Performance Management in 2017

Companies Must Become Active and Responsive – interacting with everyone working in their company.

Today’s workers expect change. Constantly. And feedback. Specifically, they expect to have the ability to change their goals as business and their own needs change. They also expect to make changes using technology. And any technology solution should mirror the experience they have in their personal lives – it should be intuitive, responsive, relevant, and immediate.

Not only should any technology be up-to-date, it needs to provide immediate feedback.

For example, when you deposit a cheque using your banking app, it tells you immediately whether that transaction was successful. Same when you purchase something using your tablet.

The modern workforce wants that type of feedback about their performance because they have choices to make about their careers and they know it.

Regular performance feedback isn’t a Millennial thing. Every employee wants to know where they stand; what their future is; if you rate them and what for; what the niggles and opportunities and challenges are. Don’t wait until they have resigned to tell them you saw them as a future Director. It will ring hollow no matter how sincere.

Likewise any feedback does not and should not exclude contractors, consultants and other individuals working with the company.  Today’s workforce is flexible moving very between employment and self employment to suit them. Don’t miss out on interacting with everyone that is working for you.

Active Performance Management enhances the Modern Workplace

Any Active Performance Management solution should take the best of the traditional performance management process and combine it with the needs of today’s workforce. It provides a structure that managers and employees want so the process remains fair. It can also include the documentation aspect necessary to support job changes and promotions.

By making the process technology driven, it can take the traditional performance management one step further and facilitate real-time feedback conversations that employees want to move to the forefront. It can also utilise downtime.

Real-time feedback piece is so important to everyone that wants and values it. Waiting once a year (for a performance review) doesn’t work. It’s time to move to real-time system for performance, with frequent touch points between the manager/client and employee or worker.

5 Key Elements of Active Performance Management (APM)

2017 is the right time to introduce active performance management. There are four key elements to changing current performance management processes.

  • Regular performance conversations. Most organisations have some mechanism in place requiring managers and employees to meet once or twice a year. With active performance management, employees and managers meet more often. The timeliness of performance feedback helps the employee perform at a higher level.
  • Peer-based feedback. In addition to increased manager feedback, employees learn how to provide each other with performance feedback. This can be just as valuable – if not more so – than manager feedback. Employees collaborate with different colleagues every day and need positive working relationships with their peers.
  • Focus on current and future projects. More frequent performance conversations mean less time is spent rehashing old behaviour. Workers and managers already know what happened in the past. The conversations are spent on future performance, talking about how to accomplish goals.
  • Development at every level. Every worker becomes skilled in delivering performance-related feedback. This helps them take ownership of their career development.
  • Looking to the future – The elephant in the room is often that both sides know that to truly realise ambitions the individual may not stay in the same place until retirement. Working in a new way means such ambitions can be captured and companies can stay in touch with their future talent even if they aren’t currently working for them.

When you implement active performance management into an organisation you may wish to phase-in different key elements.

Phased implementations can be very successful and embed ways of working firmly. Performance Management facilitated by technology will allow the flexibility to introduce the entire process or each piece separately.

Active Performance Management Leads to Talent Activation

Organisations must create processes that result in having the best talent in the right positions. Those processes need to include creating an environment where all their workers (current, future and past) feel empowered to ask for and give feedback and that any training/development they need to be available in a timely manner.

When employees are engaged with their work, their performance improves and organisations begin to set the pace rather than react to the pace of the market.

We all understand the opportunity cost of not being agile in business. Think of companies like Uber, Airbnb, and the new Amazon app-based grocery stores. These companies shouldn’t have been able to disrupt the way that they did had “legacy” brands kept up with or innovated within their respective spaces. Increased agility enables organizations to increase the speed at which they conduct business and innovate, which improves the bottom-line.

 

Employment law changes anticipated for 2017

A round up of the employment law changes anticipated for 2017, amid the ongoing uncertainty resulting from the Brexit referendum. 

Large compliance projects for data protection and gender pay gap reporting will dominate the HR agenda in 2017.

Employers are likely to see costs increase as the apprenticeship levy and additional fees for sponsoring foreign workers are introduced, and tax savings for employee benefits are significantly reduced.

Now more than ever it is important to ensure you are have good up-to-date HR practices and are employing the right people on the right terms and conditions.

  1. Data Protection Regulation compliance efforts underway

Although the EU General Data Protection Regulation (GDPR) does not come into force until May 2018, the scope of the changes under the new Regulation means that preparing for the GDPR will be high priority for employers in 2017.

