A few tips
The CIPD suggest that private sector organisations use market data to influence their pay reviews, whilst the public sector use job evaluation and the manufacturing industry make their decisions based on their ability to pay and drive this through the collective bargaining procedure. Based on this assumption, the following information provides practical advice when faced with a pay review.
1. If negotiating with collective representatives, but also if discussing with senior management or a board of directors, ensure you allow yourself time to prepare your pay review presentation, as all involved will want to know the background to the pay review figures, such as turnover, profit and loss, absence, attrition, market data etc.
2. It may be worth collating previous years’ pay review data so that you can put your arguments into context.
3. If you are part of an international organisation, and head office is external to the UK, ensure the relevant decision makers are aware of relevant facts such as inflation and the term ‘cost of living’, London weighting if appropriate and current market data, as sometimes they are not fully up to speed with these factors, and don′t consider them when setting pay review budgets.
Advice specific to collective bargaining pay reviews:
1. Prepare the organisational climate well ahead of the pay review. If things aren’t going so well (failed targets, sales down etc) ensure employees are aware so that the reduced pay figure is less of a shock.
2. Ensure you are confident that the % range you have given to work within at your negotiations is agreed in advance. There is nothing worse than spending time in pay review negotiations only to find out that the budget has changed!
3. If you have “sister” sites that are in some way linked to your organisation, but perform their own pay review, keep in contact so that you are informed of their pay details.
4. Only consider a long term pay deal such as a two or three year agreement if you are financially able to plan this far in advance. If you go for this option, insert a clause that enables you to re-negotiate the deal in extenuating circumstances.
5. Use your relationship with your senior representative (convenor, lead employee rep etc) to work with you to gain consensus and acceptance.
6. Never give away an extra % for nothing! Take a broad perspective and look to gain something in return such as a reduced night shift premium or removal of a piecework bonus.