What a manager might evaluate before giving a raise

Everyone likes to work a job where good performance is met with prompt rewards, especially monetary one. However, few employees feel satisfied with their remuneration compared to their performance. A Pew Research Centre survey in 2023 revealed that only 34% employees in USA are happy with how much they are paid. As you prepare for your next performance appraisal, you may have a lot of questions about what goes on in your managers’ mind before they give a verdict on that raise you want.

A glance through any introductory textbook on industrial psychology or HR Management will tell you that evaluating an employee’s performance before giving a raise is a complex and multifaceted process that requires careful consideration of various factors. Salary upgrades have a significant impact on not only the employee, but also the organization.

What do managers consider before giving a raise?

Imagine, you are a manager in a large organization and you have to determine how well employees are performing in their assigned roles. In this comprehensive discussion, we will explore the key aspects that a manager might evaluate before granting a raise to an employee.

Job performance

This should be a no-brainer- job performance is one of the most critical factors that mangers pay attention to. Are you delivering those results on time? Are you meeting your targets? Are you able to make wise decisions? A manager may look at your project outcomes, company reports, and take feedback from your superiors, subordinates and colleagues.

Set your goals and learn from your environment to get ahead on your performance reviews. For example, Deng and colleagues (2022) have discussed the impact of digital technologies for knowledge sharing and decision making on job performance. Having a good track record of past successes in the organization is one of the strongest predictors of being considered for a raise.

Skills and competencies

Apart from previous performance, managers also want to look at your potential to contribute to future projects. Proven expertise in certain areas of work, technical expertise, communication skills, ability to lead, adaptability to new situations and problem solving on a time crunch are highly valued skills in modern workplaces.

Sara Al-Mulla (2023) has discussed the link between e-learning tools provided for continuous upskilling among employees, and their effect on job performance, with special reference to the COVID-19 period. Employees who continue learning new skills and sharpening existing ones find it easier to take up new roles and adjust to changes in existing roles.

Initiative and participation

Employees who show initiative and contribute valuable ideas to their team are considered an asset to the organization. Do your homework and show up for brainstorming sessions, pitch meetings and presentations, with confidence. Proactive employees who show a willingness to learn and grow within their roles are highly valued.

Team performance

Collaboration and teamwork are essential in most workplaces.Tajpour and Razavi (2023) discussed how team performance of employees is essential to the survival and success of companies in the international sector.

Managers value employees who gel well with their co-workers and are able to get the best out of their team members. Working in teams comes with challenges like politics, difficult emotions, blaming and reduced productivity. Good team players are the glue that hold team projects together. Employees who foster a positive work environment and support their colleagues are more likely to be considered for a raise.

Leadership qualities

Employees in managerial and executive positions are expected to guide their subordinates, solve problems, and make strategic decisions. Subtler qualities like empathy for your subordinates’ concerns, ability to motivate them during a slump and ensure trust and mutual respect among team members. Organizations recognize and reward employees with strong leadership skills, acknowledging their crucial role in fostering a positive work environment and achieving shared objectives.

Ethical professional conduct

While many organizations claim to be ethical, violation of ethical guidelines is rampant among employees at all levels. Jha and Singh (2023) have studied the various unethical practices in workplaces and the factors triggering them. In such a discouraging context, employees who are committed to ethical principles on paper and in practice stand out as a valuable asset.

Professional conduct relates to how employees carry themselves in the workplace, how they treat their coworkers, clients and all stakeholders, and how they approach their responsibilities.  This includes qualities like punctuality, reliability, integrity, and a positive attitude. Feedback from coworkers is often sought to evaluate this aspect. Having amicable relations with one’s colleagues helps employees convey a positive impression about their work ethics.

Customer and client relationships

Customer feedback and clients’ testimonials are valuable sources of information about employee conduct. Ability to understand customers’ needs, patience in dealing with customer complaints, maintaining customer loyalty and overall good client relations significantly increase an employee’s chances of being considered for a raise.

Training and development

Employees who invest in their personal and professional development are highly valued. Managers assess whether employees participate in relevant training programs, attend workshops, or pursue further education to enhance their skills. Continuous learning and development contribute to an employee’s overall competence and can influence the decision to grant a raise.

Market research

Managers may compare an employee’s salary with the salaries offered for the same role in different organization. Managers know that it is important to keep an eye on the industry trends in order to retain employees in the long run. If the employee’s current salary is not competitive, they recognize that it is necessary to give a raise to match industry standards.

Attendance and reliability

Employees who consistently attend work and are reliable in their duties ensure the smooth functioning of day-to-day operations. They are available for team meetings, collaborations, and discussions. In roles that involve direct customer interactions, such as sales or customer service, attendance and reliability are critical. Customers appreciate consistent service and reliable support.

Employees who are present and available to assist customers build trust and satisfaction. Finally, high levels of attendance and reliability reduce costs associated with absenteeism, temporary replacements, and training new employees. Employers save money when they don’t have to invest in covering for absent employees or retraining replacements.

Company’s finances

The financial health of the organization plays a vital role in the decision-making process regarding raises. Managers consider the company’s budget, revenue, and profitability when evaluating whether they can afford to give raises. Economic factors, market trends, and the organization’s overall financial stability are taken into account.

Decisions about giving raises, hence, are dependent on several factors related to the employee, the organization and the industry climate. Ideally, a manager conducts performance and salary appraisal while keeping in mind several factors like the employee’s past performance, skills and competencies, contribution to the company, ability to lead and participate in teams, work ethics and interaction with clients, while also keeping in mind the company’s budget and industry trends.

A thoughtful and thorough evaluation process ensures that employees are rewarded fairly for their contributions, promotes job satisfaction and motivation, and fosters a positive and productive work environment. Managers play a crucial role in recognizing and appreciating employees’ efforts, ultimately contributing to the organization’s overall success.