5 signs it might be time to give an employee a raise

Make sure you are competitive in the market and know when to consider a pay increase for key staff.

Keeping an operation profitable is a fine juggling act. Most managers know the importance of fair compensation for employees. The struggle often becomes, once that solid baseline is established, how do you know why and when to give an employee a raise?

Here are five signs that might trigger a signal to evaluate raises for farm employees. You might consider giving your staff a pay increase IF….

1. The operation is experiencing above average profits.  During such times, it is great to save away money or issue nice dividends to management, but be sure to share the love and success with your key staff as well. Don’t think for a minute that talk around the water cooler doesn’t involve how well the business is doing!

2. Staff turnover is 30%+!  While there are likely a number of reasons for such high turnover, it might be because your baseline isn’t as established as you thought. It might be a good time to gain factual information on how your operation measures up against others. AgCareers.com offers a tool that benchmarks salary data on a variety of industry specific roles, the Compensation Benchmark Review. Data has proven over and over that if staff can do the same work nearby for higher compensation, chances are they will hit the road!

3. You have staff that consistently gives 100%!  When you get ‘A’ players and they produce, you need to figure out how to reward them and this includes financially. If not, eventually they will get recruited away from you and then it will be too late.

4. You have select staff that has an invaluable skill. Whether it is a team member that is great at AI or a hand that can repair anything, it is important to ensure that staff who excel within the operation are adequately paid. Once again, if not, they could be tempted to leave.

5. You have select staff that you think could do your job or other management roles in the future. Succession planning is so important no matter the size of your operation. If you have staff within your team who should be considered as potential leaders for the business, then it’s only appropriate that you keep them happy and loyal.

When it comes to effective compensation management, make sure you are competitive in the market and know when to consider a pay increase for key staff. While it’s not always about pay, everyone wants to be fairly compensated for their work.


The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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