How do you handle raises?

[Scarlett]

I know when it comes to corporate businesses, it has more to do with how long you have worked there vs skills and capability.  I am curious to know how you handle it or would handle it if you owned a small business (10 -99 employees). 

[James]

What I learned over 10 years of managing a decently sized team is raises are very tricky to administer and if done wrong the team starts to feel entitled to them. 

Have tried so many different systems without much luck of getting my desired results. More pay in my mind should be higher quality output or more output depending on the job function. 

For the first 6 or so years we just gave out raises when you changed titles or after a year of having a same title. That system worked well for a little while but quickly became a problem. 

What we found worked best was rolling out KPIs for different processes and then rewarding bonuses when certain KPI thresholds were met. This way the team member gets rewarded for their hard work and the company also gets rewarded for more or better output. It seemed to align the interest of the team member and the company the best.

Personally I know if I were ever to get into working with a large team again I would try more of a flat organizational structure. With base salaries. Then KPI based bonuses so the harder you work the more you make. 

[Scarlett]

It seems like you have to find that right balance. Giving them out too much and people will expect them but if you don't give them out often enough, people may grow to resent their job or feel under appreciated it. I always thought it was wise to give raises based on work quality. I don't like the idea of giving people money for not being fired. Like getting a raise every 6 or 12 months simply for showing up. 

[Mila]

On 11/23/2021 at 8:01 PM, Scarlett said:

It seems like you have to find that right balance. Giving them out too much and people will expect them but if you don't give them out often enough, people may grow to resent their job or feel under appreciated it. I always thought it was wise to give raises based on work quality. I don't like the idea of giving people money for not being fired. Like getting a raise every 6 or 12 months simply for showing up. 

I second this. You don't want to have your employees getting to a point where they expect it just for showing up. I believe earned raises that are done frequently enough to keep up employee morale is ideal.

[Brenden]

Never had to deal with this, but I imagine giving out raises is more on special occasions and for certain jobs. If you're in a job that doesn't avance much, I don't know if you should get a ton of raises. But, if it's a bigger company, and you can advance higher up in the job, maybe raises should be given out more. But that's just what I think.