Set the right pay rates

Setting up a new pay-rate system


It will almost certainly cost you time and money to set up a new - or even change an existing - pay-rate system.

Getting started

In the first instance, it could be helpful to set up a checklist detailing the steps you plan to take. Remember to:

  • plan the process for selecting or adapting a system
  • involve workers, both full-time and part-time
  • get expert advice if needed
  • agree changes with workers' representatives, if any (or with workers individually where there are no representatives)
  • evaluate the good and bad points of your existing system, if you have one
  • decide what the objectives of the system need to be, eg increased productivity
  • consider the most suitable pay differentials and links for your business
  • think about how workers might be able to earn increases to their basic pay, eg through annual increases, bonuses, or other payments based on performance assessment
  • communicate progress regularly to all workers
  • look out for potential pitfalls, such as changes to pay differentials and scope for discrimination
  • make sure the system is properly maintained
  • review the system's performance
  • ensure women returning from maternity leave get any pay rises occurring in their absence

Acas guidance on pay and wages.