"Join our company and earn your first raise after just 90 days," may be a recruiting technique to stimulate interest among certain applicants. Jobs that offer a wage increase after a short period generally are non-management positions requiring proof of technical expertise or an employee's ability to adapt to a production-oriented environment. An increase after a relatively short time on the job is not likely to happen in salaried positions and jobs that require high-level core competencies, such as professional and managerial positions.
You might wonder what the employment-at-will doctrine has to do with giving an employee a raise after he completes a probationary period. "Probationary period" suggests that the employee is entitled to certain rights upon successful completion of the probationary period, including the right to permanent employment, which conflicts with the employment-at-will doctrine. Therefore, human resources best practices caution employers to omit "probationary period" and "trial period" from the workplace vernacular. Using these terms may create an implied contract that the employee cannot be fired after completing that initial period, advises California labor and employment attorney Sandra Rappaport, partner with the firm Hanson Bridgett.
Union Contract Rationale
Probationary periods aren't uncommon or unusual. However, they once were used by employers to terminate union workers outside the terms and conditions of a union contract, according to Steve Bruce, author of a March 2011 article for the HR Daily Advisor website, titled "Probationary Periods – Dangerous Device or Necessary Tool?" Once a union worker was hired as a probationary employee, she was essentially excluded from the terms of the union contract that apply to regular employees, including protection from employment-at-will practices. For example, a new union worker might earn 25 cents per hour less than her counterparts for the first 90 days of work. Beginning with the 91st day, it's not just her wage rate that increases, but she's protected by the terms and conditions of the union contract that says she can only be terminated for just cause.
With the exception of the minimum wage and overtime pay rules governed by the U.S. Department of Labor and the states' labor departments, there aren't any federal or state laws that mandate how employers must compensate new employees or whether an employee who completes an introductory period must receive a pay raise. Therefore, the issue isn't with paying the employee more after he demonstrates that he's capable of doing the job. In fact, a wage hike might be warranted if there's a steep learning curve and you want to reward the employee for reaching the same competency level of other employees.
If you're in the final stages of the selection process, but you need a hook to convince the company to hire you, propose a salary increase upon the completion of your first 90 days or so with the company. For example, if you sense the hiring manager is impressed with your qualifications but just doesn't have 100 percent confidence that you're the ideal candidate, you could say, "To prove that I'm the perfect choice for this job, I will accept a salary that's five percent lower than the starting salary for the first three months. Once I have demonstrated my talent and expertise, you agree to review my performance and bring my pay rate up to or above the starting salary." That said, be careful that you don't devalue your expertise and qualifications by suggesting you'll take less money.
If your company has a particular system that requires on-the-job training and diligent practice, it might be wise to offer a "training wage" or "introductory wage." Just don't refer to it as a probationary-employee wage or trial-employee wage to protect your company from potential claims alleging an implied contract of employment. In some circumstances, employers dangle the 30- or 90-day increase carrot as an employee retention tactic. However, giving a wage increase after a short period isn't likely to show remarkable improvement in employee retention, either. The employee could stay just long enough to get the increase and leave a couple of months later, still causing you to incur the cost to recruit, hire and train a new employee – just two months later than you might have had to do otherwise.
- HR Daily Advisor: Probationary Periods - Dangerous Device or Necessary Tool?
- Inc.: Probationary Employment Periods
- University of Nebraska-Lincoln: Hiring Managers FAQ
- Nolo: Employment At Will: What Does It Mean?
- Monster: The Opportunities and Risks of Employment Probationary Periods
- VMDiva: Probationary Periods: How Long is Long Enough?
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