Employers will need to carry out audits of employee personal data that they collect and process to ensure that it meets GDPR for employee consent. New governance and record-keeping requirements mean that employers will also have to create or amend policies and processes on privacy notices, data breach responses and subject access requests.

As the GDPR will come into effect before the UK exits the EU, organisations that are not compliant by May 2018 will risk fines of up to 20 million euros or 4% of annual worldwide turnover, whichever is higher.

  1. Gender pay gap reporting begins

Private-sector, voluntary sector and public-sector organisations with 250 employees or more will be required to publish gender pay gap information for the first time.

Employers will be obliged to release information relating to employee pay and bonus pay, as well as information on the number of men and women in each quartile of the organisation’s pay distribution.

Gender pay gap regulations for private and voluntary sector employers are still in draft form but the deadline for the first report is expected to be 4 April 2018, based on pay and bonus data from 2016/17.

Reporting requirements for public-sector employees are expected to mirror private-sector timelines and requirements.

  1. Apprenticeship levy on large employers introduced

Employers with an annual payroll of more than £3 million will be required to pay a 0.5% levy on their total pay bill starting on 6 April 2017.

Large employers will be able to access levied amounts, plus a government top-up of 10%, to fund apprenticeships from accredited training providers.

Smaller organisations that are not required to pay the levy will also be able to receive funding for accredited apprenticeships by contributing 10% towards the cost of an apprenticeship, with the Government paying the remaining cost.

This is potentially great news for employers and young people entering the workforce.

  1. Salary-sacrifice schemes significantly restricted

Employers may need to reconsider their benefit offerings as tax savings through many salary-sacrifice schemes will be abolished from 6 April 2017.

Schemes related to pension savings (including pensions advice), childcare, cycle-to-work and ultra-low emission cars will not be affected.

Schemes in place prior to April 2017 will be protected until April 2018, while arrangements related to cars, accommodation and school fees will be protected until April 2021.

  1. Changes to rules for employing foreign workers 

Employers sponsoring foreign workers with a tier 2 visa will be required to pay an immigration skills charge of £1,000 per worker (£364 for small employers and charities) beginning in April 2017.

The immigration skills charge will be in addition to current fees for visa applications.

In April 2017,the minimum salary threshold for “experienced workers” applying for a tier 2 visa will also increase to £30,000.

New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

  1. Restraints on public-sector exit payments are still expected

Restrictions on public-sector exit payments, which had been expected to come into force in 2016, are still anticipated, although their implementation dates have not yet been confirmed.

Exit payments will be capped at £95,000 when public-sector employees leave their roles, including as a result of redundancy or voluntary exit.

Employees earning over £80,000 will also be required to repay exit pay if they return to any public-sector role within 12 months.

This will be a key area for the National Audit Office to look at closely and ensure that further loopholes aren’t being created.  Poor practices that included raising salaries exceptionally to benefit from Defined Benefit pension schemes, offering VR to expensive senior staff who merely wished to retire as well as agreeing terms to re-hire have been costly to the public purse.

  1. National minimum wage changes 

Cycles for national minimum wage increases – including the national living wage – will be aligned, with the next round of changes taking effect on 1 April 2017.

The next increase will see the living wage for staff aged 25 or over rising to £7.50.

Use this link to check you are paying the correct rate. Also look at current and future statutory rates for maternity pay, paternity pay, adoption pay, shared parental pay and sick pay.

https://www.gov.uk/national-minimum-wage-rates

  1. Trade union balloting changes to be implemented 

Employers await the implementation date for new balloting requirements under the Trade Union Act 2016.

Under the rules, a successful vote for strike action will require a 50% minimum turnout and a majority vote in favour of industrial action.

Industrial action in important public services will require a strike vote of 40% of all eligible voters.

Is in-house HR the best option for your Company?

Having worked ‘in-house’ for much of my career and more recently as a consultant, I’ve had seen both sides. This is particularly illuminated when one performs a detailed ‘access all areas’ HR audit.  Matching the needs of the business against the capability and remit of the HR function. Often it can be a bigger gap than anyone realises.

New role in HR – Work out what you need to do to fit in

When you begin a new role with a Company they are keen that you bring new ideas and change things. But many quickly realise that the most important thing to learn is ‘How they do things around here’. For in many companies not working that out quickly could mean one is not in post long enough to do more than just be new.

