We’re coming up to end of financial year - can you believe how fast the year is going?! (We have all been saying to each at least fortnightly since February!) – and for many businesses this is the time for performance reviews, and likely conversations about those dollar, dollar bills!!
You may have heard before that it’s best practice to separate your performance conversations from your salary review conversations. There are a few reasons why this is recommended:
If you have a formal process for salary reviews and this occurs once a year (for example), make sure people are aware. If you have previously always had your salary review and annual review conversations together, but you read a great article that gave some compelling reasons why you should change it up this year (Hint: refer tip 1), communicate with your team! Let them know why the change is occurring and also make sure both reviews are booked in, so they don’t just think you are doing a sneaky and just trying to save yourself from awkward conversations and spending more money.
A review doesn’t mean an increase. You might have written in your employment contract or employee handbook that salaries will be reviewed annually (hopefully you don’t have it written too concretely so that you always have some flexibility as the business owner), but an annual review does not mean an annual increase! Committing to look, not committing to give!
The decision to provide an annual increase may be taken out of your hands if:
Some key considerations relating to salary increases across your business are:
If you are concerned about your wages going up and up each year and are unsure about what the future might look like for your business or industry, you could consider whether a one-off bonus might be a better way to show your appreciation and reinforce the behaviour and performance that has been demonstrated, without locking you in to a higher salary ongoing.
As always, if working with Modern Awards, spreadsheets and lofty staff expectations are not your favourite things (especially in combination) then please give us a shout!