The crucial denying a raise etiquette rules. How to turn down an employee for a raise appropriately and constructively.

What denying a raise etiquette is

Denying a raise etiquette is the set of rules to turn down an employee’s request for a salary increase in a constructive way. Such rules include:

• How to appropriately handle the employee’s request.
• The behaviors to avoid.

As a manager or an employer, follow denying a raise etiquette to give constructive feedback and have positive career discussions.

General denying a raise etiquette principles

Denying a raise etiquette is based on two main principles.

• Give constructive feedback to the employee.
• Avoid harming the relationship between the employee and the company.

Denying a raise: the etiquette rules

1) Recognize the employee

When employees ask for a raise, they make a positive statement. They imply that, by working in their role, they are gaining valuable experience, developing skills, and thus gaining market value. Furthermore, if employees ask for a raise, it means that they intend to stay in the company. They like the organization, intend to keep growing in it, and are ambitious and eager to contribute more.

As a manager or an employer, this is a very positive message to receive. Thus, the most crucial etiquette rule is to recognize an employee who asks for a raise. Show your appreciation for their willingness to grow and contribute to the team.

2) Be clear and appropriate when denying a raise

Always deny a raise in person. Avoid doing it over the phone, via text or voice messages, or through email, as they are impersonal and the message and its tone can be misinterpreted.

Start by making your decision clear. Keep a positive tone of voice and positive body language.

3) Explain the reasons behind your decision

When denying a raise, state the reasons behind your decision. Say why you think it is not the right time, or why the employee’s expectations are not correct.

Provide some explanation based on objective data and facts. Make sure that you are unbiased and avoid any discriminatory behavior. Then, suggest a path toward a pay raise. In other words, try to turn the “no” into a “not now”. State under what conditions you will be able to grant the employee a raise. If you think that the employee is far from getting a raise, be honest and say it.

Do not deny a raise without providing any reason, as it is disrespectful to the employee. Doing otherwise may lead to losing the employee.

4) Getting a raise is a process: agree on the next steps

Even if denying a raise is a rejection, a manager can turn it into a positive message. Present the rejection as the first step of a career path.

Discuss career progression with the employee. Agree on the areas for improvement, a tentative timeline, milestones, and next steps. Typically, it is helpful to assign the employee additional tasks and responsibilities to help them gradually grow.

5) Ask the employee for feedback and buy-in

Ask the employee for feedback about your decision and thought process. Let the employee speak. Listen to any concerns and frustration.

Ideally, the employee should acknowledge the areas for improvement. If they do not agree, ask them to explain their reasons and provide data and facts in their support. Be open to their opinions and review the career plan. After the discussion, ask the employee to commit to the growth path.

6) Allow the employee time to absorb the rejection

Be understanding after turning an employee down for a raise. The rejection and feedback can be a blow and may take time to absorb. Allow the employee some time to reflect on the feedback, accept it, and regain motivation. Show your support.

Denying a raise etiquette: the worst mistakes

Avoid the worst denying a pay raise etiquette mistakes. 

• 10/10. Denying a raise because of bias (discrimination).
• 8/10. Denying a raise without explanation.
• 8/10. Not giving honest feedback.

Resources

• New Research Shows How Employees Feel When Their Requests for Raises Are Denied: hbr.org