The best asset of any company is the employees. While employees leave for a wide variety of reasons, pay is a major cause of employee turnover. Employees who feel that they aren’t valued by the company or paid enough for their positions tend to search for other jobs. It’s essential to recognize employees as the valued resource they are, and how better to do that than to give them a raise?
Giving raises isn’t always possible, however. So what do you do when your employees ask for a raise? How the request is handled, whether it’s accepted or denied, can determine an employee’s future satisfaction with your company.
Listen to Your Employees
If an employee is asking for a raise, they believe they deserve it, whether that’s because they expect an annual raise or because they have been working hard. It’s important to listen to what your employee has to say. Even if you ultimately deny the raise, hearing your employee out will show them that you take their requests seriously.
Think About the Request
Take some time to think about the request. Does the employee deserve it? One big project doesn’t necessarily equate to regular excellent performances. Does giving the employee a raise fall within your company’s guidelines about pay raises?
Even if you’re certain that you’ll decline the request at the moment the employee asks, it’s important to take the time to consider it. If you deny raises immediately, that could make your employees feel that their requests aren’t respected or taken seriously.
If an employee has put in a lot of hard work on a project, but you don’t feel that they have earned an overall salary increase, consider offering a bonus for that project instead. It’s a compromise that would compensate your employees for a job well done and will leave them feeling valued. Then, you can reconsider giving out raises at a later time.
It doesn’t matter what other perks your company offers if your employees are being paid less than they would make elsewhere. If your employees find out that they’re being underpaid by regional or national standards, then they may seek employment at another company that will compensate them more fairly.
If you are underpaying your employees and can’t immediately afford to pay them the standard for their positions, consider offering a salary increase and creating a plan for eventual raises to meet the industry standard.
If you do have to decline an employee’s request for a raise, it’s important to do so with respect. You don’t want your employees to walk away from the rejection wanting to look for another job. Talk to them about their career path and plans for moving forward. If possible, offer other perks, such as a more flexible schedule or more PTO.
Your employees should know exactly where they stand and leave that meeting still feeling that they are valuable to the company.