Pay review for most businesses takes place annually, usually effective at the beginning of a new financial year. When employees receive a letter or email confirming a pay change, it is a notable ‘event’ in any company’s year, and one which many people both look forward to and rely upon. Almost unconditionally, that batch of letters is the culmination of a huge body of work behind the scenes which very few people know about or see.
How can we make the lead-up to this ‘event’ as efficient and pain-free as possible for those running the process? And how can we introduce greater levels of understanding and even transparency to the process for those receiving the news? Let’s walk through each step in the pay review process and look at how Pay Review technology like Advance can ease the burden.
Setting the Framework for Pay decisions
Once a business has agreed its pay profile for the next pay review, it needs to consider the best way to conduct the process: it should be rigorous and data-enabled but without creating an internal cottage industry. The big challenge in pay review for those of us in HR and Reward is often accessing timely modelling - mainly in Excel - going back and forth with key decision makers. Not only is this a concern from a data sensitivity point of view but, with multiple versions and iterations, accuracy can also be put at risk by human error. Being able to bring all the data together in one final and agreed budgetary position is essential to avoid overspend but can be fraught with danger.
How Advance helps: the software provides a one-stop-shop, enabling managers to gather and review all employee data in one place, simplifying the entire process. By setting out a structured process and instructions on which kinds of data are required, Advance acts as a data-gathering guide rope.
Smarter Data analysis
Many different factors and priorities can play into pay pot distribution. Sometimes the emphasis will be on performance and sometimes there will be a blanket approach to all. In some cases, a larger increase will be allocated to the lowest paid, perhaps even ring-fencing those on NLW. Knowing how a policy change will impact the bottom line is essential to making decisions that are informed and fair.
How Advance helps: Advance stores the data in a way that allows HR and decision-makers to dynamically model and re-model pay scenarios. At the click of a button, you can see how a change to one employee, group or the entire factory floor would affect the budget. External data can also be integrated to assess performance and pay against the market.
Prioritising Equity
The integrity of policies around fairness and equality in pay review, and how they are put in practice, has never been under more scrutiny. A combination of legislation-driven change and the mindset and expectations of a younger generation of worker has elevated it above the ‘nice-to-have’.
How Advance helps: By applying and overlaying a company’s gender and ethnicity data and policies, Advance can illustrate the effect that a particular modelling scenario could have on cross sections of a workforce. This allows HR and business leaders to pre-empt an issue before it arises, or before it exaggerates an existing bias or imbalance.
Promoting Transparency
Bringing employees along with us in this process is important because decisions around pay are often emotive and can be difficult to justify or understand if little context is provided. If pay data stays squirrelled away in finance and HR, the tendency is for staff to question whether they are being paid fairly against the market. If we’re not careful, every decision can be received with suspicion, which tugs away at the strength of the employer-employee relationship.
How Advance helps: The customisable dashboards and insights, combined with permissions and authority levels, allow HR and managers to select what they see and share with employees, enabling a greater degree of understanding and sense of openness and transparency.
To find out more how Advance can help streamline your Pay Review, email Holly.Coe@innecto.com
