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Why Giving Timely Raise to Your Employees will Help You Get One Step Closer to Your Business Goals?

HR Tech Outlook | Tuesday, March 30, 2021

The exemplary performance of an employee is often a good reason for a raise. Effective performance deserves acknowledgment and reward. Providing merit-based pay raises is also an excellent way to inspire workers to perform well and go above and beyond.

Fremont, CA: The employees are the best asset of any organization. Although workers quit for a wide range of reasons, compensation is a significant factor contributing to employee turnover. Employees who believe they are not respected or paid enough for their positions prefer to look for other jobs. It is important to consider workers as the valuable resource they are, and how better to do that than to raise them?

However, giving raises is not always feasible. How the request is treated, whether approved or rejected, will decide the employee's future satisfaction with your organization. But how do you know when and how to give an employee a salary hike?

Criteria for Giving Raises to Employees

There are several considerations that you should consider in your decision to give an employee a raise:

Performance:

Costs of living

Merit

Period of service

Expectations:

Performance:

The exemplary performance of an employee is often a good reason for a raise. Effective performance deserves acknowledgment and reward. Providing merit-based pay raises is also an excellent way to inspire workers to perform well and go above and beyond.

Living Expense

The cost of living increases every year. And if an individual does not receive an increase on merit, an increase in the cost of living should be taken into account. The salary that the employee starts with won't have the same purchasing power for a long time. What was once a decent salary or wage could no longer suffice. If your workers feel like they don't make enough money, they might be searching for jobs elsewhere.

Merit

If an employee has mastered a new skill, he/she is now more critical to your company. The employee can better do their work, maybe more effective and better qualified for a promotion. Calculating the employee's improved skills into a pay rise can encourage them to continue to use those skills in your organization.

Duration of service

Giving raises to workers based on how long they have been with the company will promote loyalty. Employees will know their experience is respected. Plus, to get the boost, they know they're going to have to stick around. This will help to minimize turnover.

Expectations:

Addressing expectations does not necessarily warrant a raise in wages. However, if the standards for an employee change, you should consider raises at work.  If an employee needs to take on more work and more responsibilities in the same place, those increased demands should be reflected in their salary.

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