There has recently been a discussion on offering your employees raises and what translates into a deserved raise. Needless to say, I have my own two cents to add to the mix.
I do not argue with some of the reasoning behind offering and giving raises to employees. There are multiple good reasons besides just being a warm body at a desk. A few raise-worthy reasons include:
- Taking on extra tasks
- Going above and beyond
- Helping others/training new team members
However, there is one distinct reason I feel companies should raise pay: cost of living.
It has been argued that employees can get their cost of living raise through other means. Long-time employees should not have to carry the company just to make a living wage when new employees come in receiving a better wage. Updating existing incomes based on the existing environment is necessary.
Giving a raise for fun is not financially viable. Giving a cost of living raise is not the same thing. Giving people a performance raise is a great way to promote better performance.
Raises can promote growth within the company and loyalty.
However, make sure you give them within reason. Most of all, do not be afraid to compensate for cost of living when your prices rise as well. Treat your employees fairly, and they will stand behind you!