Companies by their very nature are insular. The individuals that do well are either the very brave and talented who do their own thing but bring in so much revenue that no-one cares. Equally those that are extremely corporate will have long and successful careers. Individuals that are very bright will move on naturally because there will be many options for them. Those that are clearly poorly performing will be moved on. But everyone else stays.

So, in that context the parameters of what ‘good HR’ looks like are set. This will almost certainly involve maintaining unique processes and ways of doing things. Quirky administrative approaches. Often long winded. And all the unwritten stuff about who gets fired quickly and how.  And what gets ignored or isn’t deemed officially important.

HR ignore half their customers

When a Company initiates an HR audit what they often want to know is how do we compare with our competitors? Do we have the right resources and skills in HR. Too much or too little? That answer is always unique to the organisation as often it is driven by individuals and/or the sector. If you have someone very senior that insists that HR is all about administration and problem solving and nothing more than that will dictate who you have in your function. If you are in a sector where you have high turnover and a lot of ER problems that may require some intense catch up before you move to a different model.

Companies have different motivations for HR audit from are we compliant (will I get my bonus?) right through to do we have the skills and talent in HR and the remit to achieve what the ambitious CEO and board want to achieve.  Often there is quite a gap.

And HR still exclusively focus their activities on ‘employees’. The self-employed, the flexible labour and the workforce of tomorrow are largely ignored which is a bit like only caring about the customers that visit your store and not the ones that shop occasionally on-line or could be buying your products.

Most HR process are substantially similar – not substantially different.

In an article written by Ruud Rikhof, Managing Partner of KennedyFitch he states “We believe that 80% of the activities in HR are substantially similar from company to company, not substantially different”. So, if it is substantially similar, why would you need it “in-house and customised” when you could pass it on to someone else, do it quicker and save money?

So many HR practitioners talk about Best in class. So many CEO’s don’t share these aspirations as they see such a process as long winded, expensive and distracting from core business.

Do ‘best in class’ processes you have contribute to the bottom line?

Whilst core HR processes should be agile and robust, they will never give your business a competitive edge. So, it’s wise to focus what resource you have on the things that will.

One of the issues about benchmarking your company’s HR needs against another is that whatever standard you use may not be the right one.

Your performance management system may have won awards and have some great technology with it – but does it drive performance?

You may have invested in a fantastic HR software system – but where are the reports and does anyone use or understand it apart from HR?

So, do you know what is right and important for your organisation and is that where you are directing your resources?

Individuals want an individual experience

When you go out to market to hire exceptional talent, the person you offer to is unique. You are excited about them joining and may even create a different package to get them on board. The CEO will take an interest in their on-boarding. But at that point the individual approach begins to wane. HR will get anxious that the Company is being inconsistent and will want the new hire to be treated the same as everyone else.

We have observed that increasingly individuals demand that they are treated as individuals. It’s often a deal breaker. Yet in-house HR activities are focussed on treating everyone the same.

What are the alternatives?

Many companies value their long serving loyal HR administrator. Key thing is to ensure you have the right level of senior HR challenge and expertise.

Equally you can contract out the administration, investing in a good system and employ a bright career hungry HR professional to work with your leaders and focus on the big things for your Company.

Many companies have an Employment lawyer on speed dial which absolutely supports the reactive problem solving risk adverse model that is hardly likely to have your HR function doing things differently.

Of course you can have both. HR lead in-house and HR admin in house. But that then results in what many businesses have now. A cost centre that stops more than it starts and manages problems.

Getting your HR capability right can be a powerful tool for increased competitive advantage. Especially in a challenging market

 

www.amelore.com

Christmas. It’s the time of year when…

This is the ultimate advice checklist for how HR should deal with Christmas issues…
1. Employees sometimes do stupid stuff. At Christmas time and otherwise. It’s a fact of life.
2. Just deal with it.
3. Resist the urge to worry too much about vicarious liability, discrimination and constructive dismissal. Although it is probably a good idea not to put any mistletoe up in the office.
4. Resist the urge to write any sort of policy.
5. Resist the urge to put any sort of disclaimer about behaviour in any Christmas party related literature. If someone wants to punch Bob from Accounts on the dance floor after 12 pints of beer then they will do it anyway. See points 1 and 2.
6. Resist the urge to write special rules about absence from work after social events. See point 2.
7. Apply Christmas common sense.
8. Avoid sprouts in an office environment at all times. This is especially important in small or poorly ventilated offices.
9. Never, ever, buy Secret Santa presents from Ann Summers.
10. Put a tree up; Eat some Quality Street; Wear a Christmas jumper; and remember to enjoy yourself.

