Is your company obliged to give you a review and raise?

After working at a company for a year without being scheduled for a review, you may feel uncomfortable asking your manager whether this will happen, and when you can discuss a raise. On the other hand, many employees are regularly scheduled for reviews. 

So, which of these is the correct way to handle reviews and raises? A manager, who conducts reviews, and a CEO share their take with us on this.  

Tip: If you get a raise, find out which income tax bracket you fall under with our tax calculator.

Are companies obliged to give reviews and raises?

Kgodiso Mokonyane, head of strategy at Discovery Insure, says that she spends a significant amount of her time at work on performance reviews.

“It’s good practice, but not mandatory, for individuals and companies to regularly take stock of their performance; to have a review of what they set out to do and how they have performed against the target,” says Mokonyane.

This, she explains, is for the ultimate benefit of the shareholders and employees. Part of the target-setting process is to articulate what the reward will be for achieving and surpassing the target.

“This allows individuals and companies to have a realistic view of their performance and to intervene early if their performance is not in line with the target,” says Mokonyane.

“With the right people, the business should be able to meet or exceed the target set. Based on the agreements, the employee should honour their end of the performance contract,” she adds.

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According to Chris Ogden, CEO of RubiBlue, performance reviews generate a culture of growth, clarity, and expectation management.

“Why wouldn’t you review the individual’s performance to ensure both parties are getting what they want? They give employees an opportunity to fix problems,” says Ogden.

However, he adds that if an employee’s contract includes the promise of regular reviews, then a company would need to adhere to this. If they don’t, they may face legal action or CCMA woes.

What if a company lies to employees about its profits to avoid raises?

Ogden says that raises are a company’s prerogative. However, he believes that misleading your employees is pointless, and could sabotage their motivation.  

“Why work for a company that tries to mislead you? This could lead to talent leaving for various reasons, including the perception that things aren’t going well and they need to look elsewhere. It also creates mistrust with employees if they realise the truth, and they could feel demotivated by this” says Ogden.

“Raises are not an obligation. But lying to your staff about performance will catch up with you. If you are doing well, and individuals are doing what is expected of them, then you should reward them,” he adds.

When should performance metrics be adjusted?

Mokonyane believes that extenuating circumstances should be considered in terms of work performance, and possible leniency.

For example, she explains that companies in the import-export trade may want to re-look at the revenue targets they set before the COVID-19 pandemic.

“This resulted in a global lockdown of ports, far beyond the control of any management team. Performance reviews of affected employees should not suffer as a result,” Mokonyane says.

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