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Pay & Grading, Contribution Pay & Reward Management

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Presentation on theme: "Pay & Grading, Contribution Pay & Reward Management"— Presentation transcript:

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

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