When an employee at your company asks for a raise, is that person treated fairly? Most organizations would like to say yes. But new data from PayScale, a compensation software and data company (disclosure: I work there), reveals that too often this is not the case. We surveyed more than 160,000 workers between November 2017 and April 2018 as part of our PayScale Raise Anatomy study, which resulted in two major findings. First, companies generally do a poor job of communicating why people don’t get raises. Second, there are significant racial gaps in whose raise requests are approved and whose are not.
New Research Shows How Employees Feel When Their Requests for Raises Are Denied
Asking for a raise can be an uncomfortable conversation — and it’s even more uncomfortable when that request is denied. Even worse, new research has found that 33% of employees who were denied a raise were provided no rationale, and there are significant gender and racial disparities when it comes to approval rates for raise requests. In this piece, the author offers several suggestions for managers looking to build trust when turning down an employee’s request for a raise: First, create a standard process for evaluating raise requests. Next, use objective market data to evaluate pay increase decisions. Third, be proactive about providing pay increases to existing employees. Finally, collect data and confront your unconscious biases. If you dig into this question, you’re likely to uncover some discrepancies and uncomfortable truths — but the mark of a good leader is being open to acknowledging and resolving these problems when they’re brought to light.