Managing a business involves difficult decisions and tough conversations. A classic example of these is when one of your employees reaches out to ask for a raise.
Whether you think that s/he deserves it, it can often be a complicated situation. There are many factors to consider and most of the time, it’s not entirely up to you either. You’ll have to consult with your HR staff or managers to determine the best possible outcome for everyone.
But you don’t have to go it alone. Here are seven easy steps to help guide you through this complex yet surprisingly common event.
Hold Off Your Reaction
The instinct of most employers is to react right away. Many will shoot it down at the onset, while others will go right ahead and agree. So which one is the right course of action?
Neither.
According to HR experts, the best course of action is to hold off on your reaction. There’s nothing to gain by saying no or yes immediately. As mentioned above, these kinds of decisions aren’t made overnight or on the spot.
Hence, acknowledge their request and simply tell them that you’ll give it the highest consideration.
Get More Information
Instead of granting or denying the request right away, ask for more information. Doing so will give the impression that you’re not dismissing the request outright- but that they still need to present their case.
It’s also a way to show respect and genuine curiosity. Say something encouraging like, “Thank you for bringing this to my attention. I want to give it a careful review and consideration, so can you tell me more?”
Aside from responding politely, it would also help if you take down notes and present follow-up questions. The goal is to get enough information as well as to buy yourself as much time as possible to come up with an informed and objective decision.
Evaluate the Arguments
Once you’re done with the previous step, it’s time to figure out what to do.
Don’t just consider internal equity, but also the open market. Is your employee paid fairly compared to the rest of the team? If so, how does their current rate compare to someone in the same position in other companies?
You should also give weight to your staff’s value. Is that employee an asset to the team or to the entire company?
These should all factor in to your decision to grant or deny the request.
Acknowledge the Person’s Courage
If receiving a request for a raise stresses you out, imagine the anxiety it brings to the one asking. Many employees don’t have the guts to start this conversation, so when they finally find the courage to do it, be aware that they probably took a while to muster up all that courage.
So no matter how “confident” your employee is, remember that this is a tough conversation for both of you. Acknowledge it while being as objective and emphatic as possible.
Besides, asking for a raise can be a good indicator that an employee is planning to stick around. After all, why ask for one if they can just jump ship to another company offering higher pay?
Be Attuned to Less-Direct Requests
However, not all employees are as straightforward. Many might beat around the bush or worse, try to send indirect signs.
For example, instead of directly asking for a raise, your employees might drop hints. They might mention that they’ve been performing well for the past few months. Or that they’re receiving offers from other companies.
Even if these are said jokes, take them seriously. More often than not, their very subtle ways of requesting a performance review – and an increase in compensation.
Know the Limits
Regardless how amazing an employee is, remember that there’s a limit as to how much you can pay someone in a certain position. A raise isn’t always the answer, especially if the request is based on a one-off performance.
As an employer, you’re looking for consistency and growth. Employees who consistently perform with excellence are undoubtedly worthy of recognition and additional compensation.
But for everyone else, a one-time bonus might be enough.
If an employee really insists on a raise, you can look at other options, such as transferring them to a different role within your organisation which pays more.
Deliver the Decision with Care
After weighing all the options and talking to the right people, it’s time to decide. If you’re able to grant the raise, that’s great. However, it’s best to deliver the good news with objectivity.
Explain the process that you went through and the reason why you came up with the decision. At the end of the day, you want your employees to feel that they earned it fair and square.
On the other hand, if you plan to deny the request, come right out and say it. Be as objective as possible when explaining why you consider his/her current pay as appropriate.
Be transparent and emphatic at the same time. Most importantly, don’t make an employee feel bad for asking. A raise may not be possible now, but a rejection today shouldn’t bar opportunities tomorrow.
Managing employees can be really taxing, especially when it comes to determining the proper compensation. Fortunately, we know just how to help you.
Remote Staff has been providing AU SMEs and entrepreneurs with skilled remote workers from the Philippines since 2007. Aside from a smooth hiring process, we also have an all-inclusive rate that makes compensation hassle-free and worry-free.
