For many organisations, salary benchmarking is a key part of reward strategy and a logical response to recruitment and retention challenges. Labour markets move, skills become scarce and employers need to understand what competitors are paying if they are to attract and retain talent.

Salary surveys, benchmark reports and market data all provide valuable insight into external market conditions, helping organisations assess competitiveness and respond to changing workforce pressures. However, while benchmarking can tell an organisation what the market is paying, it cannot tell an organisation whether its own pay structure remains coherent, consistent and defensible.

That distinction is becoming increasingly important. Across both the public and private sectors, organisations are facing greater scrutiny of pay decisions than ever before.

Employees are asking more questions about pay fairness, trade unions are becoming increasingly active, and pay transparency initiatives are raising expectations around how organisations explain reward decisions.

As a result, senior leaders are finding themselves confronted by questions that go beyond market competitiveness. The challenge is no longer simply understanding what people are paid, but being able to explain why they are paid it.

One of the most common assumptions in reward management is that market value and organisational value are broadly the same thing. They are related, but they are not interchangeable.

A role may command a premium in the labour market because certain skills are in short supply or particularly difficult to recruit. That may be entirely justified from a recruitment perspective.

However, external demand does not automatically determine how a role should be positioned relative to others within the organisation, nor does it explain how market-driven pay decisions affect the wider pay structure over time.

Understanding what the market values is important, but it is only one part of a much broader picture. 

This is where many organisations encounter difficulties. Pay structures rarely emerge from a single strategic decision. More often, they evolve gradually through hundreds of smaller decisions made over many years.

Recruitment challenges arise, retention concerns emerge, organisational structures change and responsibilities shift. Individual exceptions are approved for legitimate business reasons and market pressures create demands that require an immediate response.

Viewed in isolation, these decisions often make complete sense. Viewed collectively, however, they can create outcomes that nobody intended and that become increasingly difficult to explain when examined across the organisation as a whole.

The issue is not usually one poor decision. Rather, it is the cumulative effect of many reasonable decisions that were never considered together.

This is particularly common in organisations that have experienced growth, restructuring, mergers or prolonged recruitment challenges. Over time, different parts of the organisation can begin operating according to different assumptions about pay, grading and reward.

What began as sensible responses to individual circumstances can gradually alter the integrity of the wider pay structure, leaving organisations with arrangements that have evolved organically rather than through a clearly defined framework.

At this point, the conversation shifts from market competitiveness to governance. Salary benchmarking and pay governance serve fundamentally different purposes.

Benchmarking helps organisations understand external market conditions and informs decisions about recruitment and retention. Governance, by contrast, focuses on understanding the impact of those decisions within the workforce itself.

It asks different questions. Are similar roles being treated consistently? Can pay differences be objectively explained? Have exceptions been reviewed appropriately? Does the overall structure still reflect the organisation’s intended approach to reward?

These questions are becoming increasingly significant because transparency is exposing decisions that were never designed to be scrutinised.

Historically, many organisations could rely on the fact that individual pay decisions were largely invisible. Recruitment premiums, retention payments, market adjustments and historic allowances often existed without significant challenge because few people had visibility of the wider picture.

This is one reason why many organisations are revisiting the foundations of their reward frameworks. Understanding market rates remains an essential component of reward strategy, but salary benchmarking data alone cannot provide a rationale for how roles relate to one another internally, nor can it provide assurance that decisions made over time remain coherent when viewed across the workforce as a whole.

Establishing internal role value, maintaining consistency and ensuring that exceptions are appropriately governed are all critical components of a reward framework that can withstand scrutiny and support pay transparency.

None of this diminishes the value of salary benchmarking. Used appropriately, it remains an important tool for understanding labour market conditions and informing workforce strategy.

The difficulty arises when organisations assume that market data alone is sufficient to justify pay decisions. Increasingly, stakeholders are asking different questions. Not simply, “What do we pay?” but “Why do we pay it?”

