Let’s Chat… End of Year Compensation Discussions
Welcome back, everyone, and happy (almost) weekend! As December is quickly passing by, we thought this would be the perfect time to recenter around end-of-year compensation discussions. Keep reading below to find out what employees should typically expect about merit increases, bonus incentives, and general salary discussions that will take place over the next few weeks!
End-of-Year Merit Increase
Merit increases are an employer favorite as they are defined by Forbes as a “financial incentive you give your employees based on performance. It’s designed to recognize their hard work and motivate them. As long as you implement it properly, a merit increase may also increase productivity and retain employees.” A win-win for both the employer and employee, merit increases are centered around individual performance and are a great way to differentiate yourself from the rest of the team and draw attention toward the way you’ve exceeded personal goals. For this reason, we highly encourage you to keep track of little and large wins throughout the year. Whether you use an online app like ‘One Note’ or a piece of paper, ensuring that you remember all of the accomplishments you’ve achieved will prove an incredibly useful tool in advocating for why you deserve a merit increase!
Bonus Incentives
Another key component of many offer letters and roles is their bonus incentive; it’s more likely than not that a bonus is tied to your overall compensation package. What does this mean? Likely that, at the end of the year, and depending on company performance (and potentially a mix of personal and company!), you’ll be awarded a bonus on top of your salary. Bonus percentages have incredibly different ranges depending on the industry, so it’s important to keep up to date with your industry trends, salary, and bonus trackers, and ensure you’re properly compensated based on your title and job function.
General Salary Discussions
- Educate Yourself on Company Policies: Above all, we are firm believers in engaging in any type of preparation before meeting with leadership. Whether this is a weekly touch base or an annual compensation discussion, entering into the conversation with a clear understanding of what to expect is the best way to come across as knowledgeable, responsible, and accountable. You can often access this type of information in your offer letter, goal setting, on an HR portal, or otherwise noted on your internal company page. Anticipate engaging in approximately 30 minutes of investigation, and jotting down any notes about metrics to take into the conversation (ex: target bonus rate, average compensation increase, company performance percentage annual earnings, etc.).
- Express Gratitude: Additionally, no matter what happens, showing grace in the conversation by thanking your manager and any additional leadership is a key strategy for composing yourself and creating a positive atmosphere for years to come. After all, your manager wants the best for you, and any feedback is given so that you can achieve your greatest potential! If you didn’t attain the bonus or merit increase that you had hoped for, this is a great time to hone in on and clarify the critique you’ve received to incorporate it into your growth for next year.
- Ask Questions and Gain Clarity! On that note, ask questions! You should leave compensation discussions feeling well-informed about current performance, how to grow over the next year, and how to track metrics that tie into bonus or merit increases.
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