Taking a transparent approach to pay and reward

Simon Wakeman, Managing Director

I want everyone to be paid fairly and sustainably for their work at Deeson.

That’s why last year we spent six months reviewing our approach to pay and reward and in January 2018 we made the move to a more transparent way of managing pay and reward. You can read about it in full in our open source company handbook, and this post summarises our approach and how we got there.

Why review our model?

Our primary goal in reviewing our approach to pay and reward was to support our aim of building a long-term, stable, diverse and high performing team.

We’re proud of the many financial and non-financial benefits we already provide at Deeson, but we want to ensure our offer is competitive and effectively demonstrates the value our team members offer to our clients and our business.

Since 2016 we’ve been making a conscious effort to avoid perpetuating pay inequality by no longer asking for prospective employees’ previous salaries. But we’ve realised that this system isn’t robust enough. By moving to transparent and non-negotiable scales, we are ensuring pay is independent of an individual’s personal negotiation and influencing skills.

Our new model also provides a clear and fair process for reviewing pay for existing team members. We define clear expectations for each role using a job scorecard, based on measurable factors as far as possible, and pay increases are given in line with how much of an impact each team member is making in their role.

Our new pay and reward model explained.

Every role at Deeson now has a pay scale that takes into account a range of national data sources for comparable roles, the business performance for the previous year and the business plan for the next financial year. Each pay scale has nine points relating to a specific impact score.

See Deeson’s pay scales for 1st February 2018 to 30th September 2018.

The scales are reviewed by directors every September, as part of our annual budget setting for the financial year. We’ve made the scales open within the agency and to the public.

The process for reviewing existing team members’ salaries.

Every role within the agency has a job scorecard that sets out what we expect team members to achieve in their role. You can see the job scorecards here.

Each quarter, during a Deeson team member’s 1:1 meeting with their line manager, we assess their impact against the outcomes in the job scorecard.

Pay progression up the pay scale for a team member’s current role is based on how they are doing over a nine month period — using the average of their last three impact scores.

How we set pay for new starters.

During the recruitment process we carry out a theoretical assessment against the outcomes in a job scorecard, based on a new joiner’s previous experience of performing similar work elsewhere. This gives an initial impact rating which determines the starting salary we offer.

This is deliberately and transparently not negotiable. We want to base a starting salary offer on an individual’s potential impact on our business, not on their ability or willingness to negotiate when they join us. Once our standard six month probation period has been completed, team members are eligible for changes to pay and roles as set out in our handbook.

Introducing our fair pay guarantee.

We think it’s only fair to align pay and reward with the success of the business. So we’ve also introduced a fair pay guarantee.

Like most agencies, we manage the cost of pay and non-financial benefits for team members using a benchmark ratio. At Deeson we also have a number of other benefits for team members that we budget for such as our wellness fund, peer recognition scheme and paid sabbaticals.

This means that our total staffing costs — including pay, national insurance, paid holidays and pension costs — should be no more than a set percentage of our agency income.

We manage our costs carefully to make sure that this percentage is achieved as it’s an important part of achieving a sustainable, profitable and stable agency business. But it’s never possible to ensure that the ratios are achieved exactly.

For example if we deliver a strong business performance without additional staffing costs (such as new hires), then our income would go up but our staffing costs wouldn’t.

In such situations we feel it’s fair that team members overall receive the benefit of this improved business performance. This means if we underspend on total staffing costs compared to the benchmark we’ve set for that year, the difference will be distributed equally to all eligible staff as a bonus once the agency’s end of year accounts have been finalised.

How we got here.

With such a big change, affecting everyone at the agency, it was important for me that we carried out extensive research, and consulted with the entire team before introducing the changes.

We spent a lot of time talking with team members, agreeing the principles we wanted to achieve and explaining the proposed approaches we could take. Our research also involved searching extensively for pay data for similar roles to use. We concluded that using a single source for determining a pay scale presented too much risk, so our research took into account multiple sources for each type of role we have at Deeson: design, UX, technical and delivery.

After drafting the updated policy in beta form, we circulated the proposal and our supporting sources within the agency and gave everyone the opportunity to comment in the doc. We also scheduled 1:1 feedback sessions with anyone who wanted to share their thoughts or concerns in more detail. We made sure we heard everyone’s thoughts before we officially implemented the new system.

Our new pay and reward model is now in place, and the first year will be a test of how well it works in practice. We’re confident that the research and consultation we carried out will make this exercise a success, and we look forward to sharing our experiences as we go.

In addition to transparent pay scales and a fair pay guarantee, Deeson offers flexible and distributed working, 24 days paid holiday per year, and a mandatory five week paid sabbatical every five years. Take a look at our current vacancies.

Originally published at www.deeson.co.uk on March 12, 2018.