How to Address Employee Pay Rise Requests
Managing an employee pay rise request can be a challenging task for managers in any industry, and the Construction, Engineering and Infrastructure industries are no exception. On one hand, many people equate their salary with the value their company places on them – if they feel they are not being fairly compensated, it can have a negative effect on their performance. On the other hand, factors such as budget constraints and fairness to other team members mean that employers simply cannot grant every pay rise request, as much as they might want to.
Fortunately, it doesn’t have to be an uncomfortable experience. There are ways to handle these appeals objectively, and even leverage pay increases to motivate team performance. To guide you through the process, we’ve put together some tips on how to respond to an employee’s pay rise request.
Have a System in Place
For any manager, these requests are an inevitable occurrence, so establishing a system ahead of time will help to drastically reduce the stress of dealing with them. Depending on the needs of the business, this system could take many forms, such as a formal self-evaluation form that staff members can fill out and submit, justifying why they think they should get a raise. This provides an official route for making pay rise requests and gives the employer time to consider the appeal before answering.
Another option is to establish a criterion for receiving a raise and ensure all employees are aware of it. This could be one of the documents provided during the promotion or onboarding process, so employees have an understanding of these expectations before they enter a role.
It’s also important to have a plan for how to respond to an employee pay rise request to avoid being put on the spot when the issue comes up. This will reduce the likelihood of making a rash decision and avoid the exchange being skewed by emotion. Even if you aren’t likely to grant the employee a pay rise, take time to consider their request fairly. Avoid answering immediately to make sure the employee knows that they’re being taken seriously and advise them on a timeframe for when they can expect a response.
Get More Information
When deciding how to deal with an employee’s pay rise request, it’s important to get as much information as possible. Consider the reasons they may be asking – why do they feel they deserve it? Have they had an increase in their responsibilities or started supervising another team member? Maybe they’ve achieved good results on a recent project or have simply been going the extra mile to ensure the project meets requirements. There are plenty of other possible reasons that could be behind their request, such as another job offer or discussions around pay with their peers in the industry. Other important information to look at includes recent performance reviews, the company budget, and the employee’s motivation and engagement.
This can be a delicate subject, so take care when discussing it with the individual in question. Whilst it’s important to be sensitive to where the employee is coming from, their personal situation should never be a factor when deciding whether to grant a pay rise.
Fully Evaluate the Request
Now that you have gathered all the necessary information, it’s important to take the time to thoroughly evaluate the employee’s pay rise request. Look up market rates for other relevant engineering and construction roles and compare them with the requested pay, such as by using the recent Engineering New Zealand Remuneration Survey. In addition, talk to key stakeholders and identify where your limits lie.
When considering how to respond to an employee pay rise request, it can be helpful to come up with a business case (or a pros and cons list) for granting it, as this will help ensure your decision is fully informed and balanced.
Deliver the Answer Tactfully
Once the decision is made, delivering the answer is often the trickiest step for a manager to deal with, especially if the answer is ‘no.’ However, it is possible for the employer and employee to maintain their relationship regardless of the answer, so long as it’s handled correctly.
Firstly, make sure the employee knows their request was properly considered by stating all the factors that informed your decision. If their pay rise request is being granted, it’s still important to give the reasons behind your choice. This will reinforce the desired behaviours and ensure they know it wasn’t taken lightly and given simply because they asked.
If their pay rise request is being denied, communicate your decision plainly but considerately, and, again, make sure to discuss your reasons where it’s suitable to do so. If it’s appropriate, provide a future time or any other condition where their request could be reconsidered.
Some Final Thoughts
Finally, when managing an employee pay rise request, keep in mind that each employee will have a different way of communicating. Not everyone will ask for a pay rise directly – look out for hints and behaviour that might signal that it is on their radar.
Rewarding and celebrating employees is important, but remember that there are other ways to do this besides giving them a raise. Some of these include bonuses, awards, recognition and team lunches. Even if it is done in a small way, simply ensuring your employees know they are appreciated will go a long way towards not only ensuring a more engaged team but driving better project outcomes overall.
For more help on how to deal with a request for a pay raise, or any advice on Construction, Engineering and Infrastructure recruitment, don’t hesitate to get in touch with the team at RobLawMax.