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How do you announce raises?

Sheldon Reynolds's Profile

In a one-on-one meeting with the employee? In an email? In a performance review? What method works for your company and why?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Are you talking about a Company-wide or an across-the-board for a certain class of employee OR individuals.

Individuals, in person. The Company/Class, then a mass communication "letter".

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

I concur with Wayne and would add: The broader communication should give process overview to set expectations of how base salary compensation aligns with total rewards, overall HR strategy/ business objectives. (i.e. depending on the current salary, current performance and competitive market rate, a person can get above average raise for average performance or a lump sum payment instead of an increase to the salary). Provide transparency in how raises are determined that will be consistent with the individualized communication. Also depending on your HR practices, some companies separate the performance management discussion from the raise discussion so the performance one becomes more development focused and constructive. Hope this helps.

Keith Johnson
Title: Principal
Company: Keith E. Johnson CPA PA
(Principal, Keith E. Johnson CPA PA) |

I agree with Wayne. You probably want to announce a general announcement overall. Fairness and transparency are the keys. Everyone should get at least a COLA raise unless they're new to keep up with inflation, but better performers can get more

Edward Thill
Title: VP - Finance & Operations
Company: Performance Trust
(VP - Finance & Operations, Performance Trust) |

I don't agree with the general idea that "everyone should get at least a COLA raise" as that ignores whether the additional cost can be passed on to the customer. If all your lesser employees get COLA and your stronger employees get COLA+, you have to be able to increase your prices/fees by COLA+ just to maintain your margin. If you have that pricing power, congrats on being in the right business but for me, I am far more interested in making sure my A players get COLA+ than my C players get COLA.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I completely disagree with a blast e-mail. Raises must be linked to the individual and their success at reaching the strategic goals established last year...and relayed privately. There are employees that exceed your expectations; those that deliver what you require; and those that just show-up. A standard announcement and standard increase creates an expectation and kills initiative.

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

Agreed, Regis. It kills initiative for the over-performers, and creates an entitlement mindset for the ones that just show-up.

Anonymous
(Staff Accountant) |

Our company did a blast e-mail stating that no one would get a raise this year, talk about killing morale.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

We make a general statement about the overall average increase we are targeting and the effective date. Individual amounts are determined based on performance. Communication is either face to face (or via phone conversation) or by email.

Dan Kardatzke
Title: CFO
Company: Solstice Mobile
(CFO, Solstice Mobile) |

I think this really depends on the culture and your general views on acknowledging performance. We announce promotions at our quarterly all-company meetings and give the employee an envelope with the information on their raise at the meeting. We also provide quarterly performance "band" increases but those are not announced in front of the groups.

However, we are also very transparent into the various levels at the company and how you should be performing to achieve each level along with having set salary banding that is reviewed annually for each level. We also have monthly Mentor meetings to discuss performance and how to reach the next level throughout the year so it's pretty clear when someone deserves a promotion and/or raise.

Keith Johnson
Title: Principal
Company: Keith E. Johnson CPA PA
(Principal, Keith E. Johnson CPA PA) |

Chris. True, but we're about the fairness. Its more important to be fair than anything. If you don't ike someone's work, get rid of them. Otherwise, its not fair for them to not get something while others get a raise. You will be implying that their work is good enough and then not get rewarded.

Keith Johnson
Title: Principal
Company: Keith E. Johnson CPA PA
(Principal, Keith E. Johnson CPA PA) |

Also, what about the people who work hard, but for reason don't get the results? If their hard work isn't rewarded, why work?

Topic Expert
Karoline Mello
Title: Director, FP&A
Company: Apollo Group
(Director, FP&A, Apollo Group) |

My organization prior to last year linked the performance review process to the possible increase in pay annually as it occurred on the anniversary of the employees start date. The company has since moved to a common performance review cycle for all staff occurring at the beginning of the calendar year and common merit increase following the subsequent month. My group still handles the increase and performance conversations in face to face individual meetings. Unless your company is giving everyone a 3% raise across the board without considering performance there should not be a company wide announcement.

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