Setting pay is not easy, especially if you are a small organisation with limited resources or if you have years of negotiations and ad hoc salary placing to disentangle. Many organisations now set pay levels by assessing the value of roles internally (using a job evaluation system), conducting external benchmarking exercises to pitch salaries at the right level and thereafter, constructing pay scales and grades. Sounds sensible, so what could go wrong?
• First, are robust role profiles agreed and in place for comparison?
• Second, is your job evaluation scheme free from bias and analytical? Job evaluation is resource intensive and can uncover issues
but can you fairly decide internal relativity without it?
• Third, is external benchmark information relevant to job size, location and turnover?
• Fourth, are good judgements being made on grade number, placing and value?
• Fifth, are you rewarding people for the right behaviours, competencies or skills or for merely turning up (if indeed they do) each day?
• Finally, do you audit pay for equality and discrimination? Is your system fair or is it equitable? The law requires you not to
discriminate against employees/genders but unfortunately, it does not say that you need to be fair.
The National Offenders Management Service of the Secretary of State for Justice found this out to their success recently. They operated a spinal pay scale and had placed (following their pay procedures) 1 male and 1 female candidate at different starting rates due to their experience levels. Despite good performance reviews, one always remained 2 spinal places lower than the other due to their initial placement and made an equal pay claim. Perhaps surprisingly, the employment appeal tribunal found that although the starting pay practice was perhaps unfair, as the organisation would have treated males and females with these experience levels the same, it was not actually illegal and the equal pay claim was dismissed.
However, considering the local authorities fighting equal pay cases and the numerous employers grappling daily with pay issues (both in and out of the courts), it is therefore still wise to tread with caution, advice and support.
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