Report: Chief Officers’ Evaluation and Remuneration Review
/ Richard Muscat
Abdul Uddin
© 2012 Hay Group. All rights reserved. / Registered in England and in Wales: The Hay Group Management Limited: No. 763575
Registered office: 33 Grosvenor Place, London SW1X 7HG / www.haygroup.com
Contents
1. Introduction 3
2. Programme of Work 4
3. Background 5
4. Pay Policy 6
5. Evaluation Outcomes 7
6. Level of work – Top team (comparisons between levels of Problem Solving) 11
7. Remuneration Analysis 13
8. Future Reward Arrangements 17
9. Salary Ranges and Pay Modeling 18
10. Deputy Chief Executive role 23
11. Appendices 25
The Hay Guide Chart & Profile Method of Job Evaluation 25
Blackpool Council / www.haygroup.com1. Introduction
This report sets out the initial findings, analysis and options for consideration from the recent review of Chief Officer roles undertaken with Hay Group consultants.
This review includes the following roles within the new senior management structure:-
§ Chief Executive
§ Assistant Chief Executive - Children’s Services
§ Assistant Chief Executive - Adult’s Services
§ Assistant Chief Executive - Resources
§ Assistant Chief Executive - Built Environment
§ Assistant Chief Executive - Leisure and Operational Services
§ Assistant Chief Executive - Organisation, Property and Information
§ Assistant Chief Executive – Human Resources, Communication and Engagement
§ Assistant Chief Executive - Regeneration, Tourism and Culture
2. Programme of Work
The main stages of the process were:-
§ Initial planning and familiarisation with the Chief Executive and the Assistant Chief Executive – Human Resources, Communication and Engagement
§ Joint executive briefing and question and answer session with senior manager job holders.
§ Preparation of up to date job description information by job holders and review by the Chief Executive.
§ Hay Group consultant review of job description information together with additional relevant organisational context information, including structure charts, budget and resource information.
§ All jobs were then independently evaluated using the Hay Group Guide Chart and Profile evaluation method. ( A summary of which is included as an appendix to this report)
§ Consultant meeting with the Assistant Chief Executive – Human Resources, Communication and Engagement to review the evaluation outcomes, and test, validate and confirm proposed evaluations.
§ Based on the agreed proposed evaluation outcomes, we then undertook pay market comparisons against our public sector pay database.
§ Meeting with Chief Executive and Assistant Chief Executive – Human Resources, Communication and Engagement to discuss and agree final report and recommendations on future reward arrangements.
§ Provision of advice and guidance around a proposed Deputy Chief Executive role.
3. Background
Blackpool Council agreed its new vision, mission and priorities which will guide the work that the council does during 2012/13.
Employees were involved in the creation of the Council’s new vision and priorities for the year ahead, with ‘values’ collected from more than 1000 who attended the staff information sessions held last year. Local residents are at the heart of Council services and were also given the chance to have their say on what they think our priorities should be.
Council’s mission – the council cannot hope to change its destiny merely by wishing for it, only by working for it. The council will work with the public, private and third sectors, locally, regionally, nationally and internationally, to achieve this.
The priorities are to:
§ Tackle child poverty, raise aspirations and improve educational achievement
§ Safeguard and protect the most vulnerable
§ Expand and promote our tourism, arts, heritage and cultural offer
§ Improve health and well-being especially for the most disadvantaged
§ Attract sustainable investment and create quality jobs
§ Encourage responsible entrepreneurship for the benefit of our communities
§ Improve housing standards and the environment we live in by using housing investment to create stable communities
§ Create safer communities and reduce crime and anti-social behaviour
§ Deliver quality services through a professional, well-rewarded and motivated workforce
Core management principals
To help Blackpool work towards achieving its vision and priority outcomes the council has implemented some core management objectives to help senior managers drive the required response from their staff:
§ Develop your service through effective business and workforce planning
§ Manage, develop and support your staff
§ Comply with Council policy and procedures
§ Deliver value for money and efficiency and manage budgets within agreed parameters
§ Act as an Ambassador to enhance the reputation of the Council
§ Support Elected Members to undertake their role effectively
4. Pay Policy
Blackpool Borough Council has a pay policy in place which has been designed to motivate staff to achieve the accountabilities expected of them while being seen to be a fair and equal employer:
‘Blackpool Council is committed to paying all its employees appropriately and fairly using recognised job evaluation schemes that have been tested to ensure that they are free of gender bias. The pay scales for employees at all levels are in the public domain and the Council complies with requirements to publish data on senior salaries and its entire pay scale in the interests of transparency.’
