Business Deadlines


Creating Value with Career Conversations

5 January 2021

I know I should be having annual reviews with my team, but if I do won’t they all just ask for more money?

This is a questions we often get asked as HR professionals. If you conduct an annual review, does it set in the mind of your team that they will receive a salary increase? Based on our experience, yes, this can be the case. So if your business isn’t ready to have a conversation about pay increases, should you bother to do annual reviews at all?

The fact is that some of your team, based on assumptions or past experiences, may have an expectation of a salary increase following a review. Although it may seem easier to just avoid doing a review all together, if one of your team wants and expects a salary review and this isn’t addressed, they are likely to start looking elsewhere for this and you’ll end up recruiting again so we have some suggestions on how you can address this assumption head on.

If your team have the assumption that performance reviews = pay increases, you need to address it clearly and quickly. You’ll need to be really clear up front about what the expectations are and what the outcomes of this kind of review might be. Sometimes it’s as easy as changing the language you use, we like to call reviews Career Conversations. These are conversations between managers and employees about how they are going in their role compared to their position description as well as gaining an understanding of whether they are feeling challenged or overwhelmed in their position. This process allows you to directly ask questions to determine their readiness for the next step and taking on more responsibility and if they are happy and challenged where they are now.

Our process for a career conversation is to start by asking employees to rank themselves against the skills required for their position and the expected behaviours of your business. This process also directly asks if they are seeking to take on more responsibility. This allows the business to have the important conversations about what needs to be done to become fully competent in their roles and what needs to be done to gain a promotion and therefore more money. Another outcome of a Career Conversation is that development opportunities for employees are identified. From this we can create a development plan for the next 12 months, which provides the employee with the understanding that you are investing financially in developing their skills and supporting their growth.

Having said all this, salary reviews and salary increases are part and parcel of having a team. In order to keep salaries competitive and retain your best performers, you will need to review salaries regularly against internal and external markers. We recommend separating this process from Career Conversations and don’t hold them close to the end of the financial or calendar year. This helps to break the link between these conversations and an automatic pay rise.

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