Presentation on theme: "Redefining Reward at London Borough of Barking & Dagenham A New Deal?"— Presentation transcript:
1 Redefining Reward at London Borough of Barking & Dagenham A New Deal? Martin Rayson Head of HR & Organisational DevelopmentSample title page - one
2 CSR – Impact on LBBD28% cuts in grants over 4 years (av 7.1% per yr)Y1 16%, Y2 11%, Y 3 1%, Y4 7%Overall right figures in MTFSNeed to re-phase savings + limited reservesContinued expenditure restraintMaximise external funding resourcesFull cost recovery on all chargeable servicesTerms and conditions review
3 Community ChallengesThe 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 placesApproximately 16% of the Borough’s population is aged 60+, which is one of the highest in LondonThere are significant health inequalities and evidence of comparatively poor health amongst the elderly populationLBBD owns its own stock and the condition of that housing stock is causing concernThe 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 modellingInvestment in change processes (Transformation Board)Investment in people changes (People Board)Relentless chasing of VFMResources to those areas that matter most to our residentsCommissioning that makes a difference (and is cheap!!)Certainty where certainty is possibleSound, efficient processesGood quality management informationTechnology driven
5 LBBD Cost Reduction Strategy Customers accessing services more easily, more cheaplyPrioritising resources to those areas members say are most important and taking resources away from areas of less importanceTargetOperatingModelReviewing income streamsJoint VentureCompliance cultureWholeCouncil TransformationFinancial planning and monitoringEliminating WastePolicy Led BudgetingMaximising all income–grants, fees and charges, better collection ratesAsk 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 transferImproved, effective budget management, cost control, manager development, systems and control checkingReview 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 resourceHow do we make it efficient and effectiveEffective processes, people complying with processes, right first time processing
6 Overall Transformation Programme VisionPrioritiesShapeStylePolicy HouseOne B&D ModelValues & Employer BrandUnderpinned by Communication – Let’s Talk Engagement SurveyPolicy Led BudgetingJoint VenturePeople StrategyService Transformation ProgrammeEVP/New DealManagement DevelopmentTalent ManagementPerformance ManagementPeople Management Policies
7 Policy House Priorities Better together Better Home Better Health Better FutureDelivered 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 cultureCulture transformation fully supportedServices accessible to all customersA single or shared view of the customerDelivery by lower cost channels & improved satisfactionTechnology used to modernise ways of workingOverheads reduced by 50%Making our services cheaper and easier to useImproved procurement and contract managementServices redesigned to reduce costUse of Customer Data to target services
9 People Challenges Downsizing Reduce the cost of employing people – greater productivity (e.g. absence management) + terms and conditionsSustaining engagement, motivation, discretionary effortDelivery 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 BrandAn 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 rightGiving opportunities to people to maximise their potentialBuilding a healthy, resilient and diverse organisationFocusing on efficiency, capacity and performance to maximise productivityProviding inspiring leadership and effective management to build employee engagement and motivationBeing flexible in the way we employ staff and the way that they work to meet customer needs
11 Paternalistic approach Competitive salaries The Old DealPaternalistic approachCompetitive salariesDirectly employed workforceJob securityGood pension arrangementsSome flexibility in working arrangements
12 Existing Reward Arrangements Pay and conditions are generous, notable for grade drift in order to retain critical skills and specialistsEmployees are reasonably happy with their pay and conditionsWide range of benefits- some part of terms and conditions, some salary sacrificeThere is no overarching strategyNo staff feedback on the value and importance of the benefitsDifficult for LBBD to defend its current investment in employee benefitsNo 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.
17 Building the New Deal - Next Steps Positioning the DealBasic pay/contingent payTerms & ConditionsEmployee benefitsRelational Rewards
18 Employer Brand Workshops – Best Things About LBBD LocationPublic service ethosCareer advancementGood total packageThe 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 proceduresCommunication and engagementTraining and developmentLeadershipPerformance managementPsychological contractSystems and supportCorporate 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 weekReview of the application of overtimeReduction in overtime ratesReview of other enhancementsGreater control over application of special leaveTightening of the sick-pay rulesChanges to the criteria for Essential Car User AllowanceChanges to mileage ratesChange in redundancy calculatorFreeze on senior staff pay ratesIncrements paid on achievement of objectives set through appraisal.
21 Building the New Deal – The Positives Sustaining investment in learning and developmentIntroducing a “Total Rewards” approachIntroducing a bi-weekly payroll for those who wish to be paid at more frequent intervalsProtecting current levels of Annual LeaveEnabling as far as possible for people to work flexiblySupporting staff through this period of uncertainty,Taking actions to build a greater sense of partnership with staffGiving reassurance that our policies and procedures will be fairly and consistently appliedManage down further the use of agency staffLimit the number of job losses or the externalisation of jobsContinued commitment to creating entry-level jobs within LBBDSustaining 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 enjoyIntroducing a bi-weekly payroll for those who wish to be paid at more frequent intervalsProtecting current levels of Annual LeaveEnabling as far as possible for people to work flexibly and in ways which “fit” with the way people live their livesSupporting staff through this period of uncertainty, via the Employee Assistance Programme, the Credit Union and the provision of other financial guidanceTaking actions to build a greater sense of partnership with staffGiving reassurance that our policies and procedures will be fairly and consistently appliedMaking commitments to manage down further the use of agency staff, limit the number of job losses or the externalisation of jobsContinued commitment to creating entry-level jobs within LBBD
22 Benefits Within Total Reward Making more of the overall investment in reward - Total Reward StatementsSalary sacrificeFlexible benefitsVoluntary benefits
23 Next StepsPotential further work on Employer Value Proposition (as part of brand work)Assessment of potential of benefits reviewFocus on engagement as part of relational benefitsNew Deal? – not sure!