Performance reviews and salary reviews – there is a difference

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. However, new employees often take this as a virtual guarantee of a salary rise in the near future.

The impression the employer gives is that accepting the offer on the table today is a mere formality that he or she will correct at the first review. Of course, there is never 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.

But this approach does 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.

First, 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 more for simply meeting the job requirements. Additionally, your first six months, and up to 12 months in any new role can often 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 into 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.

Read more of the latest industry tips and insights by accessing our 2023 Salary Guide.

When should I ask for a salary review?

A performance review may be a good place to initiate a discussion for a higher salary or 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 express when 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 and critique.

Related: How to negotiate a higher salary

Job performance success can be its own reward

Even though an individual’s performance may be 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.

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 also be a way to improve your work-life balance which can be another form of increased benefit to reward success.

Management recognition, leadership development or exciting new projects can sometimes provide greater job satisfaction. Recognition of outstanding performance can be just as important to us as salary, so don’t take these things lightly.

 

You can calculate the average salary for your job role with the Robert Half Salary Guide Calculator, or you can contact one of our experts today.