Preparing Managers for Effective Compensation Reviews in 2024
The Challenges of Coaching Managers Through Compensation Reviews
According to industry research, 80% of compensation leaders cite “coaching managers through the process” as one of the biggest challenges in managing compensation review cycles.
Sound familiar?
Many HR professionals find that manager training and communication are the most critical areas for improvement in compensation reviews. As Christy, Sr. Employee Benefits Compliance Officer, puts it:
“My biggest frustration with the process is getting managers to complete their reviews accurately, thoroughly, and timely!”
If you struggle to help managers complete reviews efficiently, this guide outlines three key strategies to ensure they navigate the process effectively and on time.
Managers Understand the Value of Compensation Reviews
Despite concerns that managers may not take compensation review cycles seriously, research shows otherwise. According to the State of Compensation Review Management 2024 survey, managers recognize that well-executed reviews improve employee retention, engagement, and morale:
“Successfully completing a compensation review cycle helps build trust with team members and boosts overall morale. It also strengthens retention.” – Head of Engineering
Managers see these reviews as opportunities to set clear expectations, align goals, and motivate employees. So why do they struggle to execute them efficiently?
Why Managers Struggle with Compensation Reviews
1. Lack of Access to Crucial Compensation Data
Managers often lack the necessary data to make informed compensation recommendations. Surveyed managers rated their ability to access relevant data at just 6.13 out of 10, highlighting a major gap.
2. Inefficient Review Processes
Many managers find their compensation review process inefficient, rating it 6.07 out of 10. Common frustrations include:
- Outdated systems
- Scattered compensation and performance data
- Manual spreadsheet processes
3. Unclear Compensation Guidelines
Managers often lack clarity on salary bands, equity benchmarks, and performance-based pay criteria—leading to delayed and inconsistent pay decisions.
How HR Teams Can Prepare Managers for Compensation Reviews
1. Provide Easy Access to Compensation Data
To make informed salary recommendations, managers need access to:
- Current and historical compensation data
- Employees’ position within salary and equity bands
- Market benchmarks for salaries and incentives
- Performance data for pay-for-performance decisions
“My biggest frustration is not having a full view of the data I need when making compensation decisions.” – Director of Marketing
Aeqium’s Employee Total Compensation Dashboard centralizes this data, enabling managers to make fair, data-driven pay decisions.
💡 Tip: Implement a compensation cycles tool to ensure managers have real-time data at their fingertips, eliminating delays and confusion.
2. Implement Guided Workflows for Compensation Reviews
HR teams at Warby Parker, Braze, Hopper, Mixpanel, and WHOOP have successfully optimized their compensation review cycles by using guided workflows.
These workflows help managers instantly understand:
- Which employees need review
- Proposed salary changes based on company compensation philosophy
- Who still needs to complete reviews for direct reports
- How salary adjustments impact their department’s budget
Aeqium’s Guided Manager Workflow simplifies this process, ensuring managers can complete reviews accurately and efficiently.
💡 Tip: Integrate training content directly into your workflows so managers can access guidance while completing their reviews.
3. Train Managers for Effective Pay Conversations
Compensation transparency plays a major role in employee engagement. Well-communicated pay equity is 13 times more important than higher salaries in retaining employees.
To support managers, HR teams should provide training on:
- Company compensation philosophy and salary administration guidelines
- How to apply compensation policies and seek approvals
- How to navigate pay conversations—both manager-initiated and employee-initiated
“Transparency in compensation builds trust between employers and employees.”
💡 Tip: Deliver training through multiple formats—live workshops, embedded platform resources, and on-demand videos—to maximize effectiveness.
Run Faster, More Accurate Compensation Reviews with Guided Workflows
Compensation review cycles are key opportunities to improve retention and morale. By optimizing manager training and compensation workflows, HR teams can ensure:✅ Faster review cycles✅ More accurate salary recommendations✅ Increased manager confidence in pay decisions
Who knows? Your managers might even thank you 😊
🚀 Ready to streamline your compensation review process? Sign up for a demo of Aeqium today →
