Alan Ibbotson

When An Employee Wants a Raise They Don’t Deserve
May 21, 2007

As consultants helping small and medium sized businesses, we are often asked by our clients how to deal with one of those awkward situations – being asked for a raise by an under-performing employee. Handling pay conversations can be awkward even with stellar performers, but in this case it’s particularly tricky: either you want to use it as an excuse to show them the door, or handle it in such a way that you hold onto them and motivate them to improve their performance. Either way, handing over more money is probably not going to be your best course of action.

One of the reasons these conversations can be difficult is that you’re usually caught off-guard when they happen. To make matters worse, your employee will most likely come to you well prepared with a whole host of reasons why they want or deserve more money.

If you are caught off-guard and really don’t know what to do, buy yourself some time. Simply say that you would welcome the conversation and schedule a time within the next couple of days to sit down and talk about it. Then put pen to paper and prepare.

Above all else, this is an opportunity for a performance conversation. If you’re really not getting what you need from someone, yet they believe their performance justifies an increase, then there’s a perception gap that needs to be closed – and fast.

Write down all the strengths and weaknesses of the employee, with examples; you are going to have to give a mini-appraisal of sorts. Outline how and why he or she is falling short of expectations and what kind of performance you would like to see instead.

Take a look at Salary.com to benchmark the job and ensure you are in a fair market range for the jobconsidering the level, the experience required, your location etc. If you’re not, then consider how far off you are and how the “total package” might make up for it: perks, merchandise, healthcare, flexibility, time off etc. It all counts.

The way to handle the conversation itself is with a welcoming, open attitude. Being defensive or irritated will only create a tense environment that could spill over into your relationships with other employees (assuming they all talk to each other…) Be nice about it – whatever you think of their performance, it took courage for them to come to you and ask for a raise, so they deserve your respect.

Start off with something along the lines of:

“I’m glad we’re having this conversation, Angela. It’s time that we had a talk anyway about how you’re doing so I’d like to take this opportunity to do that. I do enjoy working with you and there are some things I think you do particularly well…(give examples).“

“I understand you’d like a raise, Angela and I hope to be able to give you one soon, but there are a number of things I’d like to see you do better before I can justify doing that…”

Then give examples, be supportive and offer your coaching. Remember to be constructive with your criticism, give examples and direct it towards the performance not the person. For instance “I find that you often rush things and it leads to mistakes, like this morning when….” is much better than “You’re careless and you make silly mistakes”.

To bring the conversation to a close, set 2-3 performance improvement goals with a timeframe. Offer to have another conversation about compensation at that time, if you think it’s appropriate for you to do so. Thank them for the opportunity to talk and reiterate your support and availability to help them improve.

If handled well, you might very well find that far from having a disgruntled employee at the end of the conversation, you have a determined and motivated one who might not like the fact that they didn’t get what they want, but they understand it, respect your decision and understand how to get that raise next time.

Posted by Alan Ibbotson on May 21, 2007 | Comments (0)