How to Handle an Employee Asking for a Raise
What to do when an employee asks for a raise
Responding appropriately to the raise request
- Put it in context.
Even if you deliver the news in person (and always do it privately), you will probably want to write a raise letter to the employee so that your reasoning is clear and avoids any legal liabilities. Inform the employee about the specific dollar amount (it makes it more significant than just citing a percentage boost), the contributions that led to the pay hike and express appreciation for the employee’s work. You might say or write something like, “I thought about the request you made to reconsider compensation. After doing my research, I’ve decided that a compensation change is in order.”
- Be honest.
If your company tells you that a pay raise is not possible for budgetary reasons or because that employee cannot exceed the pay scale for that job, then communicate that to the worker. In the case of a federal employee raise, for example, that decision may be entirely out of your hands as the decision often rests with lawmakers. But if you’re a private employer and you don’t believe after doing your research that the employee’s performance merits a raise, be honest about it.
How you communicate a pay raise to an employee is important because it sets the tone for the employee’s future. “I always like to tell people that now the baseline goes way up,” says Karen Dillon, author of “The HBR Guide to Office Politics.” “You got it and I’m thrilled for you. But now you’re starting at this level. This isn’t a reward to sit back on.”
Managers can often be caught off guard when a pay raise is requested, but by asking questions, doing research and being clear on legal and company policies, the response to the employee can be fair and professional and help ensure everyone on the team believes they’re being treated fairly.