Pay structure design |
Your pay structure has to reflect your
organisation's culture, values and size. We spend time with our clients to develop a pay structure that suits their needs. |
When it comes to pay structures, one size does not fit all. To tailor yours, we will look at what works well and what issues you have with your current system, and also take account of how you see your organisation developing.
Getting your pay structure rightYour pay structure should to be designed to reflect your company's roles, organisation structure and its size. It needs to take account of your culture and management style.
Most organisations start small and manage pay on a person-by-person basis, paying the going rate for each job. As companies grow, it becomes harder for them to manage pay without a more formal pay structure.
Grouping similar roles into grades can greatly simplify the task of managing your employees' pay. Job categorisation can help to achieve this.
Creating a more formal framework for pay makes it easier to explain to employees. They can see where they fit within the organisation and to see the opportunities for career development and for earning more.
How will your system enable your employees’ salaries to increase? Pay progression can be linked to general market movements, to a measure of their performance, or to a combination of both.
Pay is just one element of your reward package, so any changes should be considered as part of your overall reward strategy.
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How we can helpWe will design some options that we think will suit you now – and for the foreseeable future. We will cost out the different options and can advise on how they could impact on your employees.
Pay can be linked to incremental points or managed more flexibly within a pay range. There are pros and cons to each approach and we can advise on what might suit your organisation.
We will help to ensure that your structure is flexible enough to adapt to unexpected changes in market rates.
Benchmarking your pay levels against the market will also ensure that you recruit and retain key employees.
The introduction of a new structure may be planned as part of broader HR changes, such as the introduction of a competency or behaviours framework, or to the development of a new performance management system. We can advise and assist with changes of this nature too.
It is important to test out different options to assess how they will work and to ensure that they are not discriminatory.
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The following screenshot shows an example of the package that we have produced. This helps us to develop, test and refine a pay structure that works for your organisation. We can then model its impact on your staff, both when assimilating them to the new structure and how it will work in future pay reviews.
Once the structure is agreed, we can then help you to communicate and implement it.
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Case study: Pay structure design
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The Construction Youth Trust is a charity that helps young people access employment opportunities in the construction industry.
They asked us to develop a robust pay structure to help them as their organisation grows.
We started by evaluating their roles and then benchmarking pay and benefits.
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Next, we devised a grade structure, providing options for managing pay within this to reflect the geographic spread of their staff.
We also advised them on how their reward strategy could be reviewed to support their organisational needs.
We discussed our findings and a series of options with their senior team, before providing them with a detailed report and recommendations.
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'We enjoyed working with Karl who was very responsive to the needs of our organisation during this period of rapid growth and development.
We now have a pay scale structure with the ability for our staff to progress without having to change job.
Karl made the whole process very easy for us.'
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