Some additional points that are of interest for this piece of work from the council’s pay policy statement include:
§ All chief officer appointments are dealt with by the Chief Officer Employment Committee using the normal recruitment procedures and options with appointments made to posts with a remuneration package of more than £100,000 being ratified by voting by full Council.
§ The relationship between the highest paid employee and the median salary will be calculated on an annual basis and published on the Councils website alongside the information provided regarding pay and benefits.
§ As part of its overall and ongoing monitoring of alignment with external pay markets, both within and outside the sector, the council will use available benchmark information as appropriate. In addition, upon the annual review of this statement, the Council will also monitor any changes in the relevant ‘pay multiples’ and benchmark against other comparable local Authorities.
There is no mention within the pay policy of where the council want to benchmark the senior roles against the market but it is widely accepted that the positions at the executive level are benchmarked against the lower quartile of the market rather than the median. We have used this assumption in the pay analysis below.
5. Evaluation Outcomes
Each of the jobs has been sized using the Hay job evaluation method. This approach to measuring job size is by far the most widely used and well proven approach to job measurement in the UK.
The method is used to evaluate jobs in many organisations in both the public and private sectors. The method is used by many local authorities, NHS organisations, housing associations, police forces, and further and higher education institutions.
Table 1 overleaf sets out the overall job size rank order, with jobs grouped into a number of distinct levels. These levels represent clusters of jobs which, in evaluated job size terms, are the same or very similar in total size. While jobs may not necessarily have “scored” exactly the same number of evaluation points, jobs clustered in the same level are not significantly different in total points (and therefore job size), and would normally be considered equivalent in terms of job size for general comparison and grading purposes.
It is suggested that all posts are re-titled ‘Assistant Chief Executive’ to emphasise the move towards a more corporate approach working as part of an Executive team with Cabinet creating a ‘ One Council’ ethos that is central to the achievement of the corporate priorities
The next table (Table 2) illustrates these job clusters and levels across each of the Directorates. Illustrative typical minimum and maximum job size ranges for each of the levels are indicated in the left hand column of the table.
Table 1: Job Size Rank Order and Provisional Levels
Chief Executive / 800 / 2128
Assistant Chief Executive – Children’s Services
Assistant Chief Executive – Adult’s Services / 608
608 / 1418
1418
Assistant Chief Executive - Resources
Assistant Chief Executive – Built Environment
Assistant Chief Executive – Human Resources, Communication and Engagement
Assistant Chief Executive – Leisure and Operational Services
Assistant Chief Executive – Organisation, Property and Information
Assistant Chief Executive – Regeneration, Tourism and Culture / 528
528
528
528
528
528 / 1232
1192
1182
1142
1142
1142
Table 2: Job Size Rank Order and profiles
1801 - 2140 / Chief Executive (2128)
1508 - 1800
1261-1507 / Assistant Chief Executive – Children’s Services (1418)
Assistant Chief Executive – Adult’s Services (1418)
1056-1260 / Assistant Chief Executive – Human Resources, Communication and Engagement (1182) / Assistant Chief Executive – Resources (1232)
Assistant Chief Executive - Organisation, Property and Information (1142)
Assistant Chief Executive - Leisure and Operational Services (1142)
Assistant Chief Executive - Regeneration, Tourism and Culture (1142) / Service Director – Built Environment (1192)
A1 – Planning and Policy – roles are required to develop, implement and advise on the application of policy.
