Communicating Salary Increases To Your Employees

Have you given much thought to how you communicate salary increases to your employees? Or is it something that just happens automatically each year?

Every pay raise is an opportunity to encourage your employees and build upon a culture that values hard work and continuous improvement.

Communicating salary increases with your employees doesn’t need to be complicated, but it shouldn’t be done without intention either.

So in this short post, I’ll give you two scripts you can use.

One for communicating with employees receiving a pay raise, and another for communicating with employees who do not.

Communication for employees receiving a pay raise

Whether the impetus for the salary increase was market inflation or high performance, you should always justify the pay raise on merit.

Merit-based pay raises reinforce your appreciation for their work and encourages them to continue improving in their job.

Communicating salary increases to your employees is always best done in person. But I would also suggest that you send them a written note.

Here is an example:

Dear Valerie: This notice serves to advise you of an increase in your wage that is equal to 5% of your current hourly rate. The effective date of this increase is March 1, 2020 and the increase in pay will appear in the payroll check you receive on March 9, 2020. We are pleased to award this increase based upon your performance over the last review period and believe it will serve as an incentive for you to continue to strive to meet our business goals and objectives in the future.

Communication for employees not receiving a pay raise

At the time you give raises, you should address the change in compensation with those for whom you are giving a lower or no raise as well.

Here is a script you can use for an employee receiving a smaller raise than other colleagues:

Dear Tom: This notice serves to advise you of an increase in your wage that is equal to 2% of your current hourly rate.  The effective date of this increase is March 1, 2020 and the increase in pay will appear in the payroll check you receive on March 9, 2020. This increase is reflective of your performance over the last review period. We will review this and the goals set for you again in six months.

Conclusion

If you’re thinking about giving raises this year, I hope these examples will help you communicate effectively with your team.

Now we’d like to hear from you.

How do you communicate merit-based raises to your team?

Let me know in the comments below.