As a manager, how do you have those awkward and difficult conversations with your employees about salaries and raises and promotions? Richard and Jeff have some answers.
More people are leaving their companies right now than at any time in history. We entered the first relief period a few months ago. People left, companies made adjustments, now what are we left with? The people we absolutely need. You start making emotional decisions. How do I keep this person and make sure they don’t leave?
Because of Covid, a lot of these conversations have been postponed and avoided, and now they’ve ballooned. In today’s episode, co-hosts Richard Lindner and Jeff Mask walk listeners through some anecdotal stories and a process for having these conversations effectively to benefit both the employee and the company.
Listen in for some practical, actionable steps you can take to resolve these complicated issues.
What to Do When Someone Asks For an Inappropriate Raise
If a team member comes to you asking for a raise or promotion, and it’s inappropriate to their situation, how do you say no? Jeff says we all have horror stories as leaders, where we had good intentions but unintended consequences. People want a raise, just because they need the money, not because they’ve earned it. The company isn’t growing, or the person isn’t growing, or hasn’t delivered more value. So what do you do?
“I want to back up and say why I think this is a broken conversation,” Jeff says. He believes that, when it comes to career progression paths, we’ve let it creep in that the path lies on the shoulders of the company/manager. He believes leaders need to train their employees to see what progression can look like, and tell them it’s a choose your own adventure path.
Step #1: Flip the script. Help them see it’s theirs to declare. Step #2: Create different options with them, but let them own it.
In the past, there was a manual. This is what you did. This was the progression. Now people change careers multiple times and much later in their working life. What you as a leader have to figure out is what do they want? Where do they want to go?
Where Does Your Employee Want to Go?
As a leader, before we get to “I want more money,” try to figure out what they really want. Most of them don’t know or can’t articulate it. Ideally, you’ll ask these questions from the very beginning.
- Where do you want to be in 5 years?
- What do you want your day-to-day to look like in 10 years?
- What makes you happy?
- What energizes you?
- What income level are you looking at?
- What positions are here that would check the boxes of fulfillment for you?
Your job as a leader is to identify skill gaps between where they are and what they want. A conversation about raises is easier if you’ve already talked about skill gaps. It has to be “no and here’s why.” Or, better yet, “no, and here’s what it will take to get it to a yes.”
The no is so much easier if you’ve already built a foundation of clarity of what growth looks like. When it’s not discussed initially, the employee blames the company and feels stuck. Call out what you want, then figure out a plan. What skills do I need to develop? Then it becomes a really cool process. If you created a great plan, the question of a raise doesn’t come up. You have a much better path and help people stay engaged.
Don’t Be Too Quick to Give Away Titles
What if someone comes to you asking for a promotion, a new title? It can be scary if you think the person will leave if you don’t give them what they want. Make sure you’re not hearing an ultimatum where there isn’t one. That’s not leading from a place of confidence and power.
#1: Be self-aware. Make sure you really understand. #2: ask why. Why do they want this title? If you’re not motivated by titles, then it’s difficult to understand someone who is. Don’t give away a title like it has no value.
Richard shares a story of an employee who was doing awesome, growing rapidly, and their value to the company was growing. They came in early one day to ask about a director title. Richard gave it to them. Then, he was dismayed when this person went from having an amazing attitude to not being engaged, when they went from having a massive impact to going backward.
A week or so later, he got an email from the employee. “After doing some research online, here’s the average salary for a director of this. Here’s mine. There’s a large gap between the average and mine.”
This person had looked at the salary of a director, but not the roles/responsibilities/experience. They matched a salary to a title, but they didn’t match the roles to their average day. They hadn’t actually earned the title and never should have been given it.
It’s important to find out why a person wants a new title. Do they want to be more important organizationally? Do they want more money? Do they want to strengthen their resume? Have the person go do the research as to what that job title entails. After your research, do you still believe it’s appropropriate and you’ve earned it? And do you want that responsibility? Then we can have that conversation about a new job title.
Don’t Overlook the Importance of Growth
Jeff has a huge takeaway for leaders.
Teach the principle of patience for promotions and raises
but impatience for growth. And separate the two.
Too often people want a promotion, raise, or title and rob themselves of the growth, maturity, and value they can create for themselves. How can they grow here or strengthen this muscle? They’ll be so much more valuable over time if they can develop this patience. You can’t mistakenly replace growth with the band-aid of a title. The employee says what growth looks like for them, and you help them plan their path.
It comes back to the 3 Cs—care, clarity, and consistency. Care means being able to have a tough conversation in the moment. If you can’t do it because you want to be liked, that’s not caring. See them for who they can become.
Give clarity around what is needed before they can achieve a certain income. What are the goals, the time frame? When we’re clear on foundational principles, we won’t have to have these awkward conversations. If you haven’t, own it. “That’s on me. I’m sorry. Let’s have that clarifying conversation now.”
Consistency is important when it comes to a process around compensation conversations. If you’re not consistent, favoritism creeps in, perceived or real. If it’s perceived, it isreal, at least in their mind.
Avoid awkward, out-of-the-blue conversations by taking care of the 3 Cs at the beginning. That’s how you create a great culture.
Your job as a leader is not to give people more money. It’s to make people more valuable to the company so they can help it earn more money. Does each person on your team know what it is that they do that brings more value to the company on a day/week/monthly basis? If they’re producing more value, give them more money. And have these conversations from the beginning.
Richard and Jeff want to hear from YOU. What questions do you have about compensation, raises, and job titles? What wasn’t clear that they could clarify for you? What other topics would you like them to address on the show? Email them here with your thoughts/questions: feedback@readytolead.com
RESOURCES:
- The Truth About Employee Engagement (book by Patrick Lencioni)
- Multipliers (book by Liz Wiseman)
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