Client
Large UK water company with over 1500 employees across 750 job roles.
Solution
- Market aligned pay bands.
- New reward policy and HR guidance.
- Benefits matrix for harmonisation across the organisation.
Challenge
- Lack of consistency in pay processes and reward allocation across the business.
- Concerns around pay gaps and fairness in pay decisions.
- Lack of clarity around how to achieve related objectives.
Impact
- A full costed pay framework proposal that the Head of HR could take to the Executive Team for approval.
- Full understanding from the People Team of the process followed, the data utilised and the methodology, allowing them to own the process going forwards.
- A better understanding of how pay aligned to the external market and what steps were required to achieve better equity internally.
Context
This large UK water company identified a lack of consistency in pay processes and Reward allocation across the business leading to pay gaps and a concern around fairness in pay decisions. With over 1500 employees across 750 job roles, they needed a framework that would help establish the Total Reward package for new joiners and help managers make well-informed and fair pay decisions for their team. They were clear on their objectives but needed help in identifying how they could achieve it.
The Problem
- Lack of consistency in pay processes and Reward allocation across the business.
- Concerns around pay gaps and fairness in pay decisions.
- Nothing in place to help ensure relevant and fair reward packages were being offered at recruitment.
- No internal reward expertise - the client knew they needed something but were not confident in the what or the how.
Which meant:
- Risks around fairness and consistency in allocation of Reward.
- Potential equal pay risks.
- Difficulty making strategic pay and reward decisions.
The Tension
Employees wanted to know that pay decisions were being made fairly and consistently especially in light of acquisitions.
The People Team wanted clarity on reward packages for new joiners and to address known inequities in reward packages across different businesses.
Finance wanted to minimise costs and work within a smaller budget.
What Reward Heads did
- Diagnosed where pay did not align to market and modelled the individual and overall financial impact of introducing a new pay framework, highlighting pay equity issues and identifying opportunities to close pay gaps.
- Aligned the approach to placing new roles in pay bands through proposing principles and guidelines.
- Designed a new benefits matrix highlighting harmonisation requirements.
- Designed a bespoke internal levelling framework that would work across the business to size roles and show alignment or differentials in skills and expertise requirements.
- Implemented market-aligned pay bands.
- Implemented a Reward policy and separate HR guide, capturing the new principles and guidelines, ensuring that the team were comfortable in maintaining the new framework.
Business Impact
- A framework to ensure fairness and consistency in pay decisions.
- The ability to compare roles across the organisation and set reward for new hires at a competitive, but internally equitable level.
- Full awareness of cost for implementation along with a model for future year cost modelling.
People Impact
- Ability to see how roles compared across the business and what was needed to progress to the next level.
- Pay queries being addressed in a consistent way.
- A new level of knowledge about how the organisation approach reward decisions.
Which resulted in …
More confidence from the People Team to share pay analysis with business leaders and identify the root causes and solutions.
An organisation wide reward policy that meant the People Team could spend less time fire-fighting.
A clear way to talk to employees about reward.
If this feels familiar …
An awareness that reward is not quite working as it should, but not knowing where to start in correcting it is a common issue for many organisations, especially those that have seen growth either organically or through acquisitions.
