Leading a team
How to turn down a raise request and keep the employee
Acknowledge their arguments and say clearly that there will be no raise right now, with the real reason. Show what you can do: criteria, the date of the next review or other forms of recognition. Do not promise anything you cannot deliver.
How to handle this conversation
Recognition first, then the answer
“Your results this year are really strong, and I am glad you asked. I cannot give you a raise right now, and I want to be honest about why.”
Give the real reason
A budget freeze until year end, the company’s pay review rules. Made-up reasons come out sooner than you think.
Turn the no into a plan
For example: “Let us write down what needs to happen before the March review, and then I will put you forward for a raise.”
Meet a hint about another offer with a question
When you hear about another offer, ask calmly: “Apart from money, what matters to you in this decision?”
I say no to a raise for a strong employee
- Difficulty
- Medium to hard
- Duration
- 10-15 minutes
The situation
One of the strongest people on your team asks for a raise and brings market salary data. This year’s budget is frozen and you have no approval for exceptions, but you want this person to stay. You talk at a scheduled one-to-one.
Who you talk to
Experienced employee
Prepared, factual and sure of her value. Has arguments, does not accept generalities and, when she hears no, hints that she is already talking to other companies.
The counterpart also has private goals and information that are never shown upfront. You discover them only through the conversation, the same way you would in real life.
What makes it hard
- She has market salary data.
- General assurances that she is valued only irritate her.
- She hints at an offer from another company.
Your goals
- Say no clearly and give the real reason
- Offer a concrete plan and the date of the next review
- Find out what else matters to her
What the report looks at
- Whether the no is clear, without excuses or false promises
- Whether you acknowledge her arguments instead of undermining them
- How you respond to the signal about another offer
- Whether the conversation ends with concrete criteria and a date