{"id":681,"date":"2015-02-26T15:30:23","date_gmt":"2015-02-26T15:30:23","guid":{"rendered":"http:\/\/hr-management-dimensions.co.uk\/HRMDmn\/?p=681"},"modified":"2019-08-29T17:24:48","modified_gmt":"2019-08-29T16:24:48","slug":"are-your-senior-managers-sabotaging-your-payreward-structures","status":"publish","type":"post","link":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/are-your-senior-managers-sabotaging-your-payreward-structures\/","title":{"rendered":"Are Your Senior Managers Sabotaging Your Pay\/Reward Structures?"},"content":{"rendered":"<article id=\"post-825\" class=\"post-825 post type-post status-publish format-standard hentry category-employee-relations-and-engagement category-reward-and-recognition tag-decaying-pay-structure tag-market-rate-supplements tag-market-rates-of-pay\">\n<header class=\"entry-header\">\n<div class=\"entry-meta\"><span class=\"sep\">Posted on <\/span><a title=\"6:45 pm\" href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/blog\/are-your-senior-managers-sabotaging-your-payreward-structures\/\" rel=\"bookmark\"><time class=\"entry-date\" datetime=\"2015-02-26T18:45:16+00:00\">26\/02\/2015<\/time><\/a><span class=\"by-author\"> <span class=\"sep\"> by <\/span> <span class=\"author vcard\"><a class=\"url fn n\" title=\"View all posts by HR Professional\" href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/blog\/are-your-senior-managers-sabotaging-your-payreward-structures\/\" rel=\"author\">HR Professional<\/a><\/span><\/span><\/div>\n<\/header>\n<\/article>\n<article id=\"post-825\" class=\"post-825 post type-post status-publish format-standard hentry category-employee-relations-and-engagement category-reward-and-recognition tag-decaying-pay-structure tag-market-rate-supplements tag-market-rates-of-pay\">In the past, pay structures were viewed as almost permanent structures which only needed the occasional tinkering to keep them going. \u00a0 That was a fallacy as pay\/reward systems decay over time no matter how carefully they are crafted.\u00a0 In a recent column in the Daily Telegraph, John Timpson took a more strident view, \u201cEvery 10 years we should scrap the existing pay structure and start all again, asking this question: \u201cwhat is each\u00a0person worth to the business?\u201d. [1]<\/p>\n<p><span style=\"color: #9b0505;\"><strong>Frequent Causes of Decay<\/strong><\/span><\/p>\n<p>The rate of decay is accelerated by, for example, \u2018on the quiet individual deals\u2019, changing market rates and changes in business\/service\u00a0 needs.\u00a0 A major cause is the unwitting or intentional sabotage by senior managers who undermine the structure by:<\/p>\n<ul>\n<li>failing to address poor performance but still giving a pay rise for a quiet work life;<\/li>\n<li>favouring some individuals by inflating the value of and pay for their job; such favouritism may just simply arise because of an attractive appearance or an individual often digs the manager out of a hole;<\/li>\n<li>actively seeking to depress the value and pay of individuals who challenge such a manager or are not willing to submit to bullying;<\/li>\n<li>insisting that their function is worth more to the organisation and securing funds by shouting louder;<\/li>\n<li>distorting benefits packages of some staff groups to prove that the manager has influence.<\/li>\n<\/ul>\n<p>Other managers may well say, \u201cSo long as the results are good, so what!\u201d\u00a0 Such actions damage the internal sense of equity in the rewards received by different groups and also leads to a real feeling of unfairness by many staff that the favoured few are viewed as important by the company.\u00a0 That arises even though other senior managers may challenge the appropriateness of the above type of actions.\u00a0 Unless checked, this will lead to the decay of the pay structure, increasing sense of alienation among staff, decreases in discretionary effort and a higher pay bill in the future as delayed corrective action will have to be taken.<\/p>\n<p><span style=\"color: #9b0505;\"><strong>What Can You Do?<\/strong><\/span><\/p>\n<p>Do not rush into a major job evaluation exercise as that is rarely a cost effective solution.\u00a0\u00a0 Most organisations have an equitable sense of their internal job ranking and that can be used to help to re-align the pay structure. \u00a0 Some practical tips are given below.<\/p>\n<p><strong><span style=\"color: #9b0505;\">Distortions due to Market Rates<\/span><\/strong><\/p>\n<p>If you have to pay market\u00a0to remain competitive, adopt a transparent approach by the use of market rate premiums.\u00a0 For example, if you have to pay an additional \u00a36,000 to attract or retain individuals, on top of their basic salary, do not increase the basic\u00a0 by that amount but pay a market premium instead.\u00a0 That is simply an allowance which has several advantages:<\/p>\n<ul>\n<li>The use of a market premium allows an appropriate rate of pay to be given without the need to massage the job evaluation and pay structure;<\/li>\n<li>The market supplement\/premium becomes a separate and severable term of the individual\u2019s contract so that it may be varied or terminated by the giving of separate notice without affecting the main employment contract;<\/li>\n<li>Flexibility is retained in how you respond to a future change in market conditions e.g. reducing or staging reductions or eliminating or the supplement;<\/li>\n<li>You choose whether the market allowance is pensionable or not.