Compensation Questions? 

Employee: I want to talk about my compensation 

(Most) managers: ?!?!?!?!?

Compensation questions tend to fluster the average manager. 

It could be because they don’t want to disappoint the employee or cause any issues… 

However, I think most comp questions make managers uneasy because they just don’t know what to say! 

🙄Sometimes even when they’re told ahead of time that compensation will be discussed… 

So, today’s edition is going to solve that problem for you & your managers. 

I give you: 3 compensation questions and how to answer them! 

Feel free to copy & paste and share with your managers. 

Q: Can I have a raise?

When to expect this question:

• After an anniversary (1 year, etc) 
• During your annual or biannual review or any review process tbh 
• When the employee is asked to take on additional work 
• Honestly, whenever. Employees are asking regularly. 

Pro-tip for managers: remove the anxiety around compensation convos with direct reports by telling them you’re always happy to discuss compensation but would love a heads up before the convo so you can come prepared. Being caught off guard isn’t great! 

How to prepare for the conversation:

• Make sure you understand your company’s compensation philosophy. Is this even a possibility?
• Review the employee’s performance 
• Assess market rates for the employee’s role. The HR team can share info here around banding and market data. If they don’t have that you may have an uphill battle… 
• Consider company performance and financial standing. Can the company possibly afford to increase a salary? If funds are tight the answer is no. 

What to say during the conversation: Oftentimes we focus on the answer we’re going to give someone rather than acknowledging the effort that was put in to muster the courage to ASK. But that’s where this convo should always start!

Let me break it down for you, the convo should flow:

• Say thank you for bringing this to my attention 
• Make sure you understand & reiterate their ask 
• Share any context you have about what happens next 
• Set a specific time to follow up 

📣Here’s what that looks like:

I appreciate you bringing this up. I know how hard it can be to advocate for yourself and as your manager I want to do everything I can to support you in this process. 

I’d love to hear more from you about your salary expectations to ensure I understand. 

(Employee shares) 

Let me share some context about what happens next. [Insert next steps like: this request goes to HR, budget needs to be requested, leadership sign off, or is this an automatic no per the compensation philosophy – like do raises only happen at certain times in the year? Etc, etc]

Let’s set a time next week to revisit this convo and I can share more about where your request stands. 

Here’s where it gets tricky: Not every employee who asks for a raise is going to get one or even deserves one… I said what I said! So having a script handy on what to say when you know the employee isn’t receiving one! 

Something like… 

I wanted to grab some time for us today to chat through the next steps on you requesting a raise. 

I’m glad that we’ve started this conversation so I can better understand your compensation goals. 

However, at this moment we cannot fulfill your request for a raise. 

I know this isn’t what you wanted to hear, so let me share some context on why we cannot so that you have a better understanding. 

We cannot increase your base compensation because: [pick any of the following or write your specific reason]

• Your performance is doesn’t meet expectations (if your raises are tied exclusively to performance) 
• Due to the company’s financial situation no raises are being approved
• Your base salary is already within the band for someone in your role and responsibilities 

If a raise is possible down the line you can say: While we cannot increase your base compensation at this moment, I’d like to put together a plan on how we can address this at a future date. We can set goals and milestones to be reached to qualify for a raise. 

DO NOT, I repeat, DO NOT promise a raise down the line if it really isn’t possible. There’s nothing worse than getting someone’s hopes up and dragging them along for months only to say no again. 

Also, the earlier you get your HR team involved in the conversation, the better. 

🙅🏽‍♀️The worst thing a manager can do is ignore this request or not consider giving follow up. 

That’s how you end up on the bad manager list. 

Q: What factors influence raises and promotions?

When to expect this question:

• In interviews – a lot of candidates will ask about criteria! It helps them estimate their future earning potential. 
• After a round of promotions
• After an employee has been informed they aren’t getting a raise 
• As an employee is approaching an anniversary
• All the time, 24/7 (always be on your toes when it comes to comp) 

Pro-tip for managers: you should be the expert on your company’s compensation philosophy. That means understanding the factors that go into determining a salary and promotions. 

Here’s when it gets messy: A lot of HR teams don’t have a clear set of criteria when it comes to salary and promotions. 

But you have to have that otherwise how can you make equitable decisions?! 

Cough you can’t cough. 

Reading this and thinking, I NEED HELP!! Next week, we’re writing a compensation philosophy together. YUP, next week’s edition will teach you how to write a compensation philosophy so this question can CLEARLY be answered. 

📣Here’s how to respond to this question:

I’d be more than happy to discuss factors that go into consideration when it comes to raises or promotions. There are a few things we consider like:

Performance: When it comes to performance I look at goals being achieved, how the team is performing and if individual expectations are being exceeded. 

Role/Responsibilities: I’m looking to see you grow in your role and responsibilities. That means demonstrating growth, adaptability and commitment to your role and tasks beyond your role. 

Company performance: Another factor considered is how well the company is doing financially. It’s important to ensure any raises and promotions are aligned with the company budget. 

Ultimately, our goal is to recognize employees who have exceptional performance, possess skills needed to advance to the next level, and are aligned with our company values and goals. 

To note: be as specific as possible. Make sure when you say expectations are being exceeded that you’ve actually SET EXPECTATIONS ACCORDINGLY. 

Sorry for raising my voice but you don’t want your team confused about what the expectations are. 

Q: Can I have a bonus?

When to expect this question:

• After an employee has been informed they aren’t getting a raise – this can be see as another way to increase total compensation 
• After achieving a goal or a major milestone
• After an employee has been sustaining high performance for a while 
• During performance reviews 

Pro-tip for managers: stating this AGAIN for good measure… you should be the expert on your company’s compensation philosophy. That means understanding if bonuses are a common part of compensation at your organization. 

📣Here’s how to respond to this question:

Thanks for bringing up the topic of a bonus! I’d love to share more info about how we think about bonuses at this organization. 

Bonuses are usually awarded based on performance or achievement of a certain milestone or goal. 

Most of the time bonuses are predetermined and set during the recruitment process and are based on factors such as role, scope and organizational impact. Then they are assessed during our performance review process and awarded after that review period is completed. 

There are moments where bonuses can be leveraged for performance that is truly exceptional or when an important project is completed. 

While I can’t guarantee a bonus continuing to do exceptional work and could make you eligible for consideration. I’m here to help provide support and guidance on your goals.  

The bottom line: your compensation philosophy should have a section on bonuses, how they’re determined, who is eligible and how to award them equitability. 

More on that next week! 

What’s next:

You know what can solve all your problems and potentially answer these questions before they even become questions. 

A STRONG COMPENSATION PHILOSOPHY. 

But, how do you write a compensation philosophy and get buy-in?

🫱🏻‍🫲🏼Next week young padawan, I shall show you the way.