As an employer, you control the financial well-being of your employees. When it comes down to the finances of the company, it is often finding the balance between what is best for the company and what is best for its workers. For example, look at benefits that employers offer to their employees such as dental insurance. These are costs to the business that exist for the purpose of better retaining employees. By retaining the workers, the company is able to make more money by reducing turnover.
Keeping this in mind, an employee comes into your office requesting a raise. The final decision is up to you as the employer, so it is important that you weigh the relevant factors and proceed in a logical manner to the employee’s request.
Listen to what the Employee Wants
An important first step in response to the employee is to listen to their entire request and ask questions to gain further information. Why are they requesting this raise? When was the last time this employee received a raise? By gaining related information as to why this request is coming to you in the first place, you are better able to respond with a solution everyone will be satisfied with. Cutting off the employee without actually listening to their request is the quickest way to make them feel they are not valued at the business, and they will likely look for work elsewhere.
Consider what the Employee Brings to the Table
This stage is where you evaluate the employee to decide if they should receive the requested raise. This stage asks a lot of questions about the employee and their relationship to the company. Has it been enough time since their last raise that the request feels justified? Have they been outperforming their coworkers? What does the employee contribute to the company financially? What does the employee bring to the business other than finances? These are the types of questions you should ask yourself to evaluate whether or not the employee should get a raise. By conducting an internal or official performance evaluation of the employee, you are better able to make an informed decision.
Consider what May Happen if You Say No
If you are unsure if you should give your employee the raise, ask yourself what could happen if you deny the request. Will the employee still want to stay with the company? If the employee was asking for the raise for personal reasons, will their personal lives affect their quality of work? Will it cost more to replace the employee than to give them the raise? These types of questions can help guarantee you have come to a conclusion you are satisfied with no matter how the employee may respond.
Being honest with your employee is crucial, especially if the answer is no. Be careful not to say that you will take it under consideration if you have already come to a firm conclusion. If your response to their request is no, you should most likely explain why. If the employee can earn that raise by doing more, try explaining that to them. By maintaining honesty with your employee, you are more likely to get a satisfying conclusion for everyone.
Be Willing to Negotiate
Sometimes the business can’t afford the full raise that the employee is requesting. Be willing to negotiate with your employee. If they are asking for raise x and you can only afford amount y, then negotiate with the employee so that everyone walks away with a satisfying result.
Employers hold the financial stability of everyone involved with the company. Being fair to your employees is important. If you are a business owner and an employee come into your office asking for a raise, remember to hear them out, consider what they bring to the table, what may happen if you say no, to always be honest, and be willing to negotiate. By keeping these factors in mind, both you and the employee are more likely to achieve a satisfying result.
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