It’s the five-word question every worker wants to ask (but is often too scared to do so) and every employer or business owner expects to hear at some point: “May I have a raise?”
As the boss, you can’t necessarily blame a worker for having this desire. After all, the point of working is to earn an income sufficient to support one’s needs and the needs of one’s family. Increasing salary and improving financial standing is a worthy pursuit and expectation for anyone.
But when to grant raises and the frequency at which pay increases should be given are challenging questions to answer.
Let’s first explain the best way to handle pay increases for your Filipino VA. Then we’ll explore a few different types of raises employers give to workers.
Raises for your Filipino virtual assistant
It’s no secret that the cost of living in the Philippines is far lower than it is in the United States. Similarly, Filipinos’ salaries are significantly lower than the average U.S. pay. It’s common for professionals in the Philippines, such as engineers and professors to make $300–$400 a month. When you hire a Filipino VA, be aware that many skilled Filipino VAs are available for between $300 and $400. You should usually plan on paying them a little less than they are asking.
Then comes the raise.
In a markedly different approach to most companies who employ local, in-house full-time employees, you should give your VA a raise in two or three months after they start, contingent, of course, on whether the VA was meeting your expectations. Raise the VA’s salary to the amount they originally requested during the hiring process.
After the initial raise, additional raises are certainly appropriate. A good guideline is to give raises annually, provided your VA has performed well. More frequent raises can be given at your discretion. Raises should also be given when your VA has proven to be dedicated and loyal to your business.
The Thirteenth Month
In the Philippines, there is a law that requires employers to pay employees an additional month’s pay after they have been with the organization for one year. This pay is part of the employee’s salary and is paid out in December. It is known as “the Thirteenth Month.” You will pay this to your Filipino VA. If your VA has not been with you a full year once December rolls around, you will pro-rate the Thirteenth Month pay appropriately.
While raises are increases to one’s salary, a bonus is a one-time payout, ordinarily given as a reward for exemplary work or completion of goals. Bonuses can also be given in the form of profit sharing when a company as a whole has reached a certain financial threshold. Lastly, businesses can give a bonus at a certain time of year, such as Christmas, as a gift to employees.
I give raises from time to time to my VAs when they have produced exemplary work and when they have extended their efforts beyond my expectations. They are paid separately from salary, including separately from the Thirteenth Month.
Let me relate a story to illustrate how and why you should give bonuses to your Filipino VA:
Once, I gave one of my VAs a marketing task. I gave the VA specific instructions on how to accomplish the task. At first, I got regular updates from my VA, explaining what progress he was making with the project. After six months, the updates stopped, and I heard nothing about how the project was proceeding. I sent a follow-up email to check in with my VA and to see why the updates had stopped. In reality, the updates had stopped because he had figured out a better way to accomplish the tasks than with the information I had provided. The VA explained to me that through research, he had discovered more effective tools and methods to fulfilling the assignment.
I was shocked. I couldn’t believe my Filipino VA would try to do things better after I had given him instructions to do it “my way.” But I was impressed with his proactive attitude and desire to take the project a step beyond what I had asked. To reward him for his efforts, and to show my appreciation, I gave him a $100 bonus. He was thrilled.
Though the VA was going about things in a more effective way, he was afraid that I might not like the fact he had taken things down a different road. This is a typical way of thinking among the Filipinos. They don’t want to let you down or disappoint you. So, showing them your gratitude for excellent work is important.
Common Types of Raises
Now that you know how to address raises with your Filipino VA, consider the following ways in which different organizations increase their employees’ salaries. You can use some of these as models for how you decide to grant raises.
1. Performance-based or merit-based raises
This is a common method for granting raises. As the idea suggests, companies that subscribe to this way of giving pay increases do so when an employee has demonstrated sustained exemplary performance. Think of this type of raise as a reward for good work.
The amount of raise will depend on how well the employee has performed. It would be rare to give a performance raise more than once a year, and an annual raise of this type is quite appropriate.
Performance raises are a wonderful way to motivate top workers to continue excelling. They are also effective methods of enticing employees who may be struggling to recommit themselves and redouble their efforts.
2. Cost of living raises
Some companies take the economy into consideration when giving raises. Inflation is a part of life. The cost of housing, food, utilities and gasoline can steadily rise, reducing how far the dollar can go. To help offset these burdens, companies will increase employees’ salaries so they might maintain their standard of living. Like performance-based raises, these are almost always given annually.
3. Raises at the end of probationary period
Many companies hire an employee at a particular salary and then, upon successful completion of a “probationary period,” the employee will be given a raise. This period is usually between 30 and 90 days, during which time the employee receives on-the-job training. However, not all companies that have probationary periods grant pay increases at the end of the period. Often, this is simply a time to evaluate whether the employee will be a good fit for the company and whether they will be able to handle the workload and assignments they will be given.
4. Goal-based raises
Similar to performance-based raises, these increases are typically given during a quarterly, semiannual or annual period. During the designated time period, the employee and employee work together to set attainable yet challenging goals. The goals must be measurable, specific and directly related to the employee’s job duties.
At the end of the selected period, the employer and employee will evaluate whether the goals were attained and to what extent they were achieved. Usually, if the goals were met at the minimum level, the employee will get a raise; however, if the employee exceeded expectations, the raise will be greater.
You must exercise caution if considering goal-based raises with your Filipino VA. Often, unfortunately, employers use goals instead of training as a way to give incentive to employees. In the Philippines, this type of raise method can cause complacency and create fear with the VA. This is because your VA will be so concerned about pleasing you that they will be scared that they aren’t doing enough to meet those goals. They worry that if they don’t achieve the goal they will be fired. Therefore, goal-based raises can have the opposite effect that you would desire. This type of raise should be discouraged.
In most cases, if an employee is promoted to a higher position within the organization, a salary increase is included. Employers recognize that such a change brings more responsibility and heightened accountability. Though it is rare for an employee to be promoted multiple times in a year, if this scenario played out, it would be likely that a raise would accompany the promotion each time.
Giving raises to your virtual assistant is an important part of your business relationship. When you give a raise to someone it shows you appreciate their efforts; it demonstrates that you value their contributions; it expresses confidence in their abilities. A raise also motivates the VA to continue producing high-quality work. Raises improve morale, job satisfaction and incentive for your VA. Make these a priority in your business.
About John Jonas
John helps business owners learn to outsourcing to the Philippines and replace themselves with virtual assistants.
He founded and owns OnlineJobs.ph.
He currently employs 14 amazing Filipino workers full-time and loves every one of them. He lives in Utah, has a wonderful wife, 4 amazing kids, and golfs 4-5 times/week.
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