ELMO Employee Sentiment Index Australia (Jan – Mar ‘25)

How does your remuneration framework stack up against employee expectations? Amid rising economic pressures and shifting employee priorities, pay and performance management are under the spotlight. ELMO’s latest Employee Sentiment Index, based on a survey of 1,000 Australian employees, reveals what employees really think about pay rises, what drives them, and what they value beyond the paycheck.

Performance matters, with one in three employees saying individual performance should be the top factor in determining salary increases. Yet, fewer than a quarter believe their organisation actually prioritises this. Instead, many feel decisions are driven more by business profitability.

So where’s the disconnect? According to ELMO’s 2025 HR Industry Benchmark Report, most organisations use a mix of individual performance and market rates to increase pay, but if employees don’t see that balance, the perception gap widens.

It’s not all about the payslip

Employees also shared what they value most beyond salary, with flexible work arrangements topping the list, followed closely by performance bonuses, increased super contributions and professional development opportunities.

But what flexibility means is shifting. As organisations revisit workplace policies in 2025, only a small percentage are moving to fully remote setups. Most are landing somewhere in between, mandating some office days, or giving employees more say. The challenge is ensuring those changes reflect what employees actually want.

Why this matters now

With performance reviews and pay conversations on the horizon, this report gives you an up-to-date picture of how employees feel and where expectations may be misaligned. It’s a must-read for any HR or business leader looking to build fairer, more transparent reward strategies in 2025.