How to say “no” when your employee asks for more pay

Take a look at these common comp conversation pitfalls when talking to employees about raises.

In a perfect world, every time you wanted to reward a high-performing employee with more cash, you’d have the wherewithal to do it and no other factors to consider.

In some instances, an employee may ask and then receive. However, this isn’t always easy to do, and in some cases it’s not feasible at all.

In this day and age, it’s common for some managers to view their subordinates as friends, as many work environments have taken a more relational turn in previous years. Because of the heightened level of comfort, employees may be more willing to ask for raises, and in the same regard, some managers may want to please their employees. There’s a challenge then, in telling an employee no, especially when the manager is motivated to keep things amicable.

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Here’s how you can meet that challenge.

Listen to your employee’s case

Before making a decision about the raise, it’s good to know why the employee thinks he deserves one. Does he believe he’s underpaid relative to the market? Has she taken on new responsibilities? Has she accomplished something worthy of a bump in pay?

If an employee is confident enough to ask for a raise, often it’s because he’s done something he believes warrants it. By listening to your employee’s case, you’ll not only gain insight into his values, you may also discover you were unaware he’s done something that deserves some form of recognition. While your employee’s accomplishment may not warrant a raise, or you may not have the means to approve one, having more information about your employee’s performance will allow you to recognize her in the future.

Take time to consider the request

When refusing a raise, it’s very important to be aware of the employee’s feelings and how your refusal will come across. Being too quick to say no may give the impression you don’t value the employee, and you don’t want your employee to think that. When you take time to consider the request, however, it shows you genuinely value the employee, even if your answer will be no.

On the other hand, taking too much time to consider the request could cause your employee to believe you’re dragging your heels because you don’t care. You want to take enough time to appear thoughtful but not neglectful.

Give your employee more than “no”

Just telling your employee no without further rationale will leave him with more questions than answers, especially if you allowed him to make a case to you to begin with. By providing a reasoned rationale for the refusal, you continue to show your employee respect. In explaining your answer, you’re also able to give constructive feedback that can help him earn a raise in the future.

It’s also important to affirm the employee’s value to your organization. If she’s taken on additional responsibilities, for example, you’ll want her to be aware of your appreciation. Ultimately, you don’t want this refusal to damage the employee’s engagement or loyalty levels.

Be straightforward

If there’s a specific reason the employee doesn’t qualify for the raise at this time, be honest about it. Also, let your employee know what he can do to potentially qualify for the raise later on. Don’t sugarcoat or fluff your answers. Be kind but don’t be afraid to tell your employee exactly how it is. A good employee will generally appreciate the feedback and honesty and hopefully make the necessary changes.

Offer support and assistance

A good leader wants to see her employees succeed. You may have to turn the employee down this time, but by offering to help him do what it takes to get a raise in the future you’re showing that you believe in the employee and genuinely see potential in him to get where he wants to be. A good employee can’t help but appreciate that.


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