A2 – Co-ordination and Commercial – roles are required to deliver a support service, develop partnerships while enabling and co-ordinating efforts
A3 – Business and Operations – Visible and accountable roles, which must deliver measurable performance
The rank order indicates a potential grouping of jobs into 2 levels (below the Chief Executive level) with the Assistant Chief Executive - Adult’s Services and the Assistant Chief Executive of Children’s Services sitting above the remaining executive roles. There is also a spare reference level built in between the Chief Executive and the Director roles which is a legacy from the removal of Executive Director roles but this is a useful structure to have in case any of the roles have to grow in the future due to changing circumstances within the council.
Full Evaluations
6. Level of work – Top team (comparisons between levels of Problem Solving)
Having analysed the roles within the top team there is a clear level of strategic ability across the roles that exist to ensure that there are the role holders in place that have the ability to not only contribute to the bigger picture but translate the 5-10 year business plan into more locally defined and relevant policies.
In some ways this reinforces the overall objective of the re-organisation: to remove silos, work strategically and in collaboration across the organisation. The new structure provides a base to facilitate cross functional working and longer term strategic planning.
As has been mentioned during a number of the conversations Hay Group has had with members of the top team, it would be interesting to see how the layer below the most senior roles are structured and the level of accountability and problem solving that is associated with those roles.
If there is a significant gap (as some feedback has noted) between the Directors and their direct reports this would force Directors to focus on operational rather than strategic issues and achieving results within a 12 month period. This would reinforce silos across the organisation and mean that the important strategic direction which you are paying for is lost in the need to correct results down the organisational structure.
7. Remuneration Analysis
Based on the evaluated job sizes, we have accessed our Public sector pay market data for salary comparison purposes.
The Public sector represents remuneration data from all public sector organisations in the Hay Group database. This includes data from a wide range of public sector, not for profit, charitable and voluntary organisations including local authorities, central government and agencies, NHS Trusts, higher and further education institutions, housing associations, police and other public sector organisations.
In our view, this market provides a sound basis for your senior post holders’ remuneration comparison and as a basis for determining preferred pay market positions within overall reward strategy.
It is important to note that all comparisons set out below are based on evaluated job size not on job title or function. (Multi organisation comparisons based on job title, rather than the detailed analysis of job content and job size, are frequently misleading and can severely distort perceptions of pay competitiveness and pay market position.)
Definitions
Base salary – represents all contractually guaranteed annualised cash payments, excluding overtime payments, shift premia, unsocial hours payment, and variable bonus or incentive payments. It excludes benefits in kind or specific cash allowance in lieu of benefits).
Market percentiles – the upper quartile divides the top 25% of organisations’ pay practice from the remaining 75%. The median divides the upper 50% from the lower 50%. The lower quartile divides the lowest 25% of organisations’ pay practice from the remaining 75%.
Pay Market Comparisons
Base Salary
We have presented overall pay market comparisons in Tables 3 and 4 as follows.
Table 3 presents the public sector base salary comparisons. (These exclude London)The column headed “compa ratio” illustrates current salary as a percentage of overall pay market practice at the median, and at the lower quartile of the market.
In general current salaries for all of the top roles are below the current lower quartile of the market data. Four roles in particular are below 80% of the lower quartile market data; Assistant Chief Executive - Children’s Services, Assistant Chief Executive – Adult’s Services, Assistant Chief Executive – HR, Communication and Engagement and Assistant Chief Executive – Leisure and Operational Services.
The Chief Executive role should be discounted from too much scrutiny within this process ass the role holder has decided to take a personal salary which will last for the duration of the current political administrations term.
(In terms of broader market comparisons, public sector salary levels for jobs of this size range are typically around 10% or so less than for equivalent size jobs in the general “industrial and services” market which includes private as well as public sector organisations.)
Table 3 Public sector Pay Market Comparison(National excluding London, regionally adjusted Jan 2012)
Total Remuneration – Other Earnings and Benefits