In recent years, employees have become bolder with salary and compensation expectations, challenging small business owners in terms of staff retention and turnover. If you are unsure how to handle wage increase requests from your staff, follow these five steps:
Say the three magic words: “Tell me more”
Encourage employees to explain their reasons for seeking a raise, aiming to align perceptions of performance and address any concerns.
Evaluate the ask
Assess the employee’s overall performance and contributions, distinguishing between short-term efforts and sustained high performance. Consider whether a spot bonus might be more appropriate than a salary increase.
Do your salary research
Research industry and regional salary standards to ensure fair compensation. Explore incremental adjustments to align with industry norms and consider a step plan for future growth.
When you reject, reject with grace.
Communicate the decision tactfully, presenting researched facts without emotion. Explore nonfinancial perks or benefits as alternatives and discuss a clear career path moving forward.
Partner with your employees to create goals
Collaborate with the employee to establish SMART goals (specific, measurable, achievable, relevant, time-bound) for future promotion. Provide regular check-ins to demonstrate investment in their growth and success.
We know it’s ideal to retain talent and pay raises may be one way to do so. But if a salary increase is not feasible immediately, taking time to evaluate and discuss staff requests can contribute to long-term success for both the employee and your business.
https://sba.thehartford.com/managing-employees/employee-compensation/?cmp=EMC-SC-SBA-95757288&eml=1
