Feeling Valued: The Dreaded Salary Raise Discussion
Posted by Angie Herbers in UncategorizedI get a number of employees who e-mail me seeking advice on the best ways to request a salary increase. I always find this request interesting, because written between the lines is really a bigger issue that all employers should know.
The hidden message? If an employee makes it a point to ask for a salary increase, what they are really saying to you is that they don’t feel valued.
As I mentioned in last week’s blog, employees are looking for a purpose in their careers. But they also want to feel valued in their positions. Problem is, if they get the perception that they are not valued by the company, the only thing they can really grasp onto is asking for more compensation. Disappointment in their compensation is only part of the problem—the rest is a lack of feedback on their performance and praise for the good they have done for the company as it grows.
As business owners, we have to find the best way to retain top talent while keeping expenses in check to run a profitable business. As in any growing business, there are conflicts between the need for employers to keep expenses at budget and the need to reward and invest in key talent to aide in the growth of the company.
How have you achieved a balance between cost minimization and investments in people to increase profits? What are your success stories on how you have handled an employee who is asking for a raise, but the business is not in a growth position to do so? How have you bridged the gap between the need of growing your business and the compensation needs of your employees?
I’ve got a few suggestions that I have seen work, which will be the topic of next week’s blog, but first I’d love to get your input.
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At 37 and after helping to grow my firm for the last 13 years, I say Amen! to the discussion. First, I am an employee not an owner. The compensation method that has been best for me and my employer is one that lets me give myself my own raise. Compensation tied to productivity gains… do X and I get Y. The boss knows what the built in profit is if I am successful, and I get to give myself my own raise without having to ask.
I use the same method with the people I supervise. It works even for operations. It was the path to achieving lots of goals… documenting processes, paperless office, getting virtual office technologies, shortening statement processing times, achieving client retention goals… anything that is measurable.
Damian Gallina, CFA
Horan Capital Management (Towson, MD)
Damian:
You are exactly right. One of the best ways to motivate talent, especially next generation talent like you, is “productivity compensation.†In other words, you get the work done when and how you want so long as you get the end result the company is working toward and you will be rewarded. The key is making sure the compensation is clear, established in the forefront, and promises are fulfilled. We are finding that these methods of rewarding on productivity, instead of things like seniority, are growing planning firms much faster then the average and retaining top talent.
Thank you for your comments. Anyone else have thoughts? We’d love to hear them.