Understanding
your Total Rewards
In Parts 1 and 2 we explained how you are rewarded and how we determine your Base Pay.
In this part of the series, we explain when we review your Total Rewards and how we make Base Pay increase decisions in a fair and equitable way.
At the beginning of each year, alongside your Total Rewards team, leaders review the Base Pay for non-negotiated employees and incentives for all employees. This is when we decide annual Base Pay increases and incentive allocation for these groups that usually then take effect in April*. Many different groups and steps are involved in this process. Some key milestones that are helpful for you to know are:
Your annual performance review will take place, confirming your Performance Rating
Using your Compa Ratio and Performance Rating, we recommend your Base Pay increase
A final decision is made on increases by the Total Rewards team alongside leadership in your country
Your manager will then confirm if you have been awarded an increase in February-March each year
Any increase you receive comes into effect in April each year
* Timings may differ if you’re part of a negotiated population or Works Council.
From July-September each year, leadership and Total Rewards teams consider where any additional Base Pay increases may be needed for non-negotiated populations. Increases made at this time are for exceptional cases, for example, if external and/or internal pay levels have moved steeply in the past six months and we want to ensure pay remains equitable. We consider both Internal and Compa Ratios in this review. These changes usually take effect from 1 October each year.
Where we identify that a change to Base Pay is needed and there is a large difference between your current and target salary, we may put an Individual Salary Plan in place. This would typically run for 12-18 months and during this time, your salary would increase in agreed phases.
It is possible to receive a Base Pay increase outside of the annual compensation process or mid-year review cycle if your role changes, for example if you are promoted, go on secondment or move to a different area of the business. This is not a guarantee in every instance. Increases should only happen where there is clear evidence of a significant change in responsibilities or difference in market value for the role you are moving to. Whether you receive an increase also depends on where your Compa Ratio or Internal Ratio sits in relation to the market or your peers. If it is already higher, your pay position may not change.
Due to local labour laws, employees in some countries are part of negotiated populations. If you are part of a negotiated population, your Base Pay is reviewed and decided on a collective basis as part of a negotiated, collective bargaining or union agreement for your site. How often this takes place is dependent on each site’s agreement but is usually between 1 and 3 years.
When we review Base Pay for these agreements, we compare the value of your role to the external market to make sure what we offer is fair, equitable and competitive. See ‘How do we determine the value of the external market?’ in Part 2 for more information on the steps we take.
While the way we agree your Base Pay is different to other employee groups, other elements of your Total Rewards package, including incentives, benefits, wellbeing and recognition, are the same.
There are several factors we consider when reviewing your Total Rewards package. Select each factor to explore further.
Meet Renaldo, Nic, Lucy, Barney, Bojana and Sandra. The scenarios for Renaldo, Nic, Barney and Sandra cover their Base Pay reviews as part of the Annual Compensation Process and Mid-Year review, while Lucy and Bojana’s cover some off-cycle reviews due to a number of changes in Lucy and Bojana’s team.
Click on their names to see their pay increase decision:
When reflecting on your own Base Pay, it’s worth considering the areas where you have most influence such as delivering high performance, expanding your skillset and focusing on your career development. Your manager can help you to identify and, where available, unlock these opportunities.
Look out for additional materials from the team to support you as you look at Part 3.
