When Should You Give a Raise?
Most companies offer annual pay raises that keep up with inflation, increasing an employee’s salary by about 3%. But, if you want to go above and beyond for the employees in your business that deserve it, it’s important to know when you should give a raise.
Do you have employees who have allowed your business to grow? How about workers who are always productive and motivated? Giving them what they deserve is crucial in order to maintain their good efforts. It’s also important to make sure you’re on par with what other companies are offering people in those positions, so your employees don’t seek out a law firm dedicated to stopping wage theft.
So, how can you be sure it’s the right time to give a certain employee a raise?
You Want to Keep Your Best Employees Around
When someone agrees to accept a job, there’s an underlying notion that they’ll have room to grow within that position. That means more than just accepting a penniless promotion. Offering continual increases in salary will also increase employee retention.
Salary is directly tied to job satisfaction. When employees feel as though they’re getting the compensation they deserve, they’re more likely to feel important and valued. As a result, their performance will continue to be solid, and they’ll continue to help your business grow and succeed.
Look at the Numbers
In many cases, you can see who your best employees are with just a little bit of research. If you have a point-of-sale system, it’s easy to log in and see who is getting the most sales. If you have a CRM, check out who’s generating leads and closing deals.
Data doesn’t lie. Performance-based raises can, again, encourage your best employees to do even better. But, they can also motivate your employees who might be struggling to try harder and receive more positive feedback.
Listen to Requests
If an employee comes to you asking for a pay raise, don’t brush them off. Listen to what they have to say and ask them to put together a proposal for you, outlining why they deserve the raise. Chances are if someone is coming to you to ask for more money, they already know that they’ve put in the work to justify it. But, if they can create a persuasive proposal, it will make the decision easier on you, and give you a chance to see just how well an individual is performing that you may have not realized otherwise.
Don’t throw all of your finances at new hires. While offering a hefty salary upfront can make it easier to attract top talent, you should never forget about the employees who have been with your company for a long time.
Nowadays, it’s very easy for people to look up what they should be making. If your business isn’t on par with that, they have every reason to look for a new job. So, do your own research when it comes to employee salaries, and opt to offer more than just the standard increase for inflation. When you’re willing to give a little more, you’ll get a little more from the people who work for you.