What we found
- In most big corporates, your performance rating and your pay rise are worked out separately.
- Your base pay increase usually comes down to the company’s budget for the year and where you sit in your pay band.
- With a 3.5% budget, an average rating might get 3% and an outstanding rating 4%. On a $100K salary that gap is about $1,000 a year before tax, or about $20 a week.
- If you’re already near the top of your pay band, you’ll likely get even less however well you did.
- Most firms use a bell curve, so only a set number of people in each team can get a top score.
- The real money comes from a promotion or a new job, and the salary you negotiate when you start is the most leverage you’ll get.
Why a great review didn’t get you a great pay rise
In case you didn’t know already, in most big corporates, your performance rating and your pay rise are worked out separately. Your base pay increase usually comes down to the company’s budget for the year and where you sit in your pay band.
Each year the company allocates one budget for everyone’s pay rises, say 3.5%, and splits it up by rating. Someone rated average might get 3%, and someone rated outstanding might get 4%. On a $100K salary, that 1% difference is $1,000 a year before tax, or about $20 a week, for a much tougher year. If you’re already near the top of your pay band, you’ll likely get even less regardless of how well you did.
It works out better this way from the company’s POV. A pay rise is permanent, so they’d much rather reward a good year with a one-off bonus. However that usually stops working when the business has a bad year and the bonus pool dries up (despite the company making record profits). Then you’ve worked all year for a top rating and walked away with a raise that doesn’t even keep up with inflation, and no bonus at all.
Most firms use a bell curve, which means only a set number of people in each team can get a top score no matter how many of you smashed it. When the ratings get decided, it usually comes down to whose manager argued hardest in that room. A lot of people leave their review feeling like they worked hard for nothing, and the limit on top ratings is often the reason for this.
The real money will come from a promotion or a new job, so you’re better off putting your energy there. It’s also why the salary you negotiate when you first start is the most leverage you’re ever going to get. Especially since every raise after that builds on it.
What did TAC readers tell us?
We asked how pay rises are decided where you work. Here is what some of you said.
It takes into account:
1. the full reward awarded (base, bonus, other benefits such as L&D opps and further edu funding),
2. your position relative to peers within the same band,
3. company plus department performance, and
4. (cynically but truthfully) what your manager chooses to give you irrespective of all the above.
It usually also considers your current pay against the market (internal pay band), not just a performance rating, what we usually call "compa-ratio". So if someone is paid below the pay band with a standard performance they may get higher increases than someone paid well above with exceptional performance 💡 Is always worth it to ask your leader about your position on the pay band or other commercial considerations for the outcome
I have worked in HR in a big 4. Reality is, if you start low you’re never catching up. At promotion it’s always a conversation around how does the jump look like. If you’re at the top of the band, you will always end up mid of the band at the next level.
Yup. I hit OP (highest there is) 2 years in a row and they still wiped my pay increase and bonus - one year because of “company profit” and second year because I had 3 late timesheets 😂
If you don’t get tapped on the shoulder a few months before you even submit your self evaluation then you’re going to get meets expectations or worse. I used to run the management reports at a large global consulting/fin service organisation and I was horrified when HR casually said this. They also accidentally shared a report with me regarding attrition and next to several names it stated “non regrettable loss” so yea, get your money go home and look for other opportunities 🤷🏻♀️
CPI isn’t a salary benchmark… it moves up and down with inflation. If pay automatically followed CPI when it rose, logically it would need to fall when CPI dropped too. Salary increases are based on role, market, performance and affordability, not simply the inflation rate.
Source: The Aussie Corporate reader replies, October 2026. Spotted an error? Correct something.
