This is a common situation facing our clients. Your employee wants a salary increase but you can’t provide one, or don’t feel their efforts at work entitle them to one. These clients are faced with the risk of demotivating and or losing the employee by denying their request. If they agree this could cause a financial problem that the business just cant afford.
The difficulty with this is it can sometimes be hard for employers to find legitimate reasons to refuse someone’s request for a pay increase without it sounding mean and causing potential relationship issues. The solution; consider undertaking a salary benchmarking process! This collection of salary data relating to a particular role will provide a snapshot of what the market is actually paying. This information is extremely useful when having salary conversations as the data can support your decision if a salary increase isn’t appropriate.
Tips to remember when an employee asks for an increase:
- Give them an opportunity to explain why they feel this is warranted – maybe you need to reconsider?
- Don’t give an increase for something the employee says they will be able to offer in the future. Reward them for what they are offering to your business now. Reward the behaviour and effort you are currently seeing, not what is promised to you and may never eventuate.
- Consider what it would cost to replace this person if they left versus what it would cost to provide them an increase and keep them? The second option could be more economical.
- Is an increase the only option? Would their role suit a bonus scheme? Could you offer more flexible work hours? Could you offer one-off opportunities that might meet the needs of the employee instead?
- Use your salary benchmarking data to support the conversation.
Need help on getting together a salary benchmark report or to coach you through what to say in the conversation?
Call us for a free initial consultation and we can talk about how we can help you and your business.