Stop waiting for your employees to ask for a raise

If you only give raises when people ask, you’re setting yourself up for unfair pay practices.

If you want a raise, you need to prove your worth, do your research, and ask for it! This is great advice to employees, but I have to ask, why is this the employee’s responsibility?

It’s time to flip the tables and put the burden on managers and owners and HR departments to ensure that people don’t have to come asking for raises. Here’s why.

You have more information than your employees do

American culture makes it very uncomfortable to talk about salary. This means that your employees generally know their own salary and guess what other people earn. You, on the other hand, know what all your employees earn. You know the salary requests candidates make. Your HR department should have salary survey data and know what the market looks like.

Relying on employees to request raises means you’ll get requests that are completely outside of market ranges and, at the same time, other people who are wildly underpaid for their positions. Neither situation is good.

This sets you up for pay discrimination lawsuits

You hire John and Jane at the same time for the same position at the same salary. This is great. But, as time goes on, it’s far more likely that John will ask for a raise and Jane won’t. Take a look at this data from Glassdoor.

Now, the traditional response to such data is to tell women to ask for more raises. I agree. Women should ask for more raises. But they don’t. And this doesn’t absolve you of your responsibility to pay fairly. Do you want to stand up in court and say, “Yes, John and Jane have the same job and the same responsibilities. We hired them in at the same salary, but John asked for a raise and Jane didn’t. That’s why John makes $10,000 more than Jane does, even though Jane has a higher performance rating.”

If the Paycheck Fairness Act becomes law, this will cease to be a legitimate reason for a difference in salary. The proposed act limits pay discrepancies to “a bona fide factor other than sex, such as education, training, or experience.” He asked, and she didn’t, won’t cut it.

This is how you lose good employees

Some sectors are screaming talent shortage while others are overwhelmed with applicants. If you have applicants beating down your door, you probably don’t need to worry so much about pay increases, but if not, you may find yourself in a world of hurt.

You can wait and only give raises to people who have another job offer. The “counteroffer” may save a few employees, but it won’t save everyone. And you’ve already demonstrated that you don’t care about your employees. Plus, there will be plenty of good employees who don’t present you with a counteroffer opportunity. They’ll resign.

How to fix this

At a minimum, you should evaluate everyone’s salary yearly. If they earn below market rate, they get a raise. Yes, you still take their knowledge, skills, abilities, and performance into consideration. But your goal should be to pay the employee exactly what you would offer them if you were attempting to recruit them.

Bargains are never bargains for long. Underpaid employees eventually figure it out and leave, which means turnover costs. Or worse, they get disgruntled and stay.

Take on the responsibility of paying people fairly and giving raises when needed–not just when someone asks.

The post Stop Waiting for Your Employees to Ask for a Raise appeared first on Inc.

Original source: Inc.

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