Salary raises: When, how and why we must provide them

Pay raises represent an important part of the compensation system offered to employees, and any organization should have an internal policy in this regard. It should include the criteria for granting wage increases, the time that must elapse from hiring a person until they could receive a raise and the salary percentage limits between which these raises can occur.

First of all, pay raises should be aligned with the management of performance levels and processes regarding the achieving of objectives. They also must be in agreement with the size and culture of the organization and with the industry to which the organization belongs. Thus, before that, you must set performance criteria that qualify certain employees, managers or team leaders to receive salary increases.

Performance, a criterion for salary increases

If we set performance criteria under which these pay raises will be granted, they should be made on more levels. So, before talking about wage increases, it is necessary to determine which productivity values are below expectations, which are those that are within the limits of meeting expectations and which are the ones that could be consider as exceeding expectations.

Equally, differentiated wage increases should involve at least 2% variation between different levels of performance. Some companies follow this model and offer higher salary raises to employees that have high performance, the ones that exceed expectations, as opposed to people who have lower results, offering them a lower amount of salary wages. Some organizations choose not to differentiate pay raises based on productivity level, as they want to leave no place for envy among employees.

How should we communicate a salary raise

It is very important that employees know what is the context in which they are granted a raise and to communicate this in a more efficient manner. For example, it is good to inform the person who will receive a larger income if this comes amid an organizational policy that involves granting such benefits after a certain period of employment to all employees or if it’s a raise based on contribution, merit, and performance.

The direct supervisor is the one who should inform the employee that he will receive a raise, in a private meeting. In this kind of discussions, it is good not to mention about more substantial pay raises granted to other employees and not to attempt to justify the reduced value of the growth, unless the employee requests it. At the same time, employee productivity should not be compared with the one of other colleagues when trying a possible justification for the percentage of the salary increase.

Finally, do not forget that people feel the need to have their merits recognized, especially when they make efforts, and they perform their job with abnegation. For some, regular wage increases, no matter how small, is a measure that shows gratitude from their employer. The latter should constantly communicate to the employee his gratitude for the decision of remaining in the organization and to show his hope of being together as longer as possible.


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