It’s something that most, if not all, business owners will encounter at some point in their lives. No matter how reasonable you think your offering is, from pay to added benefits, there is likely to be one employee who wants a little extra. Sometimes the request is justified and perhaps expected, while others will come as a bolt from the blue. Just like any other deal, there’s an art to dealing with it in the right way to make sure the outcome is in the interests of all parties involved.

Assess the situation

It could be your most productive employee, or it could be your most lacklustre – the first step is to read the room and assess the situation. The initial request is likely to have been presented as the employee asking for a meeting, at which point pay may or may not have been alluded to, but it’s worth preparing for the possibility ahead of time. Revise the employee’s job description, their roles and responsibilities and judge how their performance aligns with that. Have they been going above and beyond the call of duty for the past few months, or have they shown a desire to progress in their role? Preparing in advance – where possible – makes this stage of the request much easier in the moment.

Ask for proof

There are plenty of people out there who think they’re entitled to a bigger pay packet, no matter how misguided they are in reality. An off-the-cuff request in a jokey manner is easy to laugh off – everyone would like to be paid more if they had the chance – but if they’re serious in their request, it’s time for them to prove themselves. Once you’ve looked at an employee’s credentials, ask them why they think they should get a raise – to pitch themselves to you. The employee might be the type of worker who just gets their head down and gets on with the job at hand, which can lead to much of their work going under the radar and not getting the recognition they deserve. If that’s the case, this is the point at which more could be brought to your attention than you were expecting.

Discuss expectations

Before you go away and consider the proposal, it’s worth noting what the employee is expecting the outcome to be. This may include benefits beyond financial reward – maybe they’d value an extra day or two of holiday, or to discuss flexible working arrangements to better suit them. A pay-rise will be their first port of call in solving issues, but the picture might be wider than that.

If it is financial, however, you want to make sure you’re on the same page. You don’t want to go back to them with the offer of a £1000 pay-rise if they were expecting five – that helps nobody. Discussing what the employee wants will allow you to manage their expectations and give you food for thought before considering the best course of action.

Give a considered response

You won’t be expected to make a decision on the spot – your employee knows that. Having gathered the evidence, compelling or otherwise, give yourself some time to mull it over. There’s a lot at stake here – you don’t want to offer so much of a pay-rise as to cut into your company’s profitability too much, but you don’t want to offer so little that could turn one of your best employee’s heads towards the exit door. In the current talent climate, with skilled candidates in short supply, the last thing you want to be doing is giving them reason to leave.

Sometimes it will be a straightforward and resounding yes: the employee in question has continually outperformed their expectations and it is high time they were rewarded for that. Other times, it’s not so simple. In these instances, be careful not to outright refuse and instead think of it as reversing the process – the employee had to pitch themselves to you, now you should explain to them why you won’t be adding a little extra to their pay packet. In addition, consider outlining what it is they need to do to reach the next level and give them something to aim for. Putting together a professional development plan to help them achieve their goals will make the employee feel valued within the company and show that they are part of your long term goals, rather than casting them aside and leaving you with the possibility of having to hire their replacement, which is costly in itself.