4 Tips to Remember When an Employee Asks for a Salary Increase

August 10th, 2016 by Veronica Blatt

various-world-money-300Today’s guest blogger is Paulette Steele from Real Positions. Based in Queensland, Australia, Real Positions provides specialist recruitment in the real estate, retail, and commercial and industrial sectors. Her post about what to keep in mind when employees are asking about a salary increase is available here:

Picture this! Your employee comes to you one day and wants a salary increase. However, you can’t provide them with a raise or you don’t consider their work efforts entitle them to one.

Has this happened and how do you handle this type of situation?

It’s a delicate matter particularly if you value this employee’s efforts in your business.

How do you approach this without risking, demotivating, and upsetting your employee by not giving them a raise? Or do you give them a salary increase which can result in a financial burden to your business if you can’t see sufficient financial turnover from this employee’s work?

What is the best way to handle this? Here are 4 important tips to remember when one of your employees next asks you for a salary increase:

  • Allow them the opportunity to explain why they believe they deserve an increase in their salary. It may be they are doing a lot more than you thought and that they do more than is in their job description. Some people enjoy taking on extra responsibilities to give them a challenge or because they would be otherwise bored. It could be you need to reconsider?
  • Think about what it would cost you to replace this employee if they ended up leaving. Compare the salary increase with the costs of bringing in someone new to their position. A new person will take time to pick up the responsibilities of the position and find out how your company’s systems work. Every business does things differently! And what if they aren’t as good as the person you let go?
  • If you give them an increase, it should be for what they have accomplished in their work up to now. Don’t simply give them a raise because of what they say they will do for your business in the future. These could just be hollow words spoken to ensure they obtain a salary increase.
  • Are there other alternatives to simply an increase in their salary? Does their position suit a bonus scheme? Some people enjoy having a bonus incentive if they meet or exceed their targets. Also, there are a lot of things that employees value more than money. Could you provide flexible working hours or the ability to work from home part of the time? With technology as it is nowadays, many tasks can be done remotely on a computer from a home.

So, when an employee in your company comes to you next to discuss their salary, consider these important points before making your decision.


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