Pay management - Aon Hewitt


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Pay management - Aon Hewitt

  1. 1. Pay ManagementRobust pay management is critical to balancing the essentialrequirement for active talent management and employee retention withcost effectivenessThe current economic climate means that now, more than ever, pay needs to be an effectivemanagement tool, owned and operated by the business. Pay and reward structures have to bealigned to business needs and future strategy. But employers face some tough challenges in buildingand 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 ApproachWe believe that a robust and well-designed approach to pay management creates the foundation foran 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 avariety 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.
  2. 2. 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. External Internal Simplicity Complexity Market Data Analytical Rank to Market Classification Classification Point Factor Point Factor Market Surveys CareerLink™™ JobLink™ JobLink™  Total Reward Survey  CareerLink™  JobLink™ – Roles benchmarked to market – Roles allocated to CareerLink™ levels – Aon Hewitt point factor job framework based on best content match evaluation approach – Roles slotted based on market – Easy-to-use descriptors to reflect the key – Each role assessed on value elements of a role without the need for in- compensable factors – Uses CareerLink™ levels to depth points assessment – Total score for the role is match roles – Organisational levels based on extensive calculated market research and experience, and fully – Defensible approach to aligned to our point factor plan Equal Pay – Broad levels allow flexibility – Points used to allocate CareerLink™ levels and job families are roles to levels and compare embedded in the Aon Hewitt market data to market pay sources, providing a direct connection to – Rigorous but complex external data Best for roles with strong external Best for roles that require a simple and flexible Best for roles that require a rigorous market frame of reference approach. and structured approach. On a typical project we would: Accountability  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 lineAon Hewitt Contacts: managers and the HR function, and has provided greater clarity about career and progression Duncan Brown opportunities for employees. +44 (0)207 086 Jackie Waller +44 (0)172 788 8394 About Aon Hewitt Aon Hewitt is the global leader in people management consulting and outsourcing solutions. We Leslie Moss +44 (0)207 086 9212 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.