Paying the piper – who really is in the public sector

As discussed in my last post, public sector pay is a hot topic. And not just here. Type ‘public sector pay’ into a Google news search you will get more links to US/Eire/New Zealand/Greece/etc./etc. than to UK – all discussing one form of cutting pay costs or another. In the UK there is much polemic, from all political parties, on the topic of high earners in the sector. The various commitments (suggestions/flown kites) include making all pay above £150,000 subject to Treasury approval and publishing the earnings of all those in the public sector paid over £100,000.

Assuming some of this comes to fruition it will be interesting to see who is included the definition of ‘public sector’. Obviously central and local government will be include and probably those groups, such as police, fire and teachers, that are funded locally but subject to national pay regimes. I assume that government executive agencies, such as the Environment Agency, that carry out government activities will be in the loop. But what about all those advisory quangos and commissions that are somewhat further removed from central government?

If, as I imagine the Taxpayers’ Alliance would have it, the source of funding is what counts do we include the very wide range of organisations that provide services to, or on behalf of, public bodies and councils but whose staff are not public employees? Their income comes from local authority or government funds. Some of these, such as connexions partnerships, are very much in the not-for-profit category. Others, such as Capita, are in the very-much-for-profit category. Where should the line be drawn?

Then there is everybody’s favourite target – the BBC. It is hard not to see that organisation as over-managed and generously-paid but does it use taxpayers’ money? After all you are not excused the licence fee because you are too poor to be a taxpayer. Money from the public but not public money, perhaps?

Watching all this develop is going to be great fun over the next few months.

Frozen out – public sector pay

You cannot open the paper at the moment without finding lots of stories about pay freezes for public sector workers. How widespread these will be or how strongly resisted remains to be seen. As does the nature of the pay restraint to be imposed on high earning staff in the sector. Will we have a summer of discontent? Will those earning less than £18,000 be excused the pain? Will those earning more than £100,000 / £150,000 / the Prime Minister (you choose) have their pay cut or, at the very least, see it blazoned across the local paper?

No doubt these are all topics for future posts on this blog. However it all turns out, it is pretty safe bet that there will be pay restraint, in one form or another, imposed on the sector. One interesting aspect to watch for will be in the second level of detail. Will it be absolute pay that is frozen or just range values with incremental systems continuing to operate? Or will the criteria be that pay budgets are frozen; or reduced?

Those of us old enough to remember the pay policies of the Wilson / Callaghan era will recall the many debates about whether progression through a pay range must count against the £6 p/wk limit (younger readers may be surprised to learn that pay negotiations were once conducted about pound note values and not percentages). At that time the Civil Service continued paying increments (no performance-related pay in those days) on the argument that because everyone joined a pay grade at the bottom and, mostly, left the grade towards the top increments were self-financing. It will be interesting to see what wriggle-room there is this time.

I can certainly look forward to a few months when finding a good topic to blog about will not be difficult.

When is a bonus not a bonus?

Organisations I deal with often ask how much influence corporate performance should have on payments from their PRP (performance related pay) schemes. This is mostly a problem for public sector and not-for-profit organisations. Private sector companies can easily separate corporate and personal performance by setting aside a proportion of profit for a staff bonus shared evenly across the workforce as, say, a flat percentage of salary.

This leaves them free to use the PRP scheme to reward individual performance on the basis of an annual appraisal that assesses factors specific to each individual and role. Traditionally, the rating would be reflected in the next pay rise and/or progress through a pay range. More recently, especially in the Civil Service, appraisal ratings often link to non-consolidated, non-pensionable payments; or bonuses.

But what do you do if, like the Borders Agency, organisation-wide performance falls away? The Agency was criticised last month for paying bonuses to their top 29 senior managers in spite of ‘losing’ a large number of asylum applicants. Is this fair? Certainly, not all of the 29 will have had personal targets that included “do not lose asylum seekers”.

One option is to match the effect of organisation success to the level in the hierarchy. Perhaps the Chief Executive’s payment might be based on performance of the organisation overall while that of the senior management team one-third on that of their own department and two-thirds on collective performance – the collective element then diminishing as you go down the organisation ladder. After all, it is not the receptionist’s fault if the marketing strategy goes wrong.

In the present climate, the very word ‘bonus’ generates headlines and is an easy target for those keen to cast stones. I think the term is fairly recent coinage within the Civil Service and was, perhaps, thought to give a more business-like feel. Time to hide behind new terminology, perhaps. How about; ‘contingent pay’ or ‘re-earnable pay’?

Overtime – who should get it?

