How to deal with requests from employees for a pay rise

You could almost hear the sharp intake of breath from employers up and down the country last month when David Cameron made a call to business leaders at the British Chambers of Commerce annual conference to consider pay increases for employees.

Cameron used his speech at the BCC conference to rally business leaders; saying that now is the time to reward staff with pay rises as economic conditions 'have not been this good for a long time'.

But what should you do if an employee asks for a pay rise? And how can you avoid an onslaught of pay increase requests? Here are some of our top tips.

Do your research Larger employers often have set ‘salary bands’ that determine how much an employee can be paid up to. SMEs, however, tend to have a less rigid approach. It is important that you do your research and ensure that the level you pay your employees is competitive within the market/for the function of an individual role. Underpaying your staff can mean that you will lose your most talented employees to other offers, which may cost you dearly in the long-term.

Keep a level playing field It is important to adopt a fair approach when considering any pay rise for employees and anybody that requests a pay rise should be treated in exactly the same way. You also need to consider other people in your organisation; a reactionary stance whereby only those that ask are awarded pay increases can leave you open to potential claims – especially if it so happens that you end up paying more, or less, to a person of a specific gender/race/religion than another employee with a similar role and responsibilities.