A review of pay and grading to control pay drift
The AA was established in 1905 by four motoring enthusiasts who wanted to improve the safety of UK roads for motorists. Since then, the organisation has built the largest fleet of roadside patrol vans in the country and has become the UK’s most trusted breakdown coverage provider. It also provides car insurance, home insurance, route planning, travel and boiler cover, and has over 15 million members.
After the AA's initial public offering in 2014, Collinson Grant and Watershed worked on a number of operational and HR improvement projects, supporting the business for over two years. In 2017, Watershed was asked to independently review the AA’s job evaluation, pay and grading arrangements.
The arrangements had become overly complex with many out of date job evaluations and job grades that created pay inconsistencies and potential breaches of legislation. Our objective was to standardise and simplify them.
We analysed the current evaluation scores, correlated and mapped internal salary distribution within grades and job evaluation points ranges, examined pay progression mechanisms and benchmarked salaries to create a complete understanding of the situation and its implications.
We then presented our findings, conclusions and recommendations to the AA which included:
identifying and validating around 150 benchmark jobs to support development of a job family framework and level descriptors
merging grades and pay ranges to reduce the numbers of grades by 30%
modifying the structure of the pay ranges and the progression arrangements to improve control of pay and future pay inflation
revising the pay policy to match pay to the relevant markets.
The independent assessment provided a broad overview of the pay grading arrangements and in-depth and practical information on how to update and improve them.