It is a project that fills many HR Managers or Directors with dread…. An organisation-wide pay review. Is this on your to do list for 2020? Read on to find out more about the 5 key steps involved in an organisation wide pay review, by Katy Marshall (Reward Director) from Turning Point HR Solutions (TPHR).
At TPHR we are experts in pay and reward reviews. We have almost a hundred years’ combined experience (and we have counted!). There can be many reasons why a pay review might be on your to do list – to create order in a pay system that has grown organically, to combine different systems or structures after a merger or TUPE transfer, or because the organisation has grown out of its previous system and needs pay arrangements that are a little more sophisticated to motivate its workforce. Whatever the reason behind the review, there are five key steps that you should carry out to ensure that your pay review is successful: job analysis, job evaluation, pay benchmarking, pay modelling and implementation. Read on to find out more…
- The first step is job analysis. You must ensure that before jobs are assessed, evaluated or benchmarked, you understand the role as it ACTUALLY is and not just as everyone assumes it is. Most of the time we find that organisations understand the real functions of their roles but there are always one or two roles that slip through the net. Or, you know about the roles that have been undervalued/overpaid for some time, but nothing has been done about it. This is the time to sort that out. Job analysis is about ensuring that all job documentation is up to date. Line managers should check job descriptions and person specifications for their reports to ensure they are accurate. At TPHR we can assist with this often-arduous task, either by drafting the job descriptions for you (we’re experts at this) or supporting your managers with the task. In addition, our online system Orbit Org, can help you define your organisation and lay out its structure for all to see and understand. Snapshots of teams or departments can be included in job descriptions or organograms. Reporting lines, teams, and hierarchy (or lack of) are clearly set out in a graphically pleasing way and easy to manipulate if you want to consider different organisational structures.
- Once you have your house in order in terms of job analysis, the next step is job evaluation. You all know it is about the post and not the person. But this is often the daunting [ACTUALLY STRIKES DREAD INTO THE HEART] part of the project for many HR professionals. What issues might be uncovered? What system to use? Should we do it at all? It is all understandable. We have all heard of the never-ending, gigantic equal pay cases and saw the figures involved. However, the truth is, you cannot afford not to undertake job evaluation. Equal pay issues do not come from the job evaluation process, they come from NOT conducting job evaluation or conducting it and ignoring the problems.
So next consideration… what system to use? In terms of systems, an analytical system is a must. It is the only type of system that will provide you with a defence at an employment tribunal. At TPHR, our analytical online job evaluation system, Orbit Eval, takes the strain out of the process, and we can either support your team to carry out the evaluations using Orbit Eval or completely take it off your hands and do it all for you. Orbit Eval is tribunal tested and has been used by organisations of all sizes and sectors. It can also be modified to suit your needs and links to our best-in-class pay benchmarking system Orbit Pro. Read on…..
- Next is pay benchmarking. You need to understand the market. But what market, what jobs, what competitors, what locality, what country??? We can advise you on all of this. And, our system, Orbit Pro, produces reliable and accurate pay benchmarking data. It does not just do this by accident though, it does this because we have a team of people plugging away day after day to find out exactly what your competitors are paying their staff.
We have substantial experience in this area and have built relationships with the companies who trust us with their pay data over many years. So, our data is accurate, and we are experts at finding new data. We branch into new sectors all the time and produce new reports. In addition to all of this, Orbit Pro links to our job evaluation system, so, you can be sure that the data that Orbit Produces is relevant to the size or worth of your organisations roles – our data is relevant and comparable.
We can produce data by company size, sector and locality and can undertake bespoke pay surveys on your behalf. We are also launching our new online system Orbit International shortly, which will give you reliable data on pay and hiring norms in different international jurisdictions that you can trust before starting new ventures.
- Pay modelling. This is when the magic happens…. you bring all the information and data you have gathered during the project together with your organisations needs and wants in terms of its pay arrangements. You may wish to create a simple grading structure or spinal points; you may wish to have spot rates or spot ranges for each role. You might want to think about job families or career paths. Performance related pay might be on your mind. You might have novel, exciting, and new ideas and want w advice and consultancy support to implement them. Whatever you have in mind, we can support you to develop that system from an idea, or a collection of ideas, into a functioning pay structure supported by integrated systems, policies and strategies, throughout your business that is both affordable and sustainable in the long term. It will be a system that you can present to the Board and show them how it will help the company achieve its strategic goals.
- Implementation and communication. This is about taking your people with you on the journey. It is important to remember that communication throughout the project is vital – not just at the beginning and the end. Gathering views and considering them is important. Think ahead and plan your communications in advance. You may have a joint collective bargaining agreement in place and need assistance with union positioning or perhaps a staff council to consult with. But, after all the work is done behind the scenes the time comes to unveil the new system and implement it. By now you will have decided how to approach any issues that the exercise has unearthed and put plans in place to resolve them. While you are free to decide the pay arrangements that work for your business, you should give employees the right of appeal against the outcome as it applies to them. You will also want to ensure that front line managers and senior managers are aware of the new systems and communicate them to their reports. Training for all will be required. We can help with all of this; from template letters explaining the new arrangements to training your managers on how to have difficult discussions with staff about their performance when it comes of appraisal time.
Then all the hard work pays off – you step back and admire the produce of your hard work and a challenging project. A new pay structure and its supporting systems can involve a lot of hard work and difficult decisions – it is a full-on project. But it delivers a very tangible and objective outcome. And, with our consultancy support, your project can run smoothly and get you and your team the recognition you deserve. Please get in touch if you would like to find out more.