Keeping your employees happy is critical to your business’s success. But how can you keep your employees happy when you’re meeting at the bargaining table? Moments of negotiation – when you and your employee have to align around compensation, job responsibility, accounts under management, leaves of absence, and paths for growth – can be nerve wracking. Here are five tips for how to successfully manage employee negotiations:
- Know when you’re negotiating. This may seem simple, but it’s a critical first step. Although there are times, like during annual performance reviews, where nearly every employee is negotiating for a title bump or raise, there are others when it may not be as clear. This is particularly true when someone is setting themselves up for a strong negotiating position in the future, which often happens if an employee develops a strong relationship with one of your important investors or accounts or when an employee asks for more responsibility. Be aware that asking for greater responsibility now will almost certainly lead to negotiation later, and consider this when evaluating your employee’s request for increased opportunity or responsibility. Finally, sometimes negotiation is not clear because it’s not related to compensation. Requests for leaves of absence or title changes, for instance, are types of negotiations.
- Develop frameworks that support your negotiating position. If you provide clarity and transparency in your hiring documents, internal procedures, and team communications, your employee negotiations can be more defined and will likely be more successful. Here are some great ways to accomplish this:
- Include compensation practices in your Employee Handbook, such as salary bands, when performance reviews are conducted, your company’s standard cost-of-living and merit-based raise percentages or amounts, when bonuses are evaluated and paid, and clear metrics for measuring bonus and merit-based compensation.
- Design meaningful paths for growth. These paths will show your employees that you have thought about how they can move forward successfully within your company. If creating a growth path doesn’t make sense, talk to your team members about how they can develop professionally by acquiring new skills and experiences while building your company. In either case, attaching planned milestones or metrics to compensation or title changes will provide a path forward with less negotiation on both sides, as the path is already defined.
- Celebrate your team in other ways. Acknowledge wins in team meetings, invest in a team culture that makes employees want to come to work, and have parties for the successful completion of projects. Happy employees ask for less.
When in doubt, consult with your Human Resources or legal teams for support in employee negotiations, but the best thing to remember is the golden rule - treat others the way you would want to be treated.