An alternative view of linking pay to performance Dena Smart Head of Human Resources (HR) Shared Service

Organisation Profiles Maidstone Borough Council 55 councillors – hung council for years then conservative now hung again (UKIP) 500 employees New pay scales in 2006 with link to performance in 2007 High performance increments introduced for senior roles 2012 Swale Borough Council 47 councillors – conservative administration 300 employees New pay scales linked to performance in 2010

Pay for performance – what’s it look like? Bonuses based on some criteria Payment by results /Piecework Profit related bonuses/ pay progression Total contribution pay Team bonuses Spot salary increases

Pay increases not linked to performance Inflation award Re-gradings Increments Structure changes Pay scale changes with assimilation

Pay for Performance – pros and cons Pros Intuitively right Reward high performers Limit payment to low performers Have more impact with limited budgets Currently encouraged within public sector Felt fair?? Cons Lack of transparency – equal pay issues Budget control Managers not sufficiently objective or brave enough to give honest feedback Complex to administer Trade union opposition Most people in middle Felt fair??

My own view?? Pavlov or Dan Pink??

What have we done? Same approach in both councils but at different times and with different JE systems 2 payscales into one new one Established pay policy and principles – pay at median of market salary survey Top of each pay scale is the median so incremental pay holds down pay costs

How does it work? Annual pay negotiations with trade unions – commence November – January for payment in April Pay scale with increments – varying number – minimum 2 maximum 7 – April – full developmental appraisal – not linked to pay – Increment review in Sept for payment in October as part of mid year review

Criteria for payment of increment Employee must be performing to the expected standard of the job – knowledge, skills and performance standards plus behavioural competencies Manager options – Pay increment – Withhold increment – Pay double increment – If at the top of grade withhold pay inflation

Other tools we have available to reward the high performers Career grades Non-cash rewards (gifts up to £50) Cash rewards – Director can authorise up to £500 Salary sacrifice schemes Shopping discount site Health and Well-being activities ….etc

So what has actually happened? MBC YearWithheldDouble SBC YearWithheldDouble 2014??

Further developments 2014/15 Combined appraisal approach for MKIP partners Use of 360⁰ feedback for line managers Use of Talent grid linked to development plans