How to respond to your employee’s request for a pay rise

You may be a manager or you may be a member of your HR department. You’ve been approached by an employee for a pay rise, so how do you go about responding to this request?

Firstly, remember that it takes great courage for most people to ask for a pay raise. It is more than likely they will have been deliberating asking you for some time. They will also probably be nervous in approaching you.

Also, remember that the positives of an employee asking for a pay rise is that they are giving you the chance to keep them. They clearly like the company and the role so they haven’t simply found employment elsewhere.

employee's request for a pay rise

 

How to respond to your employee’s request for a pay rise

Time to Think

You don’t have to respond straight away to this request as you may need time to gather the facts and think about the decision and your response. Resist the urge to say anything straight away that would undermine your authority, such as “It’s not up to me.”

 

Gather Information

A good first response is to ask them for more information about why they’re asking for a raise, for example a neutral phrase such as “Tell me more?” is not implying either a yes or no response to their request. Take notes of why they are asking for a raise, which also shows you are taking their request seriously. Let the employee know how long it will take you to gather information from elsewhere before you will get back to them with an answer.

 

Evaluate

So you’ve gathered information from the employee, you now need to work out if their pay is out of line with their value. Questions to help you ascertain this are:

  1. Is the employee paid fairly in comparison to their colleagues?
  2. Could this employee get a higher salary at another company?
  3. Do they have consistently high performance?
  4. How important is this person to your department or the company?
  5. Can you see them making more progress if you rewarded them with a higher salary?

To answer these questions you may need to speak to your own manager or to HR to find out about your company’s compensation system. However, bear in mind that HR’s initial reaction may be to say no to the employee’s request if they don’t know the employee as well.

You may need to stick your neck out if you believe losing the member of staff would be a great loss to the company and you think they should be encouraged to stay. You may need to make a case and back it up with information you have gathered.

how to respond to pay rise requests

Alternatives

Before making your final decision, have a think about alternatives to a pay rise. Maybe you could offer them a bonus scheme so their high performance is rewarded. Maybe career progression is important to them too and you could offer them access to a qualification. Or perhaps if they would like to earn more money they could take on another role within your organisation.

 

Responding

So you’ve made your decision and you’re ready to respond to the employee. Now you need to deliver the news in an appropriate way.

They got the pay rise: Avoid the urge to simply say they got the rise as you need to explain how they earned it. Explain that it was a carefully thought out and considered decision based on their performance and the research you undertook.

They didn’t get the rise:

Be upfront that they didn’t get what they were asking for. Then explain why by outlining the research you undertook to inform your decision. Try and be as transparent as you can about your company’s compensation system.

You don’t need to say anything negative about the employee or their performance as that may alienate them. You can leave them with a positive message about how much you value their work and effort in the organisation.

You can also encourage the member of staff to stay in the organisation by explaining how they can achieve a higher salary in the future. Be very clear and concise about what they can do along with timescales. This will hopefully keep them motivated to stay in their current role.

 

If you found this article useful, have a look at our other articles for clients and employers.