Gender pay reporting means it’s more important than ever for organisations to balance competitive reward packages that drive and motivate performance with being equitable and fair. Now, equality and equity is key. But this doesn’t mean a one size fits all approach nor does it mean one pay position for everyone. It does mean maintaining a transparent and fair approach to applying reward to enable you to justify reward differentials, particularly around pay and bonus.
I thought it would be worth sharing a blog I wrote recently on the reward pillars approach we use at Innecto. You’ll see how each element of the employee deal fits together and how fairness and equality underpins the whole structure.
Reward strategy & principles
These are set by the leadership of the business and define your overall approach to pay. Is individual or team performance more important? Is performance related pay right for your organisation? Getting these right means that other reward decisions are more straightforward.
Fixed pay
This is your employees’ base pay. It should reflect the role and the attributes needed for that role. How much you pay here needs to show how well you want to pay against the market. Where does your pay sit in the market – average, top end? How does the distribution of pay look internally according to gender, skills or experience?
Variable pay
This is the additional cash or shares that you give an employee – not normally guaranteed e.g. annual bonus, LTIP or sales commission. Variable pay is usually paid to reward extra effort or great performance. Are you maximising the effect of variable pay? Can you be confident that it is being applied fairly?
Benefits & environment
These are the benefits or ‘perks’ an employee might receive e.g. pensions, company cars, flexible working or development opportunities. They demonstrate your company values and culture and what type of employee fits this. Are your benefits attractive to both men and women?
Recognition
These are the nice surprises employees get when they have done something well. It could be a thank you email, flowers or a voucher. Recognition is highly valued but are you doing it the right way, for the right reasons and at the right time? Is recognition distributed equally between male and female employees?
Performance
This is how you manage employees’ performance, defining what is important to your business and what good or poor performance looks like. If performance management is right for your business, can you be sure that it is free from gender bias?
Engagement
This is how you communicate with and involve your employees in the business. An employee who is an advocate and actively working in the organisation’s interests is a real asset. How powerful would it be to have all your employees engaged? Do you have a clear narrative for your organisation’s gender pay position? How could it affect employee engagement if you didn’t?
Fairness
This is the element that underpins the whole employee deal. Soon details of your gender pay position will be out there for all to see. Processes like job evaluation will help to provide some clarity and objectivity around job roles, so you can be confident that your decisions around pay and reward are fair.
Getting each element right will help reduce cost wastage, get reward working harder for your business, and strengthen the employee deal. Most importantly, thinking about how each element relates to gender pay will help you develop a clear message around your gender pay position and get reporting-ready.
Contact me for help with any element of the employee deal: sarah.lardner@innecto.com
