The return of “pay” and how to optimise it
| Date | 14 August 2017 |
| DOI | https://doi.org/10.1108/SHR-05-2017-0030 |
| Pages | 182-188 |
| Published date | 14 August 2017 |
| Author | Ruth Thomas |
| Subject Matter | HR & organizational behaviour,Employee behaviour |
On another note
The return of “pay” and how to optimise it
Ruth Thomas
Ruth Thomas is based at
Curo Compensation,
London, UK.
Abstract
Purpose –There is a strange paradox at play in workplaces today – and it has all to do with that most
basic of needs: “pay”. Employees might well be working longer hours and taking out more second jobs,
but the amount of money they have left in their pockets simply is not keeping pace with the cost of living.
Design/methodology/approach –This paper examines how pay has shot back to the top of the things
employees most want from their employer, but (despite this) it also examines the extent to which pay –
the greatest cost most businesses face – seems overlooked in terms of being measured with the same
sort of ROI rigour as other business costs.
Findings –Most firms would not invest hundreds of thousands of pounds in new IT if it did not yield
some form of efficiency/productivity return but, as this paper argues, many firms can quite easily see the
total pay of their employees’ pay rise by the same amount, and yet they know nothing about whether
paying some staff more than others will actually boost productivity and profitability.
Originality/value –It is this paper’s view that compensation measurement and management is vital if
businesses are to understand how what they pay impacts performance. Firms that use data may
discover they do not need to improve everyone’s pay by the same amount to boost their productivity, but
they can do more targeting compensation around key people and key performers.
Keywords Performance, Technology, Benefits, Engagement, Rewards, Analytics
Paper type Viewpoint
There is a strange paradox at play in workplaces today and it has all to do with that
most basic of needs: “pay”. Employees might be working longer hours and taking
out more second jobs, but the amount of money they have left in their pockets simply
is not keeping pace with the cost of living.
Not surprisingly, employees want the monetary side of their reward package to increase –
not purely through higher base pay, but via bonuses or other performance-related
mechanisms. But – and here is where heads of reward and HRDs arguably need to take
note – while employees might demand more cash, are businesses really able to
demonstrate that the way they apportion it is done with the best insight and execution? Is
it done in a way that benefits them too – by yielding improved business performance?
In this article, we examine how pay has shot back up the agenda when it comes to the
things employees most want from their employer, but (despite this) it also examines the
extent to which pay – the greatest cost most businesses face – seems overlooked in terms
of being measured with the same sort of ROI rigour as other business costs.
Why pay is back on the agenda
When pay is good, it can attract the best. When pay is bad (or perceived not to be market
rate or fair), it can cause talent to leave. It all sounds extremely simple.
PAGE 182 STRATEGIC HR REVIEW VOL. 16 NO. 4 2017, pp. 182-188, © Emerald Publishing Limited, ISSN 1475-4398 DOI 10.1108/SHR-05-2017-0030
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