It’s holiday time – So, how does your holiday policy shape up?

Whilst most employers run the usual January to December holiday year, some companies operate a holiday year which mirrors their financial year. Those very brave employers have a holiday year which follows each employee’s employment start date (administratively this must be a nightmare!)

Employers with an April to March holiday year will find themselves in a peculiar situation for 2016 through to 2018. Remember that all workers are entitled to a minimum of 5.6 weeks’ paid holiday, which means 28 days for a full-timer. Bank holidays count towards this entitlement.

Due to the moving Easter holidays, rather than the typical eight bank holidays in a year, April 2016 – March 2017 will have only six bank holidays, while April 2017 – March 2018 will have ten.

So what can you do about this?

Your first port of call is to check your contractual wording around holiday entitlement. This could throw up a number of different scenarios.

Here are a few (using full-time workers as an example):

  1. When the contract states: “you are entitled to 20 days holiday plus all bank holidays”. For April 2016 – March 2017 this would mean that your employees would only receive 26 days holiday, which is obviously below the statutory minimum entitlement. You would therefore need to give them an additional two days paid holiday. For April 2017 – March 2018 they would receive 30 days holiday, but without specific wording which has anticipated this exact scenario it is unlikely you will be able to deduct the extra two days, as the entitlement is to “all” bank holidays.
  1. When the contract states: “you are entitled to 20 days holiday plus 8 bank holidays”. Again your employees would only receive 26 days holiday for April 2016-March 2017 as there are only six bank holidays. You would therefore need to give your employees an additional two days paid holiday to ensure they receive their statutory minimum entitlement.

However, for April 2017 – March 2018 you could choose not to give employees two of the ten bank holidays (there is no automatic right to time off on a bank holiday). However, unless they agree otherwise, you would not be able to deduct these from the 20 day holiday entitlement as the contract says that they are entitled to 20 days holiday. You would instead have to get them to work two bank holidays, which may not be practical if the office is closed and certainly will not be popular.

  1. When the contract states: “you are entitled to 28 days holiday inclusive of bank holidays”. The result of this is the same as point 2 above. You will have to give two extra days for 2016-2017 and you could choose to require employees to work two bank holidays for 2017-2018.

This situation is bound to arise again in the future so the next time you undertake a review of your employment contracts it would be worth considering whether you want to include wording in the holiday clause so that holiday entitlement can be adjusted each year if necessary to allow for this scenario.

This may be even more desirable where you already offer holiday in excess of the minimum statutory entitlement and don’t want to be in a position of having to afford additional days to employees in a particular year.

www.amelore.com

Eu exit and the implications for your business

Following the unexpected confirmation of a “leave” vote, many businesses will already be turning their attention to what happens next?

The most important message is that the referendum result does not trigger any automatic legal changes; neither does the UK’s formal notification that it will be withdrawing from the EU.

The UK will continue to be a member of the EU for the time being, and the status and effect of all UK and EU law remains unchanged for now, and possibly for some time in the future.

Beyond that, however, much remains to be debated and negotiated – such as the shape of trading agreements between the UK and the EU, the status of EU-derived law, thorny issues such as acquired rights, and the UK’s relationships with non-EU states.

It’s still business as usual for a while – no immediate changes

Neither the referendum result nor the UK’s formal notification to the EU has any immediate legal effect. From a legal perspective, it will be ‘business as usual’, probably for some time to come.

  • The next step is for the UK to give formal notification to the EU of it’s intention to leave. This will start the withdrawal process, which must be concluded within two years unless an extension can be agreed (which requires the consent of all twenty-seven remaining Member States).
  • The future trading relationship between the UK and the EU could take one of a number of different forms; which form it takes will have significant implications in terms of the movement of goods, services, people and capital.
  • The UK will also need to undergo a major legislative project to identify which areas of EU-derived law will stay, which will be modified and which will no longer have effect in the UK.

Each of these processes is likely to involve much consultation with the UK public and industry. Businesses have an important part to play in shaping the environment that they will be trading in, domestically and cross-border.

Employment implications of Brexit for your business

UK employers are unlikely to see any large-scale changes to current employment law in the short-term as a result of the UK leaving the EU.  The UK’s on-going relationship with EU Member States, as well as our own workplace culture, is likely to demand that the UK retains many of the EU-derived laws that have already been incorporated into domestic legislation.

Free movement of workers within the EU

Now we’ve voted to leave the EU, the free movement of workers will certainly be affected. However, changes to legislation are likely to be gradual rather than immediate.

