Salary Increase Letter Template for Employers to Use (with Example)

Appreciating the employee’s dedication and commitment is integral for the success of any organization. This ensures that your employees remain dedicated and focused on attaining the set goals. Once they do, there’s no better way of showing your appreciation than by offering them a salary increase.

The best way to communicate your employees’ salary increase is by writing a salary increase letter template. This letter serves as a formal notification of your desire to increase your employee’s income and detailed insight on why they need a pay rise.

If you don’t know how to go about writing the salary increase letter, here’s a detailed post on all that needs to be included in this letter.

After considering your employee’s request for a salary increase and having a discussion about that, the next step is writing the salary increase letter. This letter’s main purpose is to make the employee feel appreciated for the efforts they’ve put in helping the company achieve its goals. This feeling of being treasured gives the employees a sense of pride for working in the organization and carefully storing the letter in commemoration of that.

By writing this letter, your goal is to show the employee that their efforts don’t go unnoticed. In this letter, you should go into detail explaining why the employee deserves a salary increase. This means stating to the employee how much money their salary increment is and the employee’s new base salary.

When stating the salary increment, it’s best if you stated the base value by which the salary will be increased instead of a percentage, which is in most cases about 3%. Doing this is recommended as it gives the employee greater motivation.

As you write this letter, you need to concentrate on detailing the employee’s strengths and contributions that have made the organization feel obliged to reward them with a salary increase. You can also schedule a meeting with your employee to go over the employee’s performance and assess areas that can be improved in the coming year.

By detailing what areas of their careers they should focus on to improve, the employee is better placed to identify the areas in their lives where they can put in more effort. This strategy works best because it’s right after a salary increment that an employee is most receptive to any suggestions. The implementation of these suggestions qualifies the employee for a bigger salary increase during the next performance review.

Once you’re done writing the salary increase letter, go ahead and have a meeting with the employee to discuss the salary increment’s details. During this meeting, you should give your employee the chance to ask any question they might have in mind about the salary increase. Moreover, you should also go ahead and explain the firm’s reward philosophy and pay to help the employee better understand the figures behind the salary increment.

It’s important to do this since only a handful of employees understand the firm’s reward philosophy and strategies. Moreover, they lack a clear understanding of what value do benefits, base salary, and variable compensation, including the cost of employer and bonuses. Therefore, your role as the manager would be to inform the company employees about such philosophies to help them better understand the pay philosophy.

Salary Increase Letter for Employers to Use (Word Template)

Writing a salary increase letter is a skill that you need to perfect as an employer. If you had no idea where to start, this in-depth guide has provided you with all the details you need to include in a salary increase letter template.