So, You Want a Raise?

When I was just out of school during the disastrous Carter economy of the late 70’s my short-order cook’s job in a Texas truck stop paid $3.35 an hour. The truth was, I needed around $10.00 per hour to pay my bills; but that didn’t change the reality that frying eggs, making toast and stuffing burgers in buns was worth $3.35 hourly.

To make ends meet I had a few options: work longer hours, find a better or additional jobs, or upgrade my skills so that they were worth $10.00 or more per hour. So, in addition to my cooking duties I took on two door-to-door sales jobs, bought books on how to sell, and began to develop a skill set that has since paid me handsomely over many decades. Somehow whining my way out, wishing my way out, or protesting my way out of financial hardship didn’t seem like the responsible thing to do; working my way out of it made a lot more sense and was something I could control, meaning I wouldn’t have to depend on the government to do for me.

The horrifying rise of our progressive society’s entitlement-state has degraded both our national work ethic and sense of personal responsibility. The nationwide protests you see currently where mobs protest and picket for a $15.00 minimum wage are only the most recent evidence of the spoiled, slothful, whiney, victim-driven depths nations like ours have fallen into in recent years. Considering how trends in society affect the thinking of those working within a business it’s wise to have a pay raise philosophy that is clear, communicated well, and lived out without exception. Following are five rules of raises—a suggested raise philosophy—to protect your culture, preserve your assets, positively influence performance, and enrich the deserving people within your organization.

1. Raises should reward results not requests. The two key words at the bedrock of a strong culture are “earn” and “deserve”. Thus, it should be understood up front that raises will reward results not unfounded requests. To earn means to acquire through merit. Deserve means to be worthy of, to qualify for. Thus, anyone wanting a raise should be prepared to demonstrate how they have acquired it through merit, are worthy of it, and have qualified for it. Anyone expecting a raise should be able to list all duties he or she has performed, over and above what they are currently being paid to do, so as to make a justifiable case for their increase. Organizations should also consider the new skills employees have developed or responsibilities they’ve assumed as a basis for giving an earned pay increase.
2. The cost of living is irrelevant. Cost of living raises are an entitlement some employees expect to get without having to either earn or deserve the additional dollars. Thus, it qualifies for a subtle form of welfare designed to meet living needs, and which is totally unrelated to performance. The rising cost of fuel, food, housing or tuition has nothing to do with what a job is worth. Someone who sees his or her cost of living rising beyond their current paygrade will have the same options I faced—and millions of others face—when making less than their living expenses. They have a personal responsibility to upgrade their skills, learn new skills, or work harder or smarter; but shouldn’t expect—selfishly or arrogantly—that someone else will bear the cost of their rising expenses for them. You are running a business, not a welfare state.
3. Seniority is irrelevant. Free enterprise isn’t the third grade where you’re rewarded for good attendance; it should prioritize the rewarding of performance while you’re on the job. If someone is fairly rewarded during their time with an organization, why should you double-dip and reward them for the time they’ve already been rewarded for? In strong cultures performance is far more important and relevant than seniority or tenure.  No raise that isn’t tied to performance sends the right message about prioritizing results. And if you’re  concerned that your long-term—loyal—employees don’t get enough recognition without a longevity bonus then shame on your for using it as a substitute for the time, attention and appreciation you should be showing them daily.
4. Raises are not a ritualistic annual entitlement. In an age where “everyone gets a trophy,” simply for showing up rather than stepping up and excelling it’s common for some employees to believe they should be given a pay increase simply because the calendar has changed. If you’ve formed the bad habit of creating this expectation you’ll need to change it in order to improve performance and strengthen your culture. Referring to Point 1, which introduced the “earn and deserve” concept is a good place to start.
5. Deserving people shouldn’t have to ask for them. While an employee’s responsibility in earning a pay raise is to improve or develop additional skills, assume new responsibilities and gain outstanding results, the leader’s job is to recognize these accomplishments and give the appropriate raise without the deserving teammate having to ask for it. In LearnToLead’s sixteen year history no employee has ever had to ask for a raise; rather we’ve recognized outstanding performance quickly and proactively with pay raises to the deserving. This is helped define our high performance culture. It has also helps us double in size over the past two years with the same number of highly productive employees.

As a parting thought, if you live in a place like Seattle, Los Angeles or other cities oppressed by business-unfriendly city governments and are forced by law to expand the local welfare state by increasing wages far beyond what a job is worth, I suggest you have a conversation similar to this with the undeserving recipients of a government who has chosen to demonstrate goodwill and buy future voters with your checkbook:

“At our dealership we’ve always believed in paying what a job is worth. Thus, if we felt washing cars was worth $15.00 per hour, we’d have been paying you this amount all along. Since the government has seen fit to give you a pay raise our obligation is to protect the financial integrity of our dealership and redefine your job description to help justify the pay increase. Naturally, you wouldn’t expect to make sixty percent more money for doing the same work, or the same quality of work, so I’ve made it easier for you to understand what is expected of you going forward by putting it in writing. Let’s go over these revised behavioral and performance standards to make sure we’re on the same page.”

As society’s entitlement insanity exacerbates, it is time to protect your culture and devise a clear, compelling, and well-communicated pay raise philosophy. Use the guidelines within these five points that mirror your own beliefs as a place to start.

Suggested takeout: If you’ve formed the bad habit of creating this expectation you’ll need to change it in order to improve performance and strengthen your culture.