1. Redefining Reward at London Borough of Barking & Dagenham A New Deal?
Martin Rayson Head of HR & Organisational Development
Sample title page - one

2. CSR – Impact on LBBD
28% cuts in grants over 4 years (av 7.1% per yr)
Y1 16%, Y2 11%, Y 3 1%, Y4 7%
Overall right figures in MTFS
Need to re-phase savings + limited reserves
Continued expenditure restraint
Maximise external funding resources
Full cost recovery on all chargeable services
Terms and conditions review

3. Community Challenges
The Borough has one of the fastest growing populations in London. The decision to restrict Housing Benefit may increase still further the number of people relocating.
Approximately 30% of the Borough’s population is aged between 0-19 and the proportion on under-fives is significant, putting a lot of pressure on school places
Approximately 16% of the Borough’s population is aged 60+, which is one of the highest in London
There are significant health inequalities and evidence of comparatively poor health amongst the elderly population
LBBD owns its own stock and the condition of that housing stock is causing concern
The increase in population is largely from BME groups and this is changing rapidly the traditional cultural mix. The conditions which encouraged the rise of the BNP have not gone away.

4. A Different, Modern Organisation
There is no growth for services, just managing with financial constraint (for at least 5 years)
Behaviour change through role modelling
Investment in change processes (Transformation Board)
Investment in people changes (People Board)
Relentless chasing of VFM
Resources to those areas that matter most to our residents
Commissioning that makes a difference (and is cheap!!)
Certainty where certainty is possible
Sound, efficient processes
Good quality management information
Technology driven

5. LBBD Cost Reduction Strategy
Customers accessing services more easily, more cheaply
Prioritising resources to those areas members say are most important and taking resources away from areas of less importance
Target
Operating
Model
Reviewing income streams
Joint Venture
Compliance culture
Whole
Council Transformation
Financial planning and monitoring
Eliminating Waste
Policy Led Budgeting
Maximising all income–grants, fees and charges, better collection rates
Ask our staff, members and public where they think waste is, publishing details of spend over £500, stop spending on “luxury goods”
Improved and cheaper transferred services. Better and cheaper procurement, expert help to transform the rest of the organisation with rates half market price. Knowledge transfer
Improved, effective budget management, cost control, manager development, systems and control checking
Review and transformation of all services not in JV:
Is it a priority (do we need the service at all)
How do we do it with less resource
How do we make it efficient and effective
Effective processes, people complying with processes, right first time processing

6. Overall Transformation Programme
Vision
Priorities
Shape
Style
Policy House
One B&D Model
Values & Employer Brand
Underpinned by Communication – Let’s Talk Engagement Survey
Policy Led Budgeting
Joint Venture
People Strategy
Service Transformation Programme
EVP/New Deal
Management Development
Talent Management
Performance Management
People Management Policies

7. Policy House Priorities Better together Better Home Better Health
Better Future
Delivered by:
A well run organisation that will be leaner, more efficient with lower support costs and lower costs of assets, exploiting opportunities for sharing costs, minimizing waste and maximising external funding, with a well managed, motivated workforce. A respected organization with a good reputation for “doing business” understanding it’ customers and citizens, providing a responsive service and community leadership”

8. The Target Operating Model
A customer focussed culture
Culture transformation fully supported
Services accessible to all customers
A single or shared view of the customer
Delivery by lower cost channels & improved satisfaction
Technology used to modernise ways of working
Overheads reduced by 50%
Making our services cheaper and easier to use
Improved procurement and contract management
Services redesigned to reduce cost
Use of Customer Data to target services

9. People Challenges Downsizing
Reduce the cost of employing people – greater productivity (e.g. absence management) + terms and conditions
Sustaining engagement, motivation, discretionary effort
Delivery of People Strategy = Style/culture change to support transformation and the implementation of the target operating model 2. The right people, with the right skills in the right places, with the right kinds of management and leadership, motivated to perform well

10. Draft Employer Brand
An organisation which encourages innovation and risk taking, where talent is developed and nurtured and people are treated fairly and with respect.
Encouraging people to be innovative, we accept we sometimes fail and we learn when things go wrong and celebrate where they go right
Giving opportunities to people to maximise their potential
Building a healthy, resilient and diverse organisation
Focusing on efficiency, capacity and performance to maximise productivity
Providing inspiring leadership and effective management to build employee engagement and motivation
Being flexible in the way we employ staff and the way that they work to meet customer needs

11. Paternalistic approach Competitive salaries
The Old Deal
Paternalistic approach
Competitive salaries
Directly employed workforce
Job security
Good pension arrangements
Some flexibility in working arrangements

12. Existing Reward Arrangements
Pay and conditions are generous, notable for grade drift in order to retain critical skills and specialists
Employees are reasonably happy with their pay and conditions
Wide range of benefits- some part of terms and conditions, some salary sacrifice
There is no overarching strategy
No staff feedback on the value and importance of the benefits
Difficult for LBBD to defend its current investment in employee benefits
No great enthusiasm to review pay structure arrangements;
Although there has not been a full staff survey since 2006, “pulse surveys” and anecdotal evidence suggest that employees are reasonably happy with their pay and conditions;
Wide range of benefits many of which are incorporated in key terms and conditions, i.e. pension, sick pay, flexible working arrangements etc. Others are offered on a voluntary basis through standalone salary sacrifice arrangements, e.g. childcare vouchers and Cycle to Work schemes;
There is no overarching strategy or focus on employee benefits and, more seriously, no overall understanding as to what is being spent on individual benefits, their utility and their overall effectiveness in a modern local authority;
No staff feedback has been obtained on the value and importance of the benefits so that there is no alignment between organisational and employee needs;
Consequently, it would be very difficult for LBBD to defend its current investment in employee benefits, let alone make the changes needed going forward

