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Our Services
Introduction of Pay for Performance
Client Profile
Telecoms Company employing over 1,000 staff on traditional incremental salary scales. Approx 40% of staff paid at top of scale. Salaries were somewhat below market median. No bonus plans. Recent staff engagement survey indicated that only 34% of respondents were satisfied with pay and benefits. Staff attrition had increased from 10% to 23% over preceding 3-year period.
Assignment
Replace traditional reward framework with new arrangements to improve business performance, reduce attrition and enhance staff engagement levels.
Objectives
1. Introduce “pay for performance” to replace automatic salary increases
2. Ensure that individual salaries are market competitive
3. Link future increases to achievement of business and individual goals
4. Ensure that any additional costs are self-funding
How We Helped
In collaboration with the client, we followed our “Strategic Total Compensation Planning” methodology. The significant outputs included:
• Design of new job grading structure to facilitate role differentiation and support career development
• Introduction of market based salary ranges, with progression linked to individual agreed performance ratings
• Development of a new business scorecard
• Introduction of a new team bonus plan to reward achievement of key business targets
• Some modifications to benefit plans to enhance choice and meet individual
• Design of transition options to maximise take up among existing staff
The Results
• The union agreed to the introduction of PRP and over 80% of staff signed up for new deal
• The additional cost of introducing PRP will reach 7% of payroll at end of year 5
• Company performance has improved significantly and the team bonus plan has paid average awards of 8% of salary over the
past two years
• Latest climate survey shows satisfaction with pay and benefits has increased from 34% to 67%
• Staff attrition had fallen to around 10% p.a.
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