When an employee asks for a pay increase, it can be difficult to know how to manage the request. You have to juggle the employee’s expectations and the business, while also ensuring you don’t upset other employees. A request for a pay increase should not be met with a quick yes or no response, it should be well-considered before you make a final decision. These are some ways to manage a pay increase request.
Request Information
It is extremely uncomfortable for an employee to ask for a pay rise. Some will feel that they are going to you with a begging bowl. You should respect the employees and understand that this is as awkward for them as it is for you. Ask them for some more information on why they believe they deserve a pay rise and take note of it. Employees deserve respect for having the courage to ask in the first place. On the plus side, if they are requesting a pay rise, it means they want to stay with the company.
Determine Value
Consider the value the employee brings to the business before deciding. Would it make a big difference to the company if they left? Are they a good influence on the company? It is important to remember that the employee might quit if you don’t fulfil their wishes, and great talent can be difficult to find.
Compare Other Salaries
It is important to compare the employee’s salary with others. For example, is the employee receiving the same pay after four years as someone who recently joined the company? If so, it may be time to revise it. You may also want to analyse the market rate by looking at your competitors and what they pay for the same or a similar job.
Consider Alternatives
If you cannot offer a pay rise due to budget constraints but believe the employee is worth an increase, you may want to consider alternative options. For example, a more flexible working arrangement or additional annual leave. If an employee requests a pay rise and it gets refused, there is every chance they will look for alternative employment.
Set a Deadline
Manage the employee’s expectations by informing them when they can expect an answer – don’t just leave them hanging. If you need time to analyse all the data and the budgets, let them know it may be a few weeks. You should adhere to your deadline and show you take the request seriously. Be prepared to give reasons for your decision.
At Morgan Spencer, we help support clients with jobs at all levels, from administrators to senior management. To find out more about how we can help you improve your business by hiring the right talent, contact us today.