In that context, salary benchmarking can explain what the market is doing, but it cannot explain whether historic decisions remain justified, whether pay differences are consistent or whether the organisation’s overall pay structure remains coherent and defensible.

Perhaps that is the most important consideration of all.

If every employee in the organisation could see every salary tomorrow morning, which pay decisions would be hardest to explain?

For many organisations, the answer to that question reveals far more than any salary survey ever could.

For many organisations, salary benchmarking is a key part of reward strategy and a logical response to recruitment and retention challenges. Labour markets move, skills become scarce and employers need to understand what competitors are paying if they are to attract and retain talent.

Salary surveys, benchmark reports and market data all provide valuable insight into external market conditions, helping organisations assess competitiveness and respond to changing workforce pressures. However, while benchmarking can tell an organisation what the market is paying, it cannot tell an organisation whether its own pay structure remains coherent, consistent and defensible.

That distinction is becoming increasingly important. Across both the public and private sectors, organisations are facing greater scrutiny of pay decisions than ever before.

Employees are asking more questions about pay fairness, trade unions are becoming increasingly active, and pay transparency initiatives are raising expectations around how organisations explain reward decisions.

As a result, senior leaders are finding themselves confronted by questions that go beyond market competitiveness. The challenge is no longer simply understanding what people are paid, but being able to explain why they are paid it.

One of the most common assumptions in reward management is that market value and organisational value are broadly the same thing. They are related, but they are not interchangeable.

A role may command a premium in the labour market because certain skills are in short supply or particularly difficult to recruit. That may be entirely justified from a recruitment perspective.

However, external demand does not automatically determine how a role should be positioned relative to others within the organisation, nor does it explain how market-driven pay decisions affect the wider pay structure over time.

Understanding what the market values is important, but it is only one part of a much broader picture. 

This is where many organisations encounter difficulties. Pay structures rarely emerge from a single strategic decision. More often, they evolve gradually through hundreds of smaller decisions made over many years.

Recruitment challenges arise, retention concerns emerge, organisational structures change and responsibilities shift. Individual exceptions are approved for legitimate business reasons and market pressures create demands that require an immediate response.

Viewed in isolation, these decisions often make complete sense. Viewed collectively, however, they can create outcomes that nobody intended and that become increasingly difficult to explain when examined across the organisation as a whole.

The issue is not usually one poor decision. Rather, it is the cumulative effect of many reasonable decisions that were never considered together.

This is particularly common in organisations that have experienced growth, restructuring, mergers or prolonged recruitment challenges. Over time, different parts of the organisation can begin operating according to different assumptions about pay, grading and reward.

What began as sensible responses to individual circumstances can gradually alter the integrity of the wider pay structure, leaving organisations with arrangements that have evolved organically rather than through a clearly defined framework.

At this point, the conversation shifts from market competitiveness to governance. Salary benchmarking and pay governance serve fundamentally different purposes.

Benchmarking helps organisations understand external market conditions and informs decisions about recruitment and retention. Governance, by contrast, focuses on understanding the impact of those decisions within the workforce itself.

It asks different questions. Are similar roles being treated consistently? Can pay differences be objectively explained? Have exceptions been reviewed appropriately? Does the overall structure still reflect the organisation’s intended approach to reward?

These questions are becoming increasingly significant because transparency is exposing decisions that were never designed to be scrutinised.

Historically, many organisations could rely on the fact that individual pay decisions were largely invisible. Recruitment premiums, retention payments, market adjustments and historic allowances often existed without significant challenge because few people had visibility of the wider picture.

This is one reason why many organisations are revisiting the foundations of their reward frameworks. Understanding market rates remains an essential component of reward strategy, but salary benchmarking data alone cannot provide a rationale for how roles relate to one another internally, nor can it provide assurance that decisions made over time remain coherent when viewed across the workforce as a whole.

Establishing internal role value, maintaining consistency and ensuring that exceptions are appropriately governed are all critical components of a reward framework that can withstand scrutiny and support pay transparency.

None of this diminishes the value of salary benchmarking. Used appropriately, it remains an important tool for understanding labour market conditions and informing workforce strategy.

