Chatter of an economic rebound could spark a string of employee raise requests. If it does, are you ready to respond?
Here are the best and worst ways to react to a raise request, according to management consultant Dick Grote, author of How to be Good at Performance Appraisals.
The worst responses
Grote warns that the biggest mistake is issuing snap denials, like:
- We’re in a pay freeze.
- No one gets a raise until after an annual performance review.
- It’s not possible until we get a budget increase.
- You’ll have to talk to Mr. Smith about that (this screams: “I have no authority!”).
Being quick on the trigger with these responses can be soul-sapping to an employee.
There is a better way.
The best responses
Grote cautions that even if the request seems outlandish, giving a firm answer right away is not the way to go.
Instead, he recommends thanking the person for bringing the matter to your attention, promising to get back to them (set a specific date) and taking time to assess the situation.
While evaluating the request, keep in mind an employee’s value is dependent on the job he/she performs — not the quality of the individual’s performance, Grote warns. That means to determine the appropriate salary level for an individual, you must look at the market value for his/her position.
After that, there are two possible outcomes. Here’s how to handle each:
- If a raise is not warranted, and the person has reached the maximum value that can be placed on a particular role, explain to the person that the refusal is not a reflection of the person’s value as an individual but rather the worth of the job to the company — no matter how well it’s performed.
- If a raise is warranted — either because the person is underpaid compared to others doing similar work or it’d be difficult to replace the individual at the same salary — don’t grant the increase immediately. This can create the impression all employees are underpaid. Instead, Grote recommends asking for a little extra from the person before granting the raise. How can she increase her performance/value to the company? What additional duties can she take on? Only when these issues are settled does Grote suggest granting the raise.
One question you’ll want to ask yourself when the dust clears: Is this an isolated event or a sign it may be time to rethink your pay policies?