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With vacancies at an all time high and recruitment and retention challenges common, successfully managing the pay review process is a critical opportunity to retain, motivate and engage employees. 

We examine the challenges organisations are facing when it comes to such an important item on their annual agenda, identifying six key elements to build into your project plan.

business people discussing documents

The pay review challenge

The annual process involves spinning numerous plates – preparation is key. Setting aside time and resources, multiple sources of data to keep up to date, ensuring line managers are equipped to make informed and consistent review decisions, keeping senior management informed, ensuring the correct sign off process and meeting key deadlines across the whole organisation – these considerations require both bigger picture thinking and an eye for detail.

A good place to start when putting your project plan in place is what worked well last year. Identifying opportunities for improvement from the outset can alleviate pressures further down the line. With the right structure and approach, your pay review can achieve the required outcomes.

How we helped Alliance Healthcare with their pay review process

Alliance Healthcare was looking for a more efficient and effective approach to manage their annual review process which included assessment ratings and performance-related pay.

Read full case study

How to rise to the pay review challenge


Agree the review principles

Running the review in the most effective way can have a positive year on year impact on engagement levels and labour turnover, so agreeing the objectives you want to achieve with the budget available from the outset is essential.  Many organisations may already have an idea of what the overall salary increase will be, but a consistent framework will ensure that everyone involved in the process can achieve the correct outcomes. For example, advising managers on what they should be focusing on should be agreed from the start – such as identifying who the key targets are and which roles to focus on due to market pressures, or addressing inconsistencies in roles which is manifesting itself as the gender pay gap.


Formalise your project team

Often we get feedback that too many cooks can spoil the pot, so it is important to identify the key stakeholders and their place in the review process early on. A project owner or sponsor is important to establish overall control of the top-level decisions. Then individual accountabilities can be identified from this with the establishment of a delivery team.  These will include both administrators and HR VPs – those in a position where they are offering help, support and advice to managers. It is also important to consider the role of suppliers and any external support, to ensure they are fully utilised and their responsibilities communicated. This transparency around the team supports a joined up communications approach, improving consistent decision-making.


Communicate at the earliest opportunity

Project preparation in establishing the framework and team is crucial for setting the foundations of a smooth pay review. The communication stage is reliant upon these building blocks to set out the outcomes, address stakeholder expectations and communicate key deadlines. For new starters, this will be their first review so they may require time to understand the process and how the system works. For senior management, providing key dates where they will need to be involved can alleviate time pressures. Starting early gives everyone time to plan and contribute most effectively. At Paydata, we provide guidance through bespoke user guides for our software. User guides, drop in sessions and webinars are common methods for organisations to demonstrate that help is at hand.


Be guided by your data

Listening to the data is dependent on the accuracy of the data and the analysis. The collection, collation and checking of data is a huge responsibility. Not everyone that we work with at Paydata will include benchmarking data in their review, some focus on performance alone, but there is often a suggested range provided to managers. Collating that extra market benchmarking information and appropriate quartiles for managers to make informed decisions takes time, so identifying where this will be used is an important step in establishing project timescales.

How much freedom and flexibility managers are given may depend on different cultures and industries. Some may provide managers with a hard ceiling that they cannot deviate from, whereas others may allow deviation but require justification.


Manage timelines, build contingencies

Once high voluntary turnover levels, areas of difficulty in recruitment and flight risks are identified, pay levels can be appropriately targeted across the organisation. Sometimes that data may need to be sourced from other departments. Building this time into project plans is a key consideration. One of the biggest difficulties our clients face is meeting deadlines and getting everyone across the business to remain on course. This is particularly acute for senior management. They need oversight of their role early on.

We recommend starting the pay review process three months before your ‘Go Live’ date to allow enough time. Three months before the reviews start seems like a long time, but it puts the annual pay review on everyone’s agenda. This alleviates pressure over the coming weeks to meet deadlines and scope everything within project.


System familiarity

Within the scoping period, getting to grips with the system is essential to know what you can and can’t do. Identifying what will work within the system’s current capabilities will enable you to identify if anything bespoke needs to be designed within the constraints of time and costs.  It is worth asking whether these are essential or can be part of next year’s pay review.

If you do implement something new, organisations must get managers on board. This links to the communications side of the process and how comfortable employees and managers are with the system. By making sure this is properly communicated – through webinars, user guides and support – the pay system can be as effective as possible in maintaining momentum behind employee engagement and retaining the right talent. Paydata’s software provides an online system that is both intuitive and efficient, with extensive support and guidance throughout the pay review cycle.

We would welcome the opportunity to speak to you about any aspect of the pay review process. Get in touch with us if you have any further questions about how Paydata can support you with your pay review.

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