Hi: I have seen tons of sample letters for requesting a pay raise, but I have a different scenario here.
An employee has sent a letter asking for a pay raise.
The current compensation of the employee is at par with the present market rate. We cannot comply with the request but appreciate the employee's hard work and do not want him/her to look for work elsewhere.
Can some one please post a sample letter or format on 'declining a pay raise request from an employee'. That is replying to the pay raise request in negative.

From Canada, Whitchurch-stouffville
Dinesh Divekar

Business Mentor, Consultant and Trainer
Dear member,

When you ask some query on this general forum like this, the business etiquette demand disclosure of your name, designation, nature of your company or industry etc.

Related to your query you could have given following additional information:

a) The person who is asking for raise is he/she reporting to you? What is your role in the organisation? Are you from HR?

b) Do you have well-designed Policy on Performance Appraisal (PA)? If yes, then has it been communicated to the employees?

c) At what frequency the PA takes place? Is outcome of PA is linked to pay raise? What is the frequency of hike in pay?

d) Why employee is asking for raise? What is that special he/she has done? When did he get the raise last?

e) You have written that "appreciate the employee's hard work". What is the meaning of hard work? What is the measurable component? Who were the beneficiaries of his hard work?

f) Do you have employee recognition programme? If yes, then on what parameters you recognise the contribution of the employees? Is performance of employee recognisable?

Final comments: - Do not decline the employee's request for pay raise outright. I recommend you writing that "as per our company's policy, annual salary increment takes place in the month of ____. We will consider your request for your salary increment during that time."


Dinesh V Divekar

From India, Bangalore
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