Dec 13, 2023

Navigating Merit Cycles

Key strategies for preparing your managers for a successful review season

Navigating Merit Cycles

Key strategies for preparing your managers for a successful review season

Review season is on the horizon. Whether you have long-established compensation plans, have recently revamped, or fall somewhere in between, it’s important to ensure your managers are well-prepared and able to navigate the process effectively. In this blog, we’ll share some key strategies for people leaders to implement for a smooth and successful merit cycle.

Merit cycles (also referred to as annual reviews or focal reviews) are used to determine compensation and/or role changes in an organization. They often follow or are combined with performance reviews.

Key strategies ⬇️

Align on Goals With Leadership

Based on the company’s overall goals and needs, there will be some combination of the following focuses for your merit cycle: Promotions, Retention, Market Adjustments. Getting on the same page with your leadership about where your goals fall will likely affect whether equity, cash, or something else will be a key lever in a particular cycle.

This will also help you determine who should be involved in the cycle (department leads, managers, etc.).

Set Clear Expectations

Start the preparation process by setting clear expectations for the merit cycle. Provide managers with a detailed timeline, outlining key milestones and deadlines. Clearly communicate the criteria and metrics that will be used to assess employee performance. This transparency sets the stage for a fair and well-informed decision-making process.

Budget Training and Development

Before the merit cycle begins, conduct a thorough review of the organization's compensation policies. Ensure that managers are well-versed in all existing policies and call attention to any changes to salary structures, bonus criteria, or other compensation-related matters. This helps prevent misunderstandings and ensures that managers can confidently communicate these policies to their teams.

Data Accessibility and Analysis

Ensure that managers have easy access to relevant data for performance assessments. This may include performance metrics, goals achieved, and any other pertinent information. Provide training on data analysis to help managers make evidence-based decisions, fostering objectivity and consistency in the evaluation process. 

CandorIQ makes manager-level data access incredibly easy. If you’re already a client, be sure to reach out to our team with any questions about how to best utilize our people platform for your merit cycles.

Promote Consistent Communication

Emphasize the importance of consistent communication throughout the merit cycle. Encourage managers to maintain open lines of communication with their team members, providing feedback on performance and addressing any questions or concerns. Consistent communication builds trust and ensures that employees are aware of the criteria used in the evaluation process.

Addressing Bias and Fairness

Provide guidance on addressing unconscious bias during the merit cycle. Train managers to recognize and mitigate bias in performance evaluations to ensure fair and equitable outcomes. Emphasize the need for objective assessments based on merit, skill, and accomplishments rather than subjective perceptions. 

Prepare for Difficult Conversations

Acknowledge that merit cycles may involve challenging conversations, especially when it comes to discussing compensation. Provide guidance on how managers can approach these conversations with empathy, transparency, and professionalism. Equip them with strategies for delivering constructive feedback and handling any potential pushback from employees.

Preparing managers for the merit cycle is a strategic investment that contributes to the overall success of the performance evaluation and compensation process. By setting clear expectations, providing training, and ensuring data accessibility with tools like CandorIQ, HR teams can empower managers to navigate the merit cycle with confidence and fairness. This proactive approach not only strengthens the merit cycle process but also fosters a positive and collaborative work environment.

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