Is your pay fair or are you just making it up?

You’re staring at your payroll spreadsheet thinking, “Hmm… is this fair? Or are we just making it up as we go?”

Paying people fairly is not just about being nice. It is about keeping your best people from wandering off to someone who is paying attention to the market. The easiest way to do that? Stop guessing. Start using data.

1. Start with the right comparisons

Salaries do not grow evenly like weeds in a garden. Some roles shoot up in value fast, others barely budge for years. Benchmark by industry, role, location and company size. Compare apples to apples not apples to mangos in another postcode.

2. Get good intel

That salary survey you found from 2018? Bin it. Use fresh sources such as industry reports, salary surveys, government stats and recruitment agencies. The more current the data, the fewer awkward pay conversations you will have later.

3. Use salary bands to stay consistent

A clear range for each role stops random pay jumps, keeps things consistent and shows new hires you have a system. It also stops the “Bob got more because he asked” problem before it starts.

4. Pay fairly, not just more

Throwing money at the problem is not a plan. Pay people in line with the market and make sure everyone is included in annual reviews. Mix competitive base pay with performance bonuses, benefits and flexibility. Sometimes an extra day off is worth more than a pay bump.

5. Experience and education count

Your junior who has been here six months should not be on the same pay as your senior who has been holding things together for ten years. Fair means recognising skills and contribution.

6. Communicate before the grapevine does

Be clear about when reviews happen, how decisions are made and why the numbers are what they are. No one likes surprises unless it is a good one.

7. Review every year

Annual reviews keep you in line with the market, help with budget planning and show your team you are not in set and forget mode.

Extra ideas from real world stories

Let employees set their own pay

Semco in Brazil has done this since the 80s. They share company profits and market data, then let staff choose their salaries. One guy asked for triple and they agreed but created a bigger role to match it. It works in cultures with serious trust.

Paying low performers fairly

Do not leave them out of yearly salary reviews. Research shows that small increases can motivate lower performers more than top performers. It can lift overall results and stop constant rehiring.

Quick checklist for salary reviews

✅ Know your benchmarks

✅ Use fresh and reliable data

✅ Set clear salary bands

✅ Recognise skills and experience

✅ Be transparent about the process

✅ Keep reviews annual

✅ Think about unconventional options like self set pay or targeted boosts for low performers

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