How to Handle Pay Raise Complaints

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At the beginning of the new year, many companies offer raises to employees. What happens, though, when employees express unhappiness about the raises they receive? If they complain to each other, productivity and morale decline. Use several tips as you handle these complaints promptly and properly and encourage a positive, productive and healthy work environment.

Welcome Pay Raise Discussions

Employees should feel comfortable discussing any subject with you, including pay. Strive to cultivate an open door policy, and listen carefully to your employees so they feel comfortable being honest with you about all their concerns.

Compare Standard Industry Pay Rates

Search the U.S. Bureau of Labor Statistics, PayScale.com, Salary.com and job listings to find the current pay rates for employees in your industry. For the most accurate data, research companies of comparable size with employees of similar talents and skills to your employees.

Provide Performance Details

If your company’s pay raises depend on employee performance, prepare a review of the employee’s record and performance during the last year as you outline the reasoning for their specific pay raise. Offer suggestions for improvement, too, so your employees know exactly how to qualify for a bigger raise next year.

Review the Raise Policy

Your company may offer larger raises to employees after they work there for a certain number of years, or your raise policy may give everyone the same raise regardless of merit. Review this policy with employees as you explain their pay raise.

Offer Alternative Benefits

In lieu of large pay raises, the company may boost the employee benefits package or offer alternative benefits like extra time off or a flexible work schedule. Discuss these perks with employees as you help them understand this year’s pay raise.

Explain the Company’s View

Your company could have multiple reasons for giving lower-than-expected raises. While you don’t have to explain all the reasons to your employees, share some details, such as the employee budget, increase in insurance benefits or slow production, that help them understand your point of view.

Note Pay Raise Complaints

When employees take time to complain about their pay raise, record their concerns, including why they believe they deserve a bigger raise, your reasoning for the raise they received and any suggestions you made for their future improvement. The employees will appreciate being heard and the fact that you take their compensation complaints seriously.

If employees complain about their pay raise, you can take these steps to address the complaint promptly and properly. Handle the situation the right way, and you build rapport and create a stronger company.

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