What If Salary Reviews Happened All Year Round?

Salary isn’t something that only enters employees’ minds during the review cycle at the start of the year—they perform their own 'reviews' all year round. What can employers in the Middle East do to manage salary expectations?

What If Salary Reviews Happened All Year Round?

15 Dec 2016 by  Robert Richter

Am I being paid fairly for my contributions? Does my salary match up to others in similar roles as I am? And what opportunities do I have to earn more elsewhere?

Salary isn’t something that only enters employees’ minds during the review cycle at the start of the year—they perform their own reviews all year round. However, in a market of ambitious employees such as the United Arab Emirates (UAE), only 12.8% employees strongly feel they are being promoted fast enough, and just 35% are confident they are being paid fairly for the amount of effort put in.

At the same time, employee roles and contributions are only two of multiple factors a company considers in the salary review process. In the Middle East, market conditions such as low oil prices this year are likely to see companies across many industry sectors take a cautious approach to salary increases—even when their best talents are threatening to leave.

So, how can employers manage expectations when it comes to salary increases and continuously have positive conversations with even the most disgruntled employees, any time of year?

Be transparent about the process

Employees don’t often realise the factors involved in finalising the salary increase budget for the year—which includes the rate of inflation, the company’s ability to afford salary increases, and forecasted budgets for the market. Of course, there are also factors—such as performance, promotions, and internal equity—that will encourage organisations to deviate from the budget. Plus, each company has its own philosophies on salary increases.

When employees are unaware of these factors and processes, they are left to make their own deductions based on their personal experiences—which has the potential to be detrimental to employer brand. This is why it’s critical to have these factors and philosophies well-documented and clearly articulated to employees.

Communicate throughout the year

Salary components in the UAE can be a complex, and the majority of organisations say their employees don’t understand how different salary components work. As a result, they don’t understand what they have to do to achieve a salary rise.

What’s more, the worst thing an organisation can do is broadcast great increases in revenue and profit margins—but when it comes to salary reviews, explain that difficult economic circumstances don’t allow for reasonable increases.

At key points throughout the year, top leaders should communicate with employees on what company achievements mean to salary increases. Employees will always appreciate a line of sight of company targets, and are more inclined to strive for companies when they know what’s in int for them.

Managers must receive adequate training

It’s not just down to leaders—the HR function has a significant role to play in ensuring that the messages managers deliver to their teams are consistent with those from leaders.

Managers must also be well-prepared to answer questions that will come up in the meeting when the final salary increase is communicated. It’s down to HR to equip all managers with specific training beforehand, a set template on how to set the conversation, as well as standard questions and answers to manage conversations.

The annual salary review is a key motivator for employees, but if employee expectations are not managed year-round, employers can cause more harm than good. When the process is clear, fair, and well-documented, expectations on salary increases will naturally become reasonable.

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Robert Richter

Robert is a Senior Consultant with Aon Hewitt Middle East, based out of the Dubai office. Robert joined Aon Hewitt in 2013 and currently leads the compensation data team which is responsible for the industry specific compensation surveys in the GCC. Prior to joining Aon Hewitt, Robert worked as a global compensation and benefits manager for one of the largest logistics companies in the world in Germany. His area of expertise lies in Compensation & Benefits Surveys, Compensation Benchmarking and Structuring, Job Analysis and Job Evaluation.

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