What is a salary review?

Salary reviews help employers promote equity and fairness in the workplace and drive employee satisfaction.

  • What is a salary review?

  • Why is a salary review important?

  • How to conduct a salary review

  • Salary reviews for global teams

What is a salary review?

A salary review is a reassessment of an employee’s rate of pay, either on an individual basis or as part of a company-wide reevaluation of compensation. The primary aim is to ensure that the employee’s wages align with their job responsibilities, performance, skills, experience, and industry market rates.

Salary reviews may be commissioned on an ongoing basis (i.e. once a year), usually in tandem with performance reviews. However, some companies may choose to review salaries more frequently, such as bi-annually or even quarterly. 

Why is a salary review important?

Salary reviews are beneficial for both employers and employees. They help to:

  • Maintain a balanced payroll

  • Drive employee satisfaction

  • Promote equity and fairness

  • Retain top talent (especially in competitive roles and industries)

  • Foster a more productive, high-performance environment

How to conduct a salary review

To conduct a salary review, you should:

Plan ahead. Define the goals of the review, as well as the expected timeline and resources needed. The plan should be clear, achievable, and in line with your organization's wider compensation strategy.

Collect data. Take time to gather all the relevant data, including current salaries, job descriptions, employee performance data, and benefits. For global organizations, it's important to also collect benchmark data on local labor markets and costs of living, as well as employment laws in your employees’ countries.

Research the market. Understand the current market rates for different roles in various locations. This information can be obtained from salary surveys, industry reports, or recruitment agencies.

Analyze and compare. Using this data, compare your employees' salaries against market rates, considering factors such as experience, skills, and performance. For global teams, remember to also account for local factors like the cost of living.

Make a decision. Based on your analysis, decide if any adjustments to salaries are necessary. Consider the organization's budget and strategic goals. If a pay increase is warranted but not currently feasible, explore other forms of compensation or benefits.

Communicate your findings. Communicate the outcomes of the salary review to your employees. Whether their salaries are increased, decreased, or remain the same, they should understand the reasoning behind these decisions. Transparency is essential.

Implement the changes. Begin the process of adjusting the pay rates, altering job descriptions, or modifying benefits packages.

Salary reviews for global teams

Conducting a salary review for a global team can be a highly complex task. You need to consider numerous variables, including employment legislation, cultural expectations, living costs, talent markets, and macroeconomic conditions. Unsurprisingly, these can vary significantly across different regions.

As a result, your business should aim to establish a structured and transparent global compensation program. These programs should incorporate regular salary reviews to uphold equity and fairness and continuously incentivize high performance.

Expert advice

How it works

  • Plan and gather data: Set goals, collect salary info, performance reviews, and market research.

  • Analyze and compare: Check how salaries stack up against market rates and internal metrics.

  • Make decisions: Adjust pay, consider alternative rewards, or maintain current rates based on budget and analysis.

  • Communicate: Clearly explain decisions to employees, even if salaries stay the same.

  • Implement changes: Adjust pay rates, update job descriptions, or modify benefits.

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