How do I give a raise to one better worker without affecting the morale of his friend?

Question

I have two employees and one of them performs better than the other. I want to give a higher raise to recognize performance. At the same time I dont want to de-moralize the other person who happens to be a friend of the good performer. All company rules about pay confidentiality will not work between them, I know. Both of them currently work for same pay in similar roles and have same exp level. How do I manage this?

Answer 1

Instead of calling it a raise call it a performance bonus. Tell his friend he will get the bonus when he reaches the same level. That should motivate his friend to do better.

Answer 2

Use Performance Appraisal to raise employee Salary. By evaluating employee performance each year, they will be able to see how each has performed. In that case the highly performance employee will have a high pay rise as opposed to the low performance employee. It is a way of motivating worker to improve their performance.

Answer 3

It is simple. Provide increment to both but in a manner that the better worker is rewarded more than his less efficient colleague. Later call the sulking employee and assure him that his increment next time could exceed that of his friend if his performance standard becomes better than the other. There will be healthy competition amongst employees and your business will prosper.