The majority (94%) of senior finance executive respondents would give an employee a promotion without offering additional remuneration, according to research by Robert Half UK.
The research, which is based on interviews with 200 chief financial officers and finance directors in the UK, also found that around a third (30%) of respondents say promoted employees who are turned down for a pay rise in their new roles are most likely to request workplace perks instead.
In addition, 27% of respondents report that staff who are rejected for a pay rise immediately start searching for alternative employment.
The research also found:
- 42% of respondents claim the reason for promoting staff without providing a pay rise is because employee performance in the new role needs to be assessed first, and 27% cite a lack of available financial resources.
- 9% of respondents have promoted staff without offering them a pay rise because they felt the remuneration the individual received in their previous role was too high.
- 36% of respondents believe employees would be more successful when asking for a pay rise if they do so during a performance review, 28% feel the best time is at the start of a major project or when an employee is taking on a new responsibility, and 11% think staff should ask at the end of a major project.
- 23% of respondents state that employees who have been declined a pay rise usually wait until their next performance review before requesting a pay rise again.
Phil Sheridan, senior managing director at Robert Half UK, United Arab Emirates, and South America, said: “Offering employees increased responsibility and the opportunity to learn and develop can be one way to boost employee retention, loyalty and motivation, even when the funds may not be available for a pay rise. The risk with this approach in the long-term is that employees start to feel undervalued and with the new skills they have developed, they look to greener pastures to receive a competitive remuneration.
“If [organisations] do adopt a promotion first strategy scheduling a six month performance review when salary and benefits can be discussed at the same time as confirming the promotion, can be an effective strategy to avoid a negative outcome.”