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Salary Increase Letter
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Salary Increase Letter

Notify employees of a pay adjustment with this letter template.

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Pay Adjustment Letter Template: FREE Download

With inflation on the rise, compensation structures and employment levels changing, compensation reviews based on equity, employees are more likely to switch jobs and seek new opportunities. Employers are increasing wages to increase competitiveness and compensate for cost-of-living and equity. Paycor’s Salary Adjustment Letter Template can help address this action. (Note: In addition to attaching an updated compensation plan, some employers also include a revised contract for the employee to sign.)

Notification of Salary Adjustment

Salary increases are usually given at the beginning of the fiscal year or on employment anniversaries. Some employers send adjustment letters to inform employees of bonuses and pay increases/deductions. However, the best way is to have a one-on-one meeting (in-person or via video conference for remote workers) with employees and then follow up with a letter confirming the salary adjustment.

Meeting with Employees Regarding Salary Adjustments

When informing employees, the responsible manager or HR representative should describe why the increase is happening and what the employees did over the last year (innovations, dedication, achievements, service, etc.) to deserve the increase. Employers also should describe the company’s efforts to create transparent and equitable compensation structures within the company.

Pay & Career Equity 

While competitiveness has been a top consideration for designing starting salaries and compensation packages, internal equity has become a concern for many organizational leaders and employees. Pay/career equity means that everyone, including people of color and other underrepresented groups, has the same opportunity. Employers need to ensure that people have similar starting points in their careers, equitable compensation structures, the same opportunities for advancement, and access to similar resources and information that propels short- and long-term success.

Why Pay & Career Equity Matter

While this has dramatically improved over the last 50 years, the US has a history of segregating opportunities. Some genders, races, and ethnicities are underrepresented, underpaid, and placed into roles that often do not provide equity or a formal career pathway. In addition, some companies misvalue individuals of the same rank, tenure, and performance. Organizations should pay employees doing the same job fairly (i.e., equal pay for equal work).

Inequities demoralize workers, increase dissatisfaction and turnover, and affect company brands and reputations. They may also place employers in legal and regulatory jeopardy.

How to Achieve Pay & Career Equity

Conducting pay- and career-based equity studies can uncover bias and unfair compensation practices affecting individuals, roles, and departments. These issues should be remedied immediately and on an ongoing basis to ensure fair and equitable human resource practices.

Pay and Career Equity Questions 

HR and other leaders are examining pay and career equity in a new light — a great thing! Some questions they’re asking include:

  • How are starting salaries determined?
  • How is performance evaluated?
  • Do all groups have equal opportunities to achieve merit-based increases?
  • Do all employees have a career plan and equal access to training, mentorship, promotions, and other career-building programs?

Today as never before, companies must proactively manage pay, salaries, and bonus programs and mitigate future issues and concerns as an ongoing process.

Notifying employees about changes to compensation is made easier with Paycor’s free Salary Adjustment Letter template. Fill out the form for access. If you need additional help with recruiting, applicant, or employee tracking, contact us for a streamlined HR solution.

For more free resources and tools that promote DE&I best practices in the workplace, visit Perspectives+. It’s Paycor’s online knowledge library designed to help our partner network drive change, empower colleagues, and foster new leaders.

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