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Pay Raise, Please

Managing Talent

Developing a logical response when an employee asks you for a pay increase

Published on: April 26, 2013

One of my clients reached out to me when an employee asked for a pay raise unexpectedly. With this sensitive topic I had to dig in further before I could advise. Pay has always been and will always be a delicate subject when it comes to the employer/employee relationship. Managers need to consider all angles and ramifications when it comes to responses to these requests.

Employees come to the table for more green for a variety of warranted and unwarranted reasons. They may have more going out in expenses than income coming in. Another job offer might be on the table for them. Our culture has also been the culprit of spurred thoughts that longevity alone deserves more pay. Or perhaps the dreadful rumor mill started the "salary comparison" game in the field.

Developing a logical response is crucial when an employee asks you for a pay increase
Developing a logical response is crucial when an employee asks you for a pay increase

If you are lucky the requestor actually deserves the increase; he has stepped up in responsibilities and is asking that pay match his role and abilities.

Analyze data
The best ways to tackle this situation is step back and analyze the data. Look hard at the performance level of the employee and the tasks he was responsible for at the time of hire or last raise. Compare that to what he is doing now. Is he able to do more with less direction? Is he more of an asset to the team?

Now consider what would happen if the individual left. If you had to replace his skill set what would that cost? What would be the compensation for a comparable individual? What is the value of his position to the company?

The goal in the game is to provide your top performers competitive pay for their position and ensure pay aligns with the value the individual contributes to the company.

Here's a word of caution: I rarely give a pay increase upon a request from an employee. Word will get around and before you know it the entire staff is lined up at the door. If the request came from one of those unwarranted reasons, simply have the frank conversation with the final answer being no. If you feel the employee has a legitimate request, then structure it so that they do get the raise. I suggest outlining their new responsibilities and higher expectations that come along with the new rate which could be given at that time or after a trial period.