How to tell an employee they won’t be getting a raise

Sadly, for many employees there is an inbuilt expectation to receive more money at salary review time, irrespective of their performance. In an ideal world, every high performing employee would receive a pay rise, and then everyone would go out for drinks and celebrate. But sometimes there’s other factors to consider, and the bottom line is, it’s just not possible. Other times, budget constraints aren’t the issue, and the employee simply hasn’t earned it.

Either way, breaking the news of an undeliverable raise is a tough conversation for any manager to have.

It’s important to remember that when you know someone will be disappointed by a decision relating to a raise, the worst thing you can say is nothing.

So how do you tell an employee they won’t be getting a pay rise?

  1. Don’t wing it – before you talk to an employee, make sure you have planned what you’d like to say.
  2. Don’t wait too long before delivering the news – it’s important that you break the news to the employee as soon as possible, eliminating the chance for the office grapevine to let the news slip.
  3. Be honest – don’t make excuses. Be straight with your employees when asked why they won’t be getting a pay increase.
  4. Stand your ground – make it clear that your decision is final, no matter their argument.
  5. Be empathetic – the news can be disheartening, so ensure that you provide a high performing employee with hope for the future.
  6. Be constructive – if an employee hasn’t earned a pay rise, offer them some specific feedback to improve the aspects of their performance that are standing between them and the raise.

Remember to always base your decision on facts and handle the situation with compassion. The conversation may be difficult for you, but the information is just as difficult for your employee to hear.

For coaching on how to handle tough employee conversations, contact us today!