A salary review is the meeting, or the spreadsheet, where a company decides each employee's pay for the coming period, and in a company that runs an appraisal cycle it follows the calibration meeting by a week or two and takes its input from it. A compensation review, or comp review, is the same exercise seen from the finance side: the total cost of the decisions against the budget. The two names describe one table, and the table needs the same columns whichever name it goes by. This page sets out how a company of ten to two hundred runs the review, what a salary review template or compensation review template carries per employee, and how the review keeps three different kinds of rise from being paid as one unexplained number.
The order of events
Appraisals are written and calibrated. The merit matrix is applied to the calibrated ratings and costed against the merit budget. Any market adjustments to ranges are decided separately, from pay data the company has chosen to use, and any promotions are decided as role changes with their own new range. The salary review is where those three streams meet for each employee and the new salary is set, and where the total is checked against the budget once more. Only then is the outcome sheet finalised and the merit increase written into the employee's record.
What the template carries per employee
Name and role. Current salary and its position in the range. The calibrated rating. The matrix percentage and the merit increase in money. Any market adjustment, shown on its own line with its reason. Any promotion, shown as a new role and range. The new salary, the total increase and the percentage. A comment column for the reason where the outcome departs from the matrix, because a review that departs from its own rule without a written reason is a review that will not survive the question. The free final comments worksheet on this site works one row of that table from the rating and the current salary.
Keeping merit, market and promotion apart
An employee told they received a six per cent rise learns nothing about which part was for their performance; an employee told they received three per cent merit for an exceeds rating, two per cent because the role's range moved with the market, and one per cent to bring them toward the midpoint, learns exactly how the company thinks about pay. Keeping the streams apart on the template and on the outcome sheet is what makes the appraisal's rating mean something in money. Reviewvo Pro records the merit increase against the employee's cycle record and exports it, so the salary review and the review conversation agree.
Questions people ask about salary review
What is the difference between a salary review and a compensation review?
They are one exercise. Salary review is the per-employee decision on pay for the coming period; compensation review, or comp review, is the same table read as a total against the budget.
What should a salary review template include?
Current salary and position in range, the calibrated rating, the merit percentage and amount, any market adjustment and any promotion on their own lines, the new salary and total increase, and a comment where the outcome departs from the matrix.
When does the salary review happen in the cycle?
After the appraisals are written and calibrated and the merit matrix has been applied and costed, and before the outcome sheets are finalised and the review conversations are held.