Help! My employee wants a raise.

“Thank you for taking the time to meet me, I’ve been working for Smith & Co. for 3 years and I really enjoy being part of the team. Recently I looked into remuneration levels for similar roles to mine and would like to discuss an increase in my salary.”

Employee, 2019 Pay Review Meeting

Typically associated with sweaty palms and a general feeling of discomfort, it’s likely that at some point you’ve dealt with the pay increase question, either as the employee...or the manager.

Determining if an employee should be given an increase should be based on a number of factors including business performance, industry benchmarking and individual performance.

So what if performance is excellent 
but other factors mean it’s a no?

Recent studies from Harvard Business Review (2018) found 70 per cent of employees plan to look for a new job after being denied a pay increase, therefore saying no to a request for a raise may not be the best approach to retaining high performing employees.

The answer may be a personal development plan (PDP).

WHAT IS A PDP?

A PDP is a collaborative tool for managers and employees to guide the employee through a process of self-analysis, personal reflection and honest assessment of their strengths and weaknesses and enable them to evaluate their current positioning within the organisation, and consider future development opportunities.

The PDP should be owned by the employee, with guidance and support provided by the manager.

The employee should be encouraged to include both professional and personal objectives into their PDP. For example, an Accountant who is passionate about football may like to become involved in their club through coaching or by joining the club committee. In this example, the employee will build leadership and management capabilities which will benefit your business as they progress. In addition you are demonstrating your support of the employee.

WHAT DO I NEED TO DO?

The PDP process is made up of five key steps:

Step 1: Assess

Kick off with a 360 assessment focused on priority areas such as: technical knowledge, leadership and communication skills.  This is the most effective way to establish and understand your employee’s current skills and knowledge.

Step 2: Personal reflection

Having completed a 360 assessment, your employee is now in a position to reflect upon reported strengths and areas for development.

Step 3: Set professional and personal goals

Work with your employee to set short (90 days), medium (12 months) and long term (2-3 years) professional and personal goals in the PDP, building upon the strengths and development areas highlighted in the 360 assessment.  Identify areas of focus to support longer term goals such as a promotion. Better understanding your employee’s goals and future plans also assists in succession planning and determining your recruitment requirements.

Step 4: Create an action plan

Creating an action plan will enable employees to identify activities to help reach their goals. All activities should be specific, measurable, achievable, relevant and timely (SMART) and stretch the employee’s current skill and knowledge base.

Think beyond formal training. Mentoring, shadowing, presenting training, inter-team projects and other informal training options should also be considered.

Step 5: Check In

Meet regularly with employees to check in and ensure they are happy with the progress they are making, ensuring you listen with attention and intention and ask questions in each of these meetings.

The PDP process is designed to build skills and knowledge and increase engagement and performance. Your employee may still ask for that raise, ideally your processes will enable you to respond “yes”!  

Contact WCA – People & Culture Solutions if you require any assistance with your Culture, Human Resources and/or Industrial Relations requirements on (08) 9383 3293 or admin@wcasolutions.com