensured our message was not just heard but understood through team meetings, emails, performance reviews, and casual conversations.

Empowering Your Team

Empowerment and clear opportunities for growth are key. It's essential to make it known that exceeding expectations involves taking on additional responsibilities and initiatives. Recognition of such efforts should be documented and acknowledged in performance reviews. A culture of ongoing feedback, rather than annual reviews, fosters a more dynamic and responsive environment. Regular one-on-ones, skip-level meetings, and spot recognitions are tools I've found invaluable in maintaining this culture.

Making Conversations Easier

One effective strategy is implementing a Quarterly Review System. This system assesses past performance, sets clear goals for the upcoming quarter, and defines what meeting vs. exceeding expectations looks like. Regular one-on-ones complement this system, ensuring an open and transparent approach to performance and compensation discussions.

The Path Forward

In navigating the complexities of pay raise discussions within your tech teams, remember: understanding, communication, empowerment, and ongoing feedback are the four points of your compass. Implementing a structured review system ties all these elements together, ensuring a clear path forward.

If you would like to dive deeper into this topic, check out our video

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