How to Respond to an Employee’s Request for a Raise — If They Don’t Deserve It

Strong intuition is a hallmark trait of business leaders and entrepreneurs, but sometimes even the most astute of leaders can’t anticipate the curveball request that comes when an employee asks for a raise, especially when said employee may not be deserving of a raise.

If you find yourself caught off-guard by an employee’s request for a raise, keep your cool, keep your calm and be prepared to keep your commitments.

How to Handle an Underperforming Employee Who Wants a Raise

• Hear them out – As surprised as you might be by the request, give your employee a fair shot to voice their concerns. Regardless of their level of performance, it took courage for them to bring up the topic of a salary adjustment. Listen to the reasoning behind their request. Maybe they’re bored and would like new or different work. Maybe they feel frustrated by the team, culture or leadership. Chances are good something is bothering them. Find out what that is before determining a yes or no.

• Discuss performance issues – Conversations about poor performance can be awkward, but you don’t have time (or money) for weak links on your team. If an employee is truly not deserving of a raise because performance is the issue, it’s time to address the problem. Ideally, you will have already had ongoing meetings about how well (or not) the employee is doing. Share your concerns, offer specific feedback about what they need to work on and be concrete in how you will support them in achieving their goals.

• Commit to a growth plan – Once you’ve addressed performance, set a plan for improvement. Whether you want to call if a formal performance improvement plan (PIP) or not is up to you, but the idea is to get them back on track by establishing some clear goals and milestones for their performance. Set specific dates for review and commit to having another follow-up salary discussion in 6 or 12 months time (or whatever you deem appropriate). Be clear that the employee needs to reach (and maintain) certain performance objectives before revisiting the topic of a pay raise.

Helping your employee achieve success in their role is important regardless if a salary conversation is on the table. But when a request for a raise has been broached, stick to the facts to minimize any emotion that is so often a part of salary discussions.