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Raising Havoc

The right--and wrong--way to give employees raises

This story appears in the February 1996 issue of Entrepreneur. Subscribe »

What's wrong with this picture? You've just nailed down a major new contract, and to celebrate you gather your employees together and tell them they'll all be getting a 10 percent raise effective immediately.

Sound familiar? Probably, because this approach to is the small- norm--and, of course, employees are quick to applaud it. But compensation experts don't. In fact, according to them, just about everything is wrong with this picture.

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