Salary Review Checklist
A systematic salary review process ensures fair compensation, maintains competitiveness, and supports employee retention. This comprehensive checklist guides HR professionals and managers through structured salary review and adjustment procedures, helping organizations determine fair pay, retain high-performing employees, and engage underperforming workers to increase productivity.
Using a detailed checklist helps ensure that salary adjustments are based on objective performance data, market trends, and internal equity—minimizing bias and supporting transparent compensation practices.
It also facilitates consistent communication with employees about compensation decisions, career progression, and expectations, strengthening trust and motivation across the workforce.
``Strategic Value of Salary Reviews
* Organizations with structured compensation review processes experience 31% lower voluntary turnover and 14% higher employee engagement compared to those without formalized salary review procedures.
Preparation and Budget Planning
Establish the foundation for a successful salary review process with proper planning and budget analysis.
Budget Analysis
Employee Prioritization
Process Planning
Market Benchmarking and Analysis
Research and analyze current market rates to ensure competitive compensation levels.
External Market Analysis
Position Benchmarking
Compensation Gap Analysis
Employee Performance Evaluation
Thoroughly assess individual performance as a foundation for compensation decisions.
Self-Evaluation Collection
Performance Metrics Review
Qualitative Assessment
Salary Adjustment Analysis
Determine appropriate salary adjustments based on multiple factors.
Current Compensation Review
Adjustment Factors
Decision Documentation
Best Practice
Create a salary adjustment matrix that factors in both performance ratings and position in salary range to ensure consistent and fair decision-making across the organization.
Internal Equity Evaluation
Ensure fairness and consistency across the organization.
Peer Comparison
Demographic Analysis
Communication and Implementation
Effectively communicate and implement salary adjustments.
Manager Preparation
Employee Communication
Communication Best Practices
Salary Review Template Example
Employee Salary Review Form
Employee Name: [Employee Name]
Position: [Job Title]
Department: [Department]
Current Salary: $[Current Amount]
Last Review Date: [MM/DD/YYYY]
Time in Position: [Years/Months]
Performance Rating: [Rating] - [Brief Description]
Market Position: [X]% of market median for similar roles
Key Accomplishments: [Brief description of major achievements]
Recommended Adjustment: [X]% increase
New Salary: $[New Amount]
Effective Date: [MM/DD/YYYY]
Justification: [Brief explanation of adjustment rationale]
Approvals Required: [List of approvers]
Salary Review Best Practices
Consistent Schedule
Conduct salary reviews on a regular, predictable schedule to set proper expectations and ensure all employees are evaluated under similar market conditions.
Multi-Factor Approach
Base decisions on multiple factors including performance, market data, internal equity, and business conditions rather than relying on a single metric.
Transparent Process
Communicate the review process, timeline, and decision criteria clearly to build trust and manage expectations effectively.
Documentation
Maintain thorough documentation of all decisions, justifications, and communications to ensure consistency and defend decisions if challenged.
