Pay Actions: An Introduction For HR Professionals

A few weeks ago, I wrote an article about compensation practices that included a brief look at pay approaches including single-rate pay, step-based pay, and a slew of pay differentials. Taking it a step further, this article is about pay actions and explains the types, why they occur, and how they're communicated to employees.

WorldatWork defines a pay action as the movement (e.g., an increase or decrease) of an employee's base pay due to either external or internal pressures, either company or employee generated.

Company generated pay actions are usually based on external or internal influences. For example, external influences could be market adjustments or reclassification of a position and internal influences could be a promotion or demotion. An employee generated pay action can be the result of an employee's request for a demotion or, perhaps, a shift change.