We are asked from time to time about the best way to conduct an employee compensation review. I have to relay a story to you regarding a friend’s annual review. Here’s how it played out.
She sat down with her manager and recieved a very positive review. She was told she was one of their better employees – recieving 3’s and 4’s out of 5 in all performance areas. In fact, my friend is the top person in her territory and the territory is ranked 2nd out of 8 in a large corporation.
Everything was going well and she received a lot of verbal praise about her performance. Then the manager told her that she would be receiving a 1.5% increase in salary and it would be this amount. My friend interrupted her manager and told him, “That is my current salary.”
The manager asked, “Are you sure?”
He then looked it up on his computer. After about 5 minutes he said, “You’re right, but you are really going to like this then. You are actually going to be getting a 2% raise this year.”
This raise was less than $600 a year. Her manager told her that she really needed to bust her butt because he wanted to win a corporate contest and was not going to settle for second place. My friend is motivated by money so his statement was launched at the wrong time. He never told her what was in it for her: extra cash, a trip, recognition, nothing. The only thing that mattered to the manager was that he would not settle for coming in second place.
Suffice to say my friend was completely de-motivated.