While in theory citizens of EU member states no longer enjoy the automatic right to work in the UK (and vice versa), this will form part of negotiations to establish the UK’s new trading relationship with the EU.

EU nationals already employed in the UK may already have acquired rights under UK legislation, depending on how long they’ve been here. It’s likely that many will be permitted to stay in return for a similar agreement for UK nationals currently employed in EU member states.

For prospective employees, however, it may be a different story. While it will still be possible to employ personnel from EU member states, there may be extra administrative costs to be factored in, such as visa applications. An EU employee’s capacity to remain long-term in the UK may also be affected.

There may also be limitations on the type of workers that will be allowed to seek employment in the UK. If we choose to follow a model more like the US or Australia, visas may only be granted for those in professions identified as having a particular need.

Other employment legislation changes

We also expect some piecemeal reform to specific areas of employment law, such as:

  • Clarification of the rules for calculating holiday pay and how holiday accrues during periods of long term sick leave, under the Working Time Regulations (WTR)1998.
  • There is on-going litigation regarding inconsistencies between the WTR and the EU Working Time Directive (which the WTR implements in the UK), creating wide-spread confusion for UK businesses and potentially significant accrued and on-going liabilities.
  • Whilst the UK government is unlikely to repeal current working time rules, it may well take the opportunity to clarify the rules around holiday pay and provide much needed guidance for employers.
  • Pro-business reform of agency worker rights, given the additional costs and complexities of engaging agency workers since the introduction of the Agency Workers Regulations 2010, which implement the Temporary Agency Work Directive.

Whilst the AWR gives agency workers limited equal treatment rights with comparable permanent employees from day one, following a 12-week period, an agency worker has a right to equal pay, working time and holiday with a comparable permanent employee. The extent of any reforms in this area will depend on the exit terms the government is able to negotiate.

KEY THINGS TO CONSIDER NOW

Understand the profile of your workforce. How many are EU citizens? How long have they lived in the UK? Do any have the right to a British passport that you can support?

If you are in a sector recruiting lots of EU nationals or likely to, consider accelerating any planned recruitment before changes are announced to the process. Much more likely that any existing arrangements will be allowed rather than unpicked.

If you are planning to expand into areas of Europe, familiarise yourself with local employment legislation and understand any opportunities to second staff from UK and vice versa.

If you would like to speak to an experienced employment advisor, please contact us.

www.amelore.com

 

Part 2 of our predictions for HR in 2016

In the second part of the ‘Key predictions for HR for HR in 2016 we continue with Bersin of Deloitte predictions for global HR in 2016, additional commentary by Amelore.

the chariotWe have already covered Digital HR; the rush to replace outdated HR systems; the Global rush to replace and re-engineer performance management; engagement, retention and culture as top priorities and the continuing mobility of career and talent and the investment in coaching and mentoring. Moving on we have…

  1. New models for learning

It’s all about the Four “E’s”

Education (formal training)

Experiences (developmental assingments and projects)

Environment (a culture and work environment that facilitate learning)

Exposure (connections and relationships with great people).

70/20/10 model – 70% through on the job experience and practice, 20% through other people by exposure to coaching, feedback and networking and 10% through formal education-based learning interventions.

  • Traditional LMS replaced by highly interactive, curated and recommendation approach to learning.
  • L&D professionals focussing on becoming ‘learning experience designers’ as opposed to ‘instructional designers’.
  • Employees leave organisations that do not develop them or provide appealing learning experiences.

Organisations are increasingly paring down their L&D team and using external expertise if they want to run face to face sessions.  Coaching is used more as is e-learning. Many organisations have developed a strong e-learning suite but enhance this with external providers.

  1. Diversity and Inclusion – merge with key business strategies to move well beyond compliance and become a strategic part of business.

This has been part of HR for 30yrs. But little impact. Now on Global CEO’s agenda due to global workforce. Lots of press about issue – unconscious bias etc

Deloitte studied talent practices of 1,400-plus companies with a focus on Asia. After nearly 2 years of research finding point conclusively that the highest performing companies with a far superior cash flow embed inclusion into talent practices everywhere.

In the UK last year, 2015, 75% of graduates were female.  Over a third of British households are now led by a woman earning more than her male partner or as the sole earner. House husbands are on the rise although support for men getting back into the workplace.  In the same way workplaces are geared towards supporting women working in part-time roles as secondary breadwinners but missing that many women are fulltime. Not always from choice (career women) but necessity. Just people with careers.

