How to React When Your Employees Ask For A Raise

Take It Seriously

It takes some courage for an employee to ask for a raise. Most employees wouldn’t ask for more money if they didn’t believe they deserved it. Employees have done their homework and will know what value they bring to a business, and they want to receive some kind recognition of that from their employers. If an employee believes they are being neglected or undervalued they may develop a habit of underperforming in their position.

First Response

It is best to respond to your employee’s request by telling them you need some time to review their performance and talk it over with management. Give them a timeline so they can know when to expect an answer. There is no need to talk about reviewing the company budget. This can raise employee expectations and make them think they will receive a raise if there is room in the budget. First, do your own research and then decide how to respond.

Do Your Research

Employees keep track of their job performance and will often present employers with a self-analysis, which includes information to support their request for an increase in pay. Review their analysis, and then get a second opinion – your own. It is best to evaluate the performance of your entire workforce and review the pay rates of all employees at least once a year with your management team.

Pay raises based on the performance of your entire organization plus individual merit can keep employees motivated and energized in their positions.

Here are some questions to keep in mind when making your pay raise decision about an individual employee:

• What feedback or data do I have about their individual performance?
• How much do other employees in the same position make?
• Do they make the same or more than employees who have worked at the company for a longer period of time?
• Do you think they will leave the company without increased compensation?
• Can they be easily replaced?
• What incentives can I offer the employee other than a raise?

Yes/No, Give Meaningful Feedback

Whether or not you decide to reward an individual employee who seeks a raise, show them that they are valuable to your company and provide them with feedback they can use. It is best to make a timely decision, so stick to the timeline you discussed with the employee. You don’t want them to think you forgot about their request. Even if your answer is no, give them a reason why a raise can’t be given. Consider alternatives to a raise in pay – bonuses, special privileges, or extra help.

Retaining employees, especially valuable ones, can be difficult. Often it is not more money that your employees seek.  It could be recognition, career advancement, more challenging work, and many other factors that play into the daily lives of your employees. That’s exactly the type of data that we collect with our employee engagement surveys. Results are evaluated with our ClearPath Analytics and then turned into measurable steps for improvement with ClearPath Action. This allows us to track your progress and resurvey periodically to assist your company in staying aligned with goals. If you’re ready to move your organization to a higher level of performance, contact us today for a free estimate.