The threat of increasing turnover is growing as employees, especially Millennials, cotton to the tradition of chasing higher salaries by leaving the company. That's why I thought I'd share some findings from Payscale's recent "Raise Anatomy Study."
You might think this info's nice to know but not really your problem right now. I'd suggest you hold on for a few minutes, because I'm going to translate the findings into easy DIY actions that will help you manage turnover better, never a bad goal to have.
Still smarting from that key employee who left suddenly? There's info here that can help. The report's findings are good enough to make it into the Harvard Business Review. While I am not thrilled with Payscale's sketchy description of their methodology, they reported 160,060 workers provided data, which is certainly a big enough sample to make you listen closely to these findings.
33% of employees who asked for but were denied a raise, were provided no rationale for management's decision. Shocking as this number is, don't think it isn't happening in your backyard. Just imagine how big a dis this is to the asker. No surprise, 70% of these employees reported that they planned to seek a new job in six weeks.
Almost as shocking, 77% of those who asked for a raise and received a rationale for their denial (for example budgetary limits, performance issues) DID NOT BELIEVE THE EXPLANATION. Yes, this is happening in your employee group, too.
Without a better description of the research methodology, we're in the dark about whether the research was limited to those who had been turned down for a raise, which would push the percentages higher. Nor do we have any insight into what types/sizes of organizations the findings came from. Even so, the relative prevalence of not getting an explanation from your manager for being turned down is notable.
So here are some things to think about and do, because these findings are worth attention.
Do you know when someone asks for a raise in your organization? Are you confident that those who should, receive them? If the answers are no or maybe, rethink your process. Your managers could be setting up unnecessarily negative situations in their effort to follow budgetary challenges -- perhaps unnecessarily. Remember, many of your managers went through the recession and could be out of practice when it comes to approving raises.
Do your managers know what to say when asked for a raise? Do they describe a process or just say they'll think about it? Do they know what to say if they decide to turn the individual down? Do they talk the decision over with the employee? If the answer to any of these questions is no, think about creating tip sheets for each of these situations. Managers can use these prompts to guide their own actions. You could also develop a discussion outline managers can use for talking raises over with the employees while building credibility and trust for the decisions made.
Do you have a standard process for evaluating requests for raises? The answer is probably yes but -- given these findings -- a real concern would be whether managers actually follow the process. It would be good to look into these process issues and provide explicit guidelines now before your labor market gets any tighter.
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
Comments