For businesses looking to retain top employees and achieve commercial success (and aren’t we all?), salary reviews are imperative and should be conducted regularly.
Salary reviews provide the following benefits:
- They enable companies to pay fairly and competitively
- They identify and rectify any pay gaps that may exist within your company
- Underpayments and overpayments can be detected and adjusted
- Your company is seen as a top recruiter to attract the best talent
- Cost associated with employee turnover are reduced. Traditionally, these are much higher than the cost of reviewing and adjusting employee salaries
- Your employees feel valued and appreciated
How to effectively conduct a salary review:
- Conduct pay-equity analyses to provide the right data for salary reviews. Gather external market pay information from reputable, respectable salary survey sources (don’t just Google!). Look at the data that best compares with your own company in terms of industry, size and geographical location. Compare the salaries across similar positions by looking at job titles and job descriptions, then work out an “average” salary. How does it compare?
- Look within your own organisation to compare salaries. Compare roles at a similar level and consider whether there are any pay gaps relating to gender, age, race or ethnicity. Identify and rectify any gaps.
- Consider each position’s internal value to the company ie, how much a position contributes to the company’s success. Typically, those positions that directly impact business objectives are paid a higher salary than those that don’t.
- After examining salaries both inside and outside the organisation, you should have a fairly clear idea of the value of each position within the company and can begin individual salary assessments.
- Undertake individual employee performance reviews. Assess whether the employee is meeting or exceeding job requirements. If not, what training and mentoring is required? If the employee is exceeding expectations, then consider fairly compensating for this effort.
- As well as financial remuneration, consider whether the following benefits would be suitable for the well-performing employee: flexible hours, extra holidays, health insurance, etc.
- By regularly undertaking salary reviews, companies are able to stay competitive, attracting and retaining top talent, while also maintaining cost efficiencies and ensuring a positive company culture.
Determining a fair and equitable salary that’s personally tailored to the individual employee can be difficult, even with these detailed salary review processes in place. For assistance with salary reviews, get in touch with the HR Dept. We can simplify the process to assist your business.