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Managing reward data through Pay Modelling

If you need help managing your reward data, our Pay Modelling service can help you to do this more quickly and effectively.

Paydata can help you develop salary ranges, calculate pay review costs and model pay for performance awards. We can also help you with equal pay audits if needed.

Pay modelling starts with an understanding of the market. Paydata’s salary surveys give you clarity about market pay rates. But you can also use salary survey information to develop policies that apply to your business. Our simple, credible six-step approach can help you give managers the tools they need to make the right pay decisions.

Step 1: Organising your HR data

If you are worried that your HR data needs improving, you are not alone; many of our customers need help to rationalise job titles and apply job evaluation principles to level their jobs.

The Pay Modelling database forces discipline. It groups jobs into families and standard roles and sorts them into levels. If your approach is already structured, we will use the approach but if not, you can:

  • Use the job families and levels that underpin our salary surveys; or
  • Complete a salary survey with grades and job descriptions (we use your job matching to guide us).

Step 2: Organising the market data

We can combine data from Paydata salary surveys and those published by other providers, because we understand how all the major salary surveys work. We can also use data from other sources, sorted into exactly the same structure as your internal data.

Step 3: Creating market guidelines

Next, we bring together your internal data and market data. In most situations, each market source shows different results; so we use our reward expertise to interpret the results and create market guidelines for each role. Our useful ‘traffic light’ report highlights roles that are underpaid or overpaid compared to the market.

Step 4: Developing salary ranges

Published salary scales usually show a smooth pay progression between job levels. They also tend to adopt some rules about how wide a pay scale should be (minimum and maximum levels). 

We take the market guidelines created in 'Step 3' and turn them into salary ranges that you can publish and use to manage pay. When doing this, we divide the range into three sub-categories:

  • The first range represents the zone where we’d expect to find new recruits or people new to a particular role;
  • The second zone contains the market position and shows the pay range we would expect to apply to most people in the organization; and
  • The third zone is above market, showing the pay range for people who deliver high levels of contribution.

Step 5: Impact and distribution analysis

Our impact analysis highlights those people below the minimum of the pay scale, or above the maximum of the salary scale. This is helpful to help you fine-tune the scales.

The distribution analysis shows how people are distributed across the salary scale; it gives you data that can be used to manage pay.

Step 6: Pay for performance

The final step involves applying each employee’s performance rating, and using salary scales to determine how well they are paid. From this, we create a report for line managers to help them manage the pay review.  We can also calculate a pay-for-performance matrix to further guide managers in making pay decisions.

Paydata's pay modelling services

If you would like to know more about our pay modelling services, please get in touch.