It is always touchy when an employee asks for a pay rise. There may be a temptation to treat it lightly or to over react. We have some suggestions here.
- Treat the request calmly. It takes some courage to ask for a rise, so respect the employee for doing so. And it is better that he or she tells you now rather than when they leave.
- Listen to what the employee has to say. Why do they feel they are entitled to more pay? What sort of figure did they have in mind? What information has led them to that conclusion? Do you agree?
- Do your own research. That means establishing facts as opposed to supposition.
- How will it fit in with annual reviews or other salary processes.
- What impact might it have on other staff differentials.
- Many rely on recruitment agents for advice. If an agency is placing many people into your particular positions they will have a good idea of the market rate for appointments. Keep in mind they may have a vested interest if you are advertising with them.
- Don’t ignore, yet be wary of, advertised salaries. What needs to be paid to attract an employee is not always the same as that to keep one. You would be lucky if you could afford to bring every employee up to advertised rates – and disparity is dangerous.
- Rely on sound local market data available from HR consultants such as Employer Solutions. We have a licence to access a database of hundreds and thousands of jobs in the U.K. Knowing what other companies are paying will give you detailed and convincing data to discuss with your employee.
- Work out what you can afford. You may have to temper what you would like to pay with what is realistic. In discussion you may also find you need to be flexible. You need to know how far you can flex.
- Consider a total benefit statement. What other benefits are there to your employee for working with you? Some might be financial such as pension contributions, more ethereal such as training and future prospects, or a strong psychological contract such as a happy team. It may be easy for an employee to believe that the grass is greener elsewhere. Make sure they know how green it is with you. Because once they have discovered the grass isn’t greener with their next employer, then it is too late (for both of you).
- Tell the employee openly and honestly what you think and how you have reached your conclusion, for better or worse. Be prepared to discuss the data from your research in a calm, fair and professional manner. This is a crucial step, the worst you can say is to say nothing.
- Once you have “grasped the nettle”, so to speak, the relationship will invariably be better, and stronger.