29 Sep How to evaluate when staff should get a pay rise?
As staff improve their performance and skills, they will expect to be rewarded. Pay rises will help to boost the morale of staff and help them to feel valued – motivating them to work hard. It will also increase company loyalty and help you to retain good, well-qualified staff who know and understand your company. Recruiting new staff is costly – sometimes as much as 20% of a staff member’s annual salary. It makes financial sense to retain staff with a regular pay rise.
Are your staff entitled to a pay rise?
In the UK, employees are not entitled to yearly pay rises. It is entirely at the discretion of an employer. However, it is common for most companies to give an incremental rise each year. Companies will often review pay in either January (to follow the financial year) or in April (to follow the tax year) but there is again no requirement to follow this time scale.
Staff may approach you themselves to ask for a pay rise and it is down to you to evaluate whether you will accept their request. So how do you evaluate when staff should get a pay rise?
Start by looking at the data you have available to you. When did the staff member last have a rise? How much was it? Is it reasonable that they should ask for a rise at this time?
Consider the performance management targets you may have set staff in the past. What goals have they been working towards? Have they achieved these goals? How much value have they added to the company over the last year? Have they undertaken professional development to upskill?
Consider the attitude of the employee. Do they consistently work their hardest in the role? Are they punctual? Do they have a positive attitude that motivates those around them? Some of your staff may add more value to your business than just sales.
How long have they worked in the company? Moving from job to job is common. If they have worked in your company for a long period, has this been recognised?
How you choose to issue pay rises and when you choose to issue them is entirely up to you. Ultimately, to retain good staff, they need to feel that they are valued. A consistent, regular schedule for evaluating and rewarding pay rises will help staff to feel secure in their job.
Do you have a pay policy in place? If you’d like support creating a pay structure for your business get in touch for a free no-obligation chat with one of our professional HR advisors.