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6 Replies Last post: Mar 10, 2008 12:19 PM by Iwrite

Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review?

Dec 18, 2007 9:27 PM

dvibe01 2 posts since
Dec 18, 2007

I manage a small performing arts school. One of my employees (has been with me for 3 years now) just had her yearly review and I gave her a $0.50 raise per hour. Her yearly review was supposed to be in September and I held off as I have been discussing her raise with the owner until now. She asked me if her raise would be eretroactive since that's when her review was supposed to take place. The owner asked me to investigate this.

Do employees expect raises every year? We are a small business, not a large company. Business is profitable, but not much. Should I give make her raise retroactive, or effective this pay session? Please let me know any thoughts. Thanks!

Tags: retroactive_raise, yearly_review Report as inappropriate

RE.Manager 6 posts since
Dec 16, 2007

1. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Dec 18, 2007 10:06 PM

I don't think you need to make the raise retroactive, unless you think she will leave if she doesn't get it.
Did she get a raise last year on her hire date, was the review done early?

I think most employees expect a yearly raise if the firm is making money and they are doing a good job.

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dvibe01 2 posts since
Dec 18, 2007

2. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Dec 18, 2007 10:11 PM

in response to: RE.Manager

She did receive a raise last year (although the fact that min wage went up quite a bit right around the same time effected that) The review was not early last year, but was on time!

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Lighthouse24 2,396 posts since
Oct 10, 2007

3. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Dec 19, 2007 2:01 AM

I'd make her raise retroactive in this case -- just because you're the one who created that expectation by holding off on her review to confirm the raise.

From now on, however, separate the two -- conduct a formal review and appraisal of job performance at least annually, and discuss pay increases when appropriate (cost of living adjustment, promotion, or when an employee takes on more responsibility). Employees expect a raise every year if you create that expectation. If you don't, they don't (but be sure to explain to them what your criteria will be for giving raises or bonuses in the future).

Hope this helps. Best wishes.

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Peter63 30 posts since
Mar 7, 2008

4. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Mar 9, 2008 9:53 AM

It's a tricky one. In this day and age of the ever-increasing cost of living, at the risk of categorising, most "mainstream" employees just take for granted, and expect, an annual pay rise.
Unless it is specifically stated in their contract that a pay rise is honoured at review time, or any other time, the company should not be obliged to give one.

P

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BDS INC 131 posts since
Jul 20, 2007

5. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Mar 10, 2008 10:38 AM

That is an easy question. Of course your employees expect to have a raise every year. With the cost of living rising, you'll loss employees if you don't compensate them.

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Iwrite 1,101 posts since
Dec 29, 2007

6. Re: Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review? Mar 10, 2008 12:19 PM

in response to: BDS INC

I think BDS has hit on an important part of this answer, can you afford to lose this employee? I hear all the time how hard it is to find good employees. Well, keeping them is even harder.

This is about more than dollars and cents, it is about letting a good employee know what you think of his or her contribution to your business. The suggestion of separating the raise from the review is also a great idea. But it does not change expectations.

If an employee gets a bad review they more than likely can be place on probation or even lose a job.

If they get a good review, they get what? To keep their job?

Of course, they expect a raise. If the situation was reverse and you were the employee would you expect the raise to be retro-active? Would you even do the job for the amount of money you are paying?

I understand the economics of running a business, but with all the challenges small businesses face, we cannot afford to lose good employees. They are not easily replace - not like for medium and large businesses.

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Do employees expect yearly raise? Should I pay back pay for raise not given until a few months after year review?

Dec 18, 2007 9:27 PM

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