Time to Prep for Year-End Salary Reviews

[Fit Small Business | ]( HR Insights from Our Experts With only a few weeks left before we say goodbye to 2023, now is the ideal time to prepare for the upcoming year-end salary reviews. There are many factors that impact employee compensation changes—from the worker’s annual performance rating to your company’s salary budget. Regardless of the parameters and tools used, what’s important is that you conduct a fair and efficient salary review process to reward high-performing employees while improving employee engagement and retention. Read on for tips on how to conduct a salary review. Top Articles: - [6 Best Salary Comparison Tools]( - [Pay Equity: Small Business Guide to Equal Pay for Equal Work]( - [How to Do a Performance Review: A Guide for Employers](                 Why Are Salary Reviews Important?   Conducting salary reviews is an important part of managing employees, as it lets you assess whether a team member’s compensation is an accurate reflection of his or her performance at work. It also provides you with an opportunity to do a market check to help you gauge if your compensation package is at par, below, or above similar companies in the same industry. Knowing how your employee salaries compare with competitors enables you to attract, engage, and retain workers. [Why Are Salary Reviews Important?] If you have a compensation analyst or HR expert, you can do the market study and salary comparison in-house. If you don’t, there are a variety of salary comparison tools you can use (some of which are even free), providing you access to a wide range of compensation and benefits data across different job types and skills. Read more: [6 Best Salary Comparison Tools](         [Do more with your HR and Payroll]( Read the new eBook by Paylocity futurist-in-residence Elatia Abate to learn why the leadership paradigms of old are due for a fundamental overhaul. Includes a Companion Guide with reflective questions and exercises to help you and your team navigate the evolving work environment. [Do More with Your HR and Payroll](         Tips for Conducting Salary Reviews   Performing regular salary market analyses is an integral part of implementing annual salary reviews. Below are other strategies you can follow to conduct a fair and effective salary review. - Set up a compensation budget for the year that takes into account all planned salary changes and the forecasted labor costs for new positions that will be filled up in the same year. - Establish an annual salary review cycle and stick to the identified schedules. Creating an annual salary review policy is also ideal, as this document will help guide you on what to do, when to do it, and the persons involved in the entire process. - Use a performance review tool that either integrates with a compensation solution or has a built-in salary planning module. This allows you to streamline and manage goal-setting and performance review processes, including salary assessments. - Run regular internal compensation analyses to identify salary disparities between your workers. This helps ensure compliance with pay equity regulations.     Should I Care About Pay Equity?   If you get pay equity wrong, you may find yourself dealing with some legal implications. There are laws that cover this and non-compliance can lead to costly lawsuits and fines. Plus, if your company’s pay structure is fair and equitable, you get a better chance of retaining, engaging, and rewarding top talents. Read more: [Pay Equity: Small Business Guide to Equal Pay for Equal Work]( Did You Know? Pay equity does not mean equal pay for every worker. Salary differences between employees can exist and are based on several factors like skills, education, work experience, tenure, and performance.     Why Use Performance Appraisals for Salary Reviews   Year-end performance review ratings are an important data source for salary reviews. This prevents you from giving pay increases based on your “gut feel,” helping you to avoid potential pay disparity and discrimination issues. If you want to build a company culture that pays for performance, it’s critical that you conduct annual performance reviews. Not only is it a good way for people managers to communicate with each member of their team about their work output versus the identified goals for the year, but it also allows both to identify challenges and development opportunities. So, before conducting performance reviews, give yourself and your employees enough time to prepare. Take note of all accomplishments, including missed goals and roadblocks. You may also want to collect feedback from peers and other managers for a holistic review. Read more: [How to Do a Performance Review: A Guide for Employers](     What’s new in HR? Check out some of our latest HR content:   [Employee Retention Strategies to Keep Your Top Talent]( While the simplest approach to retaining employees is to offer a competitive salary package, there are other factors that impact staff engagement and retention. In this article, we tackle 14 employee retention strategies that will encourage employees to stay and achieve their goals within your company. [READ MORE]( [Best Workforce Management Software]( Regardless of the size of your workforce, handling employees and HR administrative processes for managing teams can be challenging for any business owner. With a workforce management system, you can simplify day-to-day processes, from scheduling staff shifts to tracking attendance and monitoring labor costs. In this guide, we evaluated some of the most popular workforce management tools and chose the top six providers for small businesses. [READ MORE](         Meet Fit Small Business’ HR & Payroll Experts   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [Heather Landau]( [Jennifer Soper]( [Robie Ann Ferrer](   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Want to Join Our HR Community? Check us out on LinkedIn! [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [Juvy Vallescas]( [Genevieve Que](   Want to know whether health benefits costs will increase or decrease in 2024? Watch out for next week’s newsletter as we tackle cost projections and the reason behind the expected changes. Until next time, Heather Landau, Jennifer Soper, Robie Ann Ferrer, Juvy Vallescas, and Genevieve Que [Alternate text] Want to change what you receive in your inbox? 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