Promotion or pay rise?

Recent research by recruiting specialists Robert Half discovered that the vast majority (94%) of senior finance executive respondents would give an employee a promotion without offering an additional pay rise.

The research was based on interviews with 200 chief financial officers and finance directors in the UK, and also found that around a third (30%) of respondents say promoted employees who are turned down for a pay rise in their new roles are most likely to request workplace perks instead. 27% noted that staff who are not given a pay rise immediately start looking for a new job.
The research also found:

• 42% of respondents state the reason for promotions without pay rises being that they need to assess performance in the new role first; and 27% give lack of available financial resources as the reason.
• 9% felt the remuneration the promoted staff member received in their previous role was too high.
• 36% of respondents believe employees would be more successful when asking for a pay rise if they do so during a performance review, 28% feel the best time is at the start of a major project or when an employee is taking on a new responsibility, and 11% think staff should ask at the end of a major project.
• 23% state that employees who have been declined a pay rise usually wait until their next performance review before requesting a pay rise again.

If you are not in a position to offer a capable employee a pay rise, then offering increased responsibility and the opportunity to develop their career and learn new skills could boost motivation until the time comes when you are also able to pay them more.