last year i gave my employee and increase in salary of 500 $.how do i reduce it now?

Question

i made it 400 $ . but my employee wants the same as last year. I dont want to maintain the same figure now. how do i refuse it gracefully?

Answer 1

You cant unless you can prove the employee has breached the contract somehow-poor performance, poor attendance, etc..You cannot just arbitrarily change someones salary because you feel like it.

Answer 2

I think you should consider what the impact to your employee will be? Is the $100 worth the negative feelings this will cause. Event the smallest of business can find a way to spend $100 on a good employee. Why not cut back on costs in some other area. Good help is hard to find. Why don't you reduce your other expenses and focus on keeping an obvious loyal employee. Ideas to cut costs. check your phone bill -do you really need all those services? Check your cable, internet, printing, lights, etc. I am sure somewhere you are spending more on "nothing". Raising your prices 1% that would be almost unnoticable by your customer but may give you more than the$100 your looking for.

In short, this is bad business unless you have a legitimate reason to reduce the increase. If business is bad -don't hurt the people who support you. Check your suppliers, competition. I will give you a free marketing analysis on your business. Take care of your employees.

Answer 3

I am not sure if I understand your question, but if the $500 was more like a bonus you gave the employee last year. Then you can do 1 of 2 things this year. Write down job performance concerns and tell the employee that his job performance is not as good, so he does not get as high of bonus, but only do that if it is true and if you don't mind the employee quitting. The second solution, is to blame business, tell them that they are doing a really great job and that you wish you could pay them as much as last year, but that that amount was based on how well your business does, and that business over the last year has a not been as good, and that you are so sorry, but this is best you can do this year, in fact it is probably more than you can afford, but you really care about the employee and want to give them a little more than you really should. Good Luck!

Answer 4

I wouldn't do that. I honestly think you will ruin the relationship with the employee. I expect some sort of raise every year and if I don't get a cost of living increase I am pretty upset about it.

I think if you reduce his salary he will be less productive, less motivated, maybe hurt your business by bad mouthing you, or maybe slow down business buy lowering productivity. For $100 I would definitely not rock the boat there. You will make more paying him or her the extra hundred than you will lose in productivity.

Answer 5

if you are cutting the salary, you should also reduce job responsibilities. tell the person now they no longer have to XXX or have XXX responsibility that they were doing so you aren't paying for that anymore. It's a new job, with different requirements, that pays less. the old job is going away and you need a person to do the (smaller) new job.

Answer 6

Just tell your employee that his/she do not deserve it as they did not work as hard this year as last year. Remind them that food, gas and other items do not cost as much this year as last year. After all that 24 cent and hour raise you gave them should hold them off for years so they are damn lucky to get a 19 cent and hour raise this year.

Answer 7

There is no graceful way to do so. But, you are the boss, you can do that. One thing you can do is to restructure everybody's pay and say you decided to reduce everybody's salary, but instead to give more bonus earning potential. So, if the business is good, they earn more at the end.

Answer 8

Do you have a standardized performance appraisal, telling him/her what needs to be done, and what goals need to be accomplished in order to get the $500.00. If not, simply explain to him/her that because of the local economy and a slow business year, you simple can not afford it. If he/she can not accept what you say, offer him/her additional days off with pay. That may help.

Answer 9

This is tricky. The right thing to do is leave it alone. If you try to take it back he may just quit. I also believe that depending on what state your in this might be considered illegal to take a raise back.

Answer 10

Just say this is the offer. Take it leave it.