Making a difficult compensation conversation worse

Performance reviews and compensation discussions require diplomacy and sensitivity. Staff have long memories about what is said and done.

Fragile handle with care box

Early in my career as a chartered accountant, I worked hard to learn and progress. I cared about doing a good job, and I applied myself as diligently as I could. For me, this meant both learning the intricacies of accounting and client management and investing in myself through additional study and reading. I went to the office early to further my professional development, but I left promptly at 5:00 p.m. because I always had commitments and activities. Work followed me home for the free time that I had after my sports and classes. I felt that I gave my job my all, and it was a good feeling.

I was rewarded with promotions and strong performance reviews. One promotion in particular was a complete surprise, and I was elated to be recognized for doing a good job. The words that went along with the promotion were as important to me as the new title, responsibilities and salary. The partner who told me about the promotion did a great job to put it in perspective and let me know that he and the other partners valued my work and my attitude.

Some years on another partner was responsible for my performance review, and again with him, the review discussion went smoothly. There was an easy flow back and forth with me generally leading the discussion about achievements and deliverables from the past year as well as goals and objectives for the coming year. We wrapped up the discussion with me feeling good about the positive messages.

Compensation discussion

A few weeks later, I was back in that partner’s office for a compensation discussion. This was pretty normal as the two discussions were always separated. We briefly rehashed the past year and my performance and got down to the details of my compensation adjustment. What had been a positive interaction turned sober as he relayed the difficult year that the partnership had endured, and while he and the partners were appreciative of my performance, they would only be able to reward me with a token raise. When he said the number, I was surprised, but the reality was that I knew that the year had been bad. Business was hard in the oil patch, and we had heard that message throughout the year. I accepted the cold, hard reality of an almost-nonexistent raise – until he continued.

I know that the conversation was awkward for him, because it was awkward for me, too. Instead of staying silent and taking my behavior as acceptance, he carried on and said something to this effect – “I know that you were just recently married, and your husband has a good job, so the fact that you aren’t getting a good raise won’t really matter.” With that, I did decide to say something – something along the lines of “What does my husband’s job and compensation have to do with my compensation?” I didn’t say it rudely, but I wasn’t about to let him off the hook for a statement like that. It was clearly awkward, and we wrapped up our meeting quickly. I never said anything about what he said to me and he didn’t mention it again either – until the next year.

Dependent on my circumstances alone

As we neared performance and compensation review times, I walked past the partner’s office, stopped and walked the couple of steps back to pop in for a quick word. I said something along the following lines – “I just thought that I would let you know that my husband no longer has a good job and salary this year, so I will be looking for a good raise.” He looked at me quizzically, so I explained – “Well, last year you told me that I shouldn’t be worried about getting only a very minor raise because my husband had a good job and salary. I thought that I would give you lots of warning that you will need to think about a good raise for me this year because his circumstances have changed.” The partner looked very uncomfortable, and I walked away with a little smile on my face.

We spoke later, and I told him that I was only making the point that even though he was awkward about the negligible raise in the prior year, he shouldn’t have said what he did about my husband having a good salary when we were talking about my compensation. I told him that my compensation was solely dependent on my circumstances, namely my performance and the firm’s performance, and not my husband’s. We got through the conversation, and everything was fine. I made my point, and the partner understood it. I understood and accepted his perspective as well.

Tricky and sensitive area

Compensation is such a tricky and sensitive area that everyone involved needs to take every conversation seriously. Going in, anyone representing the employer should be ultrasensitive to the employee’s perspective and speak respectfully and appreciatively. No joke is ever appropriate no matter how awkward and uncomfortable a conversation may be. Offhand, funny or glib comments generally only send a compensation conversation in the wrong direction. Honesty and directness are always the best approaches. Staff understand and know a lot more than company management may think – they read, they research, they have friends – they know.

Just remember, staff NEVER really forget badly handled situations even if they forgive the missteps (and sometimes they even write about them).

Latest Posts

Nancy Knowlton
Nancy Knowlton is co-founder and CEO of Nureva Inc. and previously the co-founder and CEO of SMART Technologies. She writes about education, entrepreneurship, business management, technology, innovation and other passions.