5 Tips to Productively Decline a Raise Request

Can an Employee Refuse a Raise?

No doubt about it, your team is working hard. But one day, an employee pops into your office and asks for a raise. They’re a fairly good worker, but frankly, they haven’t done anything extraordinary to deserve a boost to their own bottom line. You don’t want to offend them—or worse, lose them—by declining their raise request, but you can’t approve it either. Unless there has been major hinting happening around the water cooler, an employee’s request for a raise can come out of left field.

Here’s how to keep your employee motivated—and on the job—with these tips:

1. You don’t want to say no on the spot and risk offending your employee, so hear what they have to say.

Let them point out all the reasons they feel deserving of a little extra padding in their paycheck. After all, there might be projects they’ve worked on that you’re not aware of that could change your mind. But even if there isn’t, the very least you can do for employees who muster up the courage to ask for a raise is give them your full attention and seriously consider their side.

2. Your employee will be presenting their case through rose-colored glasses, so make sure you go through their history to check performance for yourself.

Review the number of times they have already received a raise, and why. Combing through their file will help you have clear facts to determine why they may or may not be worthy of a raise. Jot down points to support your case so you can refer to specifics during your face-to-face.

3. Search to see what other employers are paying for similar work to the one performed by your employee.

Is the pay competitive? If your employee’s earnings are comparable to what’s currently being offered in the market, you can cite this as a reason why they don’t deserve a raise at this time.

Once you’re armed with all the facts—including your employee’s overall job performance, their salary demands, and the market rate for their position—it’s time for a meeting.

4. Tact is key. It’s never pleasant or easy to turn down an employee’s request, so act accordingly.

Remove emotion from the equation and let your employee know you thought about this and did your research as well. Presenting them with facts will help illustrate why you won’t grant them a raise. Referencing reputable data also helps avoid making you look like the bad guy, which is vital since you still have to manage this worker in the future.

5. Before you let your dejected employee leave your office, it’s up to you to dispense some good career advice.

Make it clear they occupy an important position on the team, and offer tips on how to boost future performance to ensure a raise at the next employee review. If done correctly, you will be creating a more invested employee whose raise request was not rejected, but merely postponed to a date in the not-so-distant future.

Declining an employee’s raise request can certainly have negative results. Base your decision on facts, while still treating your employee compassionately, and motivating them to try harder to score a raise the next time.

For Employers