According to an article in the Sydney Morning Herald, the incomes of professionals, miners and retail workers are going backwards compared to the cost of living. A further 10 million private sector employees are receiving pay rises that are commensurate with inflation. As a result of these trends, you are likely to be asked for a pay rise. So what do you say to a staff member if you can’t (or don’t wish to) increase their wages?
Never Give An Immediate Answer
You need to give consideration to the request for a pay increase and work out your response. It’s OK to tell a staff member you need a few days or a couple of weeks to think about it. Just make sure you respond to their request within the timeframe you specify.
Always Be Prepared For The Follow Up Conversation
This is not the time to wing it – especially if you have decided to decline the request for a pay rise. But either way, the reasons for your response must be based on facts and performance to ensure you are setting up clear expectations on how future wage increases will be decided.
If There Are Performance Issues, Talk About It
If your decision not to grant a pay rise is based on under-performance issues, be open about it. If you haven’t already initiated a conversation about your performance expectations, now is the time to discuss it along with specific details on where improvements are required.
Perhaps You Are Already Paying Above Average Rates For The Role
In this situation, you need to demonstrate the employee’s current salary is within (or above) industry standards based on the role, their overall responsibilities and experience. You will need hard evidence to substantiate your position.
Never Allow The Conversation To Drift Into These Three Areas:
- Never compare the worker’s performance with his/her colleagues
- Never gloss over your decision by calling it a “Captain’s Call” or other management clichés
- Never make promises about wage increases next year or when sales increase or if a highly sort after customer comes on-board and other expressions of hope
Need Help To Handle Tricky Staff Conversations?
The team at End2End Business Solutions can guide you on how to approach any tricky conversation with your team. They can even be present at meetings to facilitate discussions.
To investigate the ways the End2End team can assist your business, call 02 8977 4002.