Pay Reviews: When should they be considered and how often?

One of our experienced Reward recruiters’, Leigh David, discusses the importance of pay increases and when they should be considered.

The pay review is a vital part of the reward cycle and the majority of medium to large organisations go through this process at least once a year. The resulting pay rise can be determined through cost-of-living increases for all employees, company performance, or as a reflection of finely differentiated individual increases based on performance or progression.

However, as an employee in the UK, there is no legal entitlement for a yearly pay rise — even an incremental pay rise in line with inflation. So, what does this mean for an employee?

Generally, you can expect to discuss compensation or a pay rise at least every 12 months, however ultimately, it’s up to employers to choose whether – and when – to increase staff pay.


pay review, salary increase in 2019

UK workers are expected to receive a 0.8 per cent real-term salary increase in 2019, double the increase received in 2018.


For an organisation, employee salaries are a critical business decision – there’s so much to consider, including current and future company revenue, the annual budget, the impact of salaries on the team and future hiring processes. These decisions are just as crucial because of the impact salary has on the employee experience. When an organisation decides to increase an employee’s pay, this usually results in increased job satisfaction and productivity. However, for an employee to achieve a pay rise, they need to be able to accurately demonstrate their value and overall contribution to the business.


As an employee, value is everything:

While it’s true that money is not everything, an incentive or reward as recognition for a job well done goes a long way to helping an employee feel appreciated. Recognising their achievements monetarily is a sure-fire way of increasing productivity and happiness.

If an employee feels valued, they are less likely to look for another job. If your competitors are recognising the rising price of living and individual performance, and you aren’t, you are giving your employees a reason to consider a move.

Company performance bonuses help to install a sense of loyalty, pride and value for the organisation and raise morale.

However, salary budgets are set far in advance of one-on-one performance review meetings and shouldn’t just be considered once a year. An example of the best times to discuss a pay increase with your employees in order to add value are:


  1. When they take on new responsibility

This could be due to a variety of reasons. For example prior to a major, hard-to-staff assignment, when someone leaves and responsibilities are shifted to the employee, or when there is a change within the business that impacts your team.


  1. On completion of a successful project

New experiences or project work can often help increase an employee’s level of attractiveness on the market. When key skills are learned, or they’ve just experienced a triumph at work and
you’re discussing the next hill to climb, it’s a great opportunity to chat about compensation plans to incentivise development in the team and recognise their hard work.


  1. Three months before annual review

It’s better to be prepared if this is something likely to be discussed around review time. If you’re looking to discuss pay increase in conjunction with annual performance reviews, you’ve got to request the pay bump about 12 weeks in advance to get it approved in time. It adds to your value as an employer to think ahead when considering your team’s worth.
When do you think you should offer employees a pay increase, and how many times per year should it be reviewed? I’d love to hear your thoughts!



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Are you a candidate looking for your next role? Let us help you.

Alternatively, are you an organisation with a HR or Reward vacancy? Get in touch with us today. 


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