Promotion without a Pay Raise

As an employee retention speaker and employee retention trainer, I see a lot.  I also see a lot that simply amazes me.  One of the things I just saw was an article in the Wall Street Journal that stated that 39% of employers hand our promotions with no pay increase.  My question is; why don’t you just slap the employee in the face and tell them to look for a new job?  In the opinion of this employee retention trainer, it’s a huge insult.  You want to give the person more responsibility, probably more work and not pay them anything more?  Organizations that do this are just begging to have the person quit and go somewhere where they are rewarded for what they do.

You often hear people say it’s not about the money.  I don’t buy that; not totally.  Few employees are independently wealthy and work just for the fun of it.  People work to pay the mortgage, make the car payment, to send the kids to college and to have a decent life.  So, to an extent, it is about the money.  People are told to work hard and get rewarded.  Then, when they clearly work hard, are doing something right, and get promoted and don’t get rewarded for it, the perception of most people is that it’s not fair.  Most people expect to be treated fairly.  In a fair system, the top performers get paid more!

However, the most important thing to this employee retention author is that not giving a raise is about respect.  It sends the message you don’t think enough of the person to pay them what they are worth.  That’s how most people would view it.  They would feel disrespected.  When people feel disrespected they get angry.  That anger is one of the things that drives a person to action and that action is to go home (or maybe even when they are on their lunch), fire up the computer and look on Indeed for a new job.  In this economy, you might as well count that employee as a turnover statistic because they will get a job offer in very short order…particularly if they are good.  The best people are in higher demand than they have been in decades.

Rarely does this employee retention speaker advocate throwing money at an employee retention issue.  However, in this case, to quote a local Milwaukee attorney, “It IS about the money!”  Money is a factor in employee retention and when an organization does promote someone, a pay raise is warranted.  Organizations that don’t do this risk losing some of their best people.

Jeff Kortes

jeff@humanassetmgt.com

Jeff Kortes is an employee retention expert who speaks and conducts workshops regularly in Iowa, Wisconsin, Illinois, Michigan, Minnesota and Indiana. He draws on his experiences as a human resources professional, father, coach, martial artist and U.S. Army veteran to provide thought-provoking programs that yield results.