Picture this: your best employee asks you for a significant pay rise. You look into their records and find they’ve been consistently hitting their targets and getting great scores on their performance reviews. So you agree to the raise.
But what about their colleagues, who didn’t ask, but who are also hitting targets and getting praise from their managers and peers? Should you give them a raise too — or is it their fault for not having the gumption to ask?
In this article, we discuss why you shouldn’t wait for your employees to ask for a raise — and what you can do instead.
If employees want a raise, shouldn’t they ask for one?
In short, no. Here are a few reasons why we don’t think it’s a good idea to wait for your employees to ask for a raise if they deserve one.
Asking for a raise is not the same for everyone
Want to know the biggest problem with waiting for employees to ask for a raise? Some of them just… won’t.
For example, a 2019 study from CV Library found that 64% of men were comfortable asking for a pay rise, compared to just 43% of women. That means if you’re waiting for employees to ask, you could be doing your female employees a big disservice.
And even if we take gender out of the equation, there are still plenty of reasons why some people don’t feel comfortable asking for more money. To begin with, money is just an awkward topic for a lot of people — a third of Brits feel too uncomfortable to talk about it even with their friends and family, according to one survey.
When another survey, also from 2019, asked people to share what was standing in the way of them asking for a raise, the responses included:
- Not knowing what to say (16%)
- Not wanting to seem greedy (15%)
- Being worried they’d be turned down (12%)
- …and just being straight-up scared of asking the boss (12%)
The point is, there are all sorts of reasons why asking for a raise is more difficult for some people than others. So here’s the question: should your employees’ chances of getting paid what they’re worth come down to whether or not they’re assertive enough to ask?
You have more information than your employees
Most of the time, managers and HR teams know a lot more about their organisation’s compensation policy than employees do. Employees know what they’re being paid — and they might even have discussed their salaries with colleagues to figure out if they’re getting a fair deal.
But they typically don’t have a clear picture of what compensation looks like across the organisation as a whole. And in most cases, they don’t have access to salary benchmarking data that tells them what their counterparts in similar organisations are paid.
So… does it make sense to leave it to employees to start the conversation? Not really.
If you do, two things will happen. First, you’ll get requests for raises that are way outside of market standards. You’ll likely have to decline these — which can lead to resentment. And second, some employees will be underpaid simply because they don’t know what they’re worth.
You don’t need us to tell you that neither of these are good things.
You could be setting yourself up for legal trouble
Here’s a scenario for you: you hire two employees, Bill and Mary, in the same role, at the same salary. But after a decade, Bill has consistently asked for a pay rise every two years, while Mary has always waited until one was offered. At this point, Bill may well be paid thousands more than Mary — even if she’s outperforming him.
Now imagine this situation is replicated in every department across your organisation. Suddenly, you’ve got a sizeable gender pay gap on your hands — even though you start everyone on the same salary.
And here’s the thing: the upcoming EU Pay Transparency Directive will require all businesses with 100+ employees to report on their gender pay gap, and to carry out a pay assessment if the reporting shows a non-justified gender pay gap of 5% or more.
Companies that discriminate on the basis of gender will face fines and other sanctions… And “but they didn’t ask” is simply not going to cut it as an excuse.
There’s a big potential for bias
Even when studies find that women ask for pay rises as often as men, they also find that they’re less likely to get the raise they’re asking for. And the same is often true for people of colour.
Now, you may think this won’t affect your organisation because you never make pay decisions based on anything other than the quality of the employee’s work. But can you really be sure? It’s called unconscious bias for a reason, after all.
Plus, there are other types of bias that can easily come into play here, like whether or not a manager happens to like a particular employee. That employee could be smashing their targets and outperforming their peers, but missing out on pay rises simply because they haven’t “clicked” with their manager.
This can only be avoided by having a structured system in place for pay rises — and not waiting for employees to take the lead.
You’re giving your employees extra work
The internet abounds with advice for employees on negotiating a better salary. Often, they’re told to research market rates, list their contributions to the company, and create a plan for adding more value going forward.
But all of that extra work adds up — and you can bet your employees are doing it on company time. Wouldn't you rather they spend their precious hours at work doing the job you actually employed them for?
What to do instead: Best practices for fair pay
Waiting for your employees to ask for a raise is unfair, unreasonable and often unethical. So, what should you do instead?
Review salaries at least once a year
As we’ve discussed, whether or not an employee gets a raise shouldn’t come down to whether they’re forward enough to ask for one. Instead, you should put in place a standardised process for annual salary reviews.
This lets you fairly assess each employee’s salary against a set of predetermined factors to figure out whether they deserve more. You can also take the opportunity to compare your salaries with the market rate — and give anyone who’s being underpaid a raise.
When you have a system like this in place, employees know that if they continue to work hard and meet their targets, their efforts will be rewarded — without them having to ask.
Have a compensation communication plan
If your employees don’t understand the reasoning behind your pay decisions, they might feel they’re being paid unfairly even if they’re not. And certain employees might even suspect that they’re being discriminated against if they think they should have got a raise but haven’t.
The solution is to create a compensation communication plan to help your employees understand what goes into your decisions about pay. Being open about this helps employees to understand why they’re being paid what they are, and what they need to do to move up.
Use benchmarking tools to set competitive salaries
Salary benchmarking is one of the most important tools in the HR professional’s belt when it comes to setting fair, competitive salaries. It allows you to compare your organisation’s salary structure with that of your competitors and industry peers, giving you the data you need to make stronger, more informed decisions about pay.
Using benchmarking to make salary decisions — and communicating about this with your employees — shows them that you truly care about whether they’re being paid fairly. It also makes it clear that you’re not waiting for them to ask for more money or hoping they don’t realise they’re being shortchanged.
This fosters trust in your organisation — and can even boost retention and employee satisfaction.
Where can I find accurate salary benchmarking data?
Figures, of course! We can give you access to the accurate, real-time salary data you need to make fair decisions about compensation.
Want to find out more? Book your free demo to see our salary benchmarking tool in action.