How To Manage Pay Rise Requests
8th February 2019
How much we get paid can be an emotive topic for many people. That is one of the reasons why requests for a pay rise should always be handled professionally and promptly.
The request may occur during a planned appraisal meeting or it may come out of the blue, taking you completely by surprise. Whatever situation you find yourself in good communication and following through with any commitments you make are key. Consider these steps towards a productive discussion.
1. Really Listen
Our first piece of advice is to listen carefully to the request. The likelihood is that a lot of thought and courage has gone into this request so an immediate negative response, without a good discussion, will be very disheartening. Ensure the conversation is private and confidential. What is really important is to find out why they are asking for the pay rise as there could be a number of reasons behind the request.
What motivates people to ask for more money is very personal, their drivers could be a myriad of things for instance, they've done their research and believe they are under paid; completed further education which enriches their relevant qualifications; consistently hitting targets; accepting additional responsibilities. It can be softer attributes too such as having a great attitude which motivates the whole team or staying loyal through protracted tough times.
Don't just stop there though, dig a bit deeper by asking what level of increase they had in mind.
All the information you gather in this conversation will help you set realistic expectations and come back with a constructive response.
Secondly, be prepared before you answer. This means agreeing a timeframe by which you will respond and sticking to it. There are various sources of information to begin your research. If you work in a relatively large company then your HR team is the best place to start as there will be a company specific process to follow.
Salary guides are also useful but be sure to reference one that is relevant to your location, industry and, if possible, business size. This one might be useful to you: North East Scotland Salary Guide. Recruitment agencies who specialise in your area of work will also be able to provide guidance on market rates for specific roles and responsibilities, but remember to take into account any specifics relevant to your business.
Other important sources of information include verified evidence on performance (depending on the appraisal systems this may be continually maintained or updated every 6 or 12 months), budget constraints or the influence of grading systems in your business - it may be that it is a promotion that is due, not just a pay rise.
Whatever the outcome, meaningful feedback is essential and so is giving notice of the meeting – it shows you are planning it into your time rather than just squeezing it in when it suits you. If you have good news to share and you can award a pay rise it is important that you clearly document and explain the basis for the rise – transparency is key.
Of course, the same is true if the pay rise request is being declined.
This is likely to be a much harder conversation and that's where good research and having all the facts to support the decision will stand you in good stead.
Think more broadly about showing your employee that their contributions and work are valued. Are there alternatives to show recognition for hard work.
If the employee has worked really hard on a specific project then a bonus payment, rather than annual salary rise, demonstrates that their hard work has been valued. But through good conversation you may discover they are also motivated by flexitime, extra holidays, health benefits or additional training – offer alternatives that your company can accommodate.
Remind them that saying no now doesn't mean it will be the answer forever. In fact, this could be the start of a constructive conversation about setting objectives that are linked to a salary reward structure. With clear goals in place you will both be on the same page, with expectations set you map progress over an agreed 3, 6 or 12 month plan.
Feeling undervalued is the main reason candidates tell us they want to change jobs. By treating the pay rise request respectfully it is possible to hold salary negation conversations which are constructive, maintain trust between you and lead to a positive outcome.
But a word of caution.
Take care about using pay rises as a tool to retain employees. Retention planning is a long game, made harder in the northeast of Scotland by the number of companies competing to be an employer of choice. There's no 'one size fits all' answer with a delicate balance to be achieved between retaining your best people, maintaining a work culture where people thrive and are most productive and accepting that a pay rise in the short-term is only delaying the inevitable in the longer term if someone is genuinely unhappy in their work. If you cannot change the circumstances which are unsettling them, sometimes you have to acknowledge that you just have to let someone leave.