Should I Give My Team a Raise?

This week's question from my portal “The Neagle Code: Directions for Life” comes from someone who wishes to remain anonymous.

Neagle Code Question

Hi David,

I have a large team, and I’m making my best efforts to pay everyone at the upper range of their pay scale for each position. However, people are constantly asking for a raise. This triggers a reaction in me and fear that if I don’t give them what they’re asking for, they’ll leave.

I feel guilt that I can’t pay everybody double or even triple what I’m paying them. How do I handle this?

Neagle Code Answer

First off, I think it’s great that they’re asking for a raise. I want people who will ask for a raise, because that generally shows that they want to improve.

When someone asks for a raise, consider 2 things—their performance, and what you’re willing to pay around the scale for that job.

Ask yourself:

  1. Does the employee deserve a raise (regardless of whether they’re at the top of pay scale or not)?
  2. Where do you want to draw a line with how much you pay people?

That’s a personal decision and a business decision.

Secondly, everybody can be replaced. Don’t ever put it in your mind that you have somebody who can’t be replaced. Otherwise you’ll back yourself into a corner.

Some people are more difficult to replace than others, which may require that you pay them a bit more if you feel that they—and their position—are worth it.

If someone is in a position where you’re not going to pay any more, tell them that upfront. Say, “Listen, you’re already at top of the pay scale. The only way you’re going to get a raise is if the scale increases.”

Is there a place for advancement for that person?

It’s like knowing what their hopes and dreams are, and seeing if that’s a match for your company.

If there’s no advancement possible for them, then you need to let them know. You can say, “If a promotion is not what you’re looking for, and if you don’t want to advance in the company, then I completely understand if you want to move on.”

That’s part of owning a business—knowing that some people aren’t meant to stay in that position for the rest of their life, and you’ll have to replace them.

You’re also looking at individual performance data for the person and their position.

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