How to conduct a pay review
Author: Sarah Welfare
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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.