Coachosity | Part II: Navigating difficult conversations during reviews.


Hi Reader,

Last week, I shared the importance of providing regular, meaningful recognition rather than relying on raises and promotions once a year. Today, we're focusing on how to prepare for difficult performance and compensation-related conversations that you'll invariably face each year during the review cycle.

Today at a Glance:

  • Curiosity: Walk in their shoes.
  • Insight: Be intentional with your conversations.
  • Action: Focus on the future.

Read time: 8 minutes

Get Curious: What Can I Learn?

Start with Empathy

What does your employee want out of this conversation?

Pause and consider their perspective before diving into your own agenda. It sounds simple, but leading a difficult conversation requires empathy as the starting point—a curiosity about what matters to the person across from you. Before a performance or compensation review, prepare a few open-ended questions: "How do you feel about your progress this year?" or "What would make you feel recognized and valued here?"

Questions like these will help you build trust and connection.

Understand Their Story

Every employee comes into these conversations with a story in mind.

Maybe it’s about how they are underpaid, deserve a raise, or don't feel valued. Curiosity involves probing to understand their narrative without assuming it's wrong or right. "How does your current compensation align with your expectations?" or "Do you feel your contributions are recognized, and, if not, what am I missing?"

The more you understand their version of reality, the better equipped you are to handle tough conversations.

Disarm Defensiveness

Difficult conversations often elicit defensiveness.

It’s easy for an employee to feel attacked or vulnerable during feedback conversations and performance reviews. Combat this by signaling your genuine interest: "I’d love to hear more about what challenges you faced in that project." Or ask, "What would you have needed to make that experience more successful for you?"

Showing a deep interest in their experience and perspective helps lower defenses and provides a path for a productive dialogue.

Insight: What Can I Do?

The Power of Framing

Conversations about money are always charged—psychologically and socially.

Research from the Harvard Business Review suggests that framing the conversation around growth and future opportunities is often more effective than focusing solely on compensation figures (HBR, 2020). When employees feel their future is being invested in, they tend to accept outcomes that might not entirely meet their short-term desires. Start by positioning the conversation around what the employee has accomplished and where they can go next.

Compensation, then, becomes part of a broader conversation, not the whole story.

No Surprises

The best review conversations are the ones where nothing comes as a shock.

Employees who receive regular, constructive feedback are three times more likely to feel engaged at work (Gartner, 2023). To prevent surprises, schedule regular check-ins where you discuss performance openly, both the wins and the areas needing improvement. This consistent communication creates a culture of transparency, so employees know where they stand before formal reviews.

Avoiding surprises leads to smoother, more constructive review conversations.

The Value of Acknowledgement

Research consistently shows acknowledgment to be a powerful motivator—often more so than money.

A Gallup study indicated that employees who feel adequately recognized are twice as likely to say they'll be with their company one year from now (Gallup, 2021). If a compensation increase isn’t feasible, honest recognition of someone's contributions, paired with specific examples, can often lead to increases in morale and commitment. Instead of focusing solely on what didn’t work, highlight positive behaviors, celebrate their efforts, and share how their actions benefited the team’s success.

Acknowledging positive contributions helps establish a supportive environment, making it easier to address difficult issues while maintaining trust and respect.

Action: How Can I Do It?

Be Prepared

Being prepared to lead performance and compensation conversations helps you communicate more intentionally and foster trust.

Start by clearly articulating how their work drives meaningful results for the company and how their growth aligns with both their career path and the organization's long-term goals. If compensation changes aren’t possible, be forthright about the broader context. Frame the conversation around shared goals: “We’re committed to your growth, and while compensation may be limited right now, our focus is on creating future opportunities that reward your contributions.”

A clear, transparent message not only minimizes confusion but also builds alignment and mutual commitment.

Address Misalignment

When an employee’s view of their performance doesn't match reality, it’s crucial to bridge that gap constructively.

Start by acknowledging their feelings: “I understand you feel you’ve been performing well in this area.” Then, provide specific examples where their performance has not met expectations: “However, I observed [share detailed, objective observations], which impacted [detail impact or outcome].” Follow this with a path forward: “Let’s work together on how to close these gaps and figure out how we can get you the support you need.”

Balancing honesty with support helps bring perceptions in line with reality and sets the stage for improvement.

Pro Tip: Make sure your perception matches reality. Sometimes high-performing leaders set exceptionally high bars that can - at times - be unrealistic (I speak from experience). Talk to a trusted colleague, peer, or coach and vet your expectations with them first, before you give feedback that your employee is not meeting expectations.

Focus on Development

Investing in your team's growth is the most impactful way to ensure long-term success.

According to a LinkedIn Learning report, 94% of employees say they would stay at a company longer if it invested in their career development (LinkedIn Learning, 2023). To nurture growth, identify skills each team member wants and needs to develop and align them with organizational needs. Provide opportunities such as coaching, training programs, stretch assignments, or mentorship that can accelerate their growth.

Continuous investment in development shows commitment and drives both employee engagement and retention.

Create Ownership

Wrap up every difficult conversation with clear takeaways and an opportunity for the employee to own their path forward.

It’s not just about what you think they should do next—ask them what they believe would be a positive next step. “Given what we've talked about, what’s one area you'd like to grow in?” or “How can I support your development here?” Co-create an action plan that acknowledges their agency in the process.

Ownership empowers change and creates engagement.

Leading with genuine curiosity, acting with transparency, and empowering your team to grow alongside you will allow you to navigate difficult review conversations more confidently and effectively.

Thank you for joining me this week. Feel free to forward this to someone who might benefit from it.

Here’s to leading with purpose and curiosity!

Cheers,

Del

If this was forwarded this to you, thank you for reading! If you enjoyed it, you can subscribe here.

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