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Pay Modelling

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SERVICE OVERVIEW

If you need help managing your reward data, our pay modelling service can help you to do this more quickly and effectively. We can help you to develop salary scales and model pay for performance awards. This ensures that your pay structure supports your ability to recruit, retain and motivate your people. 

Managing reward data through pay modelling

Paydata can help you develop pay ranges, calculate pay review costs and model pay for performance awards. We can also help you with equal pay audits. Pay modelling starts with an understanding of the market. Our 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 and credible six-step approach can help you give managers the tools that 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. Our pay modelling database forces discipline. If your data is already grouped into job families and levels then we can use those groupings, but if not we can help you to group your data into job families, standard roles and sort them into levels. 

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

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.

Step 4: Developing pay ranges

Published pay ranges usually show a smooth pay progression between job levels. They also tend to adopt some rules about how wide a pay range should be (the difference between the minimum and maximum). We take the market guidelines created in 'Step 3' and turn them into pay ranges that you can publish and use to manage pay. When doing this, we usually divide each range into three zones:
• The first zone is where we’d expect to find new recruits or people new to a particular role;
• The second zone generally contains the company’s chosen market position and shows the pay range we would expect to apply to most people in the organisation; 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 range or above the maximum of the pay range. This analysis can help you refine the ranges. The distribution analysis shows how people are distributed across the pay ranges; 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 the pay ranges 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.

Would you like to know more about Pay Modelling? Get in touch.

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