Performance and Salary Review from the Employer's Side

Published: Jul 22 , 2016
Author: Ben Byth

 

Given that we are all aware of the strong links between employee engagement and productivity, it should be no surprise that, at this time of year, we are often asked, “How do I achieve better outcomes  from employee salary reviews and EBA negotiations for my organisation?”.  Here are a few top tips for employers on how to extract value out of your negotiations:

Strategy

Firstly, ‘damage minimisation’ is not a winning tactic for salary negotiations. More often than not, we see managers walking into salary or EBA negotiations with a view to minimising the damage. The problem with this is that not only do you get damaged… it is also unlikely that your employee or unions are happy with the outcome either!

A much better strategy is to put a price on demands. The bigger the demand, the bigger the price. If you take this approach, you can grant your employee everything he or she desires!

Simple, right? If you are dealing with people who are used to getting their way… it may take some time for them to accept the new way of working. Keep your emotions out of it and don’t be tempted to revert to the slippery slope of relenting and accepting loss.

Examples could include:

  • If your employee asks for a pay rise, make it conditional on achieving a productivity increase that offsets the additional cost. 
  • If you are asked for a bigger car allowance, make it conditional on the employee delivering on that special strategic project.

Handling Multi-Pointed Claims

There is a clear process of how to approach the situation when someone presents a long list of demands:

  1. Ring-fence the list – check that there isn’t anything else they plan to add later.
  2. Authority – Check whether they have the authority to negotiate. You don’t want to reach an agreement only to have it overturned at the end by another deferred authority. You may also consider introducing your own deferred authority.
  3. Determine priorities – By asking which are the most important items on the list, you not only determine where to spend your effort, but also understand where they may have flexibility (for example, if they don’t talk much about an item, it is a good signal that it may not be important).
  4. Cut the list – trade the low priority items off the list: “If you agree to drop your claim for points 4 and 5, I will agree to negotiate with you on points 1,2, 3”.
  5. Link and trade – ask yourself, “Under what circumstances could I agree to each claim?”

Address the Tough Items First

The other key trap which we see managers fall into is ‘knocking over’ all the easy issues and leaving the harder ones until the end. The problem with this is that you have nothing left to trade when you are trying to ‘get the hard stuff over the line’! Our advice is to:

  • Deliver bad news early. If something you think they want isn’t going to be on the table, tell them upfront. A palatable way of doing this is to follow the bad news with all the good (where you can be flexible).
  • If all you have left to negotiate at the end is salary… you will end up in a haggle where neither party is happy. Tackle the bigger and more challenging items first.

Happy Negotiating,

Ben Byth


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About the author:

Ben Byth
Ben’s background is in commercial business to business sales. Leveraging studies in organisational psychology, Ben’s previous role was responsible for growing Profiling Online’s bespoke leadership assessment business locally and abroad across industries such as Banking and Finance, Insurance, Travel, Engineering and Professional Services.

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