This blog was written by Rochele Bertasso, Senior HR Business Partner at Helpside.

As a business leader, you likely have conducted difficult conversations and awkward meetings. One of those conversations may be to deny an employee’s raise request. You may have to deny a request due to lack of funds, or because of performance shortcomings on the part of the employee. Whatever the reason, there are some things you need to know before meeting with your employee about their raise. Here are some of those things:

Hold a Meeting

A denied raise request is an important decision that employees should receive an explanation for. An in-person meeting is preferable whenever possible. As a best practice, schedule a specific time for the meeting so you can focus in on your employee and convey a message of respect. This can assure that the conversation starts off on the right foot.

Offer Something Else

If you can’t approve an employee’s raise request due to budget issues, you may be able to offer something else. Look at your benefits offerings and see if there are any options for improvement there. You could also consider offering your employee more paid time off or greater flexibility instead of a raise.

Give Guidance

If you are refusing the request because of employee performance issues, go through your records of performance reviews and see what feedback you’ve given your employee. Was it clear? Was it helpful? Did you follow up?  If not, you may need to discuss specific goals with the employee that can help them earn a raise and see a path forward to greater rewards. Unfortunately, if performance is an issue and you haven’t been helping your employee improve their performance, they may assume their performance is up to standard igniting frustration at the denied raise request.

In your meeting, take the time to specifically go over instances where the employee has fallen below standard. Avoid taking an accusatory tone, but be clear on what the employee needs to do to provide greater value and help the company reach its goals. Whenever possible, highlight the employee’s strengths as well so they know their efforts are appreciated and they don’t get discouraged.

After you’ve reviewed the changes you’d like to see and the goals to be met, provide resources and support. Providing a mentor along with regular one-on-one check in’s can help. Also, let the employee know when their performance will be reviewed again and when they might qualify for the raise they are seeking.

Prepare for Disappointment

Regardless of how well you handle the situation, your employee will probably still feel some measure of disappointment. Make sure you stay professional, clear, and supportive even if the discussion becomes emotionally charged. If you do your best to explain the situation and help your employee achieve reasonable goals, it’s likely they won’t be upset for long.

Having difficult conversations is part of being a business leader, but that doesn’t make it any more enjoyable. Share this advice with your management team to be better prepared if they to refuse an employee’s raise request in the future.