1. Pay Management
Robust pay management is critical to balancing the essential
requirement for active talent management and employee retention with
cost effectiveness
The current economic climate means that now, more than ever, pay needs to be an effective
management tool, owned and operated by the business. Pay and reward structures have to be
aligned to business needs and future strategy. But employers face some tough challenges in building
and operating effective pay management structures in the current climate. These include:
 Balancing the need to pay competitively with the need to pay fairly. Not only is demonstrating
fairness increasingly important as we climb out of recession, but the requirement for compliant
pay practices with risk management and equal pay are forcing employers’ hands
 Pay is an increasingly important driver of employee engagement – transparency, fairness and a
clear link to performance are all high on employee list of priorities – but levels of employee
engagement are currently on the decline
 Managers are increasingly expected to own the process, decision-making and outcome, so
effective pay conversations are more important than ever, yet the evidence is that many line
managers struggle with these discussions and the quality of feedback required
 As organisations restructure business leaders want to understand the various jobs and roles and
the value they add to the organisation, yet traditional pay management processes may not
provide the answers
 M&A activity in the market means pay structures need to enable quick and effective integration,
yet job evaluation and pay management processes are often slow and cumbersome
 The approach to pay also needs to support mobility and, often, to provide a consistent structure
for incentives and benefits, particularly on an international basis
 Organisations with increments are moving towards more performance-related approaches yet
those with merit matrices are also often bemoaning the lack of pay flexibility and differentiation.
The Aon Hewitt Approach
We believe that a robust and well-designed approach to pay management creates the foundation for
an organisation’s reward and talent management policies, brings clarity for employees and managers,
and provides a basis for monitoring and controlling your pay bill.
Our extensive experience in addressing pay and reward structural issues is supplemented by a
variety of market-leading tools to help our clients create world-class pay management:
 JobLink™ - Aon Hewitt standard points factor job evaluation methodology is easy to apply and
particularly useful for organisations facing equal pay concerns. Our market leading web-based
evaluation solution can support this if required
 CareerLink™ - Aon Hewitt standard job classification tool is often used by organisations that
need a solid architecture for both pay and career progression, where the emphasis is on external
market alignment and a close relationship between skills and career development and reward
 Our Total Reward Survey has over 300 participants, meaning we have a strong market
database in a diverse range of sectors to act as an anchor for your pay management process.

2. Additionally, our in-depth expertise in bonus and incentive plan designs, performance management,
communication, talent management, employee engagement and leadership ensures the optimal
alignment of pay with these areas so as to drive maximum value for your organisation.
We tailor make the best solution for each client, delivering the most appropriate balance between
internal and external valuation, and the simplicity and detail of the approach.
External Internal
Simplicity Complexity
Market Data Analytical
Rank to Market Classification
Classification Point Factor
Point Factor
Market Surveys CareerLink™™ JobLink™
JobLink™
 Total Reward Survey  CareerLink™  JobLink™
– Roles benchmarked to market – Roles allocated to CareerLink™ levels – Aon Hewitt point factor job
framework based on best content match evaluation approach
– Roles slotted based on market – Easy-to-use descriptors to reflect the key – Each role assessed on
value elements of a role without the need for in- compensable factors
– Uses CareerLink™ levels to depth points assessment – Total score for the role is
match roles – Organisational levels based on extensive calculated
market research and experience, and fully – Defensible approach to
aligned to our point factor plan Equal Pay
– Broad levels allow flexibility – Points used to allocate
CareerLink™ levels and job families are roles to levels and compare
embedded in the Aon Hewitt market data to market pay
sources, providing a direct connection to – Rigorous but complex
external data
Best for roles with strong external Best for roles that require a simple and flexible Best for roles that require a rigorous
market frame of reference approach. and structured approach.
On a typical project we would:
Accountability
 Agree the aspects of pay management to focus on;
 Assess the effectiveness of current arrangements;
 Consider options for improvement and work these up in outline;
 Agree the optimum set of changes;
 Plan and work on the detailed design and implementation support.
Client Case Study – Building Society
The client: UK building society with 3,000 staff
The issue: Our client was facing a number of issues believed to be related to their base pay
structure. They were struggling to recruit the right calibre of staff and, when they did recruit, the
salaries paid were causing major internal relativity problems. They were also concerned that their
base pay structure did not support career progression.
How Aon Hewitt added value: After conducting management interviews and employee focus groups
to understand the real issues, we revised the existing job evaluation system and introduced a new set
of pay bands linked to a market-related structure. We also provided on-site support while the changes
were being introduced and conducted employee and manager communication sessions to ensure
there was clarity of purpose and understanding of the new approach in terms of direction, detail and
delivery.
The resulting model has considerably simplified the pay and promotion processes for both line
Aon Hewitt Contacts: managers and the HR function, and has provided greater clarity about career and progression
Duncan Brown
opportunities for employees.
+44 (0)207 086 9037
duncan.brown@aonhewitt.com
Jackie Waller
+44 (0)172 788 8394 About Aon Hewitt
jackie.waller@aonhewitt.com
Aon Hewitt is the global leader in people management consulting and outsourcing solutions. We
Leslie Moss
+44 (0)207 086 9212
design, implement, communicate, and administer a wide range of people management, retirement,
leslie.moss@aonhewitt.com investment management, health care, reward and talent management strategies. With more than
29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients
aon.co.uk and their employees. www.aonhewitt.com