Base Salary Review

The base salaries are reviewed regularly as the it is a part of the market practice. The organizations have to conduct the salary review to keep their salaries competitive and to increase the personal income of their employees.

The salary review is the review of the base salary, it is not a promise to make the salary increase for the individual employee. The company monitors the job market and its financial results and the top management makes a final decision about the salary review.

The salary review depends mainly on the conditions on the job market and the financial situation of the organization than the inflation. The base salary review should not be based on the inflation as the inflation does not reflect the increased performance of the organization.

The salary review should reflect the improved skills and competencies of the employees and the increased value of the employee for the organization. The salary review should not be directly linked with the performance of the employee as the reward for the performance is paid in the bonus.

The salary review has to be formalized as the managers have to follow the compensation policy and the compensation policy is driven by the compensation strategy. The managers are not allowed to distribute the allocated funds freely, but they have to follow the basic principles and they can make small adjustments. The manager has to be able to explain the reasons for the salary review to the employee.