Effectively communicating about a salary increase or bonus? Here's how to do it.

The salary budgets have been allocated, and the evaluation discussions have taken place. The bulk of the work for managers and HR is done. However, the devil is in the details even in the tail end of the compensation process. Because how you communicate about raises or bonuses has a significant impact on how employees feel. Spoiler alert: technology helps you handle it better.

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April 24, 2024

The communication about storage or bonuses is often problematic in many companies. Often, a plan of action is missing. In an ideal scenario, the manager discusses this during a personal conversation with the employee. Subsequently, official communication with the exact figures is sent out from HR. However, forgetfulness, poor agreements, or overloaded schedules frequently throw a wrench in the works.

Sometimes HR forgets to communicate the salary increase on time. Or the discussion only takes place after the new salary has already been paid out, or when the letter has already been sent. These are missed opportunities, as a salary increase is an excellent moment to explicitly thank employees for their efforts.

It expresses your appreciation and gives people a sense of involvement, crucial in the employee experience. This 'experience' determines how people feel, what they think, and how engaged they are with your company's mission. Salary, and everything related to it, is very important to people and thus significantly shapes the employee experience.

Salary is the decisive factor for choosing to work for a company, according to research by KU Leuven (2022). Repeated studies show that salary remains the most important job condition for employees. Good communication about salary builds trust in the company. It shows that there is attention for the individual, and that everyone makes a difference.

Software helps to handle it better. Forget forgetfulness or communications going wrong: with Youbo, you turn rewarding into a positive experience from A to Z for all involved. Organize the final part of your reward process with these four steps.

Draft a good reward letter

In the digital age of fleeting emails and quick social media posts, a carefully drafted letter is a powerful tool for conveying important messages. It cements a relationship. Even the most sophisticated email cannot compete with a reward letter.

With a reward letter, you explicitly and individually inform employees about their raise or bonus, and possibly the objectives that have been achieved. Need inspiration? Google 'employee recognition message' and discover numerous good examples on the internet. Keep in mind that a letter is personal. Write carefully and make sure the content matches the tone of voice and values of your company.

With Youbo, you can automatically send this letter after the distribution and approval process. Choose a template and the tool fills in the correct figures. Bye-bye typos. A word from the manager personalizes the letter.

Youbo automatically sends the changes to the payroll system. This is much more convenient than the process via spreadsheets, which is clunky and prone to errors. Accuracy is crucial when it comes to salary.

Timing is everything. Send the reward letter at the right moment

A performance review should be a dialogue. If an employee receives the reward letter before their discussion, it can feel like one-way communication. Instead of feeling valued, they may feel like a number; a checkbox on someone’s to-do list. The same goes if their salary changes without knowing why.

Yet, this issue often occurs in reward processes using spreadsheets. Excel is a sort of black box. HR does not know when discussions with employees take place. For companies using spreadsheets, it's a complex feat to monitor the timeline across departments. There’s no ill intent, but the consequences can be harmful.

Youbo solves this. HR can follow the status of discussions at any time in the tool. Once they are completed, the letter can be sent and the adjustment in payroll communicated. No more risk of errors.

Increase fairness through valuable insights

Measuring means knowing, and you can learn from numbers. At least, if you have reports with clear data and not as brief as in Excel. Are your salaries competitive with the market? Are there differences in the salaries of men and women? Are there outliers, positively or negatively? Reports in Youbo make this clear in an instant.

Only by examining this can you know if your compensation policy is truly fair. No difference between men and women. Between loud voices and quiet forces. Between the theory and practice of your salary policy. This is an important task for HR and managers, which they can only accomplish with the right tool.

Fairness is the cornerstone of a good salary policy. If you are unaware that the salary of a particular employee is lower than the market or their colleagues, you risk them being dissatisfied and leaving. Insight leads to appropriate actions, maintaining the satisfaction of your teams.