Companies predict that the average raise in 2017 will be about 3 percent, which is similar to previous years' averages. Is your company prepared to give out these raises?
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When compensation talk comes up with any of your employees, do these five things:
1. Ask Employees to Document Their Achievements and Prove Why They Deserve a Raise
Open the communication channel up with your employees. Request specific and quantifiable examples of merit beyond basic job duties. Doing so will get employees reflecting on their individual performances in order to determine whether or not raises are truly appropriate.
Encourage employees to get granular with their proof. For example, you might ask employees who claim to have "increased traffic" to show you the percentage by which traffic increased and explain how this impacted the department and/or company as a whole.
2. Research Compensation Levels for Comparable Jobs
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Give yourself a leg to stand on. Using public salary data, you can easily determine the baseline level of compensation for a given role in a given industry and location. Remember: When assessing an employee's salary level, consider their current, actual responsibilities. Don't simply base your assessment on their formal job description.
If you find that you are providing employees with below-average compensation, then it's likely time to give out a few raises.
3. Consider You May Not Be Able to Give Employees What They Want
Company financials mean you can't swing a raise just yet? Explain the situation to your employee transparently and honestly. Do you wish you could give your A-players raises? If there's no money in the budget, tell them so.
Consider nontraditional forms of compensation, too. One-time bonuses and non-financial avenues are worth exploring. Could you offer employees one day a week to work from home? Could you pay for them to attend a conference? Could you buy the team lunch and give them an afternoon off?
There are plenty of ways to show your employees they are valued without breaking the piggy bank – and some of your employees might even prefer these alternative measures to straight raises. According to Glassdoor, employees aged 18-44 prefer additional perks and benefits to pay raises.
4. Create a Mutual Action Plan
Thirty-two percent of employees would like to see and understand they progress they've made toward goals set by managers, so if you can't agree to a raise right now, set goals for next time. Agree to re-examine the situation when financial circumstances improve or the employee has hit their new goals. Be open about learning experiences and ways employees can develop and grow.
5. Give More Ongoing Feedback
Implement the steps to create and maintain a feedback-focused culture. Give more feedback and be open to receiving feedback yourself. By moving toward an ongoing feedback model, you can reinforce positive behaviors, nip bad habits in the bud, and more regularly deliver insight into how each team member can grow and excel in their jobs. This, in turn, will help employees see where they stand – and when they deserve raises.
When the subject of raises comes up, do your research. Prepare for the meeting and be as open as possible. Setting expectations, using the facts, and planning for what's to come will ensure employees receive raises fairly.
A version of this article originally appeared on the iRevü blog.
Michael Heller is the CEO and founder of iRevü.