HBR Guides to Performance Management Collection (4 Books) (HBR Guide Series)

Chapter 12

When to Grant a Promotion or Raise

by Amy Gallo

Managers who want to recognize employees for good work have many tools at their disposal. One of the more traditional ways to reward a top performer is to give her a promotion or raise, or both. Even if you don’t openly talk about this in your performance review session (as discussed in chapter 8, “Delivering an Effective Performance Review”), it’s often something a manager will think about—or an employee will ask about—around formal appraisal time.

But how can you know whether someone is ready for the next challenge or deserving of that bump in pay? Human resource policies and company culture often dictate when and how people move up in a company. However, managers in most companies ...