In a 2007 World of Work survey, 70% of respondents felt that a letter or email from an employee’s manager was an effective way to communicate a salary increase. I do, too, especially if it complements a salary increase discussion with the employee’s manager.
The manager’s role in communicating the employee’s salary increase is the critical factor. The manager must communicate why the employee is receiving the raise, the amount of the raise, and where that places the employee’s new base salary. It is not recommended that the manager communicate the percentage of increase as they average around 3% and that is not a motivational number as the dollar amount is.
In this sample salary increase letter, the manager has met with the employee so the letter is confirming what the employee already knows. The interaction allows the employee to ask questions. It allows the manager to explain the company’s pay and reward philosophy as well.
The above study found that compensation professionals believe that 40% or less of employees understand basic company information related to reward strategies and philosophy. Further, employees do not understand how much base salary, benefits, and variable compensation such as bonuses, cost the employer or how they support the company's pay philosophy.
Salary Increase Letter
This salary increase letter reinforces what the employee knows from meeting with his or her manager.
Name of Employee
City, State, Zip Code
Dear (Employee Name):
This letter is your official notification that effective January 1, your base salary will increase from $55,000.00 to $56,760.00. Check with Human Resources to determine what the amount of your paycheck will be based on the deductions and other elections that you have chosen.
As I mentioned during Tuesday’s meeting, you are receiving this salary increase because you accomplished the goals we had set for this year. Additionally, your contribution has increased due to your focus on continuing to develop your leadership skills.
The accomplishments of the marketing team that you led were noteworthy. Your campaign for the new product release was one of the most comprehensive and successful in our history of product launches.
You were also able to add elements of social media and word-of-mouth marketing to the actual product which is a new strategy for our company. You are currently collecting data and measuring the success of the campaign which is also a first for our marketing group.
This is a well-deserved salary increase. I want to personally thank you for all of this but also for your steadfast loyalty and commitment to our company’s success. It is appreciated.
First and Last Name of Manager / Boss
Name of the Department Manager / Boss
Disclaimer – Please Note:
Susan Heathfield makes every effort to offer accurate, common-sense, ethical Human Resources management, employer, and workplace advice both on this website, and linked to from this website, but she is not an attorney, and the content on the site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice.
The site has a world-wide audience and employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace. When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.