Organisations still have lots to do to truly embrace equality in the workplace. All male boards are all male boards.  They can’t hope to represent the workforce in the way a more balanced team would.  Likewise Unconscious Bias is alive and rampant in many recruitment practices. In many workplaces. PWC actually have a policy that women who work as receptionists have to wear 2-4inch heels. In 2016!

  1. People Analytics accelerate its growth

Companies are hiring head of people analytics, building teams and replacing HR platforms with a singular goal of creating a meaningful and useful database of information about their people.

New function is critically important. Just as Marketing can analyse the result of campaigns, create personas and segments of customer population and understand the drivers of market share success so companies are starting to be able to do for employees.

Emergence of behavioural economics leading to the application of ‘choice architecture.  Allowing employees to choose next steps – ie choice of 2/3 new jobs.  Turning traditional practices on their head.

HR teams are now becoming very data driven and the world of analytics is sweeping forward.

Many HR teams are led by people that don’t have these skills and consequently don’t set this as an area of focus.  Organisations are too used to poor quality data coming from the HR team that there is a failure to invest. In better technology. In staff with the skills to produce meaningful reports. So many businesses still have appraisal systems requiring manual interpretation by the HR team. This reflects an approach and a period of time long gone by.

  1. New breed of HR leaders enter the stage

HR profession is going through a true reinvention. Younger leaders starting to take over, heavy investment in technology, organisations sharing their creative solutions openly and critically the alignment of HR with the business is improving dramatically. Innovation is key and the function of HR is becoming increasingly important to companies.

Yet many still have Administrators or Policemen in charge with old fashioned or paper driven systems, under trained teams, organisation structures that appear bloated and misaligned and many have not figured out how to do analytics yet.

It is obvious that companies with talented HR leaders will be more competitive. Sharper. More focussed.

How can companies with the wrong HR support ever truly compete on the global stage?

We find many companies are unaware of how HR is changing and either have no-one supporting them or have the wrong level of support.

Conducting a review of your HR needs is a sensible action for any CEO.  Outsourcing HR needs, enhancing internal support, in-housing (hiring internally when you have had HR outsourcing support) and HR enhancement (additional services to compliment existing HR support) are all possibilities for fast growing and ambitious businesses.

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

Job evaluation scheme and gender pay audits

With the new requirements for organisations with 250+ staff to conduct a gender pay audit and publish results from 2018, many organisations are reviewing or implementing their job evaluation schemes.

Employers operate job evaluation schemes for a range of reasons, including the development of clear and orderly pay and grading structures and to help counter equal pay claims, as well to assist with market pricing where required.

A single job evaluation may be implemented to cover the whole workforce or employers may operate different schemes for varying groups of employees. The former approach is often favoured as this is likely to help counter any potential equal pay issues.

Types of job evaluation

There are two main types of job evaluation: analytical schemes, where jobs are broken down into their core components, and non-analytical schemes, where jobs are viewed as a whole. The use of analytical schemes is more popular because of the capacity to help provide a defence against equal pay claims.

Analytical schemes

These offer greater objectivity in assessment as the jobs are broken down in detail.

Examples of analytical schemes include ‘points rating’ and ‘factor comparison’ approaches.

Points rating – the key elements of each job, which are known as ‘factors’, are identified by the organisation and then broken down into components which may also be weighted. Each factor is assessed separately and points allocated according to the level needed for the job. The more demanding the job, the higher the points value.

Examples of factors commonly assessed include:

  • knowledge and skills
  • people management responsibility
  • communication and networking
  • decision-making
  • working environment
  • impact and influence
  • financial responsibility.

Factor comparison is also based on an assessment of factors, though no points are allocated. Use of this method is less widespread than ‘points rating’ systems as the latter approach enables a large number of jobs to be ranked at the time.

Non-analytical schemes

These are less objective than analytical schemes, but are often simpler and cheaper to introduce. Methods include job ranking, paired comparisons and job classification.

Job ranking -puts jobs in an organisation in order of their importance, or the level of difficulty involved in performing them or their value to the organisation.

Paired comparisons – compares each job in turn with another in an organisation. This takes longer than job ranking as each job is considered separately.

Job classification, also known as job grading. Before classification, an agreed number of grades are determined, usually between four and eight, based on tasks performed, skills, competencies, experience, initiative and responsibility. Clear distinctions are made between grades. The jobs in the organisation are then allocated to the pre-determined grades.

