Why should HR be involved in giving pay raises?
“Hey, I’m a people manager and want to reward my high performing team member with a pay raise. Why should I involve my HR partner in the decision? I think I know best who deserves a pay raise and how much value this employee brings to the company.”
Okay, let’s analyze this statement. It really depends from whom it is coming. What type of organization does this manager belong to? What is the company size?
Assuming that the organization is small, pay raises might be agreed directly with the General Manager. Maybe there is only one HR person and her tasks are rather administrative.
The bigger the organization, however, the more important it is to have the full picture.
What do I mean by that?
A good HR partner will not only look at the pay raise you would like to give to one individual. He will reflect on the consequences for the entire organization and compare between individuals and teams.
The following questions can serve as a guidance to properly assess whether or what kind of pay raise should be given:
When has the individual received her last increase(s)?
What about seniority? What is the start level versus what you pay for your experts?
What is the employee aiming for in her career? Does the organization have future plans with her which would influence the salary?
What is the market benchmark for the position? How much do similar organizations in your industry and/or your region pay?
What are comparable employees in your company earning? Can you keep a good balance between fair pay and performance related merit?
What happens if this employee moves to a different department? How will her pay raise affect comparable teams and job structures?
What is the (potential) influence on the team, if you give this one individual pay raise?
Are you trying to reward a special past outcome or a general high performance? In the first case, you might prefer to give a one-time payment which does not influence future increases. In the second case, you want to acknowledge the individual’s general performance which - continually and over a long period of time - has been on a very high level.
There might be other points to consider, depending on your environment.
And yes, sometimes it is very necessary and helpful to overpay an employee. So don’t follow the standards 100 percent of the time, but give room for individualism where needed.
However, if someone asked you in a year why your pay structure is the way it is, you should be able to explain and not lose yourself in excuses.
When involving and discussing with HR, you will create and align on standards easily. This will support your equal pay approach (same job, same level of pay) and give room for individual merit (rewarding high performance).
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