HR Practice Reward Pay systems Pay Systems Basic
HR Practice Reward
Pay systems • Pay Systems • Basic Rate Systems • Variable or Incentive Pay Systems • Flexible benefits
Basic rate systems Pros • Cheap and simple to administer and operate • Certainty and stability in pay for the employee • Simplicity in pay progression • Costs more easily forecast • Fewer grounds for disagreement and Cons • No incentive for improved performance or quality • Individual employees may feel aggrieved if perceive themselves to work harder or perform better than others • Can be rigid and hierarchical
Variable rate systems Pros Cons • Rewards individual contribution and performance • Can be more flexible and responsive • Can be selffinancing and linked to productivity • Easier to control increasing pay costs • Potential subjectivity, perceived bias and unfairness • Can be damaging to long term business success • Can work against effective team working
Pay Structures • • • Graded structures Broad banding Spot salaries/individual pay rates Job families Pay spines
Linking pay with performance • Definitions of pay and performance • The link to motivation • Non-pay rewards – – – Achievement Recognition Responsibility/autonomy Influence Personal growth
Reasons for joining the public sector • • • Making a positive difference Working with people A career had always wanted to do Interesting work Career progression
Employees’ pay - legal aspects • • • National Minimum Wage Maternity, paternity, statutory sick and redundancy pay Definition of a week’s pay The right to be paid Rights on transfer of an employee’s employer Short-time working Lay-offs Reducing pay rates Agreeing pay reductions Unlawful deductions
Making pay decisions • Equal pay legislation – Equal pay audits – Transparency in earnings • Information to inform pay decisions – – – Labour turnover and stability Job evaluation Salary surveys Incomes Data Services Local or sector discussion groups Recruitment agencies
Pensions • • The state pension Final salary schemes Money-purchase schemes Communicating with the employee
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