1 mins readSalary review is the periodic assessment of employee pay to determine increases, adjustments, or restructuring. A salary review sets pay actions based on performance, market data, legal requirements, and budget.
What is Salary Review
A salary review is a formal HR process that evaluates base pay and total compensation. It aligns pay with role value, individual performance, and external market benchmarks to keep compensation competitive and fair within the organization.
How does it work
Typical steps include collecting performance ratings, running market benchmarking, applying pay policies, and approving changes through payroll. Outcomes may be merit increases, promotional adjustments, cost of living updates, or corrective pay actions.
Salary reviews translate performance and market data into pay decisions.
Practical usage and examples
HR teams use salary reviews for annual pay cycles, midyear corrections, and equity audits. Recruiters and hiring managers reference review outcomes to set offer ranges and negotiate hires. Payroll implements approved changes and ensures compliance with tax and employment law.
- Annual merit review following performance cycle
- Market adjustment after benchmarking shows pay lag
- Equity correction to resolve pay gaps
Related concepts
Related terms include compensation strategy, pay equity, market benchmarking, salary bands, and total rewards. These concepts guide the structure and rationale behind salary reviews.