{"id":15013,"date":"2024-11-22T16:59:00","date_gmt":"2024-11-22T16:59:00","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=15013"},"modified":"2025-05-07T15:07:20","modified_gmt":"2025-05-07T14:07:20","slug":"employee-pay-rise-employer-respond-request","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/employee-pay-rise-employer-respond-request\/","title":{"rendered":"Got employees asking for a pay rise? Here&#8217;s how employers should respond"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ie\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tGot employees asking for a pay rise? Here&#8217;s how employers should respond\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2024-11-22T16:59:00+00:00\">22 November, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Got employees asking for a pay rise? Here&#8217;s how employers should respond\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ie\/blog\/employee-pay-rise-employer-respond-request\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ie\/blog\/author\/roisinkilleen\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2019\/10\/Roisin-Killeen.jpg\" class=\"entry-author__image\" alt=\"Roisin Killeen\" \/>\t\t\t\t<span class=\"entry-author__name\">R\u00f3is\u00edn Killeen<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>If you do a search on Google, you&#8217;ll find multiple articles discussing how an employee should ask for a pay rise.<\/p>\n\n\n\n<p>But there is little advice on how an employer should respond to such a request.<\/p>\n\n\n\n<p>This article offers some key pointers to you, as an employer, on what you should do when an employee approaches you about a pay rise.<\/p>\n\n\n\n<p>Here&#8217;s what we cover:<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-how-should-you-initially-react-to-a-pay-rise-request\" data-level=\"2\">How should you initially react to a pay rise request?<\/a><\/li><li><a href=\"#h-should-you-combine-a-pay-increase-with-a-performance-review\" data-level=\"2\">Should you combine a pay increase with a performance review?<\/a><\/li><li><a href=\"#h-factors-to-take-into-account-when-considering-a-pay-increase\" data-level=\"2\">Factors to take into account when considering a pay increase<\/a><\/li><li><a href=\"#h-how-to-negotiate-when-an-employee-asks-for-a-pay-rise\" data-level=\"2\">How to negotiate when an employee asks for a pay rise<\/a><\/li><li><a href=\"#h-find-the-right-balance\" data-level=\"2\">Find the right balance<\/a><\/li><li><a href=\"#h-can-alternatives-to-a-pay-increase-be-offered\" data-level=\"2\">Can alternatives to a pay increase be offered?<\/a><\/li><li><a href=\"#h-how-to-communicate-your-pay-rise-decision\" data-level=\"2\">How to communicate your pay rise decision<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<div class=\"single-cta\">\n\t<a\n\t\tclass=\"button button--primary gate-08ebf55b-2eba-453f-a63e-7a9afdf556ab\"\n\t\trole=\"button\"\n\t\tdata-button-location=\"content_area\"\n\t\thref=\"#gate-08ebf55b-2eba-453f-a63e-7a9afdf556ab\"\n\t>Download your free copy of The A to Z of payroll to help you understand the complexities of payroll and get the pay run right<\/a>\n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-should-you-initially-react-to-a-pay-rise-request\">How should you initially react to a pay rise request?<\/h2>\n\n\n\n<p>When an employee asks for a pay increase, you should be conscious that it can be difficult for them to bring up the subject of pay and you should react respectfully and professionally.<\/p>\n\n\n\n<p>Maureen Lynch, managing director of recruitment company Hays, stresses that it&#8217;s important to take the request seriously and not to try and avoid it or play it down.<\/p>\n\n\n\n<p>So what should your reaction be to the request of a pay rise?<\/p>\n\n\n\n<p>Start by letting the employee outline the reasons why they believe they&#8217;re entitled to a pay rise.<\/p>\n\n\n\n<p>Then tell them you&#8217;ll reflect on their request, perhaps indicate that you&#8217;ll consult with other relevant colleagues, and indicate when you will respond.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-should-you-combine-a-pay-increase-with-a-performance-review\">Should you combine a pay increase with a performance review?<\/h2>\n\n\n\n<p>Maureen says: &#8220;Some organisations have quite a tight pay structure, where incremental adjustments to an employee&#8217;s salary can only be made once they&#8217;ve hit specific targets.<\/p>\n\n\n\n<p>&#8220;Others, usually smaller organisations, have a more flexible system of salary negotiation.&#8221;<\/p>\n\n\n\n<p>She adds: &#8220;One way to put in some structure is to have a system in place where employees have to fill out a self-evaluation form when requesting a pay rise.