The communications company BBC succeeded in modernizing its reward programs while cutting budgets primarily through increased transparency in pay practices, the director of rewards said April 29 at the 2013 WorldatWork  Total Rewards Conference in Philadelphia.

The BBC had failed in several attempts to reform its pay programs, which originally were designed in the 1990s, Julia Diggs said. An increased union presence and the need to reduce 2011 operating budgets by 20 percent meant another attempt was needed, she said.

The biggest obstacle to overcome was that most BBC employees were unable to understand how or why they were paid at certain levels, Diggs said. In addition, line managers could not be consistent because they did not know what other departments were doing, which contributed to the confusion. As a result, transparency in pay practices became the key component of BBC’s pay reform, she said.

The BBC outlined for individuals the job group for their position, their career level, the salary range, the amount of base pay, and the total BBC compensation package, Diggs said. Providing context makes pay more transparent and easier for employees to understand, she said.

Even with a diminished budget, the BBC could point to the value of nonmonetary offerings for employees, such as an academy with free tuition for BBC employees, Diggs said.

The BBC worked with Deloitte Consulting to reform pay practices and began by illustrating the business case for change.

“What we really wanted to do is uncover what the ROI was going to be. We showed the BBC business faction how this would help,” said Lynda Phenix, compensation consultant at Deloitte. “We didn’t call it a cost cutting measure, we had to call it spending the budget in the most appropriate way as a business measure.

By Laime Vaitkus