How to carry out a salary review?
The toughest task for a manager or a company owner is the setting of right amount as salary to all employees in the firm. Salary is a vital part that makes the talented staff to hold on in your company. Salary review is conducted in order to have a comparison of salaries given at your company to the salaries at other companies for every designation. By assessing it you can decide whether to make a change in the basic pay of your employees. The reviews should be prepared very accurately.
Evaluate assessment points
Salary review is conducted mainly on the basis of comparison. The salary range of the employees in your company should be compared with those provided in parallel companies. You should collect the salary information of at least 2 or 3 companies. You can directly contact the company and collect the information about salary for each designation. Or you can search in web. Some websites will provide general information on salary for every designation in your company. Compare the salary list of your company with collected information. You can then decide whether there is any need for changing the salary of any employee.
Evaluate performance of employee
Salary of an employee will depend on their performance at work. A well talented employee will certainly get a high designation and high salary. You should evaluate the performance of each employee every year. Performance review worksheet can be used to rate employees based on the same criteria. It will help you in deciding the salary for each worker in your company. The criteria for performance review include the employee’s contribution for the company, timeliness, perfection, co-operation and work as per the requirements. You can provide a self-evaluation form to all the employees and prepare the preview consolidating the filled forms. If you analyze any progress in the performance of any employee, you can make an increase in their salary.
Resolve salary
Increment in salary is an encouragement to the employee. If you notice a progress in the performance review of any employee, you should certainly encourage him/her by giving a high post or salary increase. While preparing salary review, an employee having poor review will not get any raise in his/her salary. An average performer should get 1 to 2 percent increment and 3 to 4 percent increment for an above-average worker. At least a 5 percent increment should be given to excellent performers.
Share the review
After preparing the salary review, it should be presented on behalf of all the employees in your company. Don’t forget to say the achievements by employees in the last year. You can suggest methods to improve the performance of weak performers without harassing them. Appreciate the excellent performers and encourage them to achieve more. As a conclusion present an overall review and announce the new salary of employees and the date from which it will be valid.
Salary review should be presented by either the manager or the owner of the firm. It should include an overall assessment of performance of all the employees and the achievements made by the company during the last year. Salary increment should be given to excellent and above average performers. It will keep the talented workers in your company. It is also useful idea to consult some fagforeninger (trade unions in Danish) so you can solve your problem easier and reduce the stress!
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