How To Tell Someone They’re Not Ready For A Raise Yet

This is a situation that every reporting manager comes across at some point or the other — when a reportee has either articulated or indirectly conveyed that they would like an increment, but you know that they’re just not ready for one yet. Telling someone that they’re not going to get an increment can be a tricky conversation for a manager — if it does not go well, the employee is either de-motivated or angered. The result is either deterioration in the quality of work, separation or, in many cases, the former followed by the latter.

But this conversation can also be a golden opportunity for you to incentivise an employee to perform better or take on more responsibility. If you are not willing to give someone a raise right away, it is usually either because their quality of work has room for improvement or they’ve hit a glass ceiling within their role — therefore, think about this as your chance to show the employee how to earn the raise that they want by providing more value to the company.*

Here’s how to make the ‘no raise’ conversation a constructive one for both you and your reportee.

Step 1: Conduct a performance review

This is especially helpful if the increment conversation is taking place outside of the company’s normal appraisal cycle. A comprehensive performance review that highlights both high-performance areas as well as improvement areas allows you to provide the employee with a clear assessment of their professional abilities — and thus reinforces that they are being compensated according to the tasks that they are performing.

Step 2: Provide constructive feedback rather than criticism

It’s easy to tell people all the good things that they are doing. However, make notes for the ‘improvement areas’ part of the conversation in order to turn negatives into positive-action statements.

For example: if you’re reviewing someone who does work in a cross-functional role but is not organised about it and therefore wreaks havoc on workflow, don’t say: ‘You’re very disorganised and that causes problems for others.’ Try instead to frame your feedback as: ‘You could spend a little time every morning noting down all the tasks you need to complete and prioritise the ones that need greater coordination in order to make workflow more efficient.’

With this one simple change in how you frame your feedback, you can turn a potentially ‘hurtful’ statement into one about how the employee can become a more efficient professional.

Step 3: Bring up the subject of money yourself

Far too many managers don’t bring up money in the hope that if the employee does not ‘ask’, the conversation can be avoided altogether. This is not useful in the long run — if you do not provide the forum for someone to talk about what they want, you risk creating an ecosystem in which employees may be too intimidated to articulate what they want to you and but end up gossiping with each other, leading to team-wide discontent.

Taking control of the conversation by addressing the subject directly also helps you showcase yourself as an empathetic manager who is aware of your reportees’ desires (not just the company’s goals), and builds greater trust between you and your employees.

Step 4: Specify a roadmap for growth

Once you’ve brought up the subject of money and have heard out your employee’s side of things, go back to the ‘improvement areas’ you have already discussed. Highlight the key points (whether they should be showing more initiative/ correcting repeated errors in their current work/ doing more in order to perform a different role with more responsibilities) and specify a timeline within which you would like to see growth in those areas.

Be clear that you are not saying no forever to a raise; instead, you are helping them develop their skills in order to arrive at a stage where their compensation would automatically be adjusted to reflect that professional growth. Set a date for another performance review at the end of a certain period of time so that the employee knows you mean what you are saying and aren’t just trying to put them off.

Step 5: Actively make room for the employee to grow

This goes beyond the review and the conversation. Here is where you actively derive value from the person who wants more money — you track their improvement over time and slowly give them additional responsibilities and teach them how to cope with them and then excel at them.

If you are able to turn the employee who wants a raise into a high-functioning asset who deserves a raise, then your job as a manager is well done. All you need to do then is approve the raise. :-)

Summing up…

The key to making this conversation a constructive one rather than a confrontational one is being farsighted. You have to think about things carefully and figure out in which areas your company needs more contribution and where the employee’s skills would be of most value. If you go into the conversation without a plan, even if the conversation is an amicable one, you’re not really getting anything out of it — you are merely postponing the inevitable deterioration in the quality of work, separation or both. If you have a plan in place, however, remember that you’re not only carving out a growth (and increment) roadmap for the employee, but also providing value to the company by grooming someone to become a greater asset.

* Everything I have said in this piece applies only to an employee who has the potential for growth within the company. In case you’re being asked for a raise by an employee for whom you don’t see a long-term future with the company, be kind and cut them loose. They will be better off finding work at a different organisation where there is room for growth for them; you will be better off hiring a replacement who is better suited for growth within the company.


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