Performance reviews play an important role in the employment relationship. They provide a key opportunity to evaluate employee performance, give feedback, and set expectations for the future. When an employee consistently performs well and such performance is documented in review reports, questions may arise regarding entitlement to a salary increase. In this article, we explore this situation and provide practical guidance for both employers and employees.
An Example from Case Law
A recent decision by the Court of Appeal in ’s-Hertogenbosch illustrates that a positive performance review does not automatically entitle an employee to a salary increase. The case concerned the question of whether an employee could claim a higher salary on the basis of favourable performance assessments. The employee in question had received positive evaluations over several years and argued that he was therefore entitled to a salary rise. He submitted a performance review report as evidence, asserting that it carried particular probative value and supported his claim to increased remuneration.
Judgment of the Court
However, the Court of Appeal in ’s-Hertogenbosch disagreed. The court held that, although a positive performance review is valuable in recognising an employee’s contributions, it does not in itself establish a right to a salary increase. The court emphasised that there is no automatic link between an employee's performance assessment and a salary increase, unless such a link is explicitly established in the employment contract, a collective labour agreement (CAO), or another written agreement between the employer and the employee.
The court further stressed that performance reviews are primarily intended as a tool for discussing performance and providing feedback, and do not in themselves create obligations for the employer regarding remuneration. In the absence of specific agreements concerning a salary increase, an employee cannot assert a legal entitlement to an increased salary. A performance review report does not, in this context, carry any special evidentiary weight.
A key aspect of the judgment was the court’s indication that employers bear responsibility for communicating clearly about expectations and the conditions under which salary increases may occur. The court pointed out that employers must ensure that employees are properly informed about the applicable criteria for salary rises, in order to avoid misunderstandings.
Read the full judgment here.
Conclusion
This judgment has important implications for both employers and employees. For employees, it confirms that positive performance reviews do not automatically guarantee a salary increase. Employees should be aware that entitlement to increased salary depends on specific arrangements, such as those set out in a CAO or employment contract. It is essential to understand the criteria for obtaining a salary increase and to clarify these in advance.
For employers, the judgment serves as a reminder to make clear agreements regarding remuneration policy and performance evaluation. It is important to specify the conditions under which salary increases may be granted, so that employees understand what is expected of them. Doing so not only helps to prevent misunderstandings, but also contributes to a transparent and fair employment relationship.
Do you have questions about the legal implications of performance reviews or would you like assistance in formulating clear agreements regarding salary increases? The employment law specialists at SPEE advocaten & mediation are here to help.