The difference between performance reviews and salary reviews, and how to ask for a salary increase
CREDIT: This is an edited version of an article that originally appeared on Robert Half
Does a performance review mean a salary increase? Not always. When invited for a performance review it’s important to keep in mind that a salary review is often a separate conversation.
The six-month review
It isn’t uncommon for an employer to mention a six-month performance review as a salve for a potential employee’s disappointment at the salary provided in the job offer; new employees often take this as a virtual guarantee of a salary rise in the near future.
However, although the impression the employer gives, that accepting the offer on the table today is a mere formality that he or she will correct at the first review, is misleading – of course, there is never any such a guarantee. Three, six, nine and 12-month performance reviews are pretty standard in any business, so the employer isn’t necessarily promising anything more than the normal working arrangement.
This approach can lead to an unrealistic expectation that salary increases are a routine and systematic result of performance reviews. Whether you’re currently looking for a new job, or an employer, it’s important to be clear on exactly what you’re agreeing to at this stage. Will the meeting review performance, or salary?
Good performance doesn’t equal a salary increase
Even if there is firm assurance that the six-month review is linked to salary review, it doesn’t mean the business has to agree to a pay rise when the time comes. Firstly, average performance may not be enough to start a salary negotiation. If the employee’s performance is merely ‘good’ or ‘adequate’, it’s unlikely your manager will want to pay you more for simply meeting the requirements of the job.
Secondly, your first six months – and even up to 12 months – in any new role can require a large amount of learning – including learning new systems, process and building relationships with key stakeholders. This can sometimes mean that the full potential value your employer expects from you may take some time to come to fruition.
For an employer to see the benefit of increasing your salary, the performance review needs to demonstrate how the employee delivers above the expected value to the business – and that means above average, or exceptional, performance.
When should you ask for a salary review?
A performance review may be a good place to initiate a discussion about a higher salary or to propose a salary review – but, when you eventually have the meeting, it will be up to you to make the case. This is when you can pull out results you have achieved along with recent awards and recognition. It’s an opportunity to bring forward evidence that you have delivered extra value above and beyond your job description.
Just be aware that, even if your employer agrees with your case, they still may be unable to give you what you’re asking for – for now at least. It’s often an ongoing conversation and it’s important that you stay open-minded and ready to take on suggestions. Even if an individual’s performance is exceptional, if the business overall is doing less well, it might be damaging to award a pay rise. The bottom line will always win in any salary discussion.
Job performance success can be its own reward
Sometimes companies reward good performance in non-monetary ways. A more senior title, or a performance-related award, can boost future chances of promotion or career advancement. Flexible benefits or remote working may be a way to improve your work-life balance – which can be another form of extra benefit to reward success.
Management recognition, leadership development or exciting new projects can sometimes provide great job satisfaction – recognition of outstanding performance can be just as important to us as salary, so don’t take these things lightly.
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