<\/p>\n\n\n\n<p>&#8220;The benefits of this are that, on the one hand, you&#8217;re asking the employee to properly think through and justify their worth, while, on the other, you&#8217;re giving yourself time to respond.&#8221;<\/p>\n\n\n\n<p>This can be an efficient way to handle pay reviews, but it does not work for all companies.<\/p>\n\n\n\n<p>And if the review process is deemed to be unfair or unclear, it can create an atmosphere of resentment within your business.<\/p>\n\n\n\n<p>Also, sometimes, by tying performance and pay reviews together, the employee is inclined to focus on the pay review and is less focused on feedback on their performance.<\/p>\n\n\n\n<p>So, it&#8217;s important to find a structure that works best for your company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-factors-to-take-into-account-when-considering-a-pay-increase\">Factors to take into account when considering a pay increase<\/h2>\n\n\n\n<p>While related to performance, there are other factors you should take into account when considering a pay increase.<\/p>\n\n\n\n<p>What experience does your employee have?<\/p>\n\n\n\n<p>How does their pay compare with other employees?<\/p>\n\n\n\n<p>And if you give this person a pay increase, will other employees then expect one?<\/p>\n\n\n\n<p>It&#8217;s worth checking (if you don&#8217;t have the details to hand) how your employee&#8217;s pay compares with the market. Recruiters such as <a href=\"https:\/\/www.hays.ie\/salary-guide\/digital-guide\" rel=\"noopener noreferrer\">Hays<\/a> and <a href=\"https:\/\/www.morganmckinley.com\/ie\/salary-guide\" rel=\"noopener noreferrer\">Morgan McKinley<\/a> publish yearly salary guides and this may give you an indication.<\/p>\n\n\n\n<p>Crucially, you should also think about how valuable this employee is to your organisation.<\/p>\n\n\n\n<p>Is this person a leader? Is this employee a positive team member who is always ready to take on extra responsibility?<\/p>\n\n\n\n<p>Is this person highly skilled?<\/p>\n\n\n\n<p>And probably the most critical question you should ask is whether this person will be difficult to replace.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<a\n\t\tclass=\"button button--primary gate-08ebf55b-2eba-453f-a63e-7a9afdf556ab\"\n\t\trole=\"button\"\n\t\tdata-button-location=\"content_area\"\n\t\thref=\"#gate-08ebf55b-2eba-453f-a63e-7a9afdf556ab\"\n\t>Download your free copy of The A to Z of payroll to help you understand the complexities of payroll and get the pay run right<\/a>\n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-negotiate-when-an-employee-asks-for-a-pay-rise\">How to negotiate when an employee asks for a pay rise<\/h2>\n\n\n\n<p>Negotiating a pay increase can be stressful for both parties.<\/p>\n\n\n\n<p>Before engaging, you should be very clear of your position in terms of the upper limit of what you can offer and what you expect in return.<\/p>\n\n\n\n<p>Focus on the facts and don&#8217;t let emotion get in the way.<\/p>\n\n\n\n<p>Also, if you agree to a pay increase, there should be something in it for the company &#8211; be that increased responsibility or other improvements.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-find-the-right-balance\">Find the right balance<\/h2>\n\n\n\n<p>As an employer, you must balance the employee&#8217;s expectations with the company&#8217;s financial constraints. Working to a payroll budget here will help.<\/p>\n\n\n\n<p>On top of this, the labour market continues to be very tight and you must also consider the risk of not giving your employee a pay increase.<\/p>\n\n\n\n<p>Is this employee likely to walk as a result?<\/p>\n\n\n\n<p>If this is a concern, you need to consider the full implications.<\/p>\n\n\n\n<p>Maureen says: &#8220;You might find that while your budget will take a bit of a hit from increasing the employee&#8217;s salary, it may take a lot bigger hit from having to source, interview and train a brand new member of the team.<\/p>\n\n\n\n<p>&#8220;Even then, there&#8217;s no guarantee that this new employee will match the expertise and proficiency of their predecessor.<\/p>\n\n\n\n<p>&#8220;So, it&#8217;s an assessment of resources, not just in terms of capital, but also your time.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-can-alternatives-to-a-pay-increase-be-offered\">Can alternatives to a pay increase be offered?<\/h2>\n\n\n\n<p>Perhaps your company can&#8217;t afford to give a pay increase right now.<\/p>\n\n\n\n<p>Maureen says: &#8220;It might be that your employee is fully deserving of a raise, however they&#8217;ve just made the request at the wrong time, and you can work towards a feasible timeline of them achieving this.&#8221;<\/p>\n\n\n\n<p>If so, you could offer your employee other benefits.