Streamlining BT’s pay review
| Date | 01 May 2005 |
| Published date | 01 May 2005 |
| DOI | https://doi.org/10.1108/14754390580000793 |
| Pages | 4-4 |
| Subject Matter | HR & organizational behaviour |
4Volume 4 Issue 4 May/June 2005
e-HR
,
How technology is changing the way HR works
Streamlining BT’s pay review
T
he annual pay review can be a
time-consuming process, especially
when it involves gathering input
from thousands of managers in five
business units across the globe. For BT,
the process became so time-consuming
and inefficient that, in 2004, it switched
to a web-based application that
automated data generation and made
the process transparent for the first time.
The spreadsheet method
Prior to 2004, BT used a spreadsheet
approach to manage the pay review
process for its 34,000 managers
worldwide. With this approach, BT first
established the business rules for each
of their five lines of business, and then
modeled the data into spreadsheets.
These were then sent to the relevant
specialists, who would refine and split
the data into the review groups,
cascading the information down until it
reached the individual reviewing
managers.
“There were several reasons behind
changing the old system,” says Ian
Lambert, BT’s HR systems project
manager. “The spreadsheet approach
meant high administrative overheads,
data fragmentation and opportunity for
error. Reward and HR specialists had
little visibility of or control over the
process, so weren’t able to proactively
address issues. There were also obvious
concerns about security.
“The other key driver for change was
our move to a new reward framework
where managers are remunerated in
comparison with market rates. It was
important to us that people making pay
review decisions could access consistent
benchmark data.”
Selecting a solution
In 2003 BT selected HRM Software to
develop a web-based pay review
system. The new system would manage
all the information required to support
pay review through a single, easy-to-
use web-based application.
Once the process kicks off, all
reviewing managers are automatically
sent an e-mail containing a URL. This
gives them secure browser access to the
relevant subset of data and functionality
needed to make recommendations for
their employees’ base and variable pay.
For BT, a highly telecomms-linked
company, this approach worked well.
A transparent system
Using the new system, line managers
can see their employees in the context
of colleagues who are in the same role
as well as in the context of pay in the
external market. There is also
information on what the manager’s
overall budget is.
The reviewing manager submits their
recommendations automatically to the
next manager in the hierarchy who
authorizes it and it then goes up the
approval chain.
Because data is held in one place and
updated in real-time, BT’s reward
specialists have total visibility of
progress, budget, allocation, overruns,
review timelines etc. The HR specialist
at the top of each of the five parts of
the business analyzes the final outcome
(including aspects such as pay compared
to employee diversity, etc.) and takes it
to the CEO of that part of the business
to sign off. If there is a problem at any
part of the chain, such as an absent
manager, the local HR manager can
step in to ensure the review goes
ahead on time.
Gaining efficiency
In 2004 BT completed the annual pay
review of its 34,000 managers in record
time. For the first time, BT’s reward
teams were in the position to monitor
progress throughout the review, and as
a result to provide direct support
where needed.
A post-implementation survey
received positive feedback from many
line managers conducting the review
on how it simplified their task. “We
have gained substantial HR efficiencies,
but, importantly, we have also moved
with confidence into our new reward
framework,” says Lambert. “Managers
can now see how much their staff are
worth compared to the outside market.
The system has given managers all the
information they need in one place and
we can easily see whether we are
achieving competitive remuneration
levels against market rates.”
BT is one of Europe’s leading providers of
telecommunications services. It has 19
million consumer customers and over one
million business customers. Its 2004
turnover was over UK£18.5 billion.
BT
© Melcrum Publishing Ltd. 2005 For more information visit www.melcrum.com or e-mail info@melcrum.com
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