There are several aspects to LBG's pay policy which our members frequently ask about. In this article, we'll provide detail to help you understand how the pay policy works and how this may affect you.
How pay works
Lloyds Banking Group (LBG) aims to reward all colleagues fairly for their contribution to the business, and it will often refer to its Total Reward package which incorporates basic salary and other aspects of the bank's benefits and rewards that make up the overall remuneration that you receive. The bank's pay policy applies to all colleagues from grades A to G.
LBG uses pay groups and pay ranges to give structure and transparency to the way pay is managed. There are 10 pay groups, each of which has a pay range for each grade within the business, and these are split into pay zones. As part of the annual pay review, we negotiate increases to these pay ranges, which often includes changes to the pay zones too.
The Group uses a market-based approach to pay which means looking at the external job market when considering the ranges that are applied to a job role and grade. They use three pay zones that apply at grade A - E as part of this approach: Market primary, Market and Market plus. In the section headed Understanding pay zones in this article, we explain further how these zones are calculated. Each zone consists of a minimum and maximum, and there's also a mid-point for the range. For colleagues at grades F & G, the salary ranges are broad and have only a minimum, mid-point, and maximum salary attached to them.
Understanding pay zones
Pay zones are used by the business to calculate a pay range for grades A - E which runs from 95% to 130% of the mid-point. The mid-point is the middle of the three zones within the pay range. This is the internal market rate for a particular role which takes account of the external job market, affordability, and the bank's ability to recruit and retain colleagues. These are reviewed annually as part of the pay review process which is negotiated by Accord & Unite.
- Market primary - this is the minimum for the pay range and therefore the minimum salary that can be paid by the business for a job role at that grade and pay group. If your pay is 95% of the mid-point for the pay range applicable to your role, you will be in this pay zone.
- Market - this is the middle section of the pay zone running from 95% of the mid-point to 105%.
- Market plus - this pay zone is 105% to 130% of the mid-point for the pay range. When you're in this pay zone, it means you're above the market rate that the business believes applies to your job role and grade.
There are several factors which may determine where you sit in the pay zones - including historic pay increases, length of career, promotions, lateral moves you may have made during your career, and whether the Job Security policy pay protection principles have applied to you because of a restructure and subsequent placement in a role at a lower grade. Later in this article we'll cover the promotions and lateral moves part of this policy.
Understanding your pay
To begin to understand your pay, you'll first need to know your pay group and grade. This information is available to you through workday. If you don't know how to find this information already, we've got a guide to help you find my pay group number and grade on Workday.
All the pay ranges use the full-time equivalent (FTE) salary which is based on the standard contractual 35 hour working week. If you work less than a standard 35 hour working week, you'll need to calculate the FTE salary before viewing the pay ranges. You can do this by dividing your salary by your contracted weekly hours and then times by 35 (i.e. FTE = Salary ÷ Contracted weekly hours x 35).
Once you have your pay group and grade and you know your FTE salary, you'll be able to find the right pay range that applies to you. We've included the pay ranges for April 2023 on the 'LBG Pay Ranges - Apr 2023' worksheet tab of the 2023 pay increase calculator.
As you look at the pay range that applies to you, you'll be able to determine the pay zone applicable to you and whether you're below the minimum, mid-point or above the maximum pay for that range.
Everyone should be paid at least the minimum pay for the applicable salary range, although there are a couple of circumstances where the business may not increase salary (but should not reduce it). Regardless of these exclusions, there are no circumstances where salary should be paid below the Real National Living Wage (or Real London Living Wage for those based in London). The potential reasons for the business paying below the minimum are as follows:
- You're subject for a formal performance or capability plan
- You choose not to accept a salary increase which is offered to you
- You have a disciplinary hearing pending or are subject to a 12-month disciplinary sanction which details impact to your salary
If any of these apply to you, the business will review your pay when you have successfully completed the action plan, or the disciplinary warning has expired.
The maximum pay detailed in the Market plus pay zone is the highest salary a colleague should ordinarily be paid for a role. There may be circumstances where pay exceeds this maximum such as where you've had pay protection applied under the Job Security agreement, or a waiver has been agreed by the business. The business may choose not to apply salary increase, or reduce increases to anyone who is paid above the maximum for their pay range.
How pay is reviewed
Pay should be reviewed at least on an annual basis. Accord & Unite negotiate these increases with LBG and are put to our members in a democratic process to agree any pay settlements. We will only accept an offer where we have a mandate from our members to do so.
The normal date for pay reviews to take effect is the 1st of April each year, although this can be negotiated to take place at a different date due to circumstances such as high inflation and slow wage growth impacting our members' normal spending power.
Your pay will also be reviewed if you receive a promotion, or if you move to another role at the same grade (known as a lateral move), or if you move in or out of London or other locations and circumstances which would impact the pay group and therefore pay range applicable to you. Your manager also has the discretion to review your pay outside of the annual pay review process - which is known as an out of cycle pay review. We've written some further guidance on the factors that you and your manager should consider if you believe you're being paid unfairly for the job that you do.
Pay progressions & promotions
There are a couple of areas of policy which cover pay and progression when securing a new role within the business. These are covered in separate articles:
Pay protection & redundancies
There are pay protections in place under the Job Security Agreement which ensure that salary levels are maintained by anybody who is placed or secures a lower graded role because of a restructure. The protection does not have an end date, so salary levels are maintained until the pay range for your new role catches up or you secure a further role restoring you back to your original grade.
Annual pay reviews are against the lower graded role, which means if you're above the maximum, you may receive a lower or zero increase as a result, depending upon the criteria and terms that are negotiated and agreed.
Can I talk about my pay?
Yes you can.
We've written a more detailed answer on why it's important to have transparent and open conversations about pay.
What to do if you feel your pay is unfair
There are a number of steps that you can take, and several factors you may wish to consider if you believe you're being paid unfairly for the job that you do. We've written some separate guidance which you can refer to if you believe your being paid unfairly.