11 Things to Consider Before Offering an Employee a Raise

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Welcome to Recruiter Q&A, where we pose employment-related questions to the experts and share their answers!

Today’s Question: An employee has asked for a raise — is it time to grant one? What factors should you consider when making the decision?

These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization composed of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year, and have created tens of thousands of jobs.

tyler1. Performance Vs. Expectations

Merit raises should be awarded based on whether the employee has exceeded the performance metrics previously agreed upon. If they haven’t yet met their expectations in every area of responsibility, they aren’t prepared to receive a raise.

Tyler Gallagher, Regal Assets 

Justin2. Interactions With Coworkers and Clients

Aside from job performance and productivity, which are obviously the primary factors, I look at an employee’s interactions with coworkers and clients. We pride ourselves on our office culture and team camaraderie, so each person’s contribution to that environment helps measure their overall value.

Justin Lefkovitch, Mirrored Media 

zach3. The Employee’s Value to the Company

For us, determining raises depends on how big of an asset that individual is to the company. Do they exceed expectations? Do they go above and beyond? Fortunately for us, we have a fairly small, rock-solid team, so everyone has true value and does amazing work.

Zach Binder, Bell + Ivy 

stephanie4. Perseverance

Our company decides raises based on quarterly reviews. If someone went above and beyond as an employee to improve our processes or they’ve persevered with their hard work, then they deserve a raise. The process also needs to be fair so no one is left out of being praised for their performance.

Stephanie Wells, Formidable Forms 

sam5. Increases in Responsibility

An increase in responsibility is a very good indicator of how much value an employee has brought to the company. You could have two employees with 10 years of experience in the same job, but if Employee A has spent more time and effort bringing in more results for the company than Employee B, they are more deserving of a raise.

Samuel Thimothy, OneIMS – Integrated Marketing Solutions 

jared6. Quality of Work

What is this person’s quality of work like? If they regularly go above and beyond in their performance, this is a good sign they’re due for a raise. It’s important to reward good work so your team feels encouraged to repeat the results.

Jared Atchison, WPForms 

patrick7. Growth Since Hiring

Watch the employee’s growth from when they started at the company to now. Check if they are productive, stay on task, and follow up with their coworkers on projects. This is important because, as an employee grows within the company, they will have to oversee many projects and juggle many different tasks at a time.

Patrick Barnhill, Specialist ID, Inc. 

blair8. Success Rate With Customers

An employee who knows your business well and does a great job with customers is invaluable. I find that looking at an employee’s interactions and success rate with customers, as well as any feedback that directly mentions them, will give you an indication of a strong player. Offering raises to those who are excellent offers much-needed validation to people who do a tough job: dealing with unhappy customers.

Blair Williams, MemberPress 

kristin9. Initiative and Resourcefulness

One of the most important things that I look for when giving a team member a raise is how often they take the initiative on projects. If I see a team member working well independently, getting results, coming up with solutions on their own, and being resourceful, I will consider giving them a raise. Essentially, if this person makes my life easier, then they most likely deserve a raise.

Kristin Kimberly Marquet, Marquet Media, LLC 

blair10. Growth as a Leader

When considering whether to give a raise or not, I like to really evaluate the individual’s growth as a leader. How have they grown during that time? Have they really stepped into their role and taken on more responsibility? When giving a raise, I want to reward not only the employee’s quality of work, but also their drive and ingenuity.

Blair Thomas, eMerchantBroker 

eric11. Adherence to Company Values

With each performance review, it is important to reflect on whether or not the team member is living the values and beliefs of the organization. Are they adhering to the cultural norms of the business? If they are not a cultural fit, then a raise is not on the table, and a conversation on whether they should stay at the company needs to be had.

Eric Mathews, Start Co. 

By Recruiter Q&A