One of your direct reports just asked for a raise. Whether or not you hold the purse strings for your team or organization, this is a tough situation. How should you respond? Your first reaction, regardless of whether you think the employee deserves the raise, should be curiosity. Say something like “Tell me more,” which indicates that you’re not dismissing the request and gets you more information about where the person is coming from. Remain neutral and explain that you will look into the matter. Say something like “Thanks for bringing this to my attention. I want to give it careful consideration. I’ll get back to you within two weeks.” To help make your decision, consider how important the person is to you, your team, and the company, and talk to your boss and HR to determine the fairness of the person’s current salary.
Adapted from "How to Respond When Your Employee Asks for a Raise," by Amy Gallo
