Giving raises to employees is not only a good practice for an employer to follow, it can also help build stronger teams within the work place. When employees feel like they are appreciated, it increases their productivity and ensures that the company remains profitable. However, how often should a small business give raises to employees? Following are some great tips for employers to use when determining if a raise is deserved.
The first factor that a business owner needs to consider is the quality of the employee. While this might seem obvious, many employees mistakenly believe that they deserve a higher pay rate simply because they are employed by the company. In reality, employees who perform better than their counterparts will generally enjoy a higher pay rate as well. This doesn't mean, however, that an employee should accept lower pay simply because he or she is employed by the same company. There are many factors that should be considered before handing out a raise.
An employee's job performance should be given equal attention. For example, if one employee has been extremely helpful to the business, then that employee should be given a special bonus or promotion. On the other hand, if that employee continues to be a problem, then that employee should not be granted another raise. Likewise, a high-performing employee should not receive an award for a job well done. When considering which employees should receive raises, the company must look at each specific employee and evaluate his or her performance.
In addition to looking at the specific employee's job performance, a manager or owner should also consider the overall health of the business. By examining current and past profitability, a manager can see where giving raises might benefit the business. For instance, a business that consistently generate profit but suffers from low morale and poor customer service should give raises to its employees. Likewise, a business that strives to always provide quality products or services should hire smart, hardworking employees who will benefit the company by being appreciated. If the company wants to continue to grow, then it should continually find ways to motivate all of its employees.
There are many different reasons why a company might ask employees to receive raises. Some reasons might include: an employee is outperforming the competition; an employee is being recruited for a management position; or an employee has shown real improvement in one particular area. If a company determines that an employee deserves a raise, the manager should ask the employee for input before deciding how to give that person a raise. Sometimes employees will know how much they deserve. Other times the employee may have to work very hard to prove that he or she deserves a higher salary or promotion. However, that doesn't mean that the employee is already meritorious for a raise.
The employees that are performing the worst should not be given raises. For instance, a business that is losing quite a bit should not be giving out promotions or raises to employees that are not improving the business in any way. This is because the business owner has already lost a tremendous amount of money and is unable to afford to hire more employees. A business that is profitable should be able to increase its profits without having to add employees. Therefore, the best employees should be promoted or given raises based on the performance that . . . . . . they are providing for the company.
Small business owners should also ensure that they are making the most of their employees. Employees that are working hard and producing outstanding results should be rewarded. Rewards don't have to be monetary; they can be things like having their bosses praise them for a job well done or even simply being offered lunch. It's important for employees to feel as though they are appreciated. There are so many other people who seem to get the shaft when it comes to getting “a hand break”. When employees feel like they are appreciated, they will perform better.
Every business has different needs. If a small business has certain needs that other businesses do not, it's important to figure out what those needs are. Once an employee knows exactly what is expected of them, they will be happier and produce a better job for the company. Raises are necessary for the employee's morale and productivity. They should be granted on a regular basis if the business wants to see an improvement.