When a high performer consistently exceeds expectations, compensation provides a practical way to show appreciation. It means the pay and financial rewards an employee receives in exchange for work, including increased annual compensation or spot bonuses. Compensation complements recognition, feedback, and growth opportunities rather than replacing them. section 4.4.2
Use compensation as part of several connected management practices:
- Reward strong performance: connect performance reviews with increased annual compensation or spot bonuses when employees exceed expectations. section 4.4.2
- Stay competitive: align compensation with industry standards when retaining valuable technical talent is important. section 4.4.2
- Discuss financial matters clearly: use performance-review conversations to address promotions, compensation, and common employee questions. section 4.3.3
- Investigate retention concerns: when an employee plans to leave, identify the root cause and discuss compensation concerns with human resources when appropriate. section 8.6
A retention conversation
An employee says dissatisfaction with compensation is influencing a decision to leave. The engineering leader identifies the underlying concern, discusses it with human resources, and explores alternative roles that fit the employee’s skills and interests. section 8.6
