Why a performance review isn’t a salary review

In most organisations, performance reviews are a standard part of the employer / employee relationship. Their structure and length varies tremendously across different employers and employment sectors, but they’re almost always accepted as an important method of communication.

An issue that is perhaps on almost everyone’s mind before a review meeting – and often at many other times – is that of salary. Our annual income is such an important aspect of our everyday lives, with fundamental social and practical implications, and yet is something that most of us feel uncomfortable talking about, except perhaps when first accepting a job offer. We attend a job interview, are offered a job, perhaps negotiate a salary, and in most cases are then – in theory – supposed to work uncomplainingly for the same salary indefinitely.

Many workers forget that a key aspect of the review is to determine exactly how well the employer and employee are working together, and that it can and should be a two-way process. The employer will ask the employee how well they feel they’re doing their job and how it could be improved upon, whilst the employee should be asking what the employer can do to improve the way they work. Both employee and manager will usually fill in a form before the review as preparation and questions asked will usually include:

– Does the employee work to their full potential?

– Is the quality of work sufficient?

– Are they communicating with teammates effectively?

– Are their technical skills up-to-date?

– Are they honest / dependable / punctual?

– Have they met any goals set at previous appraisal(s)?

The employee should be thinking rather differently:

– What’s stopping me doing my job to the best of my abilities?

– What training might help me to do my job better?

– What are my strengths, and what areas would I like to focus on for the next x months?

An annual performance review is one of the few times that we will have dedicated one-on-one time with your manager and will talk about exactly how well they feel we’re doing your job, and so seems an ideal forum to ask the question “Can I have a pay rise?”. Whilst it may be a good time to raise the possibility of an increase – and successfully asking for a salary pay increase is something that this article will touch on later – sadly your performance review is just not the time to negotiate. Why? Well, this page goes into some detail, but the most important points are:

– Unless the employee warns the reviewer in advance that you intend to discuss your salary, they won’t expect it and will likely be unprepared themselves. They are there to discuss performance, not salary.

– They very likely won’t have the authority to grant the raise. Salary increases must usually be factored into budgets – often with the involvement of the finance department – and it’s very unlikely that the manager would be able to say ‘yes’ at the time, even if they wanted to.

– Preparing to ask for a salary review is a process which needs full consideration (see below). To try to justify a salary increase in the – likely limited – time slot allotted to a performance review is unlikely to see the employee putting themselves forward in your best light.

Instead of asking for an increase then, we might instead ask ‘what would I have to do to get a pay increase?’ If the reviewer answers positively, the employee will then have specific, measurable goals to work towards.

So how should we ask for a pay rise? As with anything, prepare as much as possible by:

– Researching the local market pay rates for the job. If the worker is already relatively well paid, they will need to think carefully how to justify an increase.

– Reading the company handbook – if there is one – to become familiar with company practise for pay rises.

– Making a list of accomplished goals and how they may have contributed to the overall purpose of the company.

– Keeping the manager on side – threatening to leave will likely not be productive.

– Clearly setting out reasons why the increase is deserved and being specific about the increase.

As with most things, the more initial planning and preparation the employee puts in personal development plan, the more likely a successful outcome.

Whilst the performance review itself is not the time to establish a pay rise, it may be an appropriate forum to raise the possibility of a raise, and if the right questions are asked can strengthen a future argument. Regardless, if both employer and employee put time and effort into the planning and execution of the review, it can be an extremely rewarding process for both parties.