4. Actively listen to employees
By identifying what your employees want from their reward package, this will help to guide the design and any nuances required of the new structure to truly drive employee engagement. Whilst the data analysis part can focus on balancing what is currently being paid against what the market is doing, it is important to meet the needs of stakeholders which should not be assumed. It is important to approach the exercise as a blank slate, with employees given the opportunity to outline what matters to them. Feedback may be more about the importance of internal parity of pay or opportunities to progress that go beyond purely financial equations.
We recommend an implementation period of between 3 – 12 months to ensure the success of the project. Without proper methodology and a strong communications plan, 70 per cent of change projects fail. Bringing your employees with you, by communicating why a revised structure is needed and the benefits to them, will need to be planned as early as possible to achieve maximum buy-in across the organisation.
5. Manage career progression within a clear and transparent structure
Employees need to be able to see where they go from here. By having a clear pay structure, employees are equipped with a roadmap for progression. This also supports Line Managers roles as they can all sing from the same hymn sheet, producing more consistent performance management decisions across an organisation.
A clear structure organisation-wide can also assist with managing payroll costs. One third of UK Reward Management Survey respondents anticipate that they will award out of cycle pay increases that account for up to one per cent of their annual pay bill. 78 per cent cite market pressures being behind the decision to make an out of cycle increase, whilst 52 per cent cite internal pay alignment and 28 per cent say they are driven by pay restructures. This matrix of individual decisions affects affordability and control, directly skewing ‘official’ figures for pay awards. Introducing a robust structure can reduce inconsistencies and provide Finance with more budget certainty.
Get in touch
Whether it’s a health check, analysis on your existing job evaluation framework or benchmarking, get in touch with us today so we can help you improve your current approach to pay. To listen to Joe’s advice in full, watch our latest webinar on demand about the key elements you need to consider when developing a pay structure and the main pay structures open to you.