Serco introduces pay grade structure for senior staff

Serco has overhauled the remuneration package for its senior staff after analysing the job roles of 500 employees and establishing a framework for a pay grading structure.

The business services firm is currently setting pay grades after ranking job roles using a points-based system. A tool, developed in-house, was used to assess job roles based on three criteria: knowledge, management complexity, and the magnitude and impact on the organisation.

Although pay bands have not been finalised, initial analysis shows that some employees will receive larger salaries, but others may have a pay cut.

Richard Hortop, reward director at Serco, said: “On the first analysis, we have seen that where roles have slotted into new levels of pay grades, there are some people who are in excess of the pay grade and some people who are beneath the pay grade. So there is now a piece to work to say ‘OK, let us agree what we think about those people’.
“The key thing is that we make those decisions collectively. What we do not want is different divisions taking a different view of how to deal with those people.

“There were just a couple of cases where people have been told how the new package aligned with their new [grade] and they have challenged it.”

The new structure has also enabled Serco to ensure that its bonuses, long-term incentive plans and performance share plan are aligned with what is being offered by the rest of the market.

Unlike other employee groups, Serco’s senior staff have never had a grading structure, which has made it hard to compare roles across divisions and set pay for staff appropriately, whether they worked in business development, finance or HR, said Hortop.

“Serco is a very diverse organisation, so we do not have a grading structure across all staff,” he said. “We have parts of the business where we have grading structures aligned to those of our clients. For instance, where we support NHS trusts with hospital staff, we will have a grading structure for those people.”

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