• Nyree Fiddes

What is the etiquette when given a pay increase or bonus?


I was talking with my colleague Linda recently about the remunerations reviews The Fiddes Group had completed with some clients at the end of financial year. One client had asked me if staff ever said “thank you” any more when given pay increases.

This question came about after a staff member had expressed disappointment at the remuneration review they had received, and proceeded to list their achievements for the year and to argue why they felt the increase offered was not enough. The staff member’s achievements and arguments were sound, and in this instance the client agreed to increase the remuneration to more than the previously offered CPI increase.

This conversation with my client led me back to my colleague Linda to ask if in her experience, did people say thank you when given a pay increase? And when they didn’t, were business owners or managers justified in feeling disappointed? Linda said in her experience, if you were paid under an Award then you never said thanks because the increases just happened as if by magic every year (but actually thanks to the hard work of the payroll team in updating all the pay rates to align with the annual Minimum Wage Increase released by Fair Work Australia). If you weren’t paid under an Award, you just accepted what you got.

All this got me thinking. What is the etiquette when given a pay increase or bonus?

Over the years I have seen everything:

  • People who are so grateful for pay increases that they send a long thank you letter or email directly to owner/s of the company extolling the virtues of the Company and the Owner/s, and how hard they – the employee - will work over the next 12 months.

  • People who are very grateful for the pay increases, that they not only say thank you directly to their Manager, but also give their Manager a card the next day or buy their Manager a coffee or a muffin next time they are out together.

  • People who see pay increases as their right, think nothing of it and don’t respond beyond a casual “yeah thanks” when they get the news of their increase.

  • People who get an increase, but complaint that it isn’t enough and grumble to anyone who’ll listen that they’re being screwed over.

  • One individual who turned down their pay increase saying that if they weren’t going to be the exact amount they wanted then they wouldn’t accept any increase at all!

So what is the etiquette when you get a pay increase/bonus as employee, or give them out as the manager? Here is my advice…

Employees – if you get an increase:

  • Be grateful for the money and say thank you to your Manager even if you didn’t get as much money as you’d hoped for. It’s highly likely that your Manager had to go into bat for you to get the increase and argue in your favour about why you deserved an increase more than someone else. The thank you will be noticed and appreciated.

  • Think about others – there may be people who didn’t get increases at all. So don’t be a jerk and boast to everyone about how much you got or complain that it’s not as much as you wanted.

  • If you didn’t get as much money as you’d hoped for try and be realistic about why:

  • Have you really and truly worked as hard as you believe?

  • Did the quality or quantity of your work warrant the amount you had hoped to receive?

  • Did you take into consideration the financial position of the organisation or the economy (e.g. hoping for a $10k increase in the middle of a financial crisis)?

Employees – if you don’t get an increase:

  • Try and be mature about it. If missing out on a pay increase or bonus really upsets you, go for a coffee, a walk or sit under a tree for a bit. Then go back to your desk and move forward.

  • If you can’t move forward, make a time to meet with your manager in a few days to talk about why you didn’t get an increase/bonus. Don’t make the meeting on the same day…you’ll handle the meeting better if you give yourself some time to reflect first. Some questions to ask could be:

  • Can you tell me what I need to do in the next 6-12 months to achieve a pay increase/bonus next year?

  • Were there any specific targets that I missed that prevented me getting an increase/bonus?

  • What would you suggest I do differently which will help me to improve my performance in my role?

  • Don’t pick a fight with your manager, or a co-worker who got an increase/bonus, because you are upset that you missed out. It won’t help, you’ll probably regret it later and worst-case scenario you may end up being performance managed.

  • Try and be realistic about why you didn’t get an increase:

  • Have you really and truly worked as hard as you believe?

  • Did the quality or quantity of your work warrant the amount you had hoped to receive?

  • Did you take into consideration the financial position of the organisation or the economy (e.g. hoping for a $10k increase in the middle of a financial crisis)?

  • If you are really upset and your organisation has an EAP (Employee Assistant Program), use it. It will be confidential and the simple act of talking to someone can be very helpful in moving on from your disappointment.

  • Try and keep an open mind when talking to your Manager about it. Managers have to think about how to spread the (often) small budget allocated to them across everyone in their team. It’s a tricky balancing act trying to work out who should get what increase… it’s highly likely your Manager didn’t get given enough money to give everyone in their team a blanket % increase.

  • Don’t make rash decisions that have a long-term impact - like resigning - if you didn’t get what you wanted. It won’t help in the long run and your anger at your manager or the organisation will dissipate eventually leaving you frustrated that you’ve acted rashly.

Managers – if you’re giving your employees an increase:

  • Tell your employees about their pay increase in a private meeting.

  • If you didn’t give increases/bonus’ to everyone in your team, tell your employees that and ask them to be considerate of others feelings.

  • If your company policy keeps monetary details confidential, remind you employees about this.

  • Give your employees a brief overview of the process you went through to decide on the increase and what the criteria was to be eligible for it.

  • If you’re paying out a bonus, remind your employees of the bonus achievement criteria, as this should have been clearly articulated in the bonus agreement that was provided.

Managers – if you’re not giving your employees an increase:

  • Be considerate about your employee’s feelings when giving them the news that they didn’t get an increase.

  • Tell them! Don’t let them live in hope that the increase/bonus letter is just taking a while to be delivered.

  • Tell them in private. It’s personal information which some my feel embarrassed hearing about in front of other people.

  • If your employee is upset, suggest they go for a coffee, a walk or sit under a tree for 30 minutes until they have got their emotions more under control and can go back to their desks.

  • Tell them why they didn’t get an increase/bonus.

  • Give clear direction on what they can do better or differently so they are in a better position next time pay reviews/bonus’ come around.

  • But also be honest about how much money was available for increases. Sometimes Organisations can't afford to give everyone CPI increases, let alone more. Sometimes you have to manage your employee's pay expectations even if that means a difficult conversation about your department's finances (or budget) versus their expectations.

  • If telling your employees was upsetting for you (it can be a rough set of meeting to get through) and your organisation has an EAP (Employee Assistant Program), use it. It will be confidential and the simple act of talking to someone can be very helpful in improving how you manager this important Management task.

Tips to help get through it

  • Be clear

  • Be kind

  • Be considerate

  • Meet to discuss in private

Nyree Fiddes

Principal

#RemunerationReview #PayIncrease #RemReview #Bonuses #money #salary #wages #AwardIncrease #HRMelbourne #HRadvicethatmakesbusinessbetter #hr #hrbusinessbetter #TheFiddesGroup #employees #managers

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