9 February 2017

Pay, populism and politics

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Eva Patier, Tamsin Sridhara with

Lesley Ballantyne, John Lewis Partnership

Contents

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European snapshots and company responses

Case study: John Lewis Partnership

Lesley Ballantyne – Director, People Strategy

Roundtable discussion

Practical insights and actions

European snapshot

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The current social - political debate is over how much more should be done to encouarge greater pay

equity and progression

MINIMUM WAGE

BUT this is not the same as a living wage¹

GENDER PAY

GAP

BUT over past few years has remained around this level²

INCOME

INEQUALITY

BUT significantly higher differences between median and CEO income ³

STOX600 WOMEN

ON BOARDS

BUT only 3.5% have female CEOs⁴

¹Source: EUROSTAT minimum wage statistics July 2016

²Source: EUROSTAT gender pay gap statistics 2014

³Source: EUROSTAT income distribution stats Feb 2016

⁴Source: EWOB – Gender Diversity on European Boards

22 members 16.7% 5.2x 25%

European snapshot

4

What’s new and topical for 2017

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Minimum wage, Equal Pay,

Gender Pay Gap, Transparency

Living Wage, Gender Pay Gap,

Pay Ratios

Shareholder Rights Directive,

Transparency on pay differentials

Equal Pay

Management diversity

Living Wage, Gender Pay Gap,

High CEO pay, Board quota

Pay ratios, Equal Opportunities,

Pay caps (gov’t owned)

Minimum wage

Pay ratios

Minimum wage

Pay caps (gov’t owned)

Companies have a choice about how the respond

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COMPANY RESPONSE

COMPLY

Focus on meeting regulatory

requirements when you have

to and minimising any risk to

the company

Proactively use external

pressure to address internal

reward/ talent weaknesses for

benefit of the business

Compliance-driven

approach

Company-driven

approach

CONNECT INTEGRATE COMMUNICATE

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We are seeing a range of responses

UNDERSTANDING BEING TRANSPARENT

INTEGRATING OWNING

Executive benchmarking

Peers

Employees

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There are common practical implications

You need to access and analyse

the DATA: even where transparency

on pay gaps/ ratios is not required by

law, more companies are ensuring

they understand the gaps and ratios,

and the drivers to these

1

2

3

There are always WIDER

IMPLICATIONS: rises in minimum

wage levels impact total rewards

strategy and affordability; gender

pay gap and board diversity are

about talent management

4

It can strike are heart of your

EMPLOYEE PROPOSITION

especially in industry sectors where

lower paid workforce and/ or

concentration of women in lower

organisation levels

5

TRANSPARENCY means care on

communication: need to make sure

that manage the messages around

minimum wage, pay gaps, CEO pay

and that messages are joined up -

internally and externally

6

Prepare for the legal and

reputational RISKS: transparency

on equal pay and gender pay gaps

and CEO can fuel litigation,

employee comment and media

mischief

It tests your job ARCHITECTURE,

rewards and careers frameworks:

a robust approach to job architecture

and levelling, and to salary and

career management supports pay

equity and progression

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Underlying each area are the same core HR areas

REWARDS

strategy

TALENT

Strategy COMMUNCIATIONS

Strategy

Low pay Equal pay Gender pay Pay differentials

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Insights from John Lewis Partnership Lesley Ballantyne, John Lewis Partnership

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Roundtable questions

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Roundtable questions

1. What impact are calls for more equity in pay and

progression, and more transparency having on your/ the

company’s agenda? ?

2. What are you doing? Planning to do? ?

3. Do you have access to the data you need? What type of

analytics are you doing to understand the situation? ?

4. How transparent are you willing to be on employee pay

levels, gender pay gaps, CEO pay ratios etc??

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Practical insights and actions

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In summary… on pay equity, progression and transparency

A robust job/ reward infrastructure is a key underpin in helping you

take a “fair” approach to pay management that fits with your agenda. It

also helps minimise the legal and reputational risks 1

2Good data and analytics provide you with facts not (mis)perceptions.

They allow you to view issues around pay equity from different

perspectives and to understand the key levers/ drivers so interventions

are properly targeted. They inform your communications

3Transparency requires carefully planned and coordinated

communications whether you want to be open or are having to be open.

Employees, stakeholders and the media will all react. You can inform and

influence that reaction

4A more integrated approach. Joining up the internal discussions and

integrating activities with your wider Rewards and Talent agenda can

increase the business benefits