<\/p>\n\n\n\n<p>Depending on the employee&#8217;s priorities, perks such as share options, flexible hours, remote working or more generous annual leave could placate the employee if their pay increase is declined.<\/p>\n\n\n\n<p>Maureen also suggests other less obvious perks, but perks that can all the same be potentially attractive, such as giving the employee added influence, more autonomy, greater access to top clients or more opportunities for business travel.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-communicate-your-pay-rise-decision\">How to communicate your pay rise decision<\/h2>\n\n\n\n<p>Depending on the size or type of your company, it may be someone from HR or you as the boss that informs the employee of the company&#8217;s decision.<\/p>\n\n\n\n<p>Whether it&#8217;s good or bad news, it is important to outline clearly how you came to the decision.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p>Your employees are the backbone of your company and you want them to be motivated and happy.<\/p>\n\n\n\n<p>But you may not be in a position to offer a pay rise.<\/p>\n\n\n\n<p>However, if you are totally transparent with your reasoning throughout the process then, even if the pay increase is refused, the employee should feel that they have been treated fairly.<\/p>\n\n\n\n<p>And also outlining a clear path to achieving a pay rise in the future should give the employee something to aim for and help to maintain a positive relationship.<\/p>\n\n\n\n<p><em>Editor&#8217;s note: This article was first published in February 2024 and has been updated for relevance.<\/em><\/p>\n\n\n\n \n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">The A to Z of payroll<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Learn about the key terms and concepts that will help you to manage the complexities of payroll systems effectively, and to confidently meet compliance requirements.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-08ebf55b-2eba-453f-a63e-7a9afdf556ab\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free guide<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" 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month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-53abbdcc-410c-4c8c-bf97-ca5c6982eebd\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"999\" height=\"666\" src=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2021\/04\/z.5E3A0481_All-Uses.jpg 999w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Discover how an employer should respond to a request for a pay rise and we cover key points to consider before making a decision.<\/p>\n","protected":false},"author":912,"featured_media":8275,"menu_order":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[163],"tags":[118,120,133,142],"business_type":[5,4],"lilypad":[],"context":[],"industry":[],"persona":[250,232],"imagine_tag":[325,204,327,212,230],"coauthors":[386],"class_list":["post-15013","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-employee-benefits","tag-employee-retention","tag-hr-process","tag-payroll","business_type-small-business","business_type-medium-sized-business"],"sage_meta":{"region":"en-ie","author_name":"R\u00f3is\u00edn Killeen","featured_image":"https:\/\/www.sage.com\/en-ie\/blog\/wp-content\/uploads\/sites\/13\/2022\/04\/GettyImages-1272757567.jpg","imagine_tags":{"325":"Employee engagement","204":"HR and Payroll","327":"HR processes","212":"Mid-sized business","230":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Ireland","distributor_original_site_url":"https:\/\/www.sage.com\/en-ie\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/15013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/users\/912"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/comments?post=15013"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/posts\/15013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media\/8275"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/media?parent=15013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/categories?post=15013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/tags?post=15013"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/business_type?post=15013"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/lilypad?post=15013"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/context?post=15013"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/industry?post=15013"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/persona?post=15013"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/imagine_tag?post=15013"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ie\/blog\/api\/wp\/v2\/coauthors?post=15013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}