Shawnee Love   •  
November 6, 2014

Giving an employee a raise should be a positive experience and yet I have seen it go sideways too often.  The employee gets upset over what he perceives is not enough, too much (it happens) and simply an unfair raise leaving the manager wondering what the heck went wrong.

Here are 3 scenarios I have seen recently:

An employee has done a great job in years’ past.  However, this last year, it seemed like he wasn’t really on top of his game.  He did the work but the manager sensed his commitment had dwindled.  He didn’t stay late like he used to, he got work done but didn’t volunteer for the extras, and most telling, there were a few more mistakes.  Nothing terrible, just not the same level of care was put in.  So instead of giving the employee the usual large raise in comparison to others, he got a raise pegged at inflation.  He was mad because he had thought large raises were the norm, and he had banked on that 6% increase to help pay for the night school he was taking.  He needs that money and asks what can he do to make it up?

An employee has been an average performer.  Solid but never great.  Saying that, you could count on her to get the job done and being quite experienced, she didn’t need much handholding.  In years past, you gave her regular raises (pretty consistent with the market), but this year the job is in demand and you have lost two of her high performing team members to competitors.  You decide to give her a large raise to ensure she knows you value her consistent effort and extensive knowledge and to ward off recruiters who suggest she could make more elsewhere.  She thanks you for the raise but on second thought wonders if you were underpaying her all these years.  She starts looking for work elsewhere and of course finds it.

An employee is a marginal performer.  You have to manage her all the time to finish the work, correct errors, follow through, etc. but on the other hand she is loved by her colleagues and is quick to volunteer for committees like health and safety and the social committee.  You have given her small increases in years past so she knows you appreciate her, but never as much as peers because she just doesn’t deliver at the same level.  Your plan is to do the same smallish increase this year (i.e., 1.5%).  She comes to the salary meeting prepared with job postings indicating higher wages elsewhere and the knowledge that she is making less than her peers, and asks how you can expect her to put in effort when you aren’t paying her fairly?

In each of these 3 situations, there is a disconnect between the employee’s expectations of what base wages and increases are for and the company’s expectations of the same.  I have said it before, and I will say it again, the only solution to all of these problems is to be very clear up front with employees about your pay practices including what you give raises for and how.  Of course, you must also ensure that your practices are aligned with your business, including its goals, and the environment in which it operates.

Come back next week and we will dive into the psychology of raises. In the meantime, we’d love to hear your experiences about raises gone awry.