Budgeting for pay reviews can mean ploughing through an overwhelming raft of data for organisations but there are simple steps and tools available to take the stress away
Pay review is a notoriously busy and stressful time for HR and finance. The need to balance every employee’s contribution and every team’s performance against internal and market-led expectations can be overwhelming, while also managing the overall budget. Here are five key things to consider.
1. Set a data-enabled framework for decisions
Once you have agreed a pay profile for the next pay review, work out the best way to conduct the process. This should be rigorous and data-led, with key decision-makers able to access data and model various scenarios, ultimately bringing all the data together in one final and agreed budgetary position.
2. Eliminate the potential for error and data loss
Doing this data exercise properly raises the key issues of data sensitivity and error. If using multiple versions or iterations of spreadsheets, for example, with bespoke configuration and macros, the scope for human error can put accuracy at risk. These files also need to be password-protected so safeguard against the danger of key staff leaving without sharing all the necessary information. With spreadsheets, there is often no way to retrieve a password.
3. Empower managers to align pay review with pay equality
Many different factors and priorities can play into pay pot distribution and knowing how a policy change will impact the bottom line is essential to making decisions that are informed and fair. By educating managers and giving them more oversight of policies around gender and ethnicity pay, they can be more accountable in the way that these things are considered and managed.
4. Promote greater transparency
If pay data is just a “finance and HR thing”, the tendency is for staff to question whether they are being paid fairly against the market. Bringing employees along in the process is important because decisions around pay are often emotive and can be difficult to justify or understand without context. A more open approach to sharing data will also help counterbalance any issues arising from workers bringing uncontextualized data from the likes of Glassdoor or PayScale into salary discussions.
How can we do all of this?
How can we ingest and analyse data that might be constantly changing, and integrate it with other data sources? And how can we plug that data analysis into our pay policies and other performance management systems in a way that steers us in our decision-making? How can we communicate all of that effectively by laying out the results in a way that is easy for everyone to understand? The answer lies in technology.
5. Embrace new technology solutions for pay review
- Better data management - Recent advances in technology allow for a far more dynamic, secure and agile storage and assimilation of data from many sources. This allows HR and key decision-makers to dynamically model and re-model pay scenarios and assess how a change to one employee, group or entire factory floor would impact the budget. External data can also be integrated to assess performance and pay against the market. Enacting pay policy - By applying and overlaying a company’s gender and ethnicity data and policies, a good pay review tech platform can illustrate how a particular modelling scenario might affect cross sections of a workforce. This allows HR to pre-empt an issue before it arises or aggravates an imbalance, elevating pay equity and ESG from aspirational agendas into everyday practice.
- Communication tool - Customisable dashboards and permissions enable HR and managers to easily and quickly share data informing pay decisions with employees, increasing their overall understanding and upping the sense of openness and transparency. In turn, this is leading many organisations to move away from the traditional annual appraisal to a more frequent and agile approach, all underpinned by access to fair and robust data sources, and cleverer, up to date analysis.
Advance is Innecto’s complete solution for pay review. No spreadsheets in sight, just real time insights to enable informed pay decisions. Find out more about how we can support you with your next pay review here.
