My Best Employee Wants a Raise
Giving raises to loyal employees who deserve them shows that you recognize all of their hard work. But does it make sense for your business?
How should you approach employee raises?
It’s human nature to want more resources for the work that we do.
Loyalty and employee retention are often hard things to come by in industries with high staff turnover rates. Giving raises to loyal employees who deserve them shows that you recognize all of their hard work. Raises will also remind them that high job performance will always be rewarded.
As a business owner, you already know that sometimes employee raises are well deserved. Other times, not so much. In this article, we’ll help you decide which is which, and how to say no. Too many times, giving and getting raises are looked at as political power moves, instead of a measurement of individual employee successes and how they help progress the business.
The first thing you want to do when considering giving your employee a raise is to evaluate their job performance. To get you started thinking about this, here a few different variables. These points are, of course, not the only things to consider, but will start you off on the right foot.
Evaluating your employee
1. Efficiency and willingness to do more
How well does this employee complete tasks that are accurate and on time? Do they seek out new tasks when a job is completed, or are they constantly quitting early for the day?
Employees who deserve a raise should be constantly looking for ways to help grow the business and help develop his or her coworkers—not just looking out for the growth of their own wallets.
READ MORE: My best employee wants to start their own business
How well does your employee manage team jobs? Are they goal-oriented?
With more money usually comes more responsibility, so if your employee ranks well in these areas they’re more likely to deliver on your higher expectations.
READ MORE: My best employee wants to a partnership
3. Confidence and growth potential
While the previous points about your employee are an absolute necessity, their confidence level might be the most important.
If employees have the confidence to ask for the raise and the ability to explain exactly how their skill growth warrants the raise, this is a good sign. Remember, it’s not your duty as the business owner to map out how the employee will improve or grow your business—it’s on them.
It’s fine to help them along, perhaps suggesting they pitch you a several month plan on how their skills will help grow the business. It’s not fine, however, to do that work for them.
After you’ve answered these questions honestly, ask yourself the following questions about your business.
Evaluating your business
1. Can you afford the raise?
Honesty is one of the most important parts of running a business, from a customer standpoint down to employee benefits.
If you can’t afford their raise right now, tell them that immediately. Perhaps you can give them a small raise now, and closer to what they hoped for in the future. Offering up success milestones is a good idea for any type of team management, as it can inspire employee motivation and healthy competition.
2. How will your other employees react?
Whether deserved or not, when one employee gets a raise, other employees will often want or expect one as well. Because of this, it’s vital to communicate to your employee your exact stance on this issue, as he or she will likely interact with the rest of the team before you get a chance to do so.
In the end, take a look at what makes sense for you business. First, look at the employee’s performance and skill set.
Next, take a look at your business internally and look at the implications of giving a raise.
READ MORE: My best employee wants to quit
Remember, loyal and high-skilled employees are rare, and the consequences of letting them walk need to be seriously considered.