Receiving a promotion is a big deal. A very big deal. Promotions mean more responsibility, new challenges, and an inherent recognition of an employee’s abilities and potential.
But not all promotions come with raises attached. During difficult financial times – when many companies freeze base salaries to control costs – employees may be promoted with the promise of raises when the economy improves. At other firms, where individuals cannot progress unless someone leaves, a promotion (without a raise) – culturally – may be Oscar-worthy recognition. And yet, at still other firms, promotions without raises are mishandled, cheap forms of recognition that lead to compression and inequity.
Two critical drivers – retention and engagement – fuel base salary increases and promotion decisions. Promotions provide individuals with rewards and recognition, career advancement and job growth. Promotions keep employees engaged, focused and committed to the company and its business strategies. Companies recognize that most employees highlight career advancement as a top reason for staying.
Employees receiving promotions without raises may find their engagement teetering. If you find yourself in the position of receiving a promotion without a raise, follow these three steps before responding:
1: Ask
After hearing about a promotion and then learning that there will not be an accompanying basesalary increase, digest the news and unearth the reasons behind the decision:
- Why am I receiving this promotion? Recognition for past efforts or because I am already performing the responsibilities of the new role?
- Is the scope of this job materially different than my current role? Am I being promoted laterally to expand my skill sets and “stretch” professionally or does the scope of my role materially expand to include more P&L responsibility, additional direct reports, etc.
- Is anyone receiving a raise or are base salary increases frozen?
- Why isn’t there an increase associated with the promotion?
- Do increases expect to be given within the next three months?
- What do I have to lose by accepting the promotion?
- What are the other – intangible – benefits received from the promotion? Exposure to new leaders? Enhanced learning? Future career opportunities?
2. Analyze
At this point, assess your career and the company’s situation. Often, companies employ promotions to develop people. Determine whether (a) there is long- term career advancement and growth with your company and (b) you actually want a long-term career with this company. The average employee remains with an employer for 4.4 years. Plus, true Millennials (the youngest employees) only manage an average of two years at one company. The negative connotations associated with shorter tenure no longer exist. Switching companies more frequently is a professionally acceptable alternative.3. Act
If promotions without raises run counterculture to the organization, accepting the promotion may cause feelings of distrust and lack of appreciation, plus significantly decreased engagement and loyalty. Obviously, employees can (a) accept the promotion and await a raise in the future, (b) decline the promotion and endure their current job or (c) accept the promotion, embrace the new responsibilities and reevaluate the situation in a few months. More often than not - Accepting the promotion without a raise negatively impacts personal career objectives, self-confidence or self-worth. Personal dissatisfaction outweighs the value provided by the promotion.
Conclusion
Accepting a promotion without a raise – or promise of a raise in the near future – can have both positive and negative personal consequences, depending on the employee’s attitude and reasons for accepting the promotion. Understanding the reasons behind a promotion without a raise - and its potential benefits – requires some investigation and soul-searching before saying “yes”.
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