CIPD conference: G4S structures pay policy from the top down

Executive employees at security services firm G4S have proposed a pay freeze for themselves during 2012.

This is the second time they have done so, following a previous freeze in 2009, demonstrating the organisation’s top-down approach to pay policy, said Matthew Davies, group compensation and benefits manager at G4S.

Speaking at the Chartered Institute of Personnel and Development’s (CIPD) reward conference on 16 May, Davies explained that transparency around pay is important within the organisation in order to engage employees with pay policy and what is happening in the business.

Over the past four years, six main external pressures have impacted on the organisation’s pay policy: inflation, the national minimum wage, the public sector (from which some employees are transferred under the transfer of undertakings (protection of employment) (Tupe)) regulations, trade unions, competitors and business margins.

Davies explained that business margins are, by far, the largest influence on pay policy at G4S, prompting the firm to relook at its business model and identify where efficiency savings could be made. As a result, it closed its final salary pension scheme to future accrual last year.

G4S has also looked at benefits to “soften the blow of pay deals”, said Davies. For example, it has launched a voluntary benefits scheme in the UK and United States at no cost to the organisation.

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