1. Pay & Grading, Contribution Pay & Reward Management
Libby Grant, Head of Strategic HR Services
5th March 2008

2. Scope of the Projects Job Evaluation Project
New grade structure/progression
Changes in incremental dates
Ending lifetime protection
New protection arrangements
Review of allowances
Awards and discounts
Market Forces Supplements
Behaviours Framework

3. Organisational Need for Change
Modernisation not Harmonisation
No clear differentiation between grades
Grade drift and ‘JE Culture’
No reward for contribution
Vulnerable under equal pay legislation
Protections consuming resources but not necessarily contributing to outcomes

4. Finance No reduction in the pay budget
Monies redistributed from lifetime protections into pay budget
Small amount from reserves injected
Must ‘wash its face’ in the medium term
Increments for the first time for lowest paid
No automatic increments for highest paid

5. Job Evaluation New scheme 70+ Benchmark jobs
Approx 500+ further sample evaluations
Comparability/matching exercise
Point scores determine new grade
Review and appeals process

6. Grades Down from 19 Grades to 10 from October 2007
Separate arrangements for senior managers (approx top 20)
Retention of existing incremental ‘spine’
Narrower grades with less overlap
Structure designed to make transfer to new structure as painless as possible for the greatest number

7. New Grade Structure ) 4 Increments 2 Contribution Increments)
4 Increments
2 Contribution
Increments
Possible Bonus
New Grade Structure

8. Assessing Contribution
4 Levels
Outstanding (consistently exceeds aims)
Excellent (achieves all aims and exceeds some)
Standard (achieves acceptable contribution to all aims but has scope to achieve more)
Below Standard (must achieve higher level of contribution)

9. Approach to pay progression (1)
Staff on lower grades 1-5 (Grades A-C)
No requirement to achieve higher levels of contribution to progress. Annual increment dependent on achieving at least ‘Standard’ level of contribution. Similar to current position but now increments for lowest paid.
Bonus of up to 3% available for ‘Outstanding’ contribution

10. Approach to pay progression (2)
Middle managers and professional staff D-J (6-14)
Conventional incremental progression through first 4 increments of grade (subject to ‘Standard’ contribution)
Access to next 2 increments dependent upon better than ‘Standard’ contribution
Non-consolidated bonus to reward highest levels of contribution for staff at top of grades

11. Approach to pay progression (3)
Top 20 Managers (15-19)
Annual pay increase entirely dependent upon contribution - not cost of living
Individual pay ranges defined by job evaluation, with market taken into account, if appropriate
Possibility of non-consolidated bonus to reward high levels of contribution

12. Contribution Pay
Based on principle that to achieve incremental progression, staff must achieve a minimum of ‘Standard’
Once point 4 achieved, progression to final 2 consolidated increments based on achieving ‘Excellent’ or better
Once on Point 6, opportunity to earn one-off non-consolidated bonus of up to 3% for ‘Excellent’ or up to 6% for ‘Outstanding’
Bonuses need to be re-earned each year
Separate scheme for Grades A - C

13. New scheme of protection
3 years (or sooner if substantive salary catches up)
Protection of total salary in cash terms (no increments or annual salary reviews)
Ending existing lifetime protections
Current lifetime protections and any arising from current JE review to end on 30/9/2010
Potential for extended protection in small number of severe cases subject to legal developments

14. Allowances additional to pay
Need to rationalise/simplify
Joint Management-Union Working Party
3 Categories
- Retain
- Replace with expenses payments
- Subsume in JE rates

15. Other changes Employee awards scheme Enhanced staff discount scheme
Changes in incremental review dates
Independent external review of Market Forces Supplements
Introduction of Behaviours Framework to support changes

16. Consultation Leaflet Intranet FAQ’s Road shows Trade Unions
Individual Consultation
New Contracts

17. Performance Development Framework – Why Do it?
Ambitious change agenda
Modernisation and continuous performance improvement required
To support the achievement of IiP
A stronger and more consistent approach to business planning and performance management required.
a successful authority, however significant internal variation exists in terms of individual contribution’

