I own a small electrical company and have been blessed with LOTS of work. Almost too busy. With the three employees and myself we are barely keeping up with the demand. One of my workers is asking for an early raise which he is scheduled to receive in a couple months. I told him I'd think about it. About a week goes by and he says that another company contacted him and he says they offered him what he was asking for. At first I was pissed that he should put me in this position but need some advice on how to handle this.
Do you find your employee an efficient worker? Is he performing well in your business? What could be the lost in your business if he leaves? You mention that you are barely keeping up with the demands, so is it possible to hire more employees, if he leaves? These are some of the things you can think about to trigger your decision. It is important to keep the employee happy if they are giving you great performances, but it is also important to measure the benefits you can offer to the benefits of your business.
I can understand your feelings when your employee address the early salary raise issue to you. If this employee is doing a great job, I believe you know that he deserves to get a raise, and it could also be a motivation for the other employees to work harder. On the other hand, if an employee is not performing efficiently, you should consider putting your focus on another that do.
If you need more support regarding the issue, I will be happy to help you sort things out. Best of luck!