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Q. My company is a bit wishy-washy when it comes to when annual reviews are. For instance, I started in January, but took a new job within the company in September. When should my review be?
Also, what does it mean to "prorate" salary and, given the above situation, is it a good or bad thing?
A. Companies normally deliver their merit increases in two ways: focal dates and anniversary dates. Focal dates are when employees are awarded their increases on a common date. Anniversary increases occur on the anniversary of the employee's hire date or the employee's last personnel/payroll transaction.
If you were hired in January but moved into a new position in September, and received an adjustment to your salary, then your new anniversary date will be in September.
Let's assume you did not move into your new position in September, and in January the following year you were due an increase. However, for some reason your manager did not complete your performance evaluation on time, so your increase was given to you a month later. If your effective date for your increase is January 31st, but the increase appears on your paycheck a month later, the company will "prorate" the increase back to January 31st. In other words, the company will pay you the difference in compensation between the time you actually received the increase and the effective date of the increase.
- Erisa Ojimba, Certified Compensation Professional
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