A compensation review decides salary increases, promotions and bonuses in one cycle. How to set the budget, give managers guidelines they can apply, check for pay equity, and communicate the outcome.
A compensation review — often called the annual salary review or pay review — is the cycle in which a company decides pay increases, promotions and variable pay for everyone at once. Running it as a single, structured cycle rather than as individual negotiations through the year is what keeps pay consistent and the budget under control. It is also where most pay inequities are either corrected or quietly made worse, depending on how carefully the review is run.
A merit matrix gives the largest increases to strong performers who are low in their band, and smaller increases to people already high in their band, even with a strong rating. That keeps pay moving towards the market midpoint for good performers without pushing salaries far above the band maximum. Keep the matrix simple enough to explain in a sentence, because managers have to defend its outcome in conversations with their teams.
Run a pay equity check before approval, not after. Compare increases and resulting pay by gender and other protected characteristics within the same level; unexplained gaps are far easier to fix in the proposal spreadsheet than in the payroll.
Ettex Sheets can carry a small or mid-size compensation review end to end: an employee table with current pay, rating and compa-ratio from the salary bands, a merit matrix that suggests the increase range, manager input columns, and budget totals by team that update as proposals change. Keeping the reviewed sheet as the record of the cycle gives next year's review, and any pay equity audit, a clear starting point.
A salary review focuses on base pay. A compensation review covers the full package: base pay, bonuses, equity and sometimes benefits.
It depends on market movement and the company's finances, but it should be set with finance at the start of the cycle and split between merit, promotions and market corrections.
Usually once a year, timed after performance reviews and before the new financial year, so ratings are available and increases can be budgeted.
Salary bands set the minimum, midpoint and maximum pay for each level of role. How to build salary bands from market data, how wide to make them, and how to handle people who fall outside their band.
Workforce planning compares the skills and headcount a business will need with what it has, then closes the gap on purpose. A practical process, the numbers to use, and the mistakes that turn it into a spreadsheet nobody trusts.
Headcount planning decides how many positions each team gets, what they cost and when they are filled. How to build a headcount plan, keep it reconciled to the budget, and handle changes during the year.