Large raise requests are systems failures. They come from undefined roles, no compensation bands, and no clear path for progression. When those don’t exist, people fill the gaps. That is when 25% and 50% raise requests show up.
Compensation should be predictable if the business is predictable. If revenue is structured, compensation must follow that structure. If compensation is not predictable, your cost structure is not predictable, and neither is your margin.
The first break is role clarity. If compensation changes without a role change, the role is unclear. A raise is a small adjustment for consistency. A large increase is not a raise. It is a different role with different responsibilities. That role must carry more ownership tied to revenue, client outcomes, or team performance that drives revenue. Without that, compensation becomes arbitrary, and arbitrary compensation breaks your business.
If you are getting large raise requests, fix the system first.
Define every role with clear responsibilities.
Set compensation bands for each role.
Define what changes when someone moves up.
If you cannot point to the difference between roles, you cannot justify pay.
Raises follow structure. Promotions follow responsibility increases.
If neither is defined, the requests will keep coming.
The second break is performance calibration. Most businesses have a standards problem, not a performance problem. When standards are not defined or enforced, expectations drop. Average performance gets misclassified as exceptional. Compensation shifts to comparison instead of output-driven results. When standards are enforced, expectations normalize and compensation follows.
The third break is market definition. In a remote environment, the labor market is not local. It is national or global. Titles do not define value. Value is determined by revenue impact. The same title does not mean the same output. Compensation tied to titles instead of revenue creates distortion and unrealistic expectations.
A compensation system produces clear outcomes. Roles are tied to revenue responsibility. Performance is measured against standards, not peers. Compensation ranges are anchored to market and output. Movement within the system requires a change in responsibility, not negotiation.
Raise requests are system checks.
If a request does not align with role, performance, and revenue, the answer is no. Not now. If it does, the role expands. Compensation follows.
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This is not a compensation conversation. It is a systems problem. Fix the system.
~ Erik