How to Say No to Pay Rises (And Not Look Like a Monster)

Clare Parkinson

blog-publish-date

24 Apr 2019

blog-read-duration

It’s one of the toughest jobs you face as a boss. Looking a hardworking employee in the eye and saying, “Sorry, you’re not getting a pay rise.”

But there is a way to say no to a pay rise that actually improves employee performance and morale. In fact, it works so well that your staff may never ask for a pay rise again…

4 steps to controlling pay rises 

1) Create pay bands for every position in your business

A pay band is the salary range for a certain role in your company based on market analysis. For example, junior HR professionals in your business may have a pay band of £22,000 to £26,000.

Setting pay bands gives you leeway to hire staff with different levels of experience. You can pay a little more to attract an employee with a strong CV or a little less if they need training to reach the required level of competence.

Pay bands are a transparent and effective way of allowing your staff to understand what pay to expect while they work for you and how they might progress through the bands for exceptional performance (more on how to handle that later).

For example, if your junior HR professional is already at the top of the band, earning £26,000, then they can’t see any scope for progression within their current role.  So they won’t ask for a raise. They’ll ask for a promotion. Which brings us on to Step 2...

2) Set capability levels that staff can progress through 

Capability levels are grades for particular job types. They help you organise and manage a fair pay structure based on your employees’ skills and responsibilities.

Some companies keep capability levels simple and set junior, middle and senior grades for roles. Others create more elaborate systems. The civil service, for example, is thought to use around 11 grades to separate the most junior from most senior staff.

When you set pay bands for your capability levels, your staff will only expect a substantial pay rise if they move up a level.

But how do you stop staff from just asking for a promotion every year? Simple, you make them earn one instead.

3) Give workers measurable targets and objectives

You should have regular conversations with staff about what you expect from them and what they want to get from their careers.  

Work with employees to set yearly objectives and goals during their appraisals. Then decide what the reward is for an employee who exceeds their objectives. This could be a pay rise within their pay band or a promotion to a higher capability level.

Setting objectives is easier to do for some jobs than others. For your sales people, you’ll probably base targets on how much new business they bring in. For staff in IT or finance, maybe it’s efficiency savings or taking on new responsibilities.

Whatever you choose, make sure objectives are measureable and sustianable and that they support your business goals.  

4) Link pay increases to business performance

If all your staff meet their objectives, you’re more likely to end the year with a healthy balance sheet. But no one can predict the future. And you can do everything right, but still have a difficult year.

So make sure your staff know that all pay rises are subject to business performance and manage expectations by sharing updates with your teams on a regular basis.

If you follow these steps, your staff will already know if they’re likely to get a pay rise or not. They won’t need to ask for one and you won’t have to disappoint them.

What if I don’t want to give staff a pay rise at all?

Let’s face it, your first priority is for your staff to do the work you’ve given them for their contracted salary. There’s nothing wrong with that.

But you can’t ignore the fact that most of your workers want to move ahead in their careers. If you don’t give them the opportunity to do so, your staff will be unmotivated, they’ll be unproductive, and eventually they’ll leave.

A pay and reward system helps you get the best performance from your workers and achieve your business goals. Plus, by putting the responsibility on your staff to earn a pay rise, rather than just ask for one, you give employees more control over their destinies. So it’s a win-win.

Let’s get you started

Our experts support businesses across the UK to get the best from their staff. We give you industry-leading market analysis to set pay bands. We help you grade jobs into capability levels. And we support you to develop a watertight appraisal process.

Get advice from a pay and reward expert. Call Croner today on 01455 858 132 or request a callback.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

Free to Download Employer Resources

  • Sample Mental Health Policy

    FREE DOWNLOAD

    Sample Mental Health Policy

    Read more
  • Disciplinary Letter Template

    FREE DOWNLOAD

    Disciplinary Letter Template

    Read more
  • H&S Risks of Sleep in Shifts

    FREE DOWNLOAD

    H&S Risks of Sleep in Shifts

    Read more
  • Cricket World Cup: Dealing with Sporting Events in the Workplace

    BLOG

    Cricket World Cup: Dealing with Sport...

    The 2019 Cricket World Cup will run from 30th May through to 14th July. Matches ...

    Read more
  • What are the benefits of benchmarking?

    BLOG

    What are the benefits of benchmarking...

    Salary benchmarking is no doubt a term you’ve come across, especially if you wor...

    Read more
  • Office Dogs: Good Idea or Bad Idea?

    BLOG

    Office Dogs: Good Idea or Bad Idea?

    So, I was going to write about Brexit this month. But we’re not doing that now. ...

    Read more
  • Numark

    CASE STUDY

    Numark

    Numark serve as a virtual head office for independent pharmacies on the high str...

    Read more
  • Gilmour Quinn

    CASE STUDY

    Gilmour Quinn

    Gilmour Quinn Financial Planning Ltd is, as the name suggests, a small financial...

    Read more
  • Wardman Brown

    CASE STUDY

    Wardman Brown

    "I would say it has has a noticeable impact, in particular it has improved the H

    Read more

Ready to focus on what you do best?

Get your free consultation and speak to an expert today.