What do you base raises on, and how do you decide the amount?
Last week, I met a former university classmate who now works at an advertising agency. She was really happy because she had just gotten a raise. But when she mentioned the amount, it honestly seemed like nonsense to me (though I didn’t say anything so I wouldn’t ruin her joy). 😀
What surprised me even more was that she had to go to her boss and ask for the raise herself (which felt like a double nonsense). But I get it...companies want to save money wherever they can.
So, how do you, founders and employers, approach giving raises to your employees?
(Or in other words, what makes you decide someone deserves a raise, and how do you decide by how much?)
Is it for loyalty? (Years spent working at your company)
A life event? (Like the birth of another child)
When an employee brings some kind of innovation?
Let me know...
Replies
I think we, the internet bubble, often don’t realize the kind of world we actually live in. In most traditional companies, whatever salary you start with is pretty much the one you stay on. But when working with startups or in digital jobs, salary changes are a much more dynamic process and happen all the time.
To me, the most natural thing is for an employee’s salary to reflect the value they bring. If their skills or work directly generate profit, it makes sense for that to be taken into account. On the other hand, if their role is more administrative, it’s naturally harder to justify adding more money. And if they bring in clients, it’s only fair they get a bigger share.
@byalexai And that's why I have never wanted to end up in the public services or government services – because such administrative work has its limit. I am amazed at how many people are comfortable selling their time and being locked in an office, not growing, and at the same time fearing a change in the political regime so they don't lose their hot seat. 🥲
@busmark_w_nika yeah, it's same in every country. In my country as exactly what you describe.
@byalexai That's sad because of those peoplewho vote for not good regime or politicians
I completely agree with you, Nika. If she’s truly happy with her work, it likely means she’s giving it her best and that alone says she deserves more.
I've also seen situations where people take advantage of someone’s dedication or personal circumstances. If an employee consistently delivers on time, fulfills responsibilities, and adds value, it should be recognized not overlooked. It's not just about performance, but also about being fair and human.
Many employees continue working hard silently, hoping their efforts will be noticed and rewarded someday. But the reality is there's no guarantee the outcome will match their expectations.
Sometimes, you have to be your own advocate especially in environments where appreciation isn't always automatic.
Raises shouldn’t just be about years worked. They should reflect impact, effort, and ownership :)
@sania_khan10 That's why I rather work for myself becauce we can deal the price at the beginning for a certain period of time :D
@busmark_w_nika That's a very good decision truly one of those ahhh moments! Great job I am with you :)
@sania_khan10 Thank you! :)
I usually tie raises to impact, not just time served. If someone moves the needle in a way that’s hard to replace, that’s my signal.
@santosh__kumar9 Is it the only way how an employee can earn more in your company?
Not every raise is cash. If someone’s in it for the long haul, I’ll offer equity or performance-based options that vest over time. That way, compensation reflects not just contribution, but alignment with where we’re going.
@a11yexpert I also think that some kind of equity is motivating to move the needle on. But I can see it only in other countries. Not in mine.