Business issues
Undertaking a pay review requires thinking about the business as a whole. Increasing pay will have an impact on your costs: for example certain parts of the business may need higher pay increases than others it could be that the businessis suffering considerable contraction along with the market place, as pressures in the economy or overseas are driving the business to change its structure.
Your business may be re-engineering itself to fit the needs of the marketplace or the products that you produce, or the services that you sell are going through considerable change. All of these will have an impact on your business, its finances and ultimately its ability to afford a pay increase.
Examples of the questions that you need to consider when undertaking a pay review are:
* What are the sales and profit forecasts for the business, how are they changing compared with last year, how realistic are they when considered in the current environment based on present performance and the state of the markets?
* Do you need more or less output from your business?
* What are the opportunities to increase prices and/or productivity to pay for the pay increase?
There may be many more, according to your circumstances.
A pay review cannot be undertaken in isolation and failure to give your business issues sufficient consideration is likely to result in problems later, either in the pay review process or, more seriously, in the business in the forthcoming year or period of the pay review.