How Do You Handle the “I Want a Raise” Discussion?

“I Want a Raise” Now What?

As a small business owner, you’ll often receive requests for a raise from your staff. Maybe you have employees go directly to their managers for the salary discussion, or perhaps you handle it yourself as part of an annual review.

However, you address the issue, below are some tips that might help take the discomfort from the process.

1. Be Ready

This is another way of saying “Be prepared.” It’s inevitable that you’ll be asked to award raises, so it’s imperative that you know your market and industry. What’s the general health of your industry, and what’s going on in your market? Take a look at similarly sized companies that operate in your location and do what you do. What percentage raises are being given by position? If you have reliable comparative data, you can more accurately determine a fair and competitive salary increase amount. Usually, your HR department or outsourcing partner will have this information.

In addition, you know your organization best. What is your budget for raises? What are your company’s priorities? Revisiting this information will help as you decide how much to increase a position’s pay. It’s crucial that you can justify why each staffer is receiving a salary increase above or below the standard. Finally, how long has the employee been with the company? How’s his or her performance? What value does the employee bring to the company? Evaluating all this and more will help you arrive at a fair decision.

2. Listen

Now that you have your qualitative and quantitative data ready, sit with your employee and listen to what he or she says without interruption. As a business owner, you can build morale and loyalty just be letting your employee feel you’ve heard what he or she has to say. Ask your staffers to explain in their words what they believe they’ve contributed to the company. You might discover something you didn’t know.

3. Be accountable.

When you talk, clearly state what you can and can’t do. Consider sharing the organization’s budget for salary increases and explain the process for determining when and why employees receive raises.

And always be sure to follow up. If your employee asked the question, get him or her answers. Pass concerns on to HR. And make sure any salary increase happens when you said it would.

The “salary” talk isn’t easy, but with some forethought and planning, it’ll go a lot smoother!

Related Articles