Responding to Pay Raise Requests
Both for an employer and an employee, one of the more uncomfortable conversations to be had surrounds pay raises.
Everyone wants to get paid more and employees often have to summon up the courage to make the request, says Jeff Haden, small business writer and contributing editor for Inc.
“That’s a tough thing for most people to do. Understand that,” he says.
So how should employers handle a pay raise request? What is the best way to say no? What is the best way to say yes? National Oil and Lube News spoke with Haden to find out.
AS TOLD TO PAUL HODOWANIC
Understand the emotion, counter with objectivity.
Expect for pay raise conversations to be uncomfortable for you. It’s going to be uncomfortable for the employee, but it’s going to be uncomfortable for you too.
So the problem is it’s an emotional discussion for an employee. That person has thought about it for a while. They’ve decided that they want a raise. In all likelihood they’re disgruntled in some way. They’re in an emotion-based place.
So when they ask, don’t get defensive. Don’t push back. It’s an important discussion for that person, treat it that way. Say, “great, tell me why you feel you deserve a raise.” Turn it back to the person, not in a bad way, but to hear what they’re thinking. The key is you have to actually sit back and listen. Don’t immediately jump in. If you do, it will make the employee feel like they haven’t been heard, which is important in that discussion regardless of the outcome.
What you can’t do is to let the emotion drive the conversation. You shouldn’t consider or really discuss the person’s personal financial situation. The fact that the employee has several car payments shouldn’t be factored into the equation because everyone has those issues. How do you judge who deserves a raise more or less based on those external factors? The second thing you don’t want to get into, if you can help it, is comparisons to how much someone else makes in comparison to another if they’re at the same job level. That’s a slippery slope you’ll have a hard time getting back from.
How to say no.
There’s a whole host of reasons why the answer might be no. Maybe the employee hasn’t met expectations, or maybe the company doesn’t have the financial standing to raise wages. But whatever the reason for saying no is, it needs to be performance-based. It needs to be quantifiable and it can’t seem like an opinion. Where you get in trouble is when your pay seems arbitrary. When it just seems like you gave out a raise because you feel like it.
So be honest and transparent with the employee. But also leave the conversation open. Be ready to tell them what they can do to earn a raise. “If you do X or Y or your metrics go up, then you can get a raise.” Whatever those criteria are, you need to give them a target to shoot for.
And don’t compare them to other people. Have a set of standard expectations that every employee can reference and understand what they need to do to get a raise.
How to say yes.
The tricky part is that if you’re paying attention to your people, you should already know their value to you. So if they deserved it, you probably should’ve already given them a raise.
That’s an awkward spot to be in because if you listen to them and say “you’re right, you do deserve a raise,” invariably that person leaves and thinks it’s great but then says “but why did I have to ask.”
So the best thing to do is deal with it right when they start thinking “well why do I have to ask?” And say, “you’re right and to be honest I haven’t been paying as close of attention as I should have and you do deserve a raise so we are going to do that. And as part of that, I promise to pay better attention to the job you do and the value you bring.” Admit the fact that they deserve it.
Now this also opens up another slippery slope. I don’t care if you have a policy that says keep your pay confidential. People talk. I used to. If you grant a raise, it’s more likely more people will come talk to you about a raise of their own, which is why it’s even more important that whatever criteria you use to make a decision for one person, you can use and apply for the other people that come along.