The term ‘Pay Plan’ can mean different things to different people. Not only can it mean a payment method plan but you may want to have a pay plan for your business in relation to compensation and/or benefits. This can prove particularly useful when you are reviewing salaries and benefits.
Some questions raised during such reviews may include:
- How much annual increase should be given to individuals?
- Should this be linked to employee performance and appraisals?
- Does company profitability need to be taken into consideration?
The answers to these are usually useful informers during annual pay reviews that organisations typically perform in the autumn or spring. Pay reviews are an extremely busy time for HR departments and using a reliable provider, that can supply up-to-date information specific to your organisation, can significantly reduce/eliminate the research time which can prove invaluable when the workload is so heavy. Furthermore, once you have a clear pay review process in place, this can also save time by being replicated on each review date.
Job descriptions are an essential part of all these plans. Without an accurate, up-to-date job description, it is extremely difficult to accurately compare your organisations’ roles against the external market. By investing time at the beginning of the pay plan’ – ensuring that all job descriptions reflect the job and not the job holder – will provide an accurate output for a pay review.
Another annual event in a pay plan is appraisals. Having clearly defined objectives from the outset can assist in setting objectives and driving business goals. These measurable criteria will make it easier to see how an employee is performing based on the objectives that have been agreed and set out each year. Employees that are over achieving against the objectives can be significantly rewarded, meaning that employees feel valued and more inclined to stay with the organisation.
When it comes to deciding on a rate for pay rises, Croner Reward publish pay surveys (segmented by region, job function and industry) that provide quartile and median ranges of pay; useful as a guide to see what other organisations are offering their top performers. These surveys can also come in handy if you are thinking about making any pay plan reviews due to company expansion or other changes.
Also useful here are our monthly Settlements and Forecasts figures – made available free to the general public on our website – across clerical, operative and managerial roles.
To ensure you are comparing your job roles accurately against the external market, have relevant job descriptions, are using an appropriate appraisal scheme that suits your business needs and have a reliable pay structure in place; an experienced pay and benefits provider is the best source of help for any business.
Croner Reward has over 40 years’ experience in providing pay and benefits advice to organisations of all sizes across all industry sectors; meaning our pay and benefits database is one of the most comprehensive in the U.K. You can be assured that the information we provide is reliable, consistent, up-to-date and available year-on-year.