The difficulty arises when organisations assume that market data alone is sufficient to justify pay decisions. Increasingly, stakeholders are asking different questions. Not simply, “What do we pay?” but “Why do we pay it?”

In that context, salary benchmarking can explain what the market is doing, but it cannot explain whether historic decisions remain justified, whether pay differences are consistent or whether the organisation’s overall pay structure remains coherent and defensible.

Perhaps that is the most important consideration of all.

If every employee in the organisation could see every salary tomorrow morning, which pay decisions would be hardest to explain?

For many organisations, the answer to that question reveals far more than any salary survey ever could.

A diverse workforce: A successful organisation thrives on diversity. Organisations can foster innovation, creativity, and different perspectives that drive business success by embracing employees with various skills, interests, and aspirations. Recognising that not everyone desires a managerial position allows organisations to tap into their workforce’s full spectrum of talents and passions.

Enhanced job satisfaction: Not everyone is inclined towards managerial responsibilities, and that is perfectly fine. By honouring individual preferences and offering alternative growth paths, organisations contribute to higher employee job satisfaction. When employees can pursue roles that align with their skills and interests, they are more likely to be engaged, motivated, and fulfilled in their work.

Retaining top talent: Employee turnover is a significant challenge for organisations, especially when valuable contributors leave due to a lack of growth opportunities. By acknowledging and accommodating the aspirations of those who do not wish to become managers, organisations can retain top talent who might otherwise seek new opportunities elsewhere. This promotes stability, reduces recruitment costs, and retains institutional knowledge.

Specialisation and subject matter expertise: Not all employees aspire to manage people, but they may have a deep passion and expertise in their specific domain. Organisations can provide avenues for these individuals to become subject matter experts, honing their skills and knowledge to become invaluable resources within their respective fields. Such specialisation can contribute to improved quality, innovation, and efficiency.

Technical career paths: In today’s increasingly technology-driven world, technical expertise is highly sought after. Organisations can create career paths that allow employees to advance as technical specialists, focusing on areas such as data analysis, research, software development, or engineering. These paths offer opportunities for growth, recognition, and increased responsibility without the need for managerial roles.

Project-based roles: Another avenue for non-managerial growth is through project-based roles. Employees who excel in project management or enjoy working on specific initiatives can be given opportunities to lead and contribute to projects that align with their interests and expertise. This allows them to develop their skills, collaborate cross-functionally, and make a meaningful impact without being burdened by ongoing managerial responsibilities

•  Cultivation of a diverse and inclusive work environment.
•  Retention of top talent through tailored growth opportunities.
•  Increased employee engagement, job satisfaction and productivity.
•  A broader range of skills and expertise within the organisation.

•  Reduced burden of managing individuals who are not interested in managerial roles.
•  Ehanced utilisation of managerial resources and focus on team members who aspire to lead.
•  Increased support and collaboration from specialised, passionate employees.

•  Alignment of career aspirations with available growth paths.
•  Improved job satisfaction and motivation.
•  Opportunities for skill development and becoming subject matter experts.
•  Recognition and rewards based on individual contributions.

In nurturing talent and planning for succession, organisations must acknowledge and value the preferences of employees who do not aspire to become managers. By embracing their choices and providing alternative growth paths, organisations can create a culture that respects individual aspirations, fosters inclusivity, and maximises the potential of every employee.

Recognising and supporting non-managerial growth opportunities leads to higher job satisfaction, increased retention of top talent, and a more diverse and agile workforce. Ultimately, by embracing individual preferences, organisations lay the foundation for sustained success and create an environment where all employees can thrive.

When it comes to change in a business environment, individual responses can be intricate and ever-changing. This can be best understood through the concept of the change curve, a model introduced by psychiatrist Elisabeth Kübler-Ross.¹ The change curve depicts the emotional phases that individuals commonly go through when confronted with notable changes. For each person, identify where they are in the change cycle and adapt your style to fit the person’s needs.

