Posted by Judith Moore on 02 October 2020
Give your pay bands a bit of TLC
When was the last time you took a closer look at your pay bands? Pay bands can be viewed as the engine that drives pay decisions, but all too often they only get an annual MOT at pay review, where limits are tweaked based on market movements and regulatory obligations (e.g. National Minimum Wage). When faced with difficulties in making reward decisions, organisations tend to look for quick fixes, by granting exceptions with the (misplaced) view that there will always be exceptions. But perhaps it is time to look under the bonnet and give pay bands a bit more TLC.
To be effective, pay bands need to align to three key elements of your organisation, Talent, Levels and Careers (TLC).
Talent
Pay bands need support the overarching talent strategy.
Talent is more than just what you need now, but also what you need in the future. When the talent strategy shifts, say as the result of more technology-focussed business strategy, would there be enough flex in your pay bands to adjust to changes in the contribution of roles, as well as their market value? Different job families can need different pay banding structures.
Levels
Pay bands should relate to the number of levels in the value-creation hierarchy.
This does not necessarily mean that they correlate directly to titles or grades; instead, it is worth focussing on whether the levels really reflect how roles are differentiated based on contribution and seniority. Sometimes, this means taking a step back and looking at the job evaluation approach underpinning the pay bands - does it include the right factors for levelling roles? Are some of the criteria weighted too heavily/not enough?
Careers
Pay bands need to facilitate career development.
It means ensuring that there is meaningful and appropriate vertical pay progression within the structure, as well as consideration to lateral opportunities. A degree of overlap between pay band levels and across any different pay band structures (i.e. by job family) enable organisations accommodate growth. Are you confident that pay is not a barrier to promotion or development within your organisation?
Do your pay bands need a little TLC? Contact us today to discuss in more detail, either by emailing judith.moore@innecto.com, or calling +44 (0)20 3457 0894.
