PAY HIKES AND MAN­AG­ING EX­PEC­TA­TIONS

As we en­ter a new year, em­ploy­ees' thoughts pon­der around the pos­si­bil­ity of a salary in­crease. For Qatar, the ex­pected salary in­creases are 5.2% of ba­sic pay for 2015. How­ever, in light of se­vere rent in­creases, and the cost of med­i­cal cover and ed­u­ca­tio

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The worst thing an or­gan­i­sa­tion can do is broad­cast great in­creases in rev­enue and profit mar­gins and, when it comes to pay reviews, start ex­plain­ing that the dif­fi­cult eco­nomic cir­cum­stances did not al­low for rea­son­able in­creases.

In ad­di­tion, just be­cause the bud­get is 5.2% does not mean that all em­ploy­ees will re­ceive a pay rise of 5.2%. So the stage is set for some dif­fi­cult con­ver­sa­tions come the pay re­view cy­cle.

So how should em­ploy­ers pre­pare for this? It's all about man­ag­ing ex­pec­ta­tions. In or­der to avoid disgruntled em­ploy­ees, two things, which go hand in hand, are very im­por­tant for or­gan­i­sa­tions:

Trans­parency

Em­ploy­ees need to un­der­stand the process un­der­taken be­fore de­ter­min­ing their fi­nal pay in­crease; this in­cludes the fac­tors con­sid­ered when fi­nal­is­ing the salary in­crease bud­get (rate of in­fla­tion, the com­pa­nies' abil­ity to af­ford pay in­creases, fore­casted bud­gets for the mar­ket etc.); con­sid­er­a­tions for de­vi­at­ing from the bud­get when it comes to set­ting the in­di­vid­ual pay in­crease (per­for­mance, pro­mo­tions, in­ter­nal eq­uity etc.) and what the company phi­los­o­phy is be­hind the pay in­crease (align­ment to the mar­ket vs. cost of liv­ing adjustment etc.)

Com­mu­ni­ca­tion

Through­out the process it is im­por­tant to keep em­ploy­ees in the loop, pro­vid­ing com­mu­ni­ca­tions from the board/CEO which puts company achieve­ments in per­spec­tive with salary in­creases. The worst thing an or­gan­i­sa­tion can do is broad­cast great in­creases in rev­enue and profit mar­gins and, when it comes to pay reviews, start ex­plain­ing that the dif­fi­cult eco­nomic cir­cum­stances did not al­low for rea­son­able in­creases. Em­ploy­ees will al­ways ap­pre­ci­ate a line of sight of company tar­gets and pay rises. Em­ploy­ees make com­pa­nies suc­cess­ful, es­pe­cially when they know “what is in it for them.”

This all may sound very triv­ial; how­ever, “com­mu­ni­ca­tion of pay pro­cesses” is the part which typ­i­cally needs im­prove­ment in most of the re­ward philoso­phies of or­gan­i­sa­tions.

In fact, the majority of the or­gan­i­sa­tions in Qatar claim that their em­ploy­ees of­ten do not un­der­stand how the dif­fer­ent pay com­po­nents work and there­fore what's re­quired of them to achieve a pay rise.

Ed­u­cate the em­ploy­ees

If all of the above has taken place, it is then up to the HR depart­ment to train the peo­ple man­agers, to en­sure that the mes­sage car­ried through­out the or­gan­i­sa­tion is con­sis­tent. Dur­ing the one-on-one dis­cus­sions be­tween man­agers and sub­or­di­nates the fi­nal pay in­crease will be com­mu­ni­cated, there­fore it is im­por­tant that all man­agers are well equipped to an­swer ques­tions which may come up dur­ing the meet­ing. There needs to be a common lan­guage amongst the lead­er­ship of the or­gan­i­sa­tion to avoid con­flict­ing mes­sages.

Over­all, ed­u­ca­tion around the salary in­crease process is vi­tal.

The an­nual pay re­view can be a key mo­ti­va­tor for em­ploy­ees, how­ever, if it is not car­ried out prop­erly, em­ploy­ers can cause more harm than good. Pay reviews can be a sen­si­tive sub­ject, so a lack of trans­parency and com­mu­ni­ca­tion from the top down can leave em­ploy­ees feel­ing un­der­val­ued and dis­en­gaged. Pro­vided the process is clear, easy to un­der­stand, fair and well doc­u­mented, ex­pec­ta­tions on pay rises will be­come rea­son­able

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