Shock: Initially, individuals may feel disbelief or shock when change is introduced. They may resist accepting it, preferring to maintain the status quo. This stage is marked by confusion, uncertainty, and a reluctance to embrace the change.

Resistance: As change takes hold, individuals may resist or become angry. They feel threatened, frustrated, and fearful of potential consequences. This resistance can manifest through questioning, expressing anger, or opposing the new direction.

Commitment: Further along the change curve, individuals reach a stage of active participation, aligning behaviours with the new direction, and contributing to change success. This stage is marked by ownership, engagement, and embracing the new normal.

Driving change within an organisation requires careful planning, effective communication, and a deep understanding of how individuals respond to change. By recognising the emotional journey depicted by the change curve, leaders can tailor their approach to support employees through each phase. It is essential to address concerns and fears, encourage open dialogue, and offer support to ensure a smooth transition.

Additionally, focusing on the benefits of change, clarifying individual advantages, and highlighting the overall positive impact can generate enthusiasm and commitment. By involving others in the change process, communicating regularly, and providing opportunities for feedback and participation, leaders can foster a sense of ownership and empowerment.

Remember, introducing change is a journey that requires patience, adaptability, and a strong commitment to effective communication. With these considerations and best practices, organisations can successfully navigate the path of change and pave the way for growth, innovation, and long-term success. 

Career management is the set of processes that organisations use to inform, direct and manage the career paths of individual employees. Typically, they look at careers from each employee’s perspective. This supports organisations where employees increasingly seek control over their own destinies, including potential career advancement and personal development, thereby contributing to the continuity of talent supply for the organisation.

With employees more engaged in their own advancement, there is often a corresponding increase in productivity and staff retention and a requirement for Managers to be trained as coaches and to work with each of their staff to develop and implement a career/development plan.

Succession management is another proactive approach that ensures continuing leadership by cultivating talent from within the organisation through planned development activities. It differs from career management in that it is not driven from the employees’ perspective or aspirations (although these may be included). The focus is more on a systematic approach in assessing the organisations’ requirements and determining in a disciplined way, the actions needed to ensure the availability of potential people for future vacancies (usually critical roles), thereby ensuring successors or a pipeline of talent. This would be driven frequently by managers or talent boards identifying successors or potentials for a Talent Pool.

Formal:  Ideally, succession planning starts effectively with the business plan answering some basic questions:

To do this, you will have to decide whether you are going to:

•  What areas of our business will grow?
•  What areas of our business will decline?
•  What areas of the business will be “outsourced” to strategic partners, vendors, and/or other organisations?
•  What business opportunities have recently emerged?
•  Have we made the decision to pursue or not pursue the opportunities?
•  What are the key strategic initiatives being attacked?

Answers to these questions, along with the demographics (age and skill profile) of the current organisation, should feed into a manpower plan that identifies requirements – this is where succession strategies can divide between succession based on specific positions and succession based on talent pools.

Consider factors like cost, features, customer service, vendor expertise, and adaptability when making your choice. Uncover your top priorities and let them guide you in your search for the HR software that’s just right for you.

Technology adoption typically goes through three phases:

1.  Automating manual processes — In this stage, we often uncover limitations previously accepted in manual processes as they cannot be resolved manually. Simply speeding up ineffective processes rarely brings value. 

2.  Embracing the technology’s capabilities — In this phase, we can be misled by flashy features or user interfaces, only to find that the software’s performance deteriorates with repeated use. Implementing technology for technology’s sake rarely leads to sustainable value.  

3.  Harnessing the technology’s power — With experience, we understand that technology is a collection of capabilities, and the challenge is to match it with specific needs. This leads to an application that improves processes, brings value, and ensures sustainable usage. 

It’s important to start by understanding the objectives of your HR processes and what outcomes you hope to achieve rather than starting with preconceived solutions or previous manual processes. To do this, take a step back and analyse your processes to determine the underlying needs. This will help ensure that you choose an HR software solution that addresses these needs rather than just automating an existing manual process. 