<\/li>\n<\/ul>\n<p>As such premiums are transparent, they are likely to be accepted as a reasonable response in a market driven pay structure.<\/p>\n<p><span style=\"color: #9b0505;\"><strong>Winning Over the Saboteurs <\/strong><\/span><\/p>\n<p>Managers who set out to undermine the pay structure need to understand that is no longer tenable as there are legitimate ways in which issues can be addressed without distorting the pay and\/or evaluation structure.<\/p>\n<p>A direct discussion will be required to explain the alternative solutions available and the expectation that the senior manager(s) will work with the rest of the senior management team to ensure the pay structure remains robust and fit for purpose.<\/p>\n<p>Take a quick look at the pay rises given to the poor performers and see whether those increases are very small \u2013 an indicator that the manager hopes that a low rise will encourage the individual to leave.\u00a0 The reality is that if the individual is reasonably well paid in any case, he\/she will not leave voluntarily so now is the time to work with the senior manager to address the poor performance or move the employee on.<\/p>\n<p>With regard to favouritism, the manager will need help to adopt a different approach but it needs to be made clear that the making of such arbitrary awards is not acceptable to top managers.<\/p>\n<div id=\"stcpDiv\">Are solutions to market rates of pay or other issues noted above of interest to you?\u00a0 If they are, contact us via<a href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\" target=\"_blank\" rel=\"noopener noreferrer\"> our website<\/a>.\u00a0 We apply the many dimensions of people management and organisational capability to help you to produce commercially and service focused solutions to human resource management issues.<\/div>\n<div><\/div>\n<div>To ensure that you receive alerts to new articles,\u00a0<em><strong>click the link at the top of the right hand column of this blog page so that you receive updates by e-mail.<\/strong><\/em><\/div>\n<div><\/div>\n<div>Sources:<\/div>\n<div>[1]\u00a0 Are you paying your people too much?\u00a0 John Timpson column in the Daily Telegraph 09 Feb 2015<\/div>\n<p>\u00a9<strong> 2015 <span style=\"color: #9b0505;\">HR Management Dimensions<\/span><\/strong><\/p>\n<p><strong>Related blogs and websites<\/strong><br \/>\nHeadsup HR \u2013 blog for Head Teachers and\u00a0 School Governors<br \/>\n<a href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\" target=\"_blank\" rel=\"noopener noreferrer\">Web site \u2013 HR Management Dimensions<\/a><br \/>\nThis blog \u2013 <a href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/blog\" target=\"_blank\" rel=\"noopener noreferrer\">HR Management Dimensions blog <\/a><\/p>\n<p>Articles are produced for information purposes only.\u00a0 They are not published as legal advice and must not be relied upon or construed as such as neither the author(s) nor the Company are aware of the particular use to which the content will be put.<\/p>\n<footer class=\"entry-meta\"><span class=\"cat-links\"> <span class=\"entry-utility-prep entry-utility-prep-cat-links\">Posted in<\/span> <a href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/blog\/are-your-senior-managers-sabotaging-your-payreward-structures\/\" rel=\"category tag\">Employee relations and engagement<\/a>, <a href=\"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/blog\/are-your-senior-managers-sabotaging-your-payreward-structures\/\" rel=\"category tag\">Reward and Recognition<\/a> <\/span><br \/>\n<span class=\"sep\"> | <\/span><span class=\"tag-links\"><br \/>\n<span class=\"entry-utility-prep entry-utility-prep-tag-links\">Tagged<\/span><\/span><\/footer>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>Posted on 26\/02\/2015 by HR Professional In the past, pay structures were viewed as almost permanent structures which only needed the occasional tinkering to keep them going. \u00a0 That was a fallacy as pay\/reward systems decay over time no matter how carefully they are crafted.\u00a0 In a recent column in the Daily Telegraph, John Timpson [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":0,"footnotes":""},"categories":[23,56,22],"tags":[29,31,32,30],"class_list":["post-681","post","type-post","status-publish","format-standard","hentry","category-pay-structures","category-performance-management","category-reward-recognition","tag-decaying-pay-structure","tag-market-rate-supplements","tag-market-rates-of-pay","tag-pay-structure-dying"],"jetpack_featured_media_url":"","post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/posts\/681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/comments?post=681"}],"version-history":[{"count":0,"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/posts\/681\/revisions"}],"wp:attachment":[{"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/media?parent=681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/categories?post=681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hr-management-dimensions.co.uk\/HRMDmn\/wp-json\/wp\/v2\/tags?post=681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}