This Simple Rule-of-Thumb About Annual Raises Will Reduce Employee Turnover If you're looking to keep your best employees, maintain morale and stay competitive in today's market, the secret might be in your approach to annual raises.
By John Boitnott Edited by Kara McIntyre
Key Takeaways
- Fair raises adjusted for inflation can prevent costly employee turnover and preserve productivity.
- Transparency and performance assessments play a key role in distributing salary increases effectively.
- Adapting raise strategies to current economic conditions can maintain staff morale and protect company reputation.
Opinions expressed by Entrepreneur contributors are their own.
A founder friend of mine recently gave an employee a raise. They thought they were doing something good — that this was a significant "generation" raise that would lift the spirits of the employee, giving them an increase in pay that would truly make a difference for their standard of living in the long run. As it turns out, my friend was mistaken and the employee was upset because the raise didn't amount to much after adjusting for inflation.
Times are tough for businesses everywhere, but giving employees fair raises can actually save you money in the long run. If you follow the right strategies, you can keep your employees happier and your organization running smoothly.
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