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Is it Time to Split Up? Separating Goal Setting & Salary Discussions from Performance Evaluation Meetings

We are all guilty of it – meeting tangents. This is a term we use to describe when a meeting goes off course and we end up accomplishing half of what we originally intended. You know how it goes – you sit down with your team to have a meeting about budgets and wind up spiraling into a discussion about customer retention. There is definitely some good that comes out of ad-hoc crowd sourced discussions, but the bottom line is that the time spent wasn’t very focused on the original discussion and you probably didn’t get as much out of the meeting as you intended.

The same is true for performance evaluation discussions – if companies attempt to cram too much into a single meeting, you risk losing focus and not achieving what you set out. Think about a manager sitting down to discuss annual performance, future goals & development, and compensation all in a single meeting – it doesn’t take a psychologist to tell you that these items are all over the map.

To handle this, some organizations are rethinking their processes and are separating review meetings from goal setting session and even compensation discussions. Here are some things to consider if you are looking to refine your review meeting-mix:

Goal Setting vs. Performance: Review meetings are generally ‘recap’ sessions where managers and staff discuss performance milestones achieved throughout the past year or past review cycle. It is a ‘backward’-looking meeting where the focus is on summarizing what the employee has done right and maybe not so right and gives both sides a chance to support their observations. There should be nothing new presented in this meeting as we like to assume employees are made aware of performance triumphs and issues as they occur, but this meeting is a great time to lay everything out on the table and discuss. Goal setting sessions, on the other hand are ‘forward’ looking and you can imagine it might be difficult or even downright ineffective to attempt to plan goals immediately after recapping current ones. Especially if the review was less than glowing, employees might need some time to regroup before opening their minds to considering future goals and development plans. We suggest that employees and managers take some time to process the discussion and then reconvene at another time to set goals for the coming review cycle. This way both parties will not be biased by the last discussion and will enter into this vital process with a clear mind.

Salary Discussions vs. Performance Meetings: There is much debate over whether or not the topic of raises and salary should be discussed in performance review meetings. Some believe that raise decisions should be established and presented at the beginning of the meeting – in order to set the tone for the review discussion. Others believe salary and raises should be discussed at the end of the review meeting – as a way to instantly reward (or not) good or poor performance. There are a few things to consider if your company does indeed plan to keep raises a part of the performance review discussion.

  • Is the decision set in stone? If you present compensation decisions during the review meeting, is the employee able to argue their case and have the decision amended if there were in fact details overlooked?
  • Is the review meeting and company budgeting in sync? If you promise a raise to an employee during a review meeting, are you able to deliver on that in the near future? If company budgeting and/or raise policies don’t take effect until months after the review meeting, then you might want to consider waiting or if not, be very clear about when the change will take effect.
  • Do you have detailed records to support raise decisions? If you plan to grant or deny any changes in salary, managers should be given the tools to not only calculate their decisions, but to justify them to employees.

The final say on this topic will reflect each company’s values and structure; however, the most effective meeting mix we have come across has been a three tiered approach where:

1. employees and managers meet once to recap performance and briefly discuss salary goals (the importance of a properly executed performance evaluation meetings is a topic on its own). See Conducting Painless Performance Evaluation Meetings.
2. Management processes the results of the meeting and plans their team’s salary increases based on a cycle’s worth of noted performance data then meets with the individuals to share the results.
3. A reasonable time period after, a manager and their employee meet again to formulate a SMART goal and development plan for the coming review cycle.

In between review meetings and throughout the entire review cycle, management should encourage active communication and dialogue. This ensures there are no surprises when it comes to review time, that employees are kept on track throughout the review period, and that managers are able to collect detailed performance records to help support performance ratings and compensation decisions at the end of the year.

No matter what your review meeting-mix is, be sure to give your managers the tools they need to properly and fairly assess and justify performance scores and accurately and consistently assign raises and goals to their team. emPerform’s easy to use talent management suite offers easy-to-use appraisals, SMART goal management, year-round feedback and journaling capabilities, and simple pay-for-performance automation.

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