Your pay review priorities
Part 1 of 3
7 December 2022
In this deck, I explain how the annual pay review supports your ESG agenda and the UN Global Sustainable Development Goals 1 (No poverty), 5 (Gender equality), 8 (Decent work and economic growth) and 16 (Peace and justice, strong institutions)
Falcon Invoice Discounting: Empowering Your Business Growth
Slides - 1-3.pdf
1. Corinne CARR, FCIPD
Responsible Reward Consultant and Coach
PeopleNet Ltd
YOUR PAY REVIEW PRIORITIES
Part 1/3
THE PAY REVIEW AND ESG
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2. MY KEY DATES:
If we haven’t met yet, here is a summary of my Reward career in three key dates:
1990: I started my Reward career with Bank of America
1998: I set up PeopleNet Ltd, a specialist Reward consultancy
2017: I introduced the concept of Responsible Reward, the integration of Reward and
Sustainability, to the Reward and Investment community in my report written in
collaboration with CASS Business School, London.
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4. WHAT IS RESPONSIBLE REWARD?
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Responsible Reward sits at the intersection of
Reward and Sustainability. It covers base pay,
incentives, benefits and pensions.
7. The promised minimum wage increase to £10.42 an hour for workers aged 23 and
over comes into effect from April next year. But it will still be below the real living
wage of £10.90 across the UK and £11.95 in London.
There are 4.8 million workers in the UK not earning the real living wage. If you don’t
directly employ some of them, one of your suppliers might. They could be your
cleaners, security guards, or drivers, and paying them the real living wage has a
positive impact on the sustainability of your business.
GOAL #1: NO POVERTY AND THE REAL LIVING WAGE
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8. Actions for you to take:
Become a real living wage employer
If you are one already, consider extending the real living wage to your whole
workforce, not just those aged 23 or over. The current minimum wage for under 18s
and apprentices is only £4.81 an hour.
Resources for you:
Listen to my recent ‘PAYING FOR GOOD’ podcast episode on living wages. I speak
with Simon Rawson, Director of Corporate Engagement at ShareAction, about why it
makes commercial and social sense to become a real living wage employer.
GOAL #1: NO POVERTY AND THE REAL LIVING WAGE
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9. Goal 5 aims to achieve gender equality by:
ending all forms of discrimination, violence and harmful practices against women and
girls
ensuring the full participation of women and equal opportunities for leadership at all
levels of political and economic decision making
GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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10. Progress on the gender pay gap is painfully slow.
GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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11. GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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According to the ONS, in 2022, the
gap among full-time employees
increased to 8.3%, up from 7.7% in
2021.
Among all employees, it decreased
to 14.9%, from 15.1% in 2021.
13. GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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Another interesting statistic is the gender pay gap when taking age into account. The ONS
explains that: “for groups aged under 40 years, the gender pay gap for full-time employees is
low, at 3.2% or below.
However, for age groups aged 40 to 49 years and older, the gender pay gap for full-time
employees is at over 10.9%. There is a lower incidence of women moving into higher-paid
managerial occupations after the age of 39 years, at which point pay in these occupations
increases.
For 2022, the gap for employees aged 22 to 29 years, 30 to 39 years, and 60 years and above
increased. Those aged 60 years and over experienced the biggest increase of 1.9 percentage
points.”
14. GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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Actions for you to take:
Be mindful of gender-biased decision making on performance ratings and pay during the
pay review cycle. HR and Reward need to challenge pay proposals where necessary to
ensure fairness and to avoid employee disengagement and potential litigation.
Consider adding factors such as age or ethnicity when you audit pay proposals. It may
reveal some undesired outcomes you can address before it’s too late.
The pay review cycle is also often the time for promotions. Again, work closely with the
business to check that senior roles are offered equally to men and women.
15. GOAL #5: GENDER EQUALITY AND
THE GENDER PAY GAP
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Resources for you:
Listen to my ‘PAYING FOR GOOD’ podcast episodes on the gender and ethnicity pay gaps
where I speak with Nigel Marriott, Chartered Statistician, a regular guest on the podcast.
16. Goal 8 recognises the importance of sustained economic growth and high levels of
economic productivity for:
the creation of well-paid quality jobs
progressive improvement of resource efficiency in consumption and production
It calls for:
opportunities for full employment and decent work for all
the eradication of forced labour, human trafficking and child labour
the promotion of labour rights and safe and secure working environments
GOAL #8: DECENT WORK AND ECONOMIC GROWTH
AND PAY RANGES
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17. Pay ranges play an important role in supporting decent work and career progression. Whether
you are creating new ranges or maintaining existing ones during this pay review cycle, you
might want to consider the:
number of sets of pay ranges you need: one for the whole business or several for different
functions?
minimum and maximum pay points
Number of job levels and variance from one to the next
current and desired employee distributions to prevent compounding gender bias, poverty
and inequalities
GOAL #8: DECENT WORK AND ECONOMIC GROWTH
AND PAY RANGES
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18. The Gini coefficient and Palma ratio are two measures of income distribution across a
nation. In the UK, they show that the disparity between top and lowest earners is
widening, causing serious financial pressure during the cost of living crisis.
In the UK and other developed countries, elderly poverty is increasing with the trend
of over 60s having to come out of retirement and return to some paid employment,
in part for financial reasons.
Investors are very sensitive to how executive pay proposals compare to those for the
wider workforce. We will look at their expectations in more detail in part three of this
mini-series.
GOAL 10: REDUCED INEQUALITIES AND
THE PAY BUDGET DISTRIBUTION
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19. Goal 16 calls for peaceful and inclusive societies based on:
respect for human rights
the protection of the most vulnerable
the rule of law and good governance at all levels
It also envisions transparent, effective, and accountable institutions.
GOAL #16: PEACE, JUSTICE AND STRONG
INSTITUTIONS AND PAY TRANSPARENCY
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20. Pay ranges, good pay governance and transparency around pay setting and
management contribute to Goal 16.
Of course, following employment law is paramount to everything we do in Reward
and this is especially relevant during the pay review cycle.
GOAL #16: PEACE, JUSTICE AND STRONG
INSTITUTIONS AND PAY TRANSPARENCY
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21. RESOURCES FOR YOU:
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Sign up to my newsletter
www.peoplenet.ltd.uk
Listen to my podcast
Download my Report
22. DO YOU WANT TO KNOW MORE ABOUT
RESPONSIBLE REWARD?
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Email Corinne Carr at: client.care@peoplenet.ltd.uk
Or
Book an introductory call here
23. These materials contain protected trademarks, copyrights and other intellectual
property.
You are welcome to use these slides for your own presentations but, please,
credit them back to Corinne Carr at PeopleNet Ltd.
Copyright of PeopleNet Ltd. All rights reserved.
NOTICE