Annual Salary Reviews in times of Crisis

At Strategic Pay, we know money is tight given the current environment, and restraint during the annual salary review will be required in most organisations. Our experience with remuneration and rewards indicates that instead of across the board increases (including zero increases), organisations should be targeting specific groups. With highly restrained pay review budgets, alternative approaches to the annual salary review will need careful thought and complex modeling to ensure the limited budget is distributed appropriately.

Three areas merit special attention when considering your annual salary review in this environment:

  • Low paid and front line staff

Low paid can mean a pay level close to the minimum wage but also covers low in comparison to the rest of the organisation/market. Front line roles have often borne the brunt of the pandemic environment and may well have changed as a result of this. This is an ideal time to ensure that internal relativities are clearly understood and to identify how your current pay levels relate to the external market.

  • Equity reviews

Focussing salary increases where there are obvious inequities will go some way towards adjusting pay inequity and will need careful analysis to ensure appropriate allocation of the limited salary review budget.

An accurate and independent assessment of what your organisation’s jobs are worth is fundamental to ensuring your internal relativities are correct and to ensure you are paying equitably.

Our meta-analysis shows, however, that considering base pay alone is not enough as gender disadvantage is sometimes identified only when you include benefits, incentives, and other forms of reward in the analysis. To fully understand disadvantage you need to have a comprehensive set of information to enable the data to be modeled and tested on a complex range of factors, including considering the total reward package – benefits, opportunity, overall treatment at work, as well as considering inequity by gender, ethnicity, and potentially other criteria.

  • Retention

Retention of critical and high performing employees will be very important for organisations in the current environment to ensure your organisation can continue delivering on its mission.

In your analysis for allocating the limited annual salary review budget, you should specifically identify business-critical and high performing roles and employees to ensure you monitor these groups and take any action deemed essential to retain them.

Strategic Pay can provide support for the above using a full range of models and frameworks, tools and resources including varied job sizing approaches, comprehensive New Zealand remuneration market information and independent advice based on extensive experience, our salary management, and remuneration modeling software, RemWise, gender equity analysis tools, and expertise, and our breadth and depth of knowledge about the New Zealand rewards and remuneration scene.

Now it is more important than ever to stay in the loop and understand the best practice annual salary review processes. With this in mind, we have created our new “Annual Salary Reviews in times of Crisis” workshop. This 90-minute session will help you gain an understanding of the different approaches to the annual salary review and enhance your capability to make objective remuneration decisions considering timing, how to distribute the salary budget fairly and how to identify and retain critical employees in a time of limited resources. 

Contact us at or regional contact details can be found here.

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