Posted by Sarah Lardner on 18 August 2023
Pay Review - risks in processes and how to mitigate
We recently worked with a client whose HR and Finance divisions were managing pay for over 15,000 employees spread across hundreds of locations in the UK. With a broad mix of salaried employees and workers on zero contracts and hourly rates - some with pay ranges and some without - they needed help streamlining a cumbersome review process that was overly reliant on excel spreadsheets.
Their system had worked well in the past but due to business growth had become time-consuming and prone to risk of human error and corruption. Using excel, they were having to split review into hundreds of separate spreadsheets for line managers to review before attempting to re-connect it all back together.
They came to Innecto looking for a technology solution that allowed them to streamline the management and implementation of the process - eliminating spreadsheets, reducing the risk of error, reducing resource hours, engaging line managers and enabling far better reporting. Here is how Advance was able to help.
1. Data gathering
Data gathering is one of the most time-consuming but essential elements of any Pay Review process. The kind of data available might vary depending on role - salary, location, start date, internal range, performance rating, job family, market comparison - and for this client it was exhausting many man-hours across the organisation to compile, sense check and review the information.
Advance solution: As part of onboarding clients with Advance, we show them what the platform does and the data it needs, some up front and some later. Advance doesn’t specifically help with data harvesting, but it does provide a checklist to help collate the data.
2. Data oversight to inform decision making
Many areas of pay decisions are nuanced and complex such as the inclusion of pay ranges, performance bands, internal equity and judging how people compare against the market. Any HR director will know that there is a trade-off between rewarding high performance and staying within the constraints of, for example, a 5% salary pot. Having flexible oversight of this information is essential to making informed, fair decisions.
Advance solution: Advance harnesses the data and enables HR and decision-makers to dynamically remodel Pay Review scenarios by showing how certain changes could impact the budget at the click of a button, whether applied to one employee, the top 10% performers or an entire department. Provisionally allocating budget by department also allows a client to understand the wider impacts on internal equity, and by integrating external market data it is also possible to assess staff performance within the organisation and against the market.
3. Fairness and Equity
This is an increasingly hot topic in the current climate and striking the right balance is essential to the employer-employee relationship, and to retaining and attracting the best people.
Advance solution: By applying a given company’s gender and ethnicity data and policies to the system via user settings, they can review the impact a scenario or decision might have on certain cross-sections, correcting where necessary.
4. Administration and reporting
Along with data-gathering, administration can take the most time in pay review. Relying on a manual process to chase managers, amend employee records, resend to managers and collate the results can quickly fall down in a mire of human error and delay.
Advance solution: With separate logins for each manager, they can review, comment and send back to HR. If there are any errors HR can amend for reappraisal or amend themselves and finalise. Changes are synchronised and the data has one source of truth. This works for managers by saving time and also for HR who can see that Manager A is 80% complete while Manager B has not yet started.
With customisable views and insights, Advance also allows a company to set and change permission levels and grant authority to enable pay decisions 'locally' or 'globally'. It also accommodates multiple currencies, which is ideal for businesses operating internationally.
This particular client found that line managers loved the new approach, process and technology and HR found it centralised, traceable and auditable. Overall it created new opportunities for conversations around Pay Review by shifting the focus from the process itself to the softer elements of added value and communication.
To speak with a consultant about ADVANCE click HERE
