Money Talks: Handle with Care – Do’s and Don’ts of Salary Revision Discussions

"Your hike this year is going to be..." these are the words employees are dreading or eagerly waiting for throughout the year.

Salary revision discussions are much like brewing a cup of chai—the right balance of preparation, timing, and approach makes all the difference. For HR professionals, these conversations aren't just about numbers—they shape trust, employee satisfaction, and the broader workplace culture.

Here's a detailed guide to help you master the art of salary revision talks, packed with actionable tips for HRs.

The do's: Get it right the first time

1. Be thoroughly prepared

Before initiating the discussion, do your homework:

• Analyse the employee's performance against measurable goals.
• Compare the offered salary revisions to industry benchmarks to ensure competitiveness.
• Understand budget constraints and the company's financial health.

Being well-prepared helps you make confident, informed decisions and shows employees that salary revisions are handled with seriousness and fairness.

2. Choose the right setting

Hold these conversations in private settings where employees can feel comfortable. Whether it's a one-on-one video call or a face-to-face meeting, create an environment that fosters open dialogue.

3. Start with genuine acknowledgment

Kick off the discussion by recognising the employee's contributions. This is not only respectful but also sets a positive tone for the conversation:

• Example: "Your ability to lead the marketing team through challenging campaigns has greatly contributed to our success this year."

4. Provide context and transparency

Explain how salary revisions align with the following:

• Performance Metrics: Outline achievements and milestones the employee has hit.
• Company Goals: Link their role to the organisation's success.
• Market Trends: Highlight how competitive their new salary is in the current job market.

Transparency builds trust and prevents ambiguity.

5. Outline future growth opportunities

If the employee's revision doesn't meet their expectations, suggest alternative ways to support their professional growth, like:

• Upskilling programmes
• New responsibilities with potential for promotions
• Additional perks or recognition programmes

Showing a clear growth path reassures employees that their contributions are valued.

6. It's not always about the money

When talking about salary hikes, don’t forget it’s not just about the numbers. Non-salary perks—like offering work-from-home options or a resort membership—can be just as valuable. These conversations are all about recognising and appreciating the employee’s contribution to the organisation, so feel free to get creative. Salary revision talks can go beyond paychecks!

You can always add some health benefits for your employees to show them that you care about their health. Additionaly preventive healthcare measures, like health check ups, doctor consultations, gym memberships, yoga classes and much more. Talk to Pazcare to build a holistic wellness package for your team as per their needs.

The don'ts: Avoid these pitfalls

1. Don't rush the conversation

Avoid treating the discussion as just another task. Take time to listen to the employee's thoughts and concerns. Rushed conversations can feel dismissive and lead to disengagement.

2. Never make assumptions

It's tempting to think you know an employee's expectations, but every individual has unique priorities—some may value flexibility over monetary hikes, while others prioritise financial recognition. Let them share their views instead of assuming.

3. Don't compare

Avoid statements like "We're giving Ravi more because he's been here longer." Comparison fosters resentment and damages team morale. Keep the focus solely on the employee in front of you.

4. Don't promise unrealistic raise

Over-promising creates mistrust. If the company faces budget limitations, communicate this honestly and constructively.

5. Avoid neglecting follow ups

Salary conversations often spark broader career-related questions. Be proactive about follow-ups:

• Share necessary documentation promptly.
• Ensure that promised growth plans or perks are implemented on time.

Best practices for Indian HRs

In India, salary discussions often involve personal factors like family obligations or educational expenses. While these aren't directly tied to decision-making, acknowledging these realities with empathy can strengthen workplace relationships.

Additionally, consider cultural nuances:

• Be respectful: The concept of hierarchy in Indian workplaces often means employees may hesitate to share concerns openly. Encourage them to speak freely without fear of judgment.
• Embrace local contexts: Highlight any region-specific benefits, like PF contributions or access to health insurance.

Turning conversations into opportunities

Salary discussions are an opportunity for HRs to strengthen the employee-employer relationship. Done right, these talks can:

• Boost employee motivation.
• Enhance workplace satisfaction.
• Position the organisation as one that truly values its team members.

Approach these discussions with the right balance of empathy, preparation, and clarity, and you'll find even difficult conversations can lead to positive outcomes.

Key takeaway: Salary talks are more than about money

Salary discussions aren't just transactional; they're about showing employees they're valued and paving the way for mutual growth. With the right approach, you can transform these conversations into moments that inspire trust, loyalty, and engagement.