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Implementation of Agenda for Change pay flexibilities Board presentation. Challenges we face as a trust. Cost pressures on funding and maximising the value of income received as a trust Greater demand on services Driving a high performing culture and driving the right behaviours

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Implementation of Agenda for Change pay flexibilities Board presentation

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    1. Implementation of Agenda for Change pay flexibilitiesBoard presentation

    2. Challenges we face as a trust • Cost pressures on funding and maximising the value of income received as a trust • Greater demand on services • Driving a high performing culture and driving the right behaviours • Being able to respond to the changing landscape and reward those who consistently deliver • Retention of mission-critical roles • Being able to attract and retain high performing leaders and employees

    3. Challenges of linking pay progression with performance • Role of appraisal systems • 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 • Potential difficulties • 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 • Reward effectiveness • Correlation between performance and reward designs • Inputs vs outputs/how vs what • Affordability and alignment • High performing companies • No one-size fits all approach • Reward and performance are customised • Culture plays a significant role

    4. People and HR management framework • Business strategy • People management strategy • Human resource strategy Role of manager Role of HR • Retain and engage • Build and grow • talent • Perform and reward • Attract • Human capital measurement In defining the people and HR strategies it is important to recognise that it needs to be effectively aligned with the wider business strategy.

    5. The future of public service workforce • Productivity • Efficiency • Flexibility • Future workforce strategy • Collaboration • Agility Require evidence-based strategy and prioritised workforce interventions focused around:

    6. Talent Management Financial reward Employment experience Non-financial reward Culture, values & leadership Benefits Learning & development Employment proposition – overall package • Base pay • Pension • Allowances • Generous bonus based on performance • Consistently attractive starting salary based on experience • Share save schemes • Mentoring & coaching • Managed career moves including a road map of a career path to give clarity and targets • Standardised skills and experience level • Job swaps • Complexity of high profile projects including opportunities to work on novel assignments • Work life balance • Access to different markets (not just the UK) • Overseas travel • Innovative projects – publicised • Resources and investment in high tech projects • More/greater degree of self empowerment on decision making • 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 Talent management Employment proposition • 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 • 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 • Apprenticeships, graduate scheme • Study leave • Job rotations as part of career development • Publicises L&D that supports clear career pathway

    7. New AfC arrangements • 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.

    8. How many employees are affected by the new AfC arrangements? (Add you own local calculations in this section. Include pie charts to illustrate figures) • Total number of full time equivalent (FTE) employees in the trust is (insert figure) • Staff groups included are: (insert figure) • Total number of FTE employees covered by the AfC terms and conditions is (insert figure) • These figures therefore affect (insert figure) per cent of employees

    9. 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: • Alignment of employees’ objectives with business objectives • Increased motivation as employees receive recognition for achieving / exceeding objectives • Improved retention, especially for top performers, as performance will be recognised • Cost savings as the trust will avoid overpaying for underperforming employees • Improved performance management processes • 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

    10. Learnings from other trusts • Keep it simple • Align the changes to the bigger people issues, eg, wider talent management work • Use the opportunity to make changes to the wider performance management process and articulate the benefits • Think out how to use technology to support the process • 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 • Communicate clearly, simply and openly at every step • 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 • Have clear guidelines, parameters and standards on managing pay progression • Take bold actions, for example, turn off automatic pay progression to reinforce a change in culture around pay progression • Ensure that line managers and staff are trained on any new system

    11. Success factors • Improved staff engagement • Enhanced customer care and quality of services • Improved recruitment, retention and career progression • Fewer staff being managed on formal disciplinary process / measures • Cost savings and optimal use of the pay budget

    12. Points to consider • Infrastructure in place, eg, values and behaviours clearly identified • How the changes impact on the trust as a whole • Align the changes with broader people issues, for example, wider talent management work • Communications and engagement with wider staff and trade unions • Sufficient resources to review, design and implement the changes • How to use technology to support the updated process • Ability to switch off automatic pay progression • How long it will take and any logistical issues • 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 • Training for line managers and staff • Appeals process

    13. Outline project plan Month 1 2 3 4 5 6 7 8 9 10 Monthly staff side meetings KEY DATES Monthly Board meetings Regular remuneration committee meetings GENERAL PROJECT MANAGEMENT Alternate weekly working group meetings Monthly communications meetings Set up mechanism for staff questions Change Impact Assessment Equality Impact Assessment Produce comms plan & key messages FAQ docs available Brief managers to cascade right messages Pilot policy to be approved and other documentation Revised performance review process to be presented to the Board DEVELOPMENT OF POLICIES / SYSTEMS / PROCESSES Review of lessons learnt post-pilot and refinement to performance review process. COMMUNICATIONS & ENGAGEMENT Update & progress emails sent to staff bi-monthly from leadership Refinement of performance review processes – preparation for pilot including trialling of training Pilot period Staff engagement sessions and workshops Ongoing engagement of payroll and HR transactional teams Regular updates to the Board Training for staff and line managers on the new performance management system Board meeting to agree to implementing changes Process for turning off pay progression agreed Board approval of approach after results of pilot presented Training on new performance management system for line managers and staff completed Pay progression successfully turned off for all bands included in phased approach Performance management system tested Pilot outcome QUALITY GATES Equality Impact Assessment

    14. Next steps • Obtain buy-in from the Executive Board / consider what else might be needed to obtain buy-in • Consider how to engage with the wider staff and trade unions • Set up a working group to co-design and implement the changes • Consult internally - HR, payroll and communications teams • Finalise project plan - key dates to be integrated with the trust’s calendar