Developing job evaluation schemes

Whether adopting an analytical or a non-analytical approach, organisations have three main options over scheme design and development:

  • a scheme may be developed in-house
  • a consultancy’s off-the-shelf package may be purchased
  • a consultancy may tailor its package to suit the organisation’s needs.

The system selected will depend on the size of the organisation and the aim of the job evaluation exercise. The Hay Group’s Guide Chart-Profile Method is the most widely used scheme.

Other factors to consider

Job evaluation is a complex and time-consuming task and many organisations draw on the expertise of external organisations to help. The key issues to consider include:

  • The process is often as important as the results.
  • Job evaluation is an ongoing process.
  • An appeals procedure should be established before the evaluation begins.
  • Clear, detailed and up-to-date job descriptions have to be drawn up.
  • The more complex the scheme, the more detailed the job description needed.
  • Accurate records of decisions have to be kept.
  • The results have to be checked to see if there are any pay anomalies.
  • Effective communications are essential, as employees may have concerns over their future job grading and pay.

Operational considerations

Many organisations don’t have the skills in-house to conduct a Gender Pay audit or review or implement job evaluation schemes. The latter can be a big piece of work and organisations should not under estimate the time and cost implications.  Given we are half way through 2016 and first set of published results will be April 2018 time is tight to really get your house in order though still possible. 

Any company Job evaluation (and market pricing exercises) schemes need to be reviewed regularly to ensure such approaches continue to meet changing business needs. Job evaluation is an assessment of the role, not the person doing it, and should be based on a fair, transparent system that is effectively communicated and understood by employees.

The type of scheme chosen will depend on organisational needs, but any staff making decisions on job roles must remain impartial and may require training in the chosen system.

How can we assist you?

Amelore can provide both job evaluation and gender pay auditing services tailored to your needs.  If you would like more information, please get in touch with us.

www.amelore.com

Gender pay – How ready is your company?

gender equalityMore than four decades after the Equal Pay Act, the gender pay gap still stands at about 19%, with the average British woman earning around 80p for every £1 earned by a man.

In October 2016 the Government will introduce Regulations that require all companies with 250+ employees to carry out a gender pay review, and publish their data.  This has implications for the company’s reputation, its ability to attract and recruit staff and could also trigger equal pay claims from existing staff.

The Regulations will make changes to the Equality Pay Act 2010, and aim to “end the gender pay gap in a generation” (David Cameron). They will take effect from 1 October 2016 with the first reports needing to be published before 30 April 2018 and then annually by 29 April.

Getting prepared

Has your company ever carried out an equal pay audit? Do you know what your issues are and are you taking steps to resolve them?  If not, we strongly recommend that you consider carrying out an Equal Pay Audit this year ahead of the compulsory reporting dates so that you are not caught by surprise and can address issues early on.

A confidential Equal Pay Audit will:

  • Review and analyse gender pay
  • Identify any gaps and risks
  • Examine which objective justifications exist
  • Make recommendations for resolving areas of high risk.

Facts and Figures

The UK’s gender pay gap currently stands at 19.1% (Office for National Statistics, 2014) – forty four years after the Equal Pay Act was introduced – and lags behind the rest of Europe on 16.4%.

The new duties apply to private and third sector employers, employing 250 or more staff within Great Britain, and include limited companies, LLPs, statutory bodies and unincorporated associations.

Employers will have to provide and publish five items of gender pay information: the mean and median gender pay gap, the mean gender bonus gap, the percentage of men and women in the bonus scheme, and the distribution between men and women in salary quartiles.

The September 2015 Business in the Community Survey reported that 89 per cent of employees said they would feel more negatively towards their employer if the gender pay gap was relatively large in their organisation.

However if it was relatively small, 71 per cent would feel more positively towards their employer.

Do employers intentionally pay women less than men?

Not they don’t do this intentionally but they can often do it unconsciously.  Men are often much better at negotiating when they join an organisation. Women have the expectation that if they work hard and are good at their job so they will be fairly rewarded. Whilst this is true it is extremely rare for an employer or HR professional to review salaries with gender in mind.  If someone is earning less than they could or should, this is seen as operationally savvy and commercial. Good management even.

women high five

We have reviewed many employer data sets and observed stand out discrepancies which are explained away as historical, personality or line manager driven and as such no longer issues.  However if an organisation is paying a woman or women less than men in equivalent roles for no tangible reason, this will not only need to be rectified urgently but could result in resignations and a damaged employer brand and/or Employment Tribunal proceedings.

