Many small organisations have historically adopted a spot salary or ad hoc approach to reward management. There is another approach employers can use – adopting a structure and salary bands!
Our case study organisation is a NGO, providing services to young people. They have less than 30 staff and a large volunteer network. The CEO wanted the values of the organisation to be applied to Reward. We presented the following solution: adopting a structure, evaluating all positions and a benchmarking exercise.
A grade structure, even in a small organisation is beneficial, structures help to achieve the following:
Promote fairness
Providing a formal framework for reward and creating a grade structure ensures that a fair methodology is applied across the organisation. It also demonstrates an organisation’s commitment to ensuring that all employees are treated fairly and that a process has been undertaken in terms of job evaluation/level and pay grade.
Set parameters to allow for fair and transparent pay progression
Pay progression via salary scales provides a transparent approach for all employees which will help to strengthen employee’s trust and confidence in their organisation’s approach to fair reward. This also helps to increase employee engagement and motivation as pay trajectory is clearly established.
Eliminate bias and subjectivity
A more formal approach to pay ensures all employees are treated fairly in terms of pay progression and does not allow for discrimination of any type to affect decisions on pay or impact an individuals earning capacity.
Satisfy Trustee/Board requirements and demonstrates good governance
As well as demonstrating a commitment to fair reward at Board/Trustee level, in terms of budgeting, having pay scales allows organisations to plan their finances and produce accurate forecasts.
In summary, for an organisation of any size to create a consistent reward based approach, we would advocate a fair and equitable remuneration system which is transparent and removes any preconceptions or room for bias. A formal arrangement to set and adjust pay and the introduction of a grade structure is therefore a vital step.