Committee and date Item No

Cabinet
8th December 2010
11
12.30 pm Public

Creating the Conditions for Success Proposed New Staff Pay and Grading
Structure

Responsible Officer Claire Lewis & Margaret Brierley

Email: claire.lewis@shropshire.gov.uk Telephone: 01743 252458

Summary
This report seeks Member approval for proposals for a newly designed Pay
and Grading structure for Shropshire Council staff which incorporates:
performance related pay;
underpinning pay progression principles; and
a revised approach to Job Evaluation

These proposals cover all Shropshire Council employees who are currently on
Grade PO22 / spinal column point 57 and below, with the exception of Teachers, and
the staff of West Mercia Supplies, Casual Workers, and those staff on the following
terms and conditions: JNC for Youth Workers, Craft Workers and Soulbury.

Recommendations

It is recommended that, subject to formal consultation with Council staff and trade
unions, that the Cabinet agrees:

A. the proposed new Grading Structure for Shropshire Council staff;

B. the proposed new Pay Progression principles;

C. the proposed new approach to Performance Related Pay; and

D. the revised approach to Job Evaluation.

 th
Cabinet 8 December 2010 Shropshire Pay and Grading

Background

1. The changing economic and political agenda in the UK means that the
way in which local councils operate needs to radically change. This
Councils agreed Transformation Programme has been created to
respond to this need for change, and the Creating the Conditions for
Success workstream deals with the future framework for employing,
rewarding, and developing our staff.

2. The Council needs the ability to attract and retain a high performing,
flexible and motivated workforce. The objective is to have people with
the skills, competencies and motivation to move forward the Councils
new operating model.

3. The existing pay and grading structure is no longer fit for purpose,
because it:

is very complex;
has 240 grades (including local variations, bars and linked
grades),
has a lack of consistency and transparency;
uses premium payments to top up salaries;
incorporates time served progression with increments related to
performance, but payment of these has become automatic by
custom and practice (with 69% of post holders at the top of their
grade)
has no flexibility to reward talent or contribution and; and
is high maintenance for Job Evaluation and Payroll Teams.

Principles

4. The principles of Shropshires new approach to pay and grading are to:

have a simplified, broad banded pay and grading structure;

have a greater focus on progression, with a direct link between
reward and employee contribution and increase in skills;
be market aware and affordable; and
support the new operating model and suit a flatter organisational
structure, where staff carry out a wider range of tasks within
larger, multi-disciplinary teams.

Contact Jackie Kelly 01743 252804 2

Achieving The Principles

5. It is proposed to simplify the present grading structure and move to a

new framework which compresses the current hierarchy of pay grades
into a smaller number of wide bands. Each of the bands will, therefore,
span the pay opportunities previously covered by several separate pay
ranges.

Detailed below is an example of how part of how such a broad banded

pay structure could look:

Current New Grade Band

scp Grade (Example)
14
13 Excelling
12 Grade 4
11
10 GRADE 2 Performing
9 Grade 3
8
7 Time served
Grade 2
6
5 GRADE 1
Grade 1 Time served
4

The new structure could feature six or seven broad banded grades,
which would be further split into Progression zones. These zones
would signify varying levels within the individuals career. Grade 1 and
2 would have a Time Served element to them which caters for lower
paid un-skilled employees where induction into the role requires
minimal development time. This means that they would be able to
progress through these incremental points on an annual basis, subject
to formal assessment of the quality of their work, unless their
performance was unsatisfactory.

6. A pay progression framework will be devised in order to control and

determine how an individual will move through the spinal column points
within their grade. It is proposed that this be designed to measure the
behavioural standards and contribution made by an individual, within a
formal performance management process. The combined score for
both elements will dictate whether the individual employee receives
progression by achieving an increment that year or not, and will also be
linked with the Councils Capability and Probation Processes. A
Moderation Process will be put into place to ensure consistency and to
support pay control, which will follow normal distribution principles.

Contact Jackie Kelly 01743 252804 3

 7. It is proposed to introduce the new grading structure in April 2011 and
fully implement the pay progression framework in April 2013. This
would allow sufficient time to embed it fully into the operations of the
organisation, to ensure Managers were fully conversant with it, and to
fully pilot the scheme and its associated moderation processes.

8. The successful introduction of the new Pay & Grading Structure is

dependent on how well it is communicated and the degree of buy in
by managers at all levels. The Councils recognised Trade Unions will
be consulted, along with employees, and will be given the opportunity
to comment and suggest alternatives.

9. In order to ensure that pay within Shropshire Council continues to be

equality proofed and to reduce the risk of equal pay claims, it is
proposed to carry out light touch Job Evaluation on key bench mark
posts across the range of PO posts from spinal column point 35
(29,236) to spinal column point 59 (50,445). This enables all other
posts to be slotted into this framework without excessive time-
consuming evaluation processes.

10. The proposed changes to the Pay and Grading Structure will enable
the Council to manage pay progression in a more flexible, fair,
transparent and adaptable way. The pay pot for distribution to
employees in support of performance related pay will be based on
affordability, market pressures and the ability to reward performance. It
will be based on a percentage of the pay budget to enable financial
planning and control. Freezing increments for two years from April
2011 enables the full introduction of a pay progression framework
incorporating pay pot distribution. Under these new arrangements,
the overall staffing budget will be overseen and signed off by Members
through the normal financial planning process. (It is recognised that
the pay pot for future incremental progression will not be any more
expensive than currently).

11. Key Dates

8th December 2010 Proposal Report to Cabinet

1st January 2011 Commencement of Consultation &
Negotiation Period with Employees & Trade
Unions (90 days)
1st April 2011 New Grading Structure becomes effective
1st April 2012 Performance Related Pay Pilot Commences
st
1 April 2013 Performance Related Pay Goes Live

This timescale has been set in order to meet the future requirements of
the Councils Management Review, in terms of supporting organisation
design and recruitment to positions in the new operating model.

Contact Jackie Kelly 01743 252804 4

List of background papers (This MUST be completed for all reports but
does not include items containing exempt or confidential information)
N/A
Human Rights Act Appraisal
The contents and proposals within this report are compatible with the Human
Rights Act 1998.

Environmental Appraisal
NA
Risk Management Appraisal
These proposals constitute significant changes to the way in which we reward
staff, we will consult with the trade unions and staff as part of the implementation.
Equality issues will also be addressed as through audits and the risk will also be
managed as the grading structure will continue to be underpinned by job
evaluation.

Community/Consultations Appraisal
NA
Cabinet Member
Mike Owen
Local Member-
NA
Appendices-
None

Contact Jackie Kelly 01743 252804 5