pay management - aon hewitt
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Pay ManagementRobust pay management is critical to balancing the essential requirement for active talent management and employee retention with cost effectiveness
The current economic climate means that now, more than ever, pay needs to be an effective management tool, owned and operated by the business. Pay and reward structures have to be aligned to business needs and future strategy. But employers face some tough challenges in building and operating effective pay management structures in the current climate. These include:
Balancing the need to pay competitively with the need to pay fairly. Not only is demonstrating fairness increasingly important as we climb out of recession, but the requirement for compliant pay practices with risk management and equal pay are forcing employers’ hands
Pay is an increasingly important driver of employee engagement – transparency, fairness and a clear link to performance are all high on employee list of priorities – but levels of employee engagement are currently on the decline
Managers are increasingly expected to own the process, decision-making and outcome, so effective pay conversations are more important than ever, yet the evidence is that many line managers struggle with these discussions and the quality of feedback required
As organisations restructure business leaders want to understand the various jobs and roles and the value they add to the organisation, yet traditional pay management processes may not provide the answers
M&A activity in the market means pay structures need to enable quick and effective integration, yet job evaluation and pay management processes are often slow and cumbersome
The approach to pay also needs to support mobility and, often, to provide a consistent structure for incentives and benefits, particularly on an international basis
Organisations with increments are moving towards more performance-related approaches yet those with merit matrices are also often bemoaning the lack of pay flexibility and differentiation.
The Aon Hewitt Approach We believe that a robust and well-designed approach to pay management creates the foundation for an organisation’s reward and talent management policies, brings clarity for employees and managers, and provides a basis for monitoring and controlling your pay bill.
Our extensive experience in addressing pay and reward structural issues is supplemented by a variety of market-leading tools to help our clients create world-class pay management:
JobLink™ - Aon Hewitt standard points factor job evaluation methodology is easy to apply and particularly useful for organisations facing equal pay concerns. Our market leading web-based evaluation solution can support this if required
CareerLink™ - Aon Hewitt standard job classification tool is often used by organisations that need a solid architecture for both pay and career progression, where the emphasis is on external market alignment and a close relationship between skills and career development and reward
Our Total Reward Survey has over 300 participants, meaning we have a strong market database in a diverse range of sectors to act as an anchor for your pay management process.
Additionally, our in-depth expertise in bonus and incentive plan designs, performance management, communication, talent management, employee engagement and leadership ensures the optimal alignment of pay with these areas so as to drive maximum value for your organisation.
We tailor make the best solution for each client, delivering the most appropriate balance between internal and external valuation, and the simplicity and detail of the approach.
On a typical project we would:
Agree the aspects of pay management to focus on;
Assess the effectiveness of current arrangements;
Consider options for improvement and work these up in outline;
Agree the optimum set of changes;
Plan and work on the detailed design and implementation support.
Client Case Study – Building Society The client: UK building society with 3,000 staff The issue: Our client was facing a number of issues believed to be related to their base pay structure. They were struggling to recruit the right calibre of staff and, when they did recruit, the salaries paid were causing major internal relativity problems. They were also concerned that their base pay structure did not support career progression. How Aon Hewitt added value: After conducting management interviews and employee focus groups to understand the real issues, we revised the existing job evaluation system and introduced a new set of pay bands linked to a market-related structure. We also provided on-site support while the changes were being introduced and conducted employee and manager communication sessions to ensure there was clarity of purpose and understanding of the new approach in terms of direction, detail and delivery.
The resulting model has considerably simplified the pay and promotion processes for both line managers and the HR function, and has provided greater clarity about career and progression opportunities for employees.
About Aon Hewitt Aon Hewitt is the global leader in people management consulting and outsourcing solutions. We design, implement, communicate, and administer a wide range of people management, retirement, investment management, health care, reward and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. www.aonhewitt.com
Aon Hewitt Contacts:
Duncan Brown+44 (0)207 086 9037
Jackie Waller+44 (0)172 788 8394
Leslie Moss+44 (0)207 086 9212
aon.co.uk
Best for roles with strong external market frame of reference
Rank to Market Market Surveys
Point FactorJobLink™
AnalyticalMarket Data
JobLink™– Aon Hewitt point factor job
evaluation approach Each role assessed on compensable factors Total score for the role is calculated Defensible approach to Equal Pay Points used to allocate roles to levels and compare to market pay Rigorous but complex
Best for roles that require a rigorous and structured approach.
Classification™
Total Reward Survey – Roles benchmarked to market
framework Roles slotted based on market value Uses CareerLink™ levels to match roles
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InternalExternal
ComplexitySimplicity
Accountability
CareerLink™ – Roles allocated to CareerLink™ levels
based on best content match Easy-to-use descriptors to reflect the key elements of a role without the need for in-depth points assessment Organisational levels based on extensive market research and experience, and fully aligned to our point factor plan Broad levels allow flexibility CareerLink™ levels and job families are embedded in the Aon Hewitt market data sources, providing a direct connection to external data
ClassificationCareerLink™
Point FactorJobLink™
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Best for roles that require a simple and flexible approach.