The salary review process is an important component of people management. Organizations must review salaries regularly and it is extremely important to have a fair and consistent approach to the salary review. It can help you retain quality employees, increase engagement and improve productivity. But it has to be done right.
A salary review is used to determine whether the pay an employee receives is an accurate reflection of how they perform. A salary review takes into account an employee’s position and the value of the similar positions in the external job market.
Regularity
Most companies choose to hold an annual salary review for employees, but many also conduct regular six-month reviews. Although salary review happens only once or twice a year, the salary review process virtually takes the whole year. Salary reviews should not be left to the last minute, but be carefully planned and resourced. Regularity in the salary review practice is vital, and especially six-month review offers a valuable preemptive opportunity to discuss an employee`s performance and salary expectations.
Project Plan
If possible a detailed project plan should be completed with resources, deadlines and timescales allocated, and a project manager appointed. The main pieces of work to be covered in a salary review are as follows:
- Job Descriptions & Validation
- Internal Rankings & Relativities
- Surveys
- Job Matching & Benchmarking
- Market Pricing Analysis
- Budget Recommendations
- Agreed Budget
- Budget Allocation
- Salary Increases
