Pay progression describes the way in which employees are able to achieve higher pay within their pay level or band. Research suggests that the most popular approach to determining pay progression takes a number of factors into account, including performance, competencies and market rates. Pay progression systems can help employers encourage high performance and offer employees a fair and transparent process for pay development.

This factsheet focuses on pay progression within pay bands. It explores the impact of pay structures on an employee’s ability to progress, in particular the number and span of existing pay bands. It outlines the different methods of determining pay progression, such as length of service, team performance and skills-based pay, and discusses methods of controlling pay progression and thus overall payroll costs. Finally, the factsheet offers some considerations for employers setting or reviewing pay progression arrangements.

CIPD viewpoint

What is pay progression?

The impact of pay structures

Methods of determining pay progression

Coverage of different approaches

Controlling pay progression

Design issues

Useful contacts and further reading

This factsheet was last updated by Charles Cotton.

Charles Cotton

Charles Cotton: Performance and Reward Adviser

Charles directs the CIPD's performance and reward research agenda. He has recently led research into: how employers can help improve their employees’ understanding of their personal finances; how front line managers make and communicate reward decisions to their employees; how employers manage the risks around reward; how private sector employers can build the business case for workplace pensions; how employees form their attitudes to pay; and how the annual pay review process can become more strategic. 

He is also responsible for the CIPD’s public policy reward work and has given evidence to select committees on banking pay, redundancy awards as well as responding to various consultations, such as on pensions, retirement and MPs’ expenses.

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