Are you prepared for the day one of your high achievers asks for a pay rise? This article will arm you with three strategies to ensure you have comfortable, collaborative performance-based conversations with your people and negotiate an outcome to suit you both.

Why is this important? Because if the request isn’t handled properly, you risk losing your best staff. We know staff retention is difficult – in fact, it’s the number one challenge faced by HR.

After working closely with leaders for over a decade, I often hear they feel ‘under siege’ from such requests. Usually it’s because there isn’t a clearly defined policy around salary negotiations, leaving managers ill-prepared.

Before we dive in, there are two key principles to consider.

1. All staff should know their value

People who feel valued by their organisation are more engaged and productive at work. In fact, not feeling valued is the third biggest reason people decide to look for new employment.

While most employees have a pretty good idea of their monetary value, they also need to hear from their employer about their non-monetary value. They need to know they matter and their presence is important to the success of the organisation.

2. Staff should feel empowered to seek a pay increase

If staff are not remunerated accordingly, they should feel confident to ask. Conversations with their managers about performance AND career aspirations should be regular, structured and consistent.

When such discussions are part of regular work activity, neither of you need be apprehensive about the topic of pay increases – or any other topic, for that matter. Your people will know they can approach you in a collaborative, non-conflict-based way to ask for what they want.

Avoiding these conversations leaves your people feeling unfulfilled and undervalued. That’s a great way to make your talented people start looking for a better and more appreciative job.

3 Tips for Handling Pay Rise Requests

1. Be an active partner in the career development of your people

When you work together to plan the career path and growth of your people, you won’t be taken by surprise at a pay increase request. It will be a logical step in the process as they develop new skills and advance.

2. Make the connection between personal development and corporate performance

Make sure your people understand how their remuneration fits with the work they do and value they offer. This reduces the likelihood of unjustified requests, but it also means if you must refuse the request, they will clearly understand why. Together you can build a strategy to get them to the level where an increase is justified.

3. Be honest and open to alternatives

Communicate with respect. Sometimes a pay increase may not be justified, or your business might not be able to afford it, so you need to be honest and say so.

Talk about alternatives you can offer to show your appreciation for their work and reduce the possibility of losing them to your competitors. As their career development partner, you’ll know what’s important to them, so think about how you can ‘pitch it to your receiver’.

Some examples include a later start in the morning, an option to work from home, a gym membership to invest in their wellness, or paying for study. Offering extra leave days is also a great alternative when budget is simply not available. Find something you can afford and make them feel valued for their hard work and commitment.

As a Manager, you should be ready to have these conversations with your people. They should be part of your regular career discussions, not something to be ignored or avoided. Instead, see these conversations as an opportunity to build strength in your relationships with your team. In this way, you won’t have to feel ‘under siege’ and your best people will be happy you are investing in their development.

About the author

Linda Murray is founder, Speaker and Executive Coach at Athena Coaching and Athena Leadership Academy, the professional development hub for high performing and high potential leaders. Linda ensures that your leaders and your teams are engaged, motivated and empowered to achieve the best results for your business.