Talking about money is not easy. It even happens that employees avoid stressful salary negotiations and often prefer to start looking for a new job in a company offering a higher salary than asking for a raise from their current employer. At the same time, a satisfactory level of salary is one of the main arguments in favor of a long-term relationship with a specific company and maintaining job satisfaction.
That is why it is worth creating clear rules for raising salaries in every company to facilitate talks with employees about a raise, ensuring confidentiality, the possibility of honest communication and the manager’s openness to the arguments.
How to talk about a raise with employees? Find out in the article.
1. Have regular conversations with employees
Satisfaction with work, including the salary received, is one of the key elements related to caring for the well-being of the employee. Sometimes the employee comes up with an offer to negotiate their earnings. Sometimes we only find out about their dissatisfaction when they leave the company. At least once a quarter, it is worth talking honestly with the employee about their feelings on the tasks performed – let’s check the level of their job satisfaction and motivation to continue. Let’s also discuss the development opportunities in the company and verify the expectations regarding the further career path, and together summarize the successes so far. Honest conversations with employees will give us the opportunity to confront their expectations towards the company with the requirements of the employer. We will also faster notice any possible problems, dissatisfaction and the risk of wanting to leave the company.
2. Assess the employee’s potential and the cost of their departure
When an employee asks for a raise, it is worth analyzing the importance of their work from the point of view of the functioning of the entire enterprise. In order to specify the contribution of this person to the company’s profits, we can, for example, verify their commitment and attitude to the implementation of tasks, decision-making, achieved successes, as well as relationships with colleagues. It is worth considering how important and responsible their position is. When considering an employee’s request to increase their salary, consider:
- what role does the person play in the organization,
- how they perform their duties,
- what is their approach to their work,
- how they cooperate with others and how they get along with co-workers,
- how important is its position from the perspective of the development and functioning of the entire organization.
Thanks to this, we will be able to assess the value of the employee’s work and their contribution to the company’s interests, as well as the costs that the company will have to incur in the event of their resignation from the current position, both in the context of recruiting a new person and training them to replace the former employee.
3. Ask the employee about the reason for the raise request
One of the most important responses to an employee’s request for a raise is to understand the reasons for their decisions and the motives that drive them. Let’s start the conversation with a few questions that will help us start negotiations properly and build a sincere partner relationship. It may turn out that the employee expects a reward for recent success, has developed their qualifications that will affect the effectiveness of their work, or has taken on additional responsibilities. Perhaps they have lost their patience while waiting to be rewarded for exceptional results and have decided to take the initiative in this direction. In such situations, increasing the salary may turn out to be justified and not only has a positive effect on the employee’s motivation, but also prevents them from burnout or a feeling of underestimation on the part of the employer. In order to find out more about the reasons for the employee’s request for a raise, we can ask:
- what made them come forward with such an inquiry,
- what success have they had recently at work,
- what has changed at their position,
- what are their ideas for the development of the enterprise,
- how they would like to develop their role in the company.
By starting the conversation in this way, we will open up the possibility of negotiation and build a sense of responsibility for the results of the employee. In the future, this will translate into greater awareness of their role and the expectations of the employer in connection with the declarations made by them.
4. Consider other ways to reward employees
During the conversation with the employee, it may turn out that their request for a raise does not result from the need to supplement the budget. Sometimes a given person feels undervalued or equates an increase in remuneration with positive feedback from a supervisor. In such a situation, there are other ways to satisfy the employee and appreciate their efforts. It is worth considering how we can show the employee satisfaction with the results of their work. An alternative way of rewarding can also work in a situation where, although the employee really deserves a raise, the company is not in a financial situation good enough to give it. What can we do then?
Let’s consider the benefits offered in the company. Before that, it is worth checking which add-ons will be of greatest interest. For this purpose, we can prepare a list of benefits and conduct a survey among employees.
Another way to reward the most effective employees is by giving bonuses or prizes e.g. gift cards or vouchers. They are not related to a long-term declaration, as in the case of a raise, but also contribute to the fund of the awarded person and their motivation for further efforts.
Employees also enjoy a great interest in non-wage benefits, such as flexible working hours, the possibility of using a telephone or a company car for private purposes, reimbursement of travel expenses to the office, additional budget for training and conferences or funding for studies.
5. Define clear criteria for awarding raises and prizes
If we want to improve wage negotiations in the company, it is worth establishing clear criteria for awarding pay raises. We can also consider introducing wage transparency. Thanks to this, each employee will know what are the earnings opportunities for various positions in the company and how they can get closer to earning them. The salary range may apply to all positions in the company, determine the amount of salary depending on the level of the position held (e.g. specialist, assistant, expert and managerial positions) or take into account such aspects as education, seniority, qualifications and achievements.
In order to determine the salaries in the company, we can create the so-called salary grid. The analysis of payroll reports that can be found on the Internet will help us in this. Thanks to them, we will be able to compare the salary offered in the company to the rates proposed by our competition. This will allow us to better manage the remuneration policy in the company, and thus to properly plan raises and internal communication.
If you’re interested in the salaries and pay rises of IT specialists, contact us. We’ll be happy to share our knowledge and help you improve your recruitment processes.