How to handle a pay rise request

Handle a pay rise request

Being a manager comes with a long list of challenges. And, having to handle a pay rise request is no exception.

It’s one thing to go into an annual review, prepared for a discussion of this kind but it’s another situation altogether when a pay rise request comes up out of the blue.

Having a process in place to handle a pay rise request

To avoid being caught off guard when these inevitable proposals crop up, it’s important to have a process in place. This should involve a number of steps, including:

1. Encourage open discussion

Let’s begin with the fact that it takes courage on the part of the employee asking for a raise. With this in mind, it’s only fair to give the employee the opportunity to express their reasoning.

Create a neutral platform where this can be discussed and give them the chance to explain why they feel they deserve an increase. Having an open discussion also gives you the opportunity to pose questions that encourage feedback.

Remember that body language, facial expressions and tone of voice all play a big part in this conversation. The aim is to listen actively and to gather sufficient insight from the employee’s perspective to understand their motivation.

Don’t rush into giving an answer on the spot. There are a couple more important steps to follow before a final decision can be reached.

2. Gear towards making an informed decision

Naturally, conversations surrounding an increase can easily become emotionally charged (that’s part of what makes this a daunting topic for both parties). This is why it’s so important to rely on evidence rather than feelings or thoughts.

After all, our memory fails us as humans from time to time and it can be tricky to remember what the employee has achieved in the past couple of months.

This is where the value of providing real-time feedback comes into play. Rather than relying on annual performance reviews, real-time feedback (as its name implies) allows you to give employees feedback on their performance in real-time. This helps them to correct course if necessary and get back onto the right path quickly. It’s an engaging approach and it helps you understand your employee’s performance on an ongoing basis.

With our real-time feedback software, you are able to view a dashboard including visual snapshots of all feedback for an individual, including feedback trends, volume of feedback and other useful information.

Gathering unbiased data is an essential element in arriving at an informed decision.

3.  Gather all the necessary data

Oftentimes, employees will have done their research – and rightly so. There is, after all, plenty of information on salary averages across industries available online, at employees’ fingertips. But that means that you are also easily able to access comparative data which you can use along with other information to arrive at a fair decision.

A decision should be made based on unbiased data, not on perceptions about the employee. You need to assess whether the employee’s motivation matches their performance and output.

Is the employee that has requested the increase a high performer? Are they reaching their objectives and exceeding expectations?

Generally speaking, high performers possess a number of the following qualities:

  • Determined to achieve quality
  • Confident in making decisions
  • Able to prioritize and work in a time-efficient manner
  • Able to work in a team and motivate others
  • Open to receiving feedback
  • Drawn to opportunities to develop their skills

Of course, the characteristics that define what a high performer ‘looks like’ to you will depend on your company culture, values and goals. There’s no one size fits all.

How then do you determine whether the employee in question is a high performer?

With technology like ours, the hard work is done for you. It helps you identify which of your employees fall within the top 10% of performers (in alignment with your specific organizational objectives).

The system collects information from all of your performance management review types, such as self-evaluations, personal development plans, goal setting, employee evaluations, upward review, and anonymous evaluations, and analyzes it in line with the parameters you set, ranking employees accordingly.

With this information, you can see and assess whether the employee deserves the increase. You can also use the data to motivate this to management and HR. Now, you can take the next step with confidence.

4. Deliver the answer and feedback

What initially seemed like a daunting endeavor should now feel less stressful – whether the decision is to grant the pay rise or not.

The good news

If the decision is a ‘yes’, this should be delivered in a composed and professional way. Explain, for example, that the decision was based on discussions with management and HR, and that it was agreed that the employee has made valuable contributions to the company, helping it reach its aims.

You want the employee to feel that they’ve earned the increase. You might also want to use this as an opportunity to discuss ways that they can continue adding value to your organization.

The unfortunate news

On the other hand, you might have to share the news that there won’t be any modification to the employee’s income. Let them know that you’ve considered the request and give them feedback as to why you’re not increasing their income at this time. For example, you might say that you’ve done a comparative study against peers inside the company and in the market and found that the pay is appropriate.

In some cases, you may want to discuss other ways that you could invest in your employee. This could include implementing flexible work arrangements or other non-monetary benefits which demonstrates appreciation and encourages retention. You could also reassure the employee that you will assess the matter again within a stipulated time period.

The employee shouldn’t walk away feeling awkward that they asked. You want to keep the channels of communication open to build a culture of trust.

Get the tools you need

It’s one thing to know how to handle a pay rise request in theory, but you ultimately need unbiased data to guide the decision-making process.

With our real-time feedback and performance management software, you can get the data you need to handle a pay rise request and navigate these conversations without stress – taking at least one challenge off of your list.

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