Pay

by Lua Leggett

Common questions

  1. Someone in my team feels that they are being paid less than another for doing the same job. What should I do about this?
  2. I am responsible for recruitment, but find it harder and harder to bring in the best people as we do not appear to compete on pay levels with the competition. What can I do about this?
  3. What’s the difference between financial reward and financial incentive?
  4. What can I suggest when a member of my team asks how they can progress their earnings while staying in the same job/role?
  5. My company is moving to contribution related pay – how can I prepare myself and my team for this change?
  6. I have to tell my team that there will be no pay rise this year – how can I sweeten this pill?

 

1. Someone in my team feels that s/he is being paid less than another for doing the same job. What should I do about this?

  • Listen effectively to the individual and promise to look into the matter.
  • Examine the evidence.
  • Draw your own conclusion.
  • Either explain to the individual the justification for the difference or refer to HR or your line manager for further guidance.

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2. I am responsible for recruitment, but find it harder and harder to bring in the best people as we do not appear to compete on pay levels with the competition. What can I do about this?

  • Review the job description and job title to ensure that you are describing the vacancy correctly
  • Ask HR what the policy is on market comparison. In other words, how competitive are we as a business generally?
  • It could be that this particular vacancy needs to be reviewed in line with the job description externally in the market place.
  • Gather evidence from interviewees – previous pay slips, P60s.
  • Is the job vacancy correctly banded/graded?

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3. What’s the difference between financial reward and financial incentive?

Financial incentives are designed to provide direct motivation. They tell people how much money they will get, in the future, if they perform to a certain standard: ‘Do this and you will get that.’

Financial rewards provide tangible means of recognising achievements. They can be retrospective: ‘You have achieved this; therefore we will pay you that.’ Alternatively, they can be prospective: ‘We will pay you more now, because we believe you will produce high levels of performance in the future.’

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4. What can I suggest when a member of my team asks how they can progress their earnings while staying in the same job/role?

As a line manager faced with a conversation with a mature (nothing to do with age) individual in post, fully competent and at the peak of the pay scale, you will need to go into the interview armed with other rewards or mechanisms to motivate them. This might include ‘acting up’, mentoring more junior or immature individuals in the same role or stretching the individual through job ‘swapping’ or temporary outplacements to get experience elsewhere in the organisation. In addition, you may be able to offer one-off cash payments that are non-consolidated.

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5. My company is moving to contribution related pay – how can I prepare myself and my team for this change?

The answers to some simple questions will test your readiness for this change:

  1. Are there valid and reliable means of measuring performance or contribution?
  2. Is there a competency framework and are there methods of assessing levels of competence objectively (or could such a framework be readily developed)?
  3. Are there effective performance management processes which I can believe in and carry out conscientiously?
  4. Is the HR function capable of providing advice and guidance in managing contribution pay?

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6. I have to tell my team that there will be no pay rise this year – how can I sweeten this pill?

You can’t! Don’t even try. Be honest: provide the evidence that the company should have given you as to the rationale. Be sure that you are correct when you say it is universal; on the other hand, if one group has been selected in isolation, you need to be able to justify this.

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