Should You Offer a Promotion Without a Raise?
In The News
On the long list of things that organizations have always done, but a practice that should be abandoned, is the concept of giving promotions without the appropriate pay raise. This came to mind when a recent advice column addressed the question. So it begs the question: Should you offer a promotion without a raise?
The short answer is “No”. It is the ultimate act of disrespect. A manager asking an employee to do more and have more responsibility without paying them more is guaranteed to create hard feelings. It may not happen right away, but it will happen.
Remember – people get upset when they believe their compensation isn’t fair. Doing more and not getting more is rightly seen as unfair. Think of this example, after a meal at a restaurant, would you tell the waiter “We’ll have dessert now, but we won’t be paying for that”? Of course not.
There are ways to handle this that treat the employee with respect.
Offer the promotion and say it is effective immediately, but with a written guarantee that the compensation will increase at a certain time in the future – say 6 months. Even better is if there is a bonus paid as well that makes up for the time they were doing the job without the raise. The key here is the written guarantee. If your HR or Finance department won’t do that, it is meaningless.
Offer the promotion and say it is effective at some point in the future when the pay raise can be given. This is more of a risk for you and the individual. For example, if you offer the promotion and then 6 weeks later something happens and they freeze all promotions, you have made a promise you can’t keep. I dislike doing this because it is such a risk – so I avoid this option if possible.
Do option #1, but also offer some non-financial benefits in the meantime. For example, paying for some management training classes to help the person prepare for the role. While this isn’t cash, it can be a way to show you are offering a benefit that most people don’t get.
Simply don’t offer the promotion until you are at a point where you can raise the pay appropriately. This carries risk too because you have no one in the role, which can cause performance issues, and because the role may never get approved or the approval taken away. The other problem with this option is what you tell the team or the employee you want to promote. Do you tell them the plan or simply say that there is a plan, and we will continue with the status quo until then. I always err on the side of giving all the information, but that can be a risk.
Another option that some people use that I hate is the faux promotion. This is where you tell the individual that you want them to take the lead with the group, but not get a title change, raise, or guarantee that they will be promoted. Managers position this as a trial run to see if someone has the skills to lead. I think it is misleading and unethical.
The danger of any of these options is that the employee may see it as a sign of disrespect. They may think that once they get the title, since you won’t pay more or commit to it, they should leave for someplace that will give them the raise.
In the end, never ask the employees to do more than they are paid for. Doing anything beyond that will damage the relationships you’ve built and hurt the team.