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Implementation of Agenda for Change
pay flexibilities
Board presentation
Challenges we face as a trust
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Cost pressures on funding and maximising the value of income received as a trust
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Greater demand on services
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Driving a high performing culture and driving the right behaviours
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Being able to respond to the changing landscape and reward those who consistently
deliver
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Retention of mission-critical roles
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Being able to attract and retain high performing leaders and employees
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Challenges of linking pay progression
with performance
Role of appraisal systems
Potential difficulties
• No clear view on what works
• Complexity and ambiguity destroy value
• A method to align employee’s objectives with those
of the organisation
• Supports the progress of high performers and to
improve poorer performers
• Fosters trust between an employer and employee
• Strong link between organisation values and
behaviours
• No single good practice approach to developing a
pay for performance system
• Need to customise approach and measurement
system to unique business requirements and
existing HR processes
• Alignment of objectives – having a connection
between an employees’ job and organisation
objectives
• Effective training
Challenges
High performing companies
Reward effectiveness
• No one-size fits all approach
• Reward and performance are customised
• Culture plays a significant role
• Correlation between performance and reward
designs
• Inputs vs outputs/how vs what
• Affordability and alignment
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People and HR management framework
In defining the people and HR strategies it is important to recognise that it needs to be effectively aligned
with the wider business strategy.
Business strategy
People management strategy
Human resource strategy
Role of manager
Attract
Role of HR
Retain and
engage
Build and grow
talent
Perform and
reward
Human capital measurement
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The future of public service workforce
Require evidence-based
strategy and prioritised
workforce interventions
focused around:
Productivity
Efficiency
Flexibility
Future
workforce
strategy
Collaboration
Agility
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Employment proposition – overall package
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Mentoring & coaching
Managed career moves including a road
map of a career path to give clarity and
targets
Talentlevel
Standardised skills and experience
Management
Job swaps
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Base pay
Pension
Allowances
Generous bonus based on performance
Consistently attractive starting salary based on
experience
Share save schemes
Complexity of high profile
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projects including opportunities
to work on novel assignments
Talent
Work life balance
management
Access to different markets (not just the UK)
Financial
Overseas travel
reward
Innovative projects – publicised
Resources and investment in high
Employment
tech projects
experience
Non-financial
More/greater degree of self empowerment
Employment
reward
on decision making
Culture,
values &
leadership
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Reputation as dynamic place to work
Widely recognised world class company to
work for
Clear diversity targets and industry awards
demonstrate their commitment to ensuring
the workplace is seen as welcome to all
fitting the role profiles
Relatively flat organisational structures and
a simpler decision-making process
proposition
Benefits
Learning &
development
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Apprenticeships, graduate scheme
Study leave
Job rotations as part of career
development
Publicises L&D that supports clear
career pathway
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Flexible working
Holidays plus bank/public holidays
Buying and selling holidays
Unpaid leave
Season ticket loans
Careers breaks/Sabbaticals
Tax efficient benefits i.e. Health
assessments, cash back cards, private
health, dentals insurance
Childcare vouchers
Sick, maternity, paternity and adoption leave
Professional institute subscriptions
On-site gym at major locations
Reduced gym membership at private venues
Local & national discount schemes
On-site nursery
Flexible benefits scheme for a total reward
package
Well being initiatives
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New AfC arrangements
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Amendments to Agenda for Change were introduced in March 2013, which offered an
opportunity to review the way in which performance and pay progression are
linked. The changes included:
– The abolition of the ‘foundation’ and ‘second’ pay gateways
– Introduction of an explicit requirement that progression through all pay points is
conditional upon meeting the required local level of performance
– Pay progression through the top two pay points in pay bands 8C, 8D and 9 to be
annually earned
– Alternative local pay arrangements available for those on bands 8C and above
– A new national set of agreed principles and criteria underpinning pay progression
within locally developed performance systems
– In pay band 5, the removal of accelerated pay progression linked to preceptorship.
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How many employees are affected by the new AfC
arrangements?
