“Should I raise the salary of my employees?” – The company Salary Policy
The salary policy so far
Until now, the salary of an employee was fixed in a negotiation. This negotiation may have taken place at the beginning, when they joined the company, or throughout their career within the organization. But always, it was an individual negotiation.
With this, what is achieved is that two or more people who do the same job have different salaries depending on that initial negotiation, which is not fair. To be a coherent leader and define a good people management strategy, this cannot happen in our company. For this reason, instead of asking ourselves if we should raise the salary of a worker, we should ask ourselves if we have a good salary policy.
Why is the traditional salary policy not fair?
The moment we enter into the negotiation of a specific person’s salary, we are acknowledging that we were not being honest with that person and that is why we accept.
Nor is it good for our salary policy that a person who contributes the same as others charges more for the mere fact of having had more success in negotiating their salary terms. Accepting this situation, we are responsible for the discomfort that this may create in the work team. Furthermore, if the increase is due to a negotiation, it is not a decision we have made, but a decision that has been forced by the pressure exerted by the worker.
When a worker comes to us and tells us that we either raise their salary or they will leave the company, we can do nothing for that person. In the first place, because this increase is not consistent with respect to the rest of their colleagues and, secondly, because it is bad for the company because we have not foreseen this increase in salary and it could affect our budget.
How to implement a good salary policy?
So that there are no conflicts regarding remuneration, we must avoid or anticipate certain situations. For example, we cannot wait for the workers to come to us to ask us for a salary increase and see what happens in that conversation.
For this reason, to assess a salary increase, you must have defined criteria so that in any case it is the same for everyone and has a justification. But it is also true that there may be aspects that are subjective in nature and must be assessed.
A 360º performance evaluation can be a solution: we talk to all the people who are in contact with a specific worker and they can give us their opinion on aspects such as motivation, the work environment they create, how they work as a team or the desire they have to learn.
Perhaps these are the most important aspects to take into account because, even if we have a very good employee, they are of no use to us if they do not have motivation or if they create a bad work environment.
For these reasons, a performance evaluation that combines objective and subjective aspects with the help of our entire team can be a good option. However, we must keep in mind that people management is something that must also be taken into account.
We have to be aware of people, not only for a salary increase, but because people management is based on the occupational well-being of our team and that includes seeing the progress of each one of them. Being present, seeing how a person who started as a junior progresses to becoming a senior and, in this case, recognizing that progression in salary.
Therefore, a salary increase should not be the result of the pressure exerted by a worker in a negotiation, but rather it must be the recognition of the professional development of a person within our organization. To do this, we must be leaders concerned with people management and, in this case, we can help ourselves with a 360º performance evaluation. A consistent and fair leader does not allow themselves to be carried away by individual negotiation, but by what benefits the entire team and the company.