Wed, 2 Feb 2011

CIPD issues pay review guide

Organisations must consider the annual pay review as more than just a ‘tick-box HR process’, warns the author of a new guide published by the Chartered Institute of Personnel and Development (CIPD).

Launched last month, The Pay Review Process is the result of research conducted by the institute and compiled by Charles Cotton, CIPD adviser for performance and reward. Its conclusions are drawn from in-depth interviews with 16 public, private and voluntary sector organisations, including the John Lewis Partnership, Oxfam and Transport for London.

The guide includes advice on planning pay review budgets, timing of reviews and communicating with employees. Cotton told Payroll World the research was necessary because previous research was too focused on the outcomes of the pay review process rather than how pay decisions have been made.

‘A lot of our members had told me that people were coming in to reward without an understanding of the pay review process,’ he said. ‘This is a crucial business process – you are increasing organisational expenditure by giving people more money, and you have to know if your decisions will lead to the recruitment engagement and retention you need.’

The guide contains examples of best practice from those organisations interviewed and encourages HR professionals to keep processes as simple as possible. It also advises payroll and HR professionals to use management tools to support decision-making and to use previous reviews as a basis for improving current practice.

Further, it includes resources for employers, including a checklist of issues to consider when using salary surveys, information on executive pay reviews, the international pay review process and union-negotiated pay reviews.