For example, instead of assuming that there will be goal cascading, mid-year appraisal, and annual ratings, focus on the actual needs of the organisation and employees, such as clear expectations for job performance and development, a sense of the priorities and progress, and continuous evidence collection.  

Before beginning the process of choosing technology, it’s important to understand what capabilities are available. Doing so will ensure that you make informed choices and take advantage of important features. 

For example, HR software can provide advanced analytics and insights into performance appraisals, including identifying potential biases or changes in rating standards and ensuring that performance ratings are reliable and accurate. By utilising this type of technology, HR departments can gain a deeper understanding of the performance of their employees and make more informed decisions about their development and career progression. 

Conduct thorough research to familiarise yourself with the current state of technology and its capabilities. Look at multiple sources, and don’t limit yourself to popular or well-known options. Consider asking questions in social media chat rooms and seeking advice from analysts, but be aware of any potential biases they may have based on their funding sources. 

Focus on the technology’s capabilities and the vendor’s ability to explain how it can meet your specific needs.

To do this, you will have to decide whether you are going to:

•  Define your process first and find software to support it.

•  Clearly outline your requirements, accepting a solution that aligns with them even if it dictates some elements.

•  Collaborate with a vendor to design an optimal process and find technology that fits it perfectly.

•  Decide on a full implementation or a phased approach based on your organisations’ level of readiness.

Remember, organisational readiness is crucial in this decision-making process. Avoid making the common mistake of being too eager to implement “shiny new technology” without proper change management, leading to implementation failure.

Consider the following factors when choosing software:

Consider the following when choosing a vendor:

For example, if an organisation is in a cultural transition, leaders who can quickly adapt and role model the required new culture may have more potential to deliver new behaviours quick.

It may be useful to consider the following factors

Human Resources often try to make objective decisions by employing a number of instruments. These commonly include psychometrics, biographical and competency-based interviews, assessment and development centers, and performance feedback (such as 360).

Psychometrics are robust tools that measure various types of ‘intelligence’ (e.g., analysis and reasoning) and are usually normed against the population. They are useful to identify people with ‘power under the hood’.

360 degree feedback provides a holistic view of an individual’s capability. Keep in mind each person has a different set of raters, each with their own perspective and rating standard. Also keep in mind that 360 feedback relies on a person having had the opportunity to demonstrate each behaviour which, if it is related to a future role, may not yet have been displayed.

Competency based interviews look for examples of past behaviour that are helpful. They can increase the predictive validity of the assessment process from 0.2 (for a biographical interview) to .51 (for a structured interview). One of the positive aspects of this process is that every person assessed is exposed to a structured set of questions which direct the person to draw only on what they have done, experienced or learned. A potential limitation is that introverts frequently do less well in these types of interviews although, if appointed, can often achieve as well as their extrovert colleagues.

Assessment/Development Centers look at how participants interact with each other and with situations. It does mean that any individual’s performance is affected by the others in the group. So it can be easy to rank individuals within a center, but sometimes difficult to objectively rank people across centers. For example, I might perform well against a set of criteria with one group of less effective people but struggle with people of similar capability to myself. To measure potential objectively, each person needs to face a set of challenges and simulations that allow rating of the potential factors without interference from external variables (like other participants). So each person needs the same chance to demonstrate that they have potential to deal with it. This is best achieved by scripted interactions, or at least governed by a set of predetermined rules (such as using actors and scenarios). Assessment centers still offer a high level of predicative validity (.53) of potential as long as they are well constructed with a variety of progressive and adaptive simulations.

Psychological assessments usually require time spent with an Occupational Psychologist discussing past experiences and situations to explore drivers, coping mechanisms and values. May be considered expensive but can be a valuable method of identifying potential executive leaders.

In summary, when measuring potential, ensure that you build a business-relevant framework which articulates what it means to have potential in your business, ensuring that factors that make people successful today and that can meet future needs are included. Secondly, use a combination of assessment methodologies to ensure a quality result (comprehensive, valid, reliable, differentiating, useful and defensible).