PAY REVIEWS
CIPD highlights need for HR to manage pay review process as a crucial business activity
A new guide by the Chartered Institute of Personnel and Development raises awareness of the need to establish the pay review as a business process and offers insight on how to achieve this.
There is something of a dearth of high-quality information on how pay decisions are made and the consequences of this. Through highlighting good practice from 16 public, private and voluntary sector organisations, this CIPD guide aims to help reward and HR professionals review and evaluate procedures for handling the process in their own organisations.
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The Pay Review Process explains how to align pay awards closely with the needs of the business and identifies ten “central messages” for organisations to adhere to, including:
Effective planning is essential.
Gathering and interpreting relevant data is critical.
Keep processes as simple as possible.
Management tools can support decision-making.
Learn the lessons of previous reviews.
Ensure roles and responsibilities are clearly defined.
Research background
The 16 employers interviewed for this research are: Boehringer Ingelheim; Citizens’ Advice Bureau; FirstGroup; Kent County Council; John Lewis Partnership; McDonalds; Moog; National Bank of Abu Dhabi; Oxfam; Royal Bank of Scotland; Sainsbury’s; Shell; Specsavers; Transport for London; TUI Travel; and Welsh Assembly Government.
A final word
“Too often the annual pay review is seen as a tick-box HR process, rather than a vital business process impacting on organisational strategy, despite the huge sums of money usually involved. Get it wrong and it may send out mixed messages on what your organisation values in terms of employee behaviours, skills, attitudes and performances. On the upside, the employers we have spoken to have emphasised that getting it right can create value for the organisation by supporting the employer brand.” - Charles Cotton, CIPD Adviser for Performance and Reward.
Want to know more?
Title: The Pay Review Process, Chartered Institute of Personnel and Development, January 2011.
Availability: The 41-page report is available to CIPD members to download from the CIPD web site at www.cipd.co.uk/subjects/pay/general/_pay-review-process.
The Chartered Institute of Personnel and Development is “Europe’s largest HR and development professional body with over 135,000 members, supporting and developing those responsible for the management and development of people within organisations.” For more details visit www.cipd.co.uk.