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Posted: 27th January 2020
Hi there – first day as a club member and I have a question already!
I have read the article HOW DO I GET RID OF RATINGS BUT KEEP BONUSES? and I couldn’t agree more with what was written. I work in the North American Region of my Firm and I removed ratings here last year which saved my team and our Partners/ Managers many wasted hours and there was a general sigh of relief across the business.
The UK region however are struggling with this as the view is that ratings are important to demonstrate fairness in pay and bonus decisions (pay being the key point raised to me). I completely disagree with that, I see the letter or number simply replacing a subjective view – so a rating does not automatically equal fairness.
I have been out of the UK for some time and I just wanted to understand if there is something in the pay gap reporting, or another requirement that makes the removal of ratings so problematic in UK businesses?
Hi Emma and welcome to the Club!
Firstly, we’re not lawyers and you’ve probably got quicker access to a definitive legal position on this than we have as you’ll be surrounded by lawyers, given where you work! But our response would be …
1. The pay gap reporting requirement is simply that – a requirement to publish your pay levels and whether there is a gap. And as you’ll see from the press, this has highlighted some major discrepancies
2. If performance ratings were a safeguard against creating pay discrepancies between genders then we wouldn’t have the problems that many companies are facing?!
3. The performance rating is, as you say, a subjective view that could be open to challenge and will not the be the biggest factor in pay level, as the discrepancies are often hard wired much earlier than pay review time (types of roles being paid less, part-time work, females being given lower starting salaries, not getting promotions, etc). Pay reviews due to performance ratings isn’t going to be the major factor here.
4. Having a set of performance ratings is I think more of a comfort blanket for HR as they try and get some control over pay gap issues rather than them offering any real ability to fix it. Whilst this need for comfort is understandable given the high profile nature of this stuff, I think there are better ways to provide it rather than continuing to inflict ratings on people. You can ensure that considering pay discrepancy is factored into any guidance for managers and the calibration sessions can include this as a key area to explore, for example.
5. So I think this is more about feeling in control than any legal requirement. It’s certainly never been raised by the many UK companies we come across who have removed ratings
Hope this helps!
Lucy, this is so helpful. I agree with all your points entirely.
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