Transparency and open ears create a good environment for salary negotiations

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In many workplaces, spring is synonymous with salary talks and salary negotiations, and for many of IDA's management members it is something that will take up both calendar space and focus in the coming time.

But how do you as a manager ensure that you create a good and safe salary negotiation environment?

Jacob Thorngreen, chief consultant at IDA's legal department, has a couple of recommendations.

"First of all, it is really important to have a great degree of transparency about how the negotiations take place. As a manager, you must not take it for granted that all employees know when salary is being negotiated, what the framework is for the negotiation, whether the conversation takes place at the manager's or the employee's initiative, and whether there is anything the employee must have prepared before the meeting. There is a big difference in how these things are done from company to company, so also for the sake of newly hired employees, transparency and clarity from the manager's side is very important," says Jacob Thorngreen.

Clarity also includes reporting clearly if salary negotiations are not automatically held in the company, adds Jacob Thorngreen.

"In those cases, the manager must make it clear that even if you do not have salary discussions once a year, the employees can always come to the manager and have a talk about salary," says IDA's legal chief consultant.

Your employee has been preparing for a long time

Another key concept for the managers when it comes to creating a good negotiation space is to prick up your ears and listen to what your employees have to say. 

"Once the meeting or negotiation is underway, the manager must remember to listen and be curious. Perhaps the employee has spent a whole year building him- or herself up for this conversation and preparing their arguments, and therefore it is extremely important to listen and try to understand things from the employee's perspective - even if the manager may not want or have the opportunity to honor all wishes. If the manager listens carefully, there may be room for opportunity and perhaps opportunities to recognize the employee in other ways than just via salary," says Jacob Thorngreen.

In addition to listening carefully, as a manager you must also ensure that you set aside the necessary time for the salary negotiations.

"It is important to send the signal to the employees that it is not just a two-minute talk where they come up with a wish, and then they are out the door again. A salary interview can also be used for a conversation in a longer perspective, and if the wishes cannot be met here and there, you can talk about what may be needed so that the employees' salary expectations can be met in the long term," says Jacob Thorngreen.

As part of the manager's preparation for the salary interviews, it is a good idea to have thought of alternatives to the figure at the bottom of the monthly payslip.

"You can often get satisfied and motivated employees from other things than salary, and you generally have to be careful not to have too narrow a focus only on money alone. Often you can talk your way into other ways of rewarding the employee's efforts, for example via more paid freedom, increased flexibility, skills development, courses and subscriptions," says Jacob Thorngreen.

He adds that of course the employees cannot take out loans from the bank by saying that they have been promised skills development.

"That is why it is important that the manager acknowledges the employees' wishes for higher salary. It's just important to also use the salary interview to discuss the other options available to reward good effort," explains Jacob Thorngreen.

Salary negotiation is not an all-you-can-eat buffet

- What is particularly important that you as a manager avoid when you have invited the employees to salary negotiations?

"One must refrain from sending a signal that a large buffet opens up with the salary discussion, where the employees can choose how big a pay rise they want. If you know in advance that there is nothing to pursue or only very few funds are at stake, it is important to announce this openly and honestly.”

"I have heard of many examples of how it can really leave employees disappointed, frustrated and demotivated if they have turned up for a salary negotiation with high expectations, and then after two minutes of dictation they are out the door with much less than they had counted on, and without having talked about how and when their expectations might be fulfilled. That situation must be avoided by the manager," says Jacob Thorngreen.