So, as an employer, how can you make pay rise conversations more comfortable and constructive—for both parties? We asked SEEK’s Resident Psychologist Sabina Read to share three strategies for more transparent and productive salary discussions. Here’s her advice.
1. Explain how salaries are determined
It’s good practice to be as open as possible about how salaries are calculated, Read says. Outlining the factors that help to formulate a salary, including benchmarking, time in the role and performance, can help people to gauge whether their salary is competitive in the workplace and the wider market, she explains.
“Let it be a conversation built on trust and transparency and mutual needs,” Read says. “It’s that foundation that will create a more productive and more sustainable employee-employer relationship.”
2. Equip your team with the right information
You can also outline what it takes for an employee to secure a pay rise. This could include completing projects that stretch beyond their job description or demonstrating how they add value to the role or the business.
Read says if you outline what it takes to succeed in securing a pay rise, you’re starting a more open conversation around salary that includes tangible steps for change and progression. Even if your employee doesn’t secure a pay rise, a constructive conversation like this can strengthen your relationship and help them to direct their focus on what to work toward for next time.
“People make assumptions and, if they don’t get a pay rise, they may think they’re not doing a good job,” Read explains. “Having a good conversation can help clear away any misunderstandings.”
3. Explore other ways to make people feel valued
If a pay rise just isn’t possible, you could explore other benefits to offer. For many employees, flexibility is a focus. SEEK research reveals the top three benefits outside of salary nominated by Australian employees are:
- The ability to choose their own working hours
- Extra time off for additional hours worked
- The ability to work from home
Casual dress, free food and stock options held more weight with male employees while women placed greater value on flexibility, working from home and education, the research identified.
Every employee will have their own priorities, so take the time to find these out—it could be salary packaging, extra annual leave, higher super contributions or a nine-day fortnight. Then communicate the benefits you can offer and that you’re open to tailoring new ones.
“This is a good opportunity to ask what else can help a person feel valued, and explain that you do value them,” Read says. “Find out what else is important to them. It might be as simple as wanting to be told they’re doing a great job.”