How do you conduct a pay review?
This is an area that can quite easily become over complicated. It is however key to the employment relationship as it is very personal to the employees involved.
Ultimately pay is the reason the vast majority of employees go to work and they want to know that they are being rewarded fairly for the job that they are doing. To keep your workforce engaged it is vital that you get the pay review process correct.
There are some simple but key steps that you can follow that will ensure that the process is followed fairly, does not set any precedents and importantly comes within budget: –
1. Budget – first and foremost you need to determine how much budget is available and can be allocated. It is essential that you consider external factors when making this decision but internal factors also have a heavy influence, for example affordability and any specific market-pay pressures. Be careful to use reliable sources if researching externally.
2. Type– will it be individual and related to performance or company wide. Be specific and ensure this is incorporated in your handbook/policies or procedures. If you are excluding a group of employees, for example new starters this should be set out in clear criteria.
3. Trade union – if you have a trade union you need to engage with them early in the process. Check procedures/agreements in place and try to avoid surprises by having regular contact beforehand.
4. Performance-based – ensure that you have a robust method of assessing employee performance and support the line managers in carrying out assessments and recommending awards.
5. Discrimination – be careful not to discriminate against part time employees or any other protected characteristics.
6. Communication – is always the key. Prepare these in advance and ensure they provide consistent messages. They should be transparent and provide a timetable to manage expectations.
7. Confirm – remember to write to the employee to confirm them of their pay increase.
8. Payroll – lastly but by no means least remember to update with payroll. It’s quite easy to do when using modern payroll system provided by Nominak HR&Payroll. Check out https://nominakhr.com/payroll/ for details.
If you are considering a pay freeze this year and have regularly given pay reviews in the past then you need to check the wording of employee contracts.
Preparation is the key and keep it simple. If you would like further information on conducting a pay review then please do not hesitate to contact SimpleHR.