Benefits to the organisation

Pay is at the heart of the employment relationship, it influences how valued an employee feels and can act as a powerful demotivator if you get it wrong.

As an employer you will need to go public with your data, publish it on your website and upload it to a government website.

It is worth looking at the information early to assess what risks you are carrying and what measures need to be put in place over the next year to two before the first reports are published. Carrying out an audit now will help you comply with the law and good practice.

It is important that you feel confident that any analysis has been carried out reliably and that valid defences are understood or that indefensible issues are tackled so that you have fair, rational and transparent pay for your employees.

Understanding your risk profile and the measures to reduce these risks will protect your company from reputational and financial risks.

How we can help?

Amelore can conduct a gender pay audit and provide you with a report and recommendations now so you can address any issues before this legislation takes effect.

www.amelore.com

Executive Search and Recruitment Agencies – Do you know the difference?

recruitment posterHiring the right people is as significant to the success of a company as the business model and health of the balance sheet.

Recruitment is a highly lucrative unregulated and fast growing industry. It is important therefore for companies to understand the different options available to them, the costs as well as the benefits and any downside of the choices they make.

Some Key Facts

The CIPD (Chartered Institute of Personnel and Development) in partnership with Hays Recruitment, conducted a Resourcing and Talent Planning survey in 2015.

Resourcing and talent management in current economy “an employee’s market”

  • Half of CEOs have recruitment & talent management as a priority
  • Three quarters are recruiting key talent/niche areas
  • Growing demand for labour – more than half expecting headcount to increase
  • Skills shortages are escalating – four-fifths feel that competition for talent has increased
  • Lack of specialist or technical skills & lack of sector/industry or general experience were common problems
  • Organisations are increasingly required to be creative in both their search for candidates and the packages they offer

What is the difference between Executive Search and Recruitment Agencies?

The aim of Recruitment Agencies is to fill a position with the best available person. Recruitment agencies source from a pool of candidates that are actively looking for a new challenge by advertising on various platforms. This leads to a group of candidates that are “self-selected” of which the selection was not pre-determined by the company.

The aim of Executive Search consultants is to locate and recruit the best person, regardless of whether he or she is already employed or seeking a new position.

This approach can broaden and deepen the talent pool available to a search firm’s clients and places the control of who should be part of this talent pool, squarely in the hands of the client company.

There may also be the use of specialised psychometric tools, resources and skills to enhance the selection process.

The costs

Executive Search and Recruitment Agencies tend to charge a percentage fee or a retainer.

The percentage fee is based on the starting salary of the candidate and is normally payable once the candidate starts work with you. This form of charging is most common and if you don’t find a suitable candidate, you don’t have to pay the agency anything.

However, fees can vary from 8-25% depending on the agency and the salary. If you choose a retainer fee, it is agreed at the outset; with a percentage being payable upfront and the remainder due when the candidate starts their employment.

What are your recruitment options?

Your network – Many companies use their personal network to find staff and this can be very effective. However it can also lead to skills shortages and complications with personal relationships.

Advertising online – Companies may advertise via online sites such as Linkedin, Indeed, Monster, Fish4jobs etc  This has the benefit of advertising that your company is busy and hiring but can create a lot of administration.

Recruitment Agencies – You won’t have been in business long before the sales calls start.  When choosing an agency, try and get a recommendation and check their credentials. Anyone can set an agency up with no qualifications or experience. If things like diversity and inclusion are important to your company make sure you ask about this.

Executive Search or Headhunters – This is usually used for senior or specialised roles due to the cost. Finding a firm that understands and challenges you is worth a lot. Meeting a few firms and interviewing them can be helpful.

De-constructed recruitment – A key component of recruitment is identifying the passive candidate.  You pay a day rate for experienced researchers to find and speak to candidates for you.  A cheaper option but requires internal co-ordination.

Independent HR company or individual – Many experienced HR professionals have strong recruitment experience. They will often manage the process for you, even if you work with an external recruiter.

Common recruitment mistakes

Organisations in high growth mode often run very inefficient and costly recruitment processes with little thought for the candidate experience even though it is a seller’s market.  Multiple repetitive interviews, waiting until vacancies have been created to start a process and failing to assess candidates thoroughly are typical.

Looking ahead

It is important for companies to understand and cultivate their ability to read market conditions, trends, movement and fluidity in order to develop and manage effective recruitment strategies. Needs changes as companies grow and it is important to regularly review this.

Do get in contact if we can help you with your recruitment or retention issues.