Salary review is when employers pay particular attention to their employees’ wages annually or bi-annually. It aims to determine whether there are any disparities among employees for similar jobs and alleviate any perceived imbalance. Salary reviews act as morale boosters for employees who see their achievements recognized. Employers can also use them to identify gaps in their business operations, such as areas where staffing changes may be needed or where general compensation practices need updating.
Timely salary reviews are essential for company growth and to create a high-performing team. When leadership acknowledges the employees’ performances and does salary reviews to compensate them, it results in employee satisfaction. Here are a few important things that salary review impacts-
Most companies conduct yearly salary reviews. However, doing salary reviews every six months can also be a good idea for companies that want to focus on employee satisfaction. Salary reviews don’t necessarily mean a salary hike; they mean employees’ salaries will be compared to the market standard and their responsibilities. Then, if they are paid unfairly, the salary will be reviewed.
Salary reviews can be a hectic process for HRs, but preparing for it beforehand can make the process less complicated. Here are a few things you can do to prepare for a salary review:
HRs can make fair salary decisions by thoroughly preparing the budget, process, and individual reviews.
While salary review deals with reviewing the salary structure of employees and ensuring fair compensation according to industry standards, salary increase deals with hiking the salary. A salary review can also lead to a reduced salary for an employee, while a salary increase can only lead to a hike.
Yes, consistent salary reviews ensure that employees are given competitive salaries. It also creates an atmosphere of trust, wherein employees feel like they are being appreciated enough for their work.
Employees who feel they are being paid fairly will stay in the organization. Salary reviews reflect the fact that the company cares enough to compensate them for their hard work.
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