Aunty B: My employee just asked for a pay rise and I don’t know how to respond

Dear Aunty B,

One of my sales executives has recently asked for me for a pay rise. They’ve been with our company for around 10 months and while I don’t have any major concerns about their performance until now, I’m not sure that they deserve a higher salary just yet.

To be honest, this is the first time I’ve had a request from a staff member for a pay rise outside of the usual 12-month reviews we conduct. I’m keen to keep this person in the business but I’m worried that if I grant their request now, it will set up an ongoing pattern of them asking for pay rises every few months. Plus, I don’t want to get similar request from other members of the sales team.

What would you do?

Jamie,

Victoria

Dear Jamie,

The best piece of advice I can give you is to not rush into a decision – and do your research.

The fact you are writing to me suggests that you haven’t completely made up your mind yet and that’s probably a good thing. If you turn this employee down, you risk affecting their level of motivation but at the same time, if you commit to a salary increase that is not warranted or one your business cannot afford, you’ve created extra financial pressure for yourself.

As a first step, you should meet with this employee and ask them to tell you more. Why do they feel they deserve a pay rise? What evidence do they have that their work is improving your business? Are there other benefits that you could offer them instead of a salary increase, such as a bonus scheme or extra training?

At the same time, I think you should invest some time in completing a salary benchmarking process.

It’s an idea I picked up from HR specialist Jess Klein over at the wattsnext HR blog. And it makes perfect sense – all businesses should know what the market is paying for any given role.

A salary benchmarking process involves collecting salary data for similar positions within a market to provide a “snapshot” of the market for say, sales executives.

“This information is extremely useful when having salary conversations as the data can support your decision if a salary increase isn’t appropriate,” Klein says.

Armed with this data, you will have a better sense of whether the salary you’re currently paying is on par with similar roles in the industry. Together with your conversation with your employee, you’re now in a better position to make a call.

Klein also makes another good point and that is to make sure you’re not increasing someone’s salary based on something they say they will offer the business in the future. What’s important is what they are offering the business today.

“Reward the behaviour and effort you are currently seeing, not what is promised to you and may never eventuate,” she says.

Be Smart,

Aunty B