What Do You Do When A Good Employee Asks For A Raise?

Paul Daniels wrote a great blog last week in our Tuesdays with Paul.  He wrote about an employee (let’s call her Paula) who walked into the office where she works (surprise…the company is Paul’s Glass Shop) and asks Paul, the owner, for a raise.  This happened in April of this year.

Paul and Paula spoke for 10 minutes and Paula told Paul she would like a raise to $44K.  She presently makes $36K. She gets good benefits and last year received a $2K holiday bonus.

Now, some background. Paul’s glass has two people in Paula’s position. Paula and, you guessed it, Pauline (groans are acceptable now). Pauline has been with Paul one year longer than Paula and makes $44K, with the same benefits and holiday bonus.

Both Paula and Pauline can read simple takeoffs, give quotes up to $3K and handle the incoming phone calls with great skills.  Paul knows that Pauline has a big mouth and has probably told Paula what she makes. Paula didn’t threaten Paul with, “Give me a raise or I have to leave you.” But Paul knows that his competitor across the street, Pedro’s Glass Shop (I couldn’t resist) is paying his office staff over $40K.

What should he do?

To me this is a no question asked situation. Pay Paula the $44K rate starting next week. If not, he will surely lose her, maybe not physically for a month or two, but her mentality will not be centered on Paul’s at all.

Are there situations that say “Don’t give the raise.”  Not too many in June of 2022. Inflation is mounting; costs are going up for employees at home as well as for shop owners at work. If Paul or any other shop owner does not offer raises outside of their once-a-year, carved-in-stone policy they will lose their best people. Competitors will go after your best employees and leave the second-tier folks with your firm.

This will all change in 12months. I hope. But until our economy cools off and prices stabilize across all areas of business and life, the old rules don’t apply. You will be caught standing on second base while your competitors hit home runs with your best folks. Give those raises now or you may not have the chance to give them when December rolls around.

A Favorite Silly From Paul:

Paul1: Hey, is it true that the law of gravity keeps us on the earth?

Paul2: Yes, that is true.

Paul1: What did we do before the law was passed?