Strategic reward programmes

Setting up salary systems

The right salary programs can make the difference between retaining key staff and watching them go to your competitors. Hay Group’s consultants, drawing on our extensive knowledge of pay and rewards across the globe, can help you put in place the right salary systems for your business strategy.

The issue
Every business knows the importance of offering its staff the right salary. Effective base salary systems can help organisations:

  • align rewards with individual and team performance as well as work culture
  • provide clear frameworks to manage career development
  • provide a basis for a competitive and differentiated reward package that reflects the internal and external value of work
  • ensure that roles are effectively differentiated and leveled within the organisation
  • manage the needs of different demographic categories of employees: the younger and the older, for example
  • offer reward programmes that provide parity among and between employee groups, and
  • provide a link between performance management systems and how employees are paid.

But actually identifying what structures to use and the amounts to pay is a far harder task. How much can the business afford to pay? How much do your competitors offer? And how much is each individual’s performance worth? What structures would employees find most motivating? What mix of remuneration best meets employee needs?

Why Hay Group?
Hay Group can help you approach these questions methodically and develop salary systems that are not only competitive but which reflect your business and employee performance.

Our systems are based not only on a detailed understanding of your business, but also an understanding of how the work your staff does creates value for the organisation. Then our programme design balances out the various components of reward – base salaries, short- and long-term incentives, and benefits.

Alongside this, we are able to draw on the world’s most comprehensive databank of employee rewards information – Hay Group PayNet – which enables us to help you benchmark your structures and individual employee remuneration against competitors. This isn’t just based on comparing rewards for people with the same job title, but actually on the content of the job they do.

Crucially, too, the information we put together is linked to your business goals and ensures that you are offering salaries that reflect those goals, and the organisation’s ability to pay.

Hay Group also utilize our employee diagnostic capability to study employee diagnostics and the needs of different groups.

Other firms view salary management as more of a technical design exercise. Our programmes are aligned with your business, practical to implement, and ROI focused.

Hay Group’s approach
Our approach to base salary management balances business, technical, and behavioural factors. We look not only at salary but also the wider rewards on offer, to help understand the total remuneration on offer to your staff. We will:

  • work closely with key decision makers, including your financial people
  • develop a comprehensive understanding of your business strategy, business model, KPIs, and work culture and your overall reward strategy
  • help you set clear priorities for salary management programmes for different groups of potential participants – we study your employee demographics so that the reward programmes best meet their needs: no one programme necessarily fits all
  • understand the criteria that differentiate work in the organisation and apply those criteria to develop a hierarchy of value-added role contribution in the organisation – through bands, grades, career families or broad band approaches
  • analyse and understand potential base salary equity issues and their impact on remuneration design
  • analyse and understand the competitiveness of the base salary programme against relevant external markets
  • Work with you to ensure managers and employees understand the reward programmes so that employees fully understand the value of the programmes

From this we then develop base salary plans that are aligned with your business requirements and reward strategy. We also model outcomes and costs of alternative plan designs, to help you see the bigger picture, and explain the potential cost and accounting implications of our recommended strategy. We will then show you how this compares to other organisations, and offer insights into why different types of plans tend to be used by different organisations.

Finally, we can provide you with the benefit of our experience and expertise in implementing and communicating the new salary programme. Many of the best designs are wasted through lack of proper communications and poor implementation: we place as much priority on both communications and implementation as on initial design.

Hay Group in action
Hay Group has helped develop salary systems for many organisations. View our case studies.

Find out more
If you would like to discuss how we can help you refine your salary programme, please contact us.