13. Challenges Around Reward
A fixed paybill with inflationary pressures built in through contractual progression and RPI increases;
Reward for service as opposed to performance;
Pay awards and levels that are out of step with other sectors;
Single status treating staff as an homogenous whole rather than centering on function and demographic need;
Reward not being linked to talent management;
Generous pension and compensation provisions;
Reward as an administrative encumbrance rather than as a strategic management tool;
Does it reflect the kind of organisation we need to become

14. Building The New Deal - Objectives
Reduce the cost of employing staff, thereby contributing to the necessary budget savings in 2011/12 and beyond;
Develop a Total Reward package that is fit for purpose for a modern local authority;
Motivate people who will be crucial to sustaining a modern Council;
Deliver greater flexibility in our approach to reward and simplify our arrangements, thereby also reducing costs;
Enhance productivity;
Reflect our values and ensure fairness and consistency across the Council;
The need to reduce costs;
Sustaining engagement and protecting discretionary effort;
Being fair and equitable;
Ensuring we are able to recruit and retain good people;
Focussing on getting more for what people are paid as their basic pay;
Ensuring people understand the full value of the reward package.

15. Total Rewards Approach

17. Building the New Deal - Next Steps
Positioning the Deal
Basic pay/contingent pay
Terms & Conditions
Employee benefits
Relational Rewards

18. Employer Brand Workshops – Best Things About LBBD
Location
Public service ethos
Career advancement
Good total package
The most commonly cited attraction for working in LBBD was the location.
Employees felt that they would have the opportunity to make a difference to the lives of customers. Barking and Dagenham, being a deprived borough facing many challenges, was seen as a place where employees could be a part of real change and improvement.
Some participants claimed that they were attracted to the job rather than the organisation. They saw the relatively large size of the authority as representing an opportunity for career advancement without having to change organisations in the future.
A number of participants cited the ‘whole package’ of terms and conditions as a contributing factor to their joining the organisation. Flexibility in terms of work hours, pay structures, annual leave and a shorter working week were all mentioned as attractive factors to potential employees.

19. Employer Brand Workshops – Things To Improve
Policies and procedures
Communication and engagement
Training and development
Leadership
Performance management
Psychological contract
Systems and support
Corporate policies and procedures should be universally adopted and corporately enforced to ensure consistency, transparency and fairness of approach.
There needs to be more communication between managers and staff, especially the frontline. There should be greater engagement with staff around change and around big decisions so that staff feel involved and on board.
Staff should be given training and development opportunities which will give them the necessary skills to do their job, but which will also enable them to progress in their careers.
Managers and leaders need to lead by example; they must live the brand and the values of the organisation.
The appraisal system needs to be meaningful to staff. Performance should be managed and staff should be rewarded for good work through mechanisms such as performance related pay, development opportunities, or performance dependant increments.
There needs to be a new ‘psychological contract’ between the organisation and staff which clearly sets out what is expected of employees and what they will get from the organisation in return.
Enable staff to do their jobs properly by cutting out internal barriers to effective working.

20. Building The New Deal – Changes to Terms and Conditions
Looking at the length of the working day and week
Review of the application of overtime
Reduction in overtime rates
Review of other enhancements
Greater control over application of special leave
Tightening of the sick-pay rules
Changes to the criteria for Essential Car User Allowance
Changes to mileage rates
Change in redundancy calculator
Freeze on senior staff pay rates
Increments paid on achievement of objectives set through appraisal.

21. Building the New Deal – The Positives
Sustaining investment in learning and development
Introducing a “Total Rewards” approach
Introducing a bi-weekly payroll for those who wish to be paid at more frequent intervals
Protecting current levels of Annual Leave
Enabling as far as possible for people to work flexibly
Supporting staff through this period of uncertainty,
Taking actions to build a greater sense of partnership with staff
Giving reassurance that our policies and procedures will be fairly and consistently applied
Manage down further the use of agency staff
Limit the number of job losses or the externalisation of jobs
Continued commitment to creating entry-level jobs within LBBD
Sustaining investment in learning and development, by protecting budgets – in this way we can ensure that people have the skills to be more productive, but also more employable (but perhaps not necessarily at LBBD)
Introducing a “Total Rewards” approach and exploring the extent to which we can make more of the funding envelope to offer more choice to staff around the benefits they can enjoy
Introducing a bi-weekly payroll for those who wish to be paid at more frequent intervals
Protecting current levels of Annual Leave
Enabling as far as possible for people to work flexibly and in ways which “fit” with the way people live their lives
Supporting staff through this period of uncertainty, via the Employee Assistance Programme, the Credit Union and the provision of other financial guidance
Taking actions to build a greater sense of partnership with staff
Giving reassurance that our policies and procedures will be fairly and consistently applied
Making commitments to manage down further the use of agency staff, limit the number of job losses or the externalisation of jobs
Continued commitment to creating entry-level jobs within LBBD

22. Benefits Within Total Reward
Making more of the overall investment in reward - Total Reward Statements
Salary sacrifice
Flexible benefits
Voluntary benefits

23. Next Steps
Potential further work on Employer Value Proposition (as part of brand work)
Assessment of potential of benefits review
Focus on engagement as part of relational benefits
New Deal? – not sure!