18. Performance Development Framework
Makes expectations of staff more explicit at all levels
Provides a structure to help differentiate the contribution made by staff
Aligns behaviours with organisational vision and business strategy
Greater focus on organisational learning, staff development and performance improvement
Underpins contribution-based pay and grading structure
Underpins broader HR tools eg recruitment and succession planning

19. Aligning People Management Tools
Recruitment &
Selection
Reward
Learning &
Development
PDF
Talent
Management
Managing
Performance
Succession
Planning

20. Design Process
External consultancy facilitated the design of the PDF - content was driven by staff feedback
The Town Clerk (Chief Exec), eight Chief Officers and a number of high performers from around the business were interviewed
Focus groups held with a cross-section of over 80 managers and staff
Findings were fed back to Amicus, GMB, Chief Officers, staff and managers who had attended the focus groups and interviews
The framework and appraisal processes tested with approx 40 managers
Nearly 200 staff and managers contributed to the design of the PDF

21. Research Findings – Key Themes
Bedrock Behaviours:
Organisational Savvy
Analysis
Problem Solving
Networking & Relationship
Building
Professionalism
Emerging Behaviours:
Managing Performance
Change Orientation
Inclusiveness
Drive
Customer Focus
Accountability
Developing and Recognising Others
Business Acumen
Valuing Others
Self Improvement

22. Clusters & Core Behaviours

23. Framework Structure – Levels & Indicators

24. Guidance for Use (1)
Managers must select six core behaviours for each position they manage (up to eight for staff with management responsibilities)
Chief Officers have agreed that staff operating at competency level 5 will trial being assessed against all 13 behaviours
Where possible a balance of core behaviours should be drawn from across the Thinking, Building Relationships, Achieving and Self-Managing clusters for all positions (1 core behaviours must be selected from each of these clusters for all roles)
The ‘Leading’ cluster is likely to only be relevant to roles with management / supervisory responsibilities

25. Guidance for Use (2)
All 3 core behaviours in the ‘Leading’ cluster are mandatory core behaviours for all staff who manage or appraise other staff
The indicators (ticks and crosses) are meant to provide a focus for performance & development discussions
They are a guide - and not a ‘definitive’ or an ‘exhaustive’ list (other evidence, feedback and observation should be used together with the indicators)
The levels are cumulative

26. Performance Appraisal Process – Context and Aims
To align service, team and individual objectives with business plans and organisational goals
Focus and drive performance improvement
Hold people to account for meeting expectations
Improve organisational consistency in the way staff are managed and developed
Recognise and reward the contribution made by all staff
Provide a fair and structured way to raise concerns about performance or encourage performance improvements

27. Performance Management
Staff will be rewarded for the total contribution they make, not just the targets they reach i.e. staff are to be assessed on the basis of both how they go about their work and what they achieve.
The ‘how’ is defined through core behaviours and the ‘what’ is expressed through objectives and performance indicators.

28. Assessing Core Behaviours
A Outstanding: Consistently demonstrating behaviours beyond that required of the role.
B Excellent: Consistently achieving the level required and often demonstrates behaviour expected at the next level or recognised as a role model.
C Standard: Usually achieving the level required. A small number of adverse examples or performance at the next level might be demonstrated.
D Improvement Required: Sometimes achieving the level required but adverse examples often demonstrated.

29. Moderating the Process
Initial moderation undertaken at Team and Departmental level – expectation is for broadly normal distribution curve
This will be followed by moderation by corporate centre to ensure equality and consistency across departments – audited and shared with TUs
When moderation process complete (July/August), final confirmations sent to staff of bonus payments to be paid with October salary
No planned right of appeal

30. Next Steps Communications strategy ‘ramped-up’ from January
Promotional aids also developed
Training programme for all managers will continue well into April 2008
All HR policies are being reviewed and realigned
Longer-term: recruitment, talent management and career planning processes to be reviewed
Decisions about distribution, links to pay and detailed moderation process to be made as well as recording decisions on HR system

31. Current Timetable
Appraisals and target setting to use new format from April 2008
April 2008 – March 2009: shadow year for PDF
April 2009 – discussions with staff about their assessment in a ‘safe’ environment i.e no pay impact
April 2009 – PDF goes live and will impact on salary next year
First ‘live’ contribution assessments in April 2010
First application of contribution progression and payment of bonus – October 2010