(Add you own local calculations in this section. Include pie charts to illustrate figures)
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Total number of full time equivalent (FTE) employees in the trust is (insert figure)
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Staff groups included are: (insert figure)
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Total number of FTE employees covered by the AfC terms and conditions is (insert
figure)
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These figures therefore affect (insert figure) per cent of employees
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Benefits of introducing the new AfC pay
arrangements
There are a number of benefits associated with implementing the proposed changes, including
the link between pay progression and performance:
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Alignment of employees’ objectives with business objectives
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Increased motivation as employees receive recognition for achieving / exceeding
objectives
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Improved retention, especially for top performers, as performance will be recognised
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Cost savings as the trust will avoid overpaying for underperforming employees
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Improved performance management processes
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A number of organisations have implemented the pay flexibility changes with the following
benefits realised so far:
– Increase in staff reporting that they receive well-structured appraisals
– Increase in statutory mandatory training compliance
– Increase in staff engagement scores
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Learnings from other trusts
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Keep it simple
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Align the changes to the bigger people issues, eg, wider talent management work
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Use the opportunity to make changes to the wider performance management
process and articulate the benefits
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Think out how to use technology to support the process
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Engage early and work in partnership with trade unions and the wider workforce involve line managers and trade unions in co-designing any new system
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Communicate clearly, simply and openly at every step
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Take a measured approach to implementation i.e. phased approach across different
bands of staff, modelling with senior people first then adapting around lessons learnt
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Have clear guidelines, parameters and standards on managing pay progression
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Take bold actions, for example, turn off automatic pay progression to reinforce a
change in culture around pay progression
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Ensure that line managers and staff are trained on any new system
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Success factors
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Improved staff engagement
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Enhanced customer care and quality of services
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Improved recruitment, retention and career progression
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Fewer staff being managed on formal disciplinary process / measures
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Cost savings and optimal use of the pay budget
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Points to consider
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Infrastructure in place, eg, values and behaviours clearly identified
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How the changes impact on the trust as a whole
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Align the changes with broader people issues, for example, wider talent management work
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Communications and engagement with wider staff and trade unions
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Sufficient resources to review, design and implement the changes
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How to use technology to support the updated process
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Ability to switch off automatic pay progression
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How long it will take and any logistical issues
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Develop policies, systems and processes including the changes required to the
performance management system to deliver an effective appraisal process linking pay
progression with performance
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Training for line managers and staff
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Appeals process
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Outline project plan
Month
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4
5
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Monthly staff side meetings
KEY DATES
Monthly Board meetings
Regular remuneration committee meetings
GENERAL
PROJECT
MANAGEMENT
Alternate weekly working group meetings
Monthly communications meetings
Change Impact
Assessment
Set up mechanism
for staff questions
Brief managers to cascade right messages
Equality Impact Assessment
Produce comms plan &
key messages
FAQ docs available
Update & progress emails sent to staff bi-monthly from leadership
COMMUNICATIONS
& ENGAGEMENT
Staff engagement sessions and workshops
Regular updates to the Board
DEVELOPMENT
OF POLICIES /
SYSTEMS /
PROCESSES
Pilot policy to
be approved
and other
documentation
Refinement of performance
review processes –
preparation for pilot
including trialling of training
Pilot period
Review of lessons
learnt post-pilot
and refinement to
performance review
process.
Revised
performance
review process to
be presented to
the Board
Training for staff and line
managers on the new
performance management system
Ongoing engagement of payroll and HR transactional teams
QUALITY
GATES
Board meeting
to agree to
implementing
changes
Process for turning
off pay progression
agreed
Pilot outcome
Board approval
of approach
after results of
pilot presented
Performance
management
system tested
Training on new
performance
management
system for line
managers and
staff completed
Pay progression
successfully turned off
for all bands included
in phased approach
Equality Impact
Assessment
Next steps
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Obtain buy-in from the Executive Board / consider what else might be needed to obtain
buy-in
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Consider how to engage with the wider staff and trade unions
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Set up a working group to co-design and implement the changes
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Consult internally - HR, payroll and communications teams
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Finalise project plan - key dates to be integrated with the trust’s calendar
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