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Inspire Success

Providing hints, tips and ideas that help you maintain high performing workplaces that are customer focussed and free of conflict

Rewarding your employees – the Salary Review process

Kate Cahill - Friday, November 11, 2011

Rewarding and recognising your staff can be as simple as a pat on the back to a more structured salary review process. What is important is that your employees feel valued and know they are recognised for the contribution they make to your business.  While it is true that people often do not move jobs for money alone, the remuneration on offer can play a significant role, both in attracting a candidate to join your firm, or leading a current employee to “look around”. Here we look at the salary review process.....

Why do a salary review
You can keep your salary review and performance review separate but it does make sense to bring the two together and allows you to reward your high performing staff. If you are managing both processes it is best practice for the salary review to happen immediately after the performance appraisals. For those who manage these processes they believe that being paid appropriately is a form of recognition and sends a message to staff regarding how much they are valued. Whilst money is by no means the sole motivating factor at work, if you underpay, it is a definite de-motivator, and in this employment market this is likely to lead to staff moving to firms who will pay them the recognition they feel they deserve.

In general, salary reviews are about two things:

  1. How the employee performs their job.
  2. Where that employee fits relative to the external job market.

Getting the right information for your salary review
It’s important when managing a salary review to look at what the market is paying. You can get information from contacts in your network, from industry information gained through salary surveys from various organisations and from Human Resource and recruitment professionals. Finding out what it would cost to replace an employee in the current market is revealing and valuable information.

Salary reviews are an important process and require care and preparation in order to meet your employees’ expectations and ensure that the review is a valuable process. It is also important that full explanations are offered as to the reasons and criteria behind why salaries are reviewed. Not everyone may receive a salary increase or at least an increase at the level they were expecting, so it is important that their expectations are managed correctly by fully justifying and preparing prior to undertaking the review. Likewise, you may be in a position to offer someone a pay increase at a higher level than they were expecting. Here, it is important that you fully utilise this situation by praising and congratulating on excellent performance or contribution.
Although companies have different approaches to reviewing and remunerating employees, simple considerations can help you make the process become more effective:

Tips for your salary review process

  • Have a good understanding of the objectives of your performance and salary review processes prior to beginning e.g. to align your business and employee goals, to recognise and reward well performing employees etc
  • The process should be carefully planned and documented from beginning to end
  • Ensure all your Managers are trained in the process being used and understand how the review should be conducted. Have template documents that are used so that employees are all treated in the same way and so fairly
  • Ensure feedback and decisions are objective and based on your benchmarking criteria and that they are clear and easily understood by your Managers and employees
  • Make sure your rating system is fair and easy for employees to understand. Have each rating translate into what the raise in salary will be (if performance unsatisfactory then there would not be a raise)
  • Ensure pay is reviewed in line with the Modern Award rates of pay
Is this something that could be an issue at your place? Inspire Success is all about implementing practical solutions that help create high performing workplaces which are customer focussed and free of conflict - no matter what size your business is. Contact Rae Phillips at Inspire Success for further information
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