I recently heard from a friend her company was doing evaluations separate from compensation discussions.

15 Comments

1. Julie McGovern, EdDSeptember 13,2023 at 2:24PM UTC

   In education, at least in union states, this is how it’s always done. Technically it allows the employee to see their strengths and challenges and work toward specific goals. In reality, in many school districts, it feels like a gotcha. Again, in states with organized labor, pay is tied directly to a contract.

   But I can see the value outside education. Your salary might be tied to a pay scale or budgetary restrictions, so doing a separate evaluation does give you and your supervisor the chance to see where you are excelling and therefore plot the next steps in your career. Noting the challenges can also give you a good picture of what you need to work on.

2. AnonymousSeptember 13,2023 at 2:28PM UTC

   Why doing evaluations don't always equate with changes in compensation? Totally reasonable. Who wants to be caught off guard if their performance is under-performing? No one. Shouldn't be a tough ask or understanding to do evaluations on where someone is performing at, some do the 6 or 9box to see where their team is at in their growth to plan the succession plan and address opportunities. It's a good thing. Total sense when you have a high level view and mindset in people managing.

3. AnonymousSeptember 13,2023 at 3:02PM UTC

   This is going to be an individual company decision. It makes sense to me in cases where a company may be doing an across the board, set specific % increase. If everyone is truly getting the same increase, it doesn't make a whole lot of sense to tie performance to the increase. Because then, how can you justify giving a superstar performer the same increase as someone who is doing the bare minimum? It's demotivating. Been there done that.

   Story time, many years ago, like 20 I think, I worked for an organization that did just that. Glowing review, 2% increase. Why? Because that's what everyone was getting. So me: If you are giving me the same as everyone else, then really, what motivation is there to rock it out? Less than a year later, I was gone from there.

4. AnonymousSeptember 14,2023 at 12:53PM UTC

   I do HR consulting and I’ve seen it done both ways. I think separate conversations is good so that employees don’t lose focus of the performance feedback and only focus on comp. Also, comp is not only performance. That’s the largest part of larger increases, but most companies are doing market benchmarking every year and there are adjustments that have nothing to do with performance and more about market and cost of labor/living. Or large companies have a bucket of money and budgets for salaries, so the performance informs who gets what from that bucket so evaluations come first. I like this method best, performance evals one month and comp changes the next.

5. Kimberly G. SmothersSeptember 14,2023 at 12:54PM UTC

   Check out this article: https://blog.leadr.com/separating-pay-and-performance-conversations#:~:text=The%20Performance%20Review&text=Separating%20the%20performance%20and%20pay,more%20than%20just%20their%20pay.

6. AnonymousSeptember 14,2023 at 7:34PM UTC

   This is helpful, thank you! I think my company could have delivered the why on why they were separating the conversations and not just "We are not having those conversations at this time."

7. AnonymousSeptember 14,2023 at 5:09PM UTC

   There are many good reasons for doing this the best one being you manage performance differently than you do compensation and IMHO it removes the stigma of productivity being all about money.

8. misskelleypSeptember 14,2023 at 11:39PM UTC

   Yes, CEOs seem to think this is a good idea. I think it's silly - in the employee's heads, comp and performance are absolutely linked. I don't know why anyone thinks it's a good idea to separate the two.

9. AnonymousSeptember 16,2023 at 12:41PM UTC

   It's a simple process of separating the apples and oranges because they are not the same thing. When I worked as a senior (VP-level) manager, I was given a dollar figure I could use for raises based on my organization's performance. I had a ranking of employees from the last set of appraisals from one to "n," and the total of raises for the organization could not exceed the raise "bucket" amount. It wasn't easy justifying one person who ranked second in the organization (a senior member) with a 2.5 percent raise when I gave a midline performer (a new person who was a real go-getter) a 50 percent raise. The senior-level person was valuable and did his work, but he was also obnoxious and made more than I did (as a product of an acquisition). The other person consistently did an exceptional job, was creative, had initiative, and was worth twice his salary on the open market (making one-quarter of the senior person's salary). Giving the senior level person a higher percentage raise only took money from everyone else's raises. A couple of years later, the guy who got the 50 percent raise was managing the group, and by then, his salary was in line with the open market. The senior-level guy with the nasty attitude got fired by presenting it to the wrong executive.

   The justification I gave the executives for the disparity was based on 1) each person's salary compared to the open market, 2) their position within the salary bands, and 3) their initiative and attitude. The executives agreed with my assessment that the lower-paid employee would be harder to replace if they both left. As it turned out, losing the other person's nasty attitude from the organization significantly increased the group's productivity after he was fired.

10. AnonymousSeptember 17,2023 at 10:08PM UTC

    Doesn't this go back to directly correlating performance and pay though?

11. AnonymousSeptember 17,2023 at 11:33PM UTC

    Yes and no. Based on rank and percent raise, no. Based on attitude and initiative, yes. Since the higher ranked person was making $98K/year and the other guy was making about $25K, each percent of the $98K was a higher dollar amount. The $25K guy got a more significant dollar raise, but he was the only one. The most important criterion in this case was each person's market value and how difficult they would be to replace.

12. AnonymousSeptember 15,2023 at 12:58PM UTC

    It is more common than you might think. I worked for a company that did performance appraisals on your work anniversary, but compensation wasn't done until the fiscal new year. It made the budgeting process easier (apparently). Criteria for performance rankings were productivity, but compensation was based on market value for the job role, a person's place in the salary bands, and performance being the last criterion.

13. Wendy ScottSeptember 15,2023 at 7:20PM UTC

    Where I’ve worked the performance review informs the pay rise alongside other factors such as the economy, state of the busiand how much is in the pay rise bucket for that year.

14. MoniqueSeptember 15,2023 at 9:56PM UTC

    Sounds like they may possibly be hosting performance calibration meetings which reviews performance and also provide a forum for comparing employee performance and discussing individual performance reviews with the goal of making sure that managers apply similar standards across all employees.

15. AnonymousSeptember 16,2023 at 3:05AM UTC

    My company does this. Everyone gets the same raise which is usually more of a cost of living increase. Last year was 8% and this year was 5%. Our evaluation impacts our bonuses. And yes every employee qualifies for a bonus. The amount of bonus is based on your position and your performance. For my position it is generally is 15-25% of my annual salary. Our receptionist is 1-8% of her annual salary.