Here’s the tricky situation: one of your top performers comes knocking on your office door and requests for a salary raise. While your employee has carefully outlined the reasons on why he deserves a raise, one of them being feeling underpaid for the job done, as in comparison to other peers at the same level and field. The dilemma is, you do not want to lose your A top player. However, given your company’s current financial condition, you are not really sure if you can afford giving more to this employee. Then how you should handle such conversation?
Every employee wants to get proper recognition from the company for all the efforts and contributions that they have put in the business. Salary raise is one of the most tangible form of recognition to make employees feel a sense of achievement.
Unfortunately, employers often fail to know what their employees think about salary offered, until one of them asks for a salary raise. If such requests are not handled cautiously, it might lead to unwanted prolonged issues such as harsh confrontation and could even cost employee resignation.
Salary raise request should not be perceived as a kind of hindrance that interferes with your business plan. More than this, such demand is an opportunity to provide appropriate rewards for your top performers. Rather than being ungrateful for employee contributions to business success, you should appreciate their courage to open up and speak the truth to you. This definitely means that your employees talk to you, about their concerns and need for a raise, because they care about the business. If they are not loyal, they can just leave the job anytime for higher pay in another company.
As a leader, when times demand of you to deal with such similar situations, here are couple of things you must follow to be prepared to handle salary raise requests from an employee tactfully:
Try to put yourself in the shoes of your employee. When they ask for a salary raise, they must have considered all the consequences before approaching you. Therefore, you should treat their requests seriously with respect.
Don’t rush to say ‘No’ and defend yourself because it could only worsen the situation. Rather, you should take time to listen to their concerns and review their reasons.
To arrive at the best decision regarding employee’s request for a salary raise, you should pay attention to their past performance. You will need to open up their performance report and find out if they successfully meet the organisation’s targets and expectations. Not only individual performance goals, but you also need to monitor their active contribution in the team development.
Happy employee is equal to a successful business. If you find that an employee demonstrates good track record and the company’s financial condition is good, then you should give them the reward they deserve.
Through this approach, you can support growth of both your business and employees in tandem. If you feel that the employee is able to showcase hard work and commitment to achieve business goals, then it perhaps the right time for you to reward them right with the requested salary raise.
As the old adage goes, “honesty is the best policy.” If you look at this situation from an employee’s perspective, then asking for a salary raise in itself to the employer/boss is not an easy thing to do. They have to muster courage to confront the boss face-to-face and produce legit reasons on why they deserve a raise.
Therefore, you should reward their courage with honesty, about why they should or should not get the raise. Clarity is one of the keys in effective salary negotiation. Give them some understanding on the company’s current condition, so that they can accept the decision gracefully.
Getting rejected for a pay raise request can prove to be very demotivating for employees to impact their performance and morale. So, if you think your business cannot afford to grant their raise request at this point in time, it will be wise of a business leader to pacify their expectations by offering them other alternatives.
Reach out to the employees and negotiate with them for other non-monetary perks such as increased flexibility to work from home, providing more flexible work hours, or delegating top projects to them.
Salary negotiation is a sensitive issue that can be difficult to handle. However, if you initiate a wrong step in this direction, it could seed more serious problem in the future. The key to tactfully navigating through such requests, is discussion and explanation with clarity, while always treating your employees with respect. You need to convince them that you value their contributions to the organisation and showcase sincerity to review their requests.