We have demonstrated the effective Raman spectroscopy for the phase transition and phonon dynamics of NiPdSi films annealed at various temperatures. In addition to the appearance of alloy disorder-induced Raman peaks, we have shown that the presence of Pd in NiSi results not only in the retardation of NiSi2 phase transition to about 900 °C, but also in the redshift (∼3–4 cm−1) of the first-order Raman peaks. The observed Raman frequency downshift with increasing temperature can be described well by a model which has taken into account the contributions of the anharmonic, thermal expansion, and strain effects, revealing the dominant role of the phonon decay. Effects of Pd addition and annealing temperature on the Raman frequency and linewidth have been discussed. The introduction of Pd is found to reduce the Raman frequency downshift, demonstrating the favorable use of NiPdSi for microelectronics applications.