It is a truism that almost any business owner or manager will be addressed at some point by employees seeking increases. However, limited financial resources or poor employee performance, among other considerations, increases mean that can not be given automatically. There are times when these applications must be rejected. Sometimes, for example, an employee is requesting the increase and as a manager, you have to explain why this is so and does not deserve this time. Other times, the employee deserves a raise, but because of the financial situation of the company, this step is skipped. Whatever the case is, you must make your employees understand why you can not give them a raise.
When the employee deserve a raise
Be honest with the employee about why you can not provide an increase at this time. Assure that the lack of an increase is not because you do not appreciate the work done. Explain kindly the purpose or the situations. If applicable, tell him you’re not getting a raise. If you’re doing a pay cut then also mention it.
Make an appointment for a future job evaluation where the possibility of an increase can be discussed. In particular, if you can do to predict the end of a cash flow crisis or other financial hardship that prevents you currently offer increases. Discuss or aware them of the situation that are expected to be. Note: Be careful to do it in a manner and kind way so that to not kill their expectations or hopes to continue working on company.
It would be better if you offers employees other rewards for doing their job well. Non-monetary rewards could include paid time off, better benefits, a flexible work schedule or other benefits that are fiscally viable at that time. As I said above, always do it in a nice way but make them to feel that they are part of the company but for some purpose, increase or raise is delayed this year and looking forward to do it next time. Give them more hopes to not get offended but be ok.
When the employee does not deserve a raise
Be honest and direct about why the employee does not deserve salary increase. Be specific about aspects of their job performance that stand between them and the raise. Give them advice and hope. Tell them to improve this or that or work that way or this way. Bring up the situation in a nice way.
Make sure the employee understands that it depends, on whether or not you are given a raise. It highlights the fact that when the fiscal health of the company is solid, increases to employees who deserve them are awarded.
Tell the employee that when your value to the company or organization exceeds its cost, will get, or will be taken into account for a pay rise. It offers suggestions on how to improve their performance. Encourages the employee to do well in your work and try to win a pay rise next year.
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