How to diplomatically decline a pay rise request

Turning down a pay rise request is never nice. While there’s no doubting it needs to be done from time to time, to minimise any negative impacts, it’s important to tackle the situation sensitively and fairly.

Reasons for saying no

There are a number of reasons you might turn down a pay rise request. For example:

• You feel the employee is already being paid fairly
• The business doesn’t currently have any budget for pay rises
• You don’t agree with the employee’s rationale
• The business’ trading performance doesn’t allow for any additional costs at this time.

Provide a clear explanation

Whatever your reason for saying no, make sure you clearly and carefully explain why you’ve come to that decision.

So, for example, if the reason is that you don’t currently have any budget for pay rises, state this. Let them know that it’s a business-wide barrier, and that it doesn’t reflect on their individual performance. However, it’s important to be consistent. This explanation will be hard to justify if you allow some pay rises and not others.

Or, if you disagree with the employee’s reasoning for a raise, go through their justifications and fairly and politely outline your opposing views.

Maintaining morale

Understandably, a pay rise rejection can damage an employee’s morale. The last thing you want is for them to leave feeling demoralised and demotivated – they, you and the business will lose out.

To keep them driven for the future, give them examples and pointers of how they can better position themselves for a raise in the future. For example, if they aren’t consistently hitting their targets and this is a barrier, advise them on how they could bridge this gap.

One thing you absolutely shouldn’t do though, is over promise. Don’t put the world on a plate if it’s simply filling them with false hope – it’ll only come back to haunt you down the line. Be honest, and assure them that you’ll do everything you can to help them advance, but that any raise depends on the future circumstances and cannot be guaranteed.

Your approach

Bad news is bad news, but you can soften the blow with your demeanour. When explaining your reasoning, you should remain fair, sensitive, polite and encouraging at all times.

This will help to ensure the employee takes your comments constructively and doesn’t leave deflated or disgruntled.

Considerations

Some businesses are open when it comes to sharing salaries and rises. Others aren’t. Regardless of your stance, you should be fair and consistent when deciding whether or not to grant a pay rise.

If you’re not, you could find yourself facing allegations of discrimination. How? Here’s an example:

Let’s say you’ve got a male and female employee who hold largely similar roles. Both have a good work ethic. Both regularly over achieve on their targets. Both add the same value to the business’ bottom line. Both request a pay rise within days of each other.

You accept the female employee’s request, but decline the male employee’s.

If the male employee catches wind of what’s happened (how they discover this information is a different matter), and believes there is no clear difference in circumstances justifying a different decision, he may make a sex discrimination claim against you.

If this were to materialise, you would have to evidence a watertight case as to why the female employee’s request was accepted, and the male employee’s wasn’t.

Where we come in

Here at Citation, our Employment Law & HR experts can take the pain out of pay. With everything from maintaining morale and avoiding discrimination, we’re here to help.

Get in touch with the team on 0345 844 1111 or hello@citation.co.uk for more information on what we can do for you.