Salaries on the upswing again – but what should a review be?

This time of year the water cooler is a place where expectations mount. The tension builds as, behind closed doors, life changing conversations are going on.

Salary and performance reviews are looming on the horizon, if they’ve not already started, and the word is, from insiders in the human resources field and at the partner level in many firms across the nation, that an average salary increase, for those who receive positive reviews, will be in the range of 6% to 7% across the board.

Of course, to get an average increase of 6% to 7%, some are likely to receive less and some will no doubt receive more.

Not that the actual dollar amounts should be discussed, of course, that’s personal and private information and many firms stipulate in their contracts of employment that salaries are a taboo topic for open discussion.

However, as a consultant living in the real world, I understand that those team members who are close to each other sometimes divulge their salary to peers – in the strictest of confidence of course – just out of pure curiosity. (I’ll tell you mine if you tell me yours.)

The most common error made by many firms at this time of year, is to treat the dreaded review meetings as either a simple ‘this is what we propose paying you next year’ one-way conversation, or worst, an opportunity to beat the employee over the head with all their shortcomings adequately displayed during the previous twelve months.

Either way, it is entirely missing the point of what a good, constructive review discussion should be all about.

In an ideal world, the review process should be used for constructive criticism (the emphasis being on constructive rather than criticism), review the previous periods results and achievements, to talk about the good things and achievements of the individual and their team (if appropriate) and areas that could benefit from improvement.

We certainly do not want to make it too ‘flowery’, indeed it has to be a pretty frank and open discussion if it is to be of any real use, but there’s another key word: Discussion. It should be a two-way communication tool, not a dictatorial process that just receives lip service from all within the firm.

The process should refer to numerous notes made during the course of the individual’s performance so that a true yardstick of their performance can be seen.

During the year, we need to catch people doing something right, praise them for it, and make notes in staff files of such events for future reference (now!).

I am not talking of meaningless ‘political’ praise, but a truly heart-felt, genuine ‘well done’ or ‘thank you’ when merited. These are 2 of the most sought-after phrases from managers and partners by young, ambitious staff, yet they are also the most scarcely used.

So, alas, we do not live in a perfect world.

Ideally last year should have been handled the same way, with the meeting concluding by setting goals for the coming year. If you have done this, great, take a gold star from my desk and pin it on your lapel.

That way, we can start this years review off with a comparison of actual results and achievements of the current year to the goals set in last years review meeting.

Only then can we start to assess whether the individual is on track and making progress, maybe they’re ready for a promotion or maybe not, but without this simple information we will never truly know.

Goals also motivate people. They are something to strive for, and they’re not just for staff – Partners benefit as much as, if not more than, staff as far as goal setting is concerned (but that’s another story for another issue).

Once you have started this process, you can more readily identify which staff member merits a salary increase more than others and therefore you can decide how to allocated your salary pool for the coming year with this useful data in hand.

But what should team members be judged by?

Well, here are some ideas:

· Total number of hours dedicated to the practice
· Percentage chargeable to, and recovered from, clients
· Number of new client inquiries generated
· Number of presentations to prospective clients made
· Percentage of successful conversions from inquiry to client
· Dollar value of new engagements generated from existing clients
· Number of referrals/dollar value of referrals received from client and contacts
· Dollar value of new business generated
· Progress of staff that report to this person
· Comments from 360 degree reviews (where your staff review your performance)
· Comments from clients about you and the level of service you provide them, in other words how satisfied clients are with what you do for them
· Number or dollar value of clients lost in the previous period
· Number of articles that you submitted that were published by target publications
· Time devoted to mentoring and training team members
· Time devoted to other business-generating activities

Of course, each firm will have different criteria that they select to assess performance by, but the above, while by far not an exhaustive list, will give you some ideas to consider.

Once you have decided to implement a true review process, you need to be consistent in applying the principles. Only then can the system been transparent and be seen to be fair.

Salary increases are not a right. They have to be earned on merit, and even then there is only one person who is going to pay for it – the client. Fair pay is a right, and that’s yet another issue, but as the old Dire Straits song tells us ‘Money for Nothing’ is really just a fantasy.