Promotions without the pay rise
Promotions are often synonymous with an increase in authority, responsibility and salary, right? Wrong.
It seems the latter of these perceived increases is not always a guarantee, according to the results of a new survey.
Recruitment firm Robert Half UK found that 94% of finance executives would promote an employee without offering any rise in their pay. When asked what their motivation for this move was, the majority of CFOs and FDs said they believed the employee needed to prove themselves in the new role before receiving any additional remuneration.
During the current period of economic uncertainty, some accounting and finance firms simply don’t have adequate funds to put towards a pay hike for newly promoted members of staff. A lack of available financial resources was the second most cited reason for promotion without pay.
The survey also found that many employers are using promotions as a way of motivating their employees.
Although this strategy can be an effective way of boosting employee loyalty and retention in the short term, if it is used as a long term solution it may push staff to "look to greener pastures to receive a competitive remuneration," says Phil Sheridan, Senior Managing Director of Robert Half UK UAE and South America.
Phil went on to advise: "If companies do adopt a promotion first strategy scheduling a six month performance review when salary and benefits can be discussed at the same time as confirming the promotion, [it] can be an effective strategy to avoid a negative outcome.”
When is the best time to ask for a raise?
In line with what Phil has suggested, the majority (36%) of executives said that an employee is most likely to successfully negotiate a raise during their performance review.
Making the request during a business critical junction may also be effective, with 26% of CFOs and FD saying either the beginning or end of a major project is the best time to ask.
Show me the money
When approached by an employee for a pay rise, in whatever situation, a manager should consider how valuable that employee is to the company before making a decision.
More than a quarter (27%) of finance and business leaders said that employees who are turned down for a pay rise immediately start looking for another job.
Read next: Tips to ask for a payrise
Do you agree with the research findings? Let us know in the comments below.