In 2013, the average company gave out a 3 percent pay raise. That average is expected in 2014, as well.
As a business owner, how do you know how much to give and who to give it to? And how can you keep everyone happy in the process?
The job market is tough, and fortunately your employees are aware of your company’s overall circumstances.
New graduates learned in college that one of the challenges they would face after school would be answering how to position yourself for best paying careers, so they, too, know what it’s like to be out in the real world.
How to determine who deserves a raise
As a small business owner, giving out raises at the right time to the right candidates is an important aspect of your job.
Employees like to know they’re doing a good job and they like to be recognized for their hard work, most likely in terms of more money.
Employees that may potentially deserve a raise are those that:
- Consistently work hard – Do you have an employee that is willing to stay late or work overtime when needed? Does this employee do so with a smile on their face? Employees that go above and beyond their normal job responsibilities are the first that should be recognized. They care about your company and want to see it succeed. Hard workers almost always deserve raises, assuming your company can afford it.
- Offer something unique to your company – Maybe this particular employee isn’t the hardest worker, but maybe he or she does something valuable and irreplaceable for your business. For example, if you run a small construction business and have one drywall specialist who consistently gets rave reviews from customers, offering a raise to keep the employee around is worth it. It shows you value their work and know it would be hard to find a replacement.
- Meet or exceed their goals – If an employee regularly meets or exceeds sales goals, for example, they are most likely deserving of a raise. Without good, hard-working employees who sell your product or service, you wouldn’t have a business. Reward them.
How to keep everyone happy
When it comes time to give out raises, employees may start to gossip on who did or didn’t get a raise. This can cause tension and jealousy in the workplace, and may cause some valued employees to leave if they feel underappreciated.
To keep everyone happy, hold a one-on-one meeting with each employee, if possible.
Go over their position in the company, why they are or aren’t getting a raise, their strong points and what they can do to improve. Explain your position as a business owner and what your goals are long-term.
By making the employee feel like a part of a team (which they are), employee gossip should be decreased whether or not you offered them a raise.
For those that didn’t receive a raise, you could consider offering additional incentives.
These can include a few extra paid vacation days per year, allowing them to work from home one day per week or offering a more flexible schedule in the office.
Some employees would rather work four 10-hour days, for example, than five 8-hour days.
See what would be valuable to those employees and offer it to them, especially if you wanted to give them a raise but simply could not afford it.
Photo credit: businessnewsdaily.com
About the Author: Sarah Brooks is a freelance writer living in Glendale, AZ. She writes on personal finances, small businesses and travel.
