5 Things to Do When an Employee Asks for a Raise

5-things-employee-blog

It’s Monday morning and you’re only halfway through your first cup of coffee when your calendar pings with a reminder about a meeting – one of your key employees has wanted to talk with you for a while now, but you’ve been putting it off because you have a good idea of what they want. Sure enough, no sooner do you sit down than you get hit with those five little words that every manager dreads: “can I have a raise?”

Receiving a raise request from one of your workers can be stressful and sometimes a little frustrating. You have a hundred things on your plate at any given time, and handling a request for more money can feel like a nuisance. At the same time, if your employee is asking for a raise, it means that they’re not happy/content with their current employment status. And especially in today’s difficult job market, doing your best to retain good employees is vital. So while your first instinct may be to make a rash decision either way, take some time to address the request professionally and carefully. To help you out, we’ve compiled the following five tips for handling a raise request in the best way possible.

  1. Don’t immediately react
    Whatever happens throughout the conversation, don’t react either way. There’s nothing to gain from giving them an immediate “no,” and you likely can’t agree to a raise without first talking with a few other individuals. Instead, thank the employee for coming to you about the matter and then dive deeper into the conversation to learn more. After your discussion, allow time to consider their request and all the details presented before making a decision.
  1. Discuss the reason for the request
    If your employee is savvy, they’ll come prepared with a strong argument for why they deserves an increase in pay. Listen to their points and be ready to ask follow-up questions. Has their workload increased? Have they single-handedly improved sales by a large percentage? The employee should have numbers or evidence to back up the request. If not, ask them to put that information together for your review.
  1. Look at the market
    Every position is worth a certain amount, and that amount is typically determined by the job market. If the employee brings a market salary range as an argument for a raise, ensure that it’s referencing a Hawaii pay scale, not using mainland numbers, as they do tend to differ. Also realize that it’s possible that the employee has simply reached a limit of the value that can be placed on their role. If this is the case, and you want to keep them with your company, you may need to look at promotion opportunities.
  1. Consider the implications of saying ‘yes’ or ‘no’
    It’s important to think about what granting or denying this request could mean. For example, it’s possible that at least one other employee will find out about the raise and want a piece of the pie as well. Is your company prepared to handle that? Concurrently, you should gauge whether or not your employee would quit should they not receive the increase, and what that would mean for your business.
  1. Look at all your options
    Although it may seem that there are only two ways to answer a raise request, there may be other options, depending on the situation. Can you negotiate by offering your employee another benefit or perk instead? For example, a more flexible schedule or promise of an annual bonus? Another option is to say yes, contingent on the employee meeting certain criteria over the next however many months. For example, meeting a certain number of sales goals or improving X, Y, and Z in their performance. Be sure to explore all your options before making your final decision.

At the end of the day, you must consider how important the person is to you, your team, and the company. By keeping these things at the forefront of your mind, handling employee raise requests will be a much easier process for everyone involved.