"Promised" Raises Can Send Employees Scurrying When They Are Delayed

Virtually every day I hear from candidates at all levels who have been promised raises that never seem to happen.  The result is almost always that the employee loses interest in their job and their company.  Within a month or so they become vulnerable to recruiters and other job offers.  I believe a lot of good people are lost because companies fail to administer raises and fail to manage the perceptions of their employees.

The issue is that sometimes raises are promised by supervisors who have no business promising them.  But even when they are not specifically promised, employees have a mind set that they will be given.  Often, employee manuals list the time periods in which raises may be given, but no one remembers the may and assumes that they will be receiving their expected raise within a reasonable period in that time frame.  Employees who are given a formal annual evaluation on a regular basis (say, annually) expect an increase within the time frame specified in the employee handbook.

With senior people, most agencies have policies which dictate how often a raise can be given.  Some are eighteen months, some are thirty.  Inevitably, as the time approaches, the employee begins to look forward to the additional money.  My observation is that the raises rarely come on time; They often happen (if they happen) two, three or six months later.  And all too often it is not in the expected amount (“Well, things are rather tough now and this is the best we could do.  But your raise is more than most at your level.”).  That’s just B.S

Among juniors, the raise can be life saving.  A huge percentage of recent (two years or so) college graduates are still supported or subsidized by their families.  They often have to have multiple roommates – a situation actually worse than what they had in college. And to top it off, many are paying college loans.  It is damn hard to make ends meet at $30-40 grand.  When the expected or promised raise doesn’t come, all too often, these people are forced to look for a job and become soured on their current employer.

What a waste.  This kind of turnover is expensive and, frankly, unnecessary.  There are many ways around the issue.

I have always believed in spot bonuses.  It doesn’t have to be much – even $1,000 for a junior – just enough to pay for some new clothes or a trip to see friends in Florida.  But it does wonders to keep employees enthusiastic and happy.  And in the long run, it helps keep employees loyal and motivated.

I also believe that small raises, given with greater frequency are a great motivator and may actually cost companies less money in the long run.

Once a raise is promised it has to be given. Not three or six months later, but when it is due.  However….

I would like to share a story of a wonderful raise.  There are very few agencies around like Wells, Rich, Greene. (Those of you young enough not to know them should click on the link.  They were one of the great agencies.  WRG closed in 1998.)  I will make it very brief.  It happened a while ago and I know that the person it happened to is one of my readers, so my details are purposely fuzzy.  An account executive was told by her boss that she would be given a raise in January, along with a promotion to account supervisor.  She was making $35k, which was a good salary for an AE in the late eighties/early nineties. She got her promotion, but of course January came and went with no raise.  So did February, March and April.  The employee kept being told her raise was in the works.  At one point, she asked me what to expect.  I told her she should be brought to $45, but more than likely would be in the low $40’s.  The summer went by, then September and October.  She was ready to look for a job; she hated her agency.  Then November came and she called me saying, “Holy, s---!”  Her raise came.  It was retroactive to the previous January.  Her check was so big she couldn’t figure out what her raise was.  Then she called me back.  They increased her to $55! And the difference was all in one check.  That was Wells. And employees who worked there knew that things like this happened.  But, alas, there are no more Wells Rich Greenes.  They were an extraordinary exception.

When a raise is due, it should be given.  Wage freezes and stalling are a too familiar subterfuge.Why chase employees away?