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How to conduct a pay review

Summary

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Decide objectives for the pay review, its scope and timescale.
Plan well in advance and ensure that the responsibilities and roles of the pay and benefits team, HR, finance and the organisation's leadership in carrying out the review are clear.
Check procedures where an agreement is being negotiated with a trade union and try to avoid surprises by having regular contact beforehand.
Gather and analyse information on factors relevant to the pay award such as inflation, market rates or comparable pay awards.
Work with finance colleagues to agree an outline budget for the settlement.
Decide the types of pay review that will be made.
Where a performance-based-settlement is being made, ensure that there is a robust method of assessing employee performance and support line managers in carrying out assessments and recommending awards.
Check the wording of employee contracts where a pay freeze is being proposed.
Check that the pay award does not lead to or perpetuate discrimination.
Pay attention to employee communications throughout the process and agree consistent messages about the pay review to employees throughout the process.
Ensure that the process is as transparent as possible.
When the pay award is finalised, write to employees to inform them of their pay increase and new salary from the effective date.
Review the process in order that it can be improved next time.