Common practices for pay rises and promotions

DontPanic · PayPerShop Newbie Joined: 05 Mar 2008 Posts: 2

Hello I'm new and live in the UK.
I have a question which I'm sure is not covered by the Law, but is probably a question of ethics. I've come here to see if anyone can tell me what practices are common.

Imagine a company who conducts employee performance reviews and salary adjustments every year in April.
I know nobody is legally entitled to a pay rise, but lets say that due to hard work and impressive results Mr Smith enjoys an average annual salary increase of 6%.
Each year he improves his performance and his potential enough to be awarded 6% each time his review comes round every April.

One year Mr Smith gets promoted in December and is given a new salary �3000 above his existing salary. The promotion comes with more responsibilities and Mr Smith continues his new role with even more enthusiasm and success than before. Again when April comes around his results are as impressive as they have always been and he looks forward to his salary review.

There are now a number of outcomes after his review that would affect his salary:

1. Even though his review shows he has improved significantly over the last 12 months his boss explains that he has only been in his new position for 4 months (a third of a year) so can only be given a third of his usual raise. Therefore he is awarded a 2% salary increase.

2. His boss recognises Mr Smith's commitment over the last 12 months by awarding him his usual 6% increase. After all, a salary increase and a promotion are separate things.

3. His boss realises that 6% of Mr Smith's new salary is quite a large increase. So his boss calculates a midpoint based on the two different salaries in the past year. This works out as an annual salary increase of 4.1%

Does anyone know which is the most common practice amongst employers?

If option 1 is common, I can understand it, but I'm struggling to understand how it could be fair. Surely the company should reward Mr Smith separately from the promotion based on 12 months of exemplary performance? If the company had given the promotion at the end of March they could effectively refuse to give (get away without having to give) an annual pay rise.

Again I realise the company is completely within their rights to award salary increases at their discretion depending on their internal policies and procedures. But please take this example as a hypothetical situation.

Thanks
Richard

Ian Whyteside

Richard,

This is quite a detailed set of possibilities but fundamentally an employer does have the right to award rises and promotions in that manner which fits the terms and conditions.

It would be wonderful if the employer in this case had clear and unambiguous terms which set out exactly how the awards are dealt with in these circumstances because, surprising as it may seem, it is not unusual for employees to be promoted part way through the annual period.

Unfortunately very few employers will have such clear terms and conditions and hence some interpretation will be needed.

Firstly, whatever they do has to be fair and it ought to be equitable so that employees in one part of the organisation who have been promoted can expect to be treated in the same manner as those in another part of the company. Sadly, again, this is not always the case.

Secondly, whatever happens to one employee ought to have happened in the past, in other words custom and practice. There should not be a completely new occurrence, there must have been a similar situation from the past which can be used and applied now.

Again, sadly, this may not help either because it depends on the new manager being prepared to bear the cost of an increase generated from the employees previous work for a different manager.

All I can suggest is that the person affected by such a hypothetical situation should prepare their own estimate of what would be fare in their circumstances and to present this to the manager as an alternative to whatever is being proposed.

There is no guarantee that this would be agreed to but there may be a compromise to be reached if people are willing.

Ian whyteside

DontPanic · PayPerShop Newbie Joined: 05 Mar 2008 Posts: 2

Many thanks Ian.
That answers my question from a balanced and fair viewpoint. I shall advise Mr Smith to proceed as you suggest.

Richard