I was with a new TMT client of ours yesterday. Are you wondering what our TMT program is? I’ll talk more about that on Monday. It’s very popular!

When we got to the point of talking about their performance reviews and compensation reviews, we discussed the value of having these as separate events. However this particular business is very virtual. Most of the employees are consultants and there is not one large office where people congregate on a regular basis. Scheduling people for separate compensation reviews is a challenge.

The problem with combining a compensation review with a performance review is the employee doesn’t really focus as much attention to the performance review because they just want to learn how much more money they can make. The pending compensation review is kind of like having an elephant in the room that no one wants to talk about. Although you’re reviewing the employee’s performance, they’re mainly thinking about the “elephant” and wondering how long it will be until you talk about it.

He has a great solution: He talks about the compensation review first and then provides the detail that validates the compensation decision (the performance review) second. He he talks about what’s most interesting to the employee first, which is their compensation, and then they review the individual’s performance.

If you have to combine your compensation and performance reviews, then I recommend you take this approach. However, you should be prepared that if the compensation increase you propose is less than the employee expects, then it may make for a more tenuous performance discussion. Brooding, complaining, shuffling of feet…