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Increase basic pay or offer bonuses?

By Adam Turner
23 Jun 2016
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The ‘To Be or Not To Be’ question of the moment:

Do you increase salaries for the whole workforce or provide a bonus payout for those who work unsociable hours?
A troubling question especially in the retail sector, as M&S found out recently.

According to The Guardian, when the retailer recently revealed plans to increase basic pay by 15% and reduce special pay rates proportionately, it came to light that some employees could actually lose around £2,000 per year.

Viv Copeland, Head of Reward at Croner, explains:

“Pay is a highly motivational factor for some employees, so distributing pay across the workforce can be an enormous challenge. The pressure is on to make salary increases at least once a year but these funds have to come from somewhere. Undertaking a pay and grading review can be vital in this process, as it can highlight potential pitfalls before they arise.

“In a sector like retail, where many workers used to earn the National Minimum Wage, the introduction of The National Living Wage will have had a major impact, just as it has for organisations in other sectors. For instance, 20% of respondents to Croner Reward’s research around the topic stated that they would stop using pay as a differential/benefit, 20% also saying that they may need to make redundancies. “However, we would advise organisations to think very carefully about any pay decisions before taking action, especially in a climate where many UK workers are looking to change employer.”

To learn more about Croner Reward’s consultancy services, please call 0844 728 0103.

About the Author

Image of Croner employee Adam Turner

Adam has been with Croner Reward for 3 years. He has over 15 years’ experience working with various organisations and sectors. He has a strong passion, breadth and depth for job evaluation and salary benchmarking. He has a strong customer focused work ethic, ensuring clients always get the best possible outcome for their organisations from their Reward Projects.

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