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When you want to
retain your best staff in a competitive job market, giving
them a salary increase is likely to be the first thing that
comes to mind. But before you decide on giving them that
raise, first consider whether they really deserve it. Here
are some questions you should ask yourself:
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Can they
document their long-term goal accomplishments?
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Is the
proposed raise on par with market salary levels for your
industry and their job descriptions?
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How
valuable are they to your business?
High performers should be rewarded, but why give a pay
increase to poor performers? If you do find that some
staff members' performances don't merit a raise, you
need to deliver the news in the best possible way to
avoid conflict.
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What this means is that you
should:
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Ensure the staff
member understands that you appreciate their effort, and that you
will reward them for excellent work.
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Establish a
three-to-six month plan that ties a raise to meeting specific goals
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Set a time to review
their performance again.
You might consider using
increasingly popular bonus systems to reward performance rather than
increasing staff members' base salaries each year.
Salary reviews need to be handled professionally and with sensitivity,
otherwise they can lead to disputes, dissatisfaction and low morale
among your staff. A successful evaluation is an effective tool for
producing positive benefits for both your organization and for your
staff; a poorly conducted evaluation process can cause havoc. A key
aspect of an effective salary review are performance reviews, which
should be conducted regularly throughout the year for all staff members,
and not just done at the time of the annual salary review. Performance
reviews may occur on a weekly, monthly or quarterly basis, depending on
the size and nature of your business and the complexity of the staff
member's job.
Documenting Performance
Reviews
Performance reviews should be
well documented and understood by yourself and all your staff. Their
purpose is to maintain ongoing communication and feedback, and to ensure
that each party's expectations are being met. They can be informal or
formal one-on-one meetings to assess whether actual performance meets
pre-determined and agreed performance levels. Any performance issues
should be dealt with quickly and effectively, as they can have a
negative impact on your staff's morale and productivity, your customer
relationships and your business' bottom line. So, don't leave it until
the annual salary review period when the damage may have already been
done.
For performance evaluations, as a minimum you should have a written
policy and procedures manual that outlines:
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who will conduct
the review
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what performance
criteria will be evaluated
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when the
performance review will take place
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how it is to be
conducted, and
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the purpose of the
performance review.
Give a formal review document
to each staff member to fill out before the review process begins. The
document asks your staff members to:
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Rate their performance
against a set of criteria that has been discussed and agreed to
between yourself and your staff members at the beginning of the
review period
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Highlight their
achievements, which are to be supported by outcomes and performance
indicators such as sales figures, cost savings and the overall
contribution to the business' development
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Signal areas where
they need to improve
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Indicate factors that
have prevented or hindered their performance
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State what they enjoy
about their job
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Inform you about the
specific areas in which they wish to acquire and develop skills.
Allow sufficient time for your
staff members to complete the self-assessment documents, and for you to
read their evaluations and comments, before you set up a time for a
meeting. Review what pay increases you want to give to your staff
members. Make sure you can conduct the review in private without any
interruptions. Reviews need to be undertaken in an environment of trust,
honesty, integrity and respect. You'll need to be fully aware of the
company's policy in relation to minimum acceptable workplace behaviour
such as equal opportunity, privacy requirements, discrimination,
harassment, workplace health and safety, security, intellectual
property, and confidentiality.
You should have on hand the staff member's employment contract or letter
documenting:
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their annual, monthly
or weekly pay rate
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other benefits and
allowances, bonuses and commissions
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termination and
redundancy clauses, and
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superannuation
entitlements.
In addition, you should
have a copy of the staff member's job description, which includes their
responsibilities, duties and competencies, the key criteria or
indicators upon which their performance will be evaluated, and the chain
of command for reporting purposes. The document should also set out
staff management responsibilities.
During the review meeting, follow the agenda that both you have both
have agreed upon.
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Make sure that
you:
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Give your
staff member your full attention and show interest in
them
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Concentrate on what they are saying and listen for
underlying emotions and feelings
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Check your
understanding of what they are saying through
questioning and identify the main issues. Avoid making
assumptions
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Ensure
your views and comments are supported by facts, figures
and specific examples of performance. Don't generalise.
The key to a
successful staff review is for all parties involved to be
effective listeners and be willing to accept and use
feedback and comments constructively. Feedback is most
useful when it is timely, specific and factual, and
delivered in a courteous and positive manner. |
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