Talking Cents

How To Decide On Giving a Raise to Small Business Employees?

Your business employees need a boost of motivation such as incentives, raises, retention bonus, etc. After all, they are the support system that made your business successful and reached milestones. While you can decide the amount or percentage of incentive or raise that you want to give, you must ensure that you are fair and reasonable when it comes to rewarding employees for their hard work.

While deciding on the revised payroll of employees, you should probably have some parameters based on performance, skillset, and consistency. These three things are required of any employee regardless of their job profile. Here are four ways for you to decide who should be getting the highest raise or incentive for being an integral part of your business.

Duration Of Employment

The number of years an employee stays is a significant factor. The importance of an employee grows exponentially compared to the number of years stayed. This is solely because the longer an employee stays, the more loyal he or she is to the company. And the more dedicated such workers are towards the growth of the business. As a result, it is a critical factor in determining raise. On the contrary, when a long term employee does not receive their due, they get discouraged to further commit to the business.

Good Performance

Consistent good performance is usually one of the first things that small business owners consider. However, you should have a more multifaceted approach in quantifying the performance of your employees. Work ethics such as arriving at the workplace on time, submitting deliverables before deadlines, and observing professional behaviour with colleagues and clients are also important. Consider these factors before deciding who should get a higher raise.

Acquiring New Skills

You hire people due to their skillset. If an employee improves upon their skills, and adds more value to the company, they must get a raise. This is because by upskilling themselves, they have proven to be a great investment to your small business. Also, this encourages their colleagues to become more proficient in their job.

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