What To Do When an Employee Asks for a Raise.

If you’re productivity is humming and your employees are working hard, it is highly likely that you’ll hear raise requests from time to time (of course, you’re likely to hear them when productivity is down, too – employers are nearly always considering asking for a raise!).

Raise requests deserve due diligence.

Be careful not to write off a raise request right away, but don’t just give in either. Ask the following four questions to help you determine whether a raise is in order:

1. Does the employee deserve it? This could be the easiest question to ask. If you don’t have enough one-on-one time with the employee, then you may have to talk to other managers, or glance at annual reviews, to determine whether the question of a raise should be considered further.
2. What’s a fair salary for the employee’s position? The fact is, you may already be overpaying your employee! But, if your employee is woefully underpaid, a raise in salary may certainly be in order. Certain online websites may offer you examples of salaries for a variety of positions. Or, you can do a competitive analysis. Your HR department can also provide you with some insight into salary, to help you find a foundation of reference.
3. Can you afford it? You may want to give your employee a raise, but is there room in your budget? Some serious number crunching may be in order to determine whether a raise is a realistic possibility within your organization. Keep in mind that, even if proper workplace etiquette is maintained, other employees may learn of the raise and request their own raises.
4. Are you willing to lose the employee? Bear in mind that if you are unable to offer the employee a raise, that employee may choose to move on to another company. Are you prepared to lose this employee? The cost to hire a new employee is estimated at twice that employee’s annual salary. Does the cost of hiring a new employee outweigh the raise? Is this employee a top contributor to your company?

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