Creating a salary policy

The purpose of a salary policy for any organisation is to establish the principles that underpin its salary structure. For any voluntary organisation, regardless of size, good practice dictates that such a policy must be based on the following values:

Fairness

Any process for determining remuneration organisation-wide should be fair - and seem fair - to staff of all levels and grades, as well as to other stakeholders including users, trustees and funders.

It should be universally viewed as an equitable means of determining rewards based on relevant factors which are non-discriminatory on grounds of gender, race, gender reassignment or disability (remember you will also need to consider age, sexual orientation, ethnic or national origin and religion or belief or lack thereof).

By no means should the pay of any single post be, or seem, excessive in relation to that of others. In cases where it is necessary to pay premium rates in order to attract the calibre of individual needed for a job, such as qualified Internet Technology professionals, differentials should be based on valid and, where possible, quantifiable data such as industry survey data.

Openness

Given the highly accountable and public nature of most voluntary sector organisations, any process for determining remuneration must be an open one. Organisations should be prepared to demonstrate that they have nothing to hide and that the process of determining reward levels is open to informed debate.

Objectivity

The process of determining remuneration should be objective. To this end, organisations need to establish objective criteria that enable comparisons to be made between jobs within the organisation and with those in comparable organisations. This is normally done using a job evaluation scheme (see below for details). This helps ensure that pay-related decisions are consistent and made to a common standard.

Responsibility

It goes without saying that the process of determining reward packages in any organisation must be legally responsible, taking into account basic statutory requirements for fairness, non-discrimination, and the minimum wage. In the voluntary sector, organisations may wish their systems to be socially responsible as well. As a way to further their role as social motivators, voluntary organisations may decide to build core values into their salary structures - values that reflect the organisation's beliefs in equity and social justice, for instance.

Effectiveness

While the ideal remuneration policy expresses all the right values, the most important issue is whether or not it works. In an increasingly competitive environment, the main objective of any reward system is to allow organisations to attract the calibre of people required to deliver their objectives and advance their mission.

Many workers will be attracted to the voluntary sector by the nature of the work, but organisations cannot count solely on goodwill. Even sincere personal commitment can be undermined by disputes over pay and benefits.

The voluntary sector needs trained professionals in order to carry out its work - and it must be prepared to pay them fairly and competitively. It is important to liaise with your fundraising team to ensure that all potential costs of future staff are built into any funding application.

Reviewed and updated by the HR Services Partnership - April 2010.

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