When you co-mingle a salary increase or raise conversation with a review conversation — one of them is always going to get the short end of the stick. To make sure both conversations get the attention they deserve and because you do not want to set the precedence that every time someone gets a review — they automatically get a raise — you need to separate the two.

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Hey everybody! Drew McLellan here from Agency Management Institute. This week, I am coming to you from Honolulu, Hawaii. This week, I want to talk to you about uncoupling two critical elements that are part of every agency’s employee strategy. And the two things I want you to uncouple are performance reviews and salary increases. Too often, agencies combine these two things. And what it does is either it teaches your employees that every year they should expect and deserve a raise, regardless of if they’re doing the same job at the same level, whether the agency has done better or worse. They’re going to expect that annual increase when you tie raises to annual reviews. Or what happens is you stop doing annual reviews because you don’t want to have the raise conversation. I’ve seen many agencies make both of those mistakes many times. And even if you are going to give someone a raise, when you tie it to a review, what happens is they immediately flip to that page in the review or they’re thinking only about the raise aspect of your conversation and they don’t hear the other things that you’re saying. In agencies that are 100 people or less, 50 people or less, 20 people or less, oftentimes, people aren’t changing roles every year. They may be getting better, but in many cases they are at a ceiling with your organization, and so a salary increase is not tied to a longevity thing. One of the things we have to get better about communicating to our team, and as owners and leaders understanding, is that raises come when someone adds additional value. So I’m not going to pay more money for the same thing, but if somebody adds more value, more skills, more certifications, they become more valuable to a client or to the team, now we’re talking. Now they’ve earned a raise, and I want to give them that raise. But when you uncouple raises and reviews and then you can have real conversations with your team about what it’s going to take to get a raise. And that is, “Here’s what you’re worth today. Let’s talk about all the different things you can do, learn, grow in, get better at, so that you’re worth more in three months or six months or a year from now.” Those are two completely separate conversations, and you will have more productive reviews, you will have better dialogue in those reviews, if you make it very clear to your entire staff that the one thing that you’re not going to talk about in a review is money. Okay? Put that to work for 2020. I’ll talk to you soon.

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