Most people dread asking for a pay rise, and in many cases many managers don’t enjoy the conversation either. Regardless of if it’s tied in with a performance review or if the conversation is instigated out of the blue by the employee, both parties often handle the conversation and negotiation poorly.
Job seekers have been motivated to seek out other employment opportunities because they have been left feeling disengaged, demotivated and undervalued after having a request for a pay rise rejected. How you; as either the employer or employee, handle the pay rise negotiation can have positive or negative flow on effects. If the request for a pay rise has been squashed, regardless of the reason, it’s vital that you don’t just end the conversation there. If the conversation comes to an end after “no sorry we are not in a position to increase your salary” you are leaving yourself in murky territory.
Here’s my 3 top tips for turning this negative into a positive for both parties:
- The employer and employee need to ensure they have clarity going forward. This is the ideal time to clarify expectations, set KPI milestones and agree on some goals that upon achievement will result in a salary review. Maybe these are over and above what’s in the position description or are focussed on addressing a particular problem in the business at the present time; either way by both parties having clarity around direction as well as some new goals and objectives to engage with, the conversation will end much more positively. Don’t make promises or commitments that you can’t follow through on.
- Agree on a timeline. As the employee, it’s probably taken you a fair bit of courage to finally knock on your boss’ door and ask for a pay rise. It’s not an easy conversation to instigate so by agreeing on a date / timeframe to have a follow up conversation and review the situation you’ll feel much better. Not agreeing on a follow up date will leave the employer thinking every time you walk in to their office that you are going to raise the matter again and as the employee you are left wondering how soon you can raise the matter again. Either way the matter festers so lock in a review date.
- A pay rise doesn’t always have to be about the dollars. There are many other ways to have the value of your package increased or if the motivation for asking for a pay rise is about feeling valued and being recognised for your contribution, think about how you can achieve that recognition through other alternatives. This can be the ideal time to float these ideas. You can make suggestions about other incentives that would appeal to you or be of value or as the employer you can suggest incentives that you think might be of interest. Don’t expect an answer on the spot if this is a new concept for the business. Float your ideas and by having an agreed follow up timeline you can consider and provide feedback on these incentives and how they could work to the benefit of both parties.
The ultimate outcome for a rejected pay rise discussion is to ensure that the employee walks away feeling valued even though they will be disappointed to have had their request rejected. Hopefully you went in to this discussion prepared and with relevant and accurate information. Regardless, now is the time to gather information to support your next discussion and negotiation. Information and knowledge is power. Make sure you arm yourself for the next discussion with information on market rates, how you compare against your peers, competitors and other employers in the region. Find out what incentives or benefits other employers offer and understand what your earning capacity is for your profession. Keeping the pay rise discussion evidence and fact based will give you a far greater chance of ensuring the employee remains engaged and is retained in the business.
Do you agree? How have you handled pay rise rejection, what’s worked and what hasn’t? I’d love to hear your thoughts and experiences so we can all learn how to better handle this tricky conversation and ensure we retain our employees and keep them engaged.
