How to Assess Salaries Without Offending Anyone: 4 Efficient Techniques
The author of this article is IT Manager Dzmitry Veliasnitski.
In the first article, I provided a detailed list of parameters for determining fair and well-grounded employee compensation. Here they are in brief:
Impact,
Skills,
Goals,
Responsibility,
Culture fit,
Loyalty, and
Job market situation.
Of course, you can’t measure each of these parameters precisely, but there are some tools, or techniques, that may help you assess them more effectively. These do not represent the entire universe of available tools, but they are tools that I have used with decent success.
360 reviews
This tool is the most popular method of employee performance review, and for a good reason. A well-constructed, truly anonymous, 360-review questionnaire will give you a wonderful picture of what is going on in your team, and the team members’ opinions, while reducing their fear of speaking out.
This tool must, however, be used with caution. Please don’t be exclusively bound to it as the sole metric of an employee’s performance. You can score your employee using the first six parameters above, but only use it as a guidance for your subsequent decisions regarding the appropriate amount of a compensation increase/decrease. Individual opinions are not very reliable, and they change frequently. Make sure that you get the bigger picture and understand the overall workplace situation, while dealing with individual cases separately.
Participatory budgeting
It is very hard to measure an employee’s impact 100% fairly. In certain situations, however, if we need to distribute a bonus among a group of people, we can use this simple technique:
1. A group of 6 people gathers in a room.
2. This room has 6 sacks in it, each sack is marked with the name of one of the people in the room.
3. Each person is given 20 tokens, each token corresponds to 5% of the overall pie.
4. The goal is for each person to distribute their tokens as fairly as possible between the sacks, but they cannot vote for/given tokens to themselves.
5. While the other participants look away, each person takes a turn approaching the sacks and distributing their tokens according to the rules.
6. The financial bonus is distributed in the same proportion as the tokens in the sacks.
This tool can be modified depending on your needs. However, if you use the tool, please do so with caution, since some people can engage with it in a biased way.
TRIZ
One of the liberating structures, TRIZ suggests that we think on the contrary: not “What must we do to achieve our purpose?” but “What must we stop doing to make progress on our deepest purpose?”.
In this spirit, think about an employee not only in terms of what they’re doing, but also what they’re not doing, about what they should do and what they shouldn’t do.
But most importantly, try to imagine a situation in which this employee is suddenly gone: what is going to change and how? Is the fact of that change a good or a bad thing?
Please be aware that there are professions such as project managers, Scrum masters, and Agile coaches whose purpose is to eliminate the necessity of management and just be a steward, an example of a great professional, and a champion of healthy values and ways of working.
Self-assessment using the same questionnaire as the team
Before the performance review meeting, let the employee fill out a 360-review questionnaire to perform a self-assessment.
It is a great technique that puts you, as a manager, in a better position:
You will see whether there is a discrepancy in the assessment of the employee by you, this employee and the rest of the team.
You can prepare to analyze this discrepancy in an interview beforehand.
You can take time to understand the main arguments and perhaps change your own opinion.
Instead of an outro
First, I’ve personally tried the techniques described in this paper, and it looked to me as though they work, especially if I am transparent with the team about how they work. The team members instantly understand the rules of the game, what is needed and why.
Second, although I don’t have research or scientific studies backing up this list, I believe that it more or less covers everything. I encourage you to review your own 360 review questionnaires to see whether they cover the above-mentioned criteria (hopefully without being too long and boring).
Finally, you should feel free to tailor this list to your needs, placing an emphasis during compensation negotiation where you think it is most important for your company/team/department, etc.