Today the TUC report that the amount of paid overtime has fallen significantly over the last year. This is not surprising given the depth of the recession. Much of the reduction will have come from reduced output; especially in manufacturing; some will have come from organisations where overtime was reduced to save jobs. Countering this will be situations where job losses result in essential overtime for those remaining.

The working population falls into two groups. Those for whom paid overtime is a regular part of life and those whose monthly pay rarely differs from their basic salary divided by 12. Overtime is a valuable management tool for flexing costs in situations where attendance equals output (manufacturing) or where attendance is a necessity (counter or call centre staff). However, there is a grey area, particularly for office-based jobs, where output is not quantified and allocation of time is down to the individual.

Much administrative and managerial work requires social interaction as well as form-filling and decision-making. The HR Officer who never asks staff how they feel about their work or discuses last night’s football will be seen as aloof and will not understand employee attitudes as they should. But when, at the end of the day, they have to stay on to complete a promised report are they working legitimate overtime or did they spend too long discussing last night’s match? Did they choose the wrong priorities for that day’s many tasks?

Common practice, and the law, require specified hours work but there are many jobs where a day at work may not always equal a day’s work.

Top of the heap – public sector pay

Today’s Times has an article on the topic of whether any public servant should be paid more than the Prime Minister. It is a two-part article with one writer arguing the case against, another the case for. The question, of course, arises from the fact that quite a lot of them already do.

Once you start debating senior pay in this way, and in public, you end up with all sorts of highly emotive but inappropriate comparisons. Just how many nurses is the Prime Minister worth? How many times the minimum wage should the person running your local council be paid? Once you go down this route you inevitably end up with truncated salary structures, and much bickering.

The salaries paid to public sector chief executives (local government, the NHS, quangos, etc.) should, as in all sectors, be based on: the skills and experience needed; what is paid for such people elsewhere; and the difficulty, or otherwise, of attracting good candidates. Whether or not you think the correct answer has been arrived at for these executives you have to admit that the third part of the test, the ease of finding candidates, goes out of the window if you make the PM’s salary the yardstick. At the very least there are the 300+ MPs who would love to reverse their initials; possibly even take a pay cut for the privilege.

MoD bonuses – why the fuss?

Much heat and great indignation in the media today as it becomes known that the MoD (an arm of government that has overtaken the Child Support Agency in the public ordure stakes) is paying £47m in bonuses to its staff. Most of the critics seem not to understand the nature of this scheme. Essentially it uses a pot of money (possibly around 3% of payroll) accumulated by withholding small amounts from earlier pay reviews. It is distributed among staff as a non-consolidated payment based on annual appraisal ratings (it looks as though around two thirds of staff shared the pot). As it is not consolidated into basic, contractual pay it is not an addition to the annual paybill. It should be similar in amount to what was paid in previous years – just (potentially) distributed differently each year.

Sick on Monday; back by Friday – absence

Recent research by Mercer has found that 35% of all sick leave is taken on Mondays but only 3% on Fridays. Which must mean the vast majority of those away on Monday are back in by Friday (if not Tuesday).

Mercer suggest that Monday sickness and frequent short-term absences can be a symptom of low employee engagement and morale. More cynical readers might wonder whether this might better be credited to weekend excess and little fear of the consequences of staying away.

Cynicism apart, the real lesson of this survey is that the sophistication of many HRIS systems makes detailed analyses easier than ever. Mercer extend their own analysis to consider differences between men and women and between full- and part-time staff. But why stop there? Many investigations into absence fail to be useful because they aggregate too many different causes and situations. Modern HRIS systems enable you to avoid that pitfall and the consequent over-generalisations.

Perhaps you should code in all the additional stuff you know about your staff and work out what proportion of the Monday sickies had been playing soccer or rugby at the weekend? Or rock climbing? Or sky diving? You might improve your absence statistics at a stroke by sifting out all those application forms that proudly fill up the ‘other activities’ box with such high-risk pastimes. After all, few train-spotters or embroidery enthusiasts end up in A&E on a Sunday afternoon.

Say it like it is

I never learned to type properly and, consequently, my keyboard time is not as efficient as it should be. Occasionally I have flirted with typing tutor programmes but willpower and dedication always desert me. I have recently been experimenting with a speech to text program and have been mightily impressed. The software required very little initial training so that I was up and running virtually straight out of the box. By no means do I have RADA-like diction and know that I can, all too easily, descend into mumbling yet the number of times it misinterprets what I say are very few.

The greatest benefit comes when I am writing longer pieces of text for a proposal, report or this blog. Normally I find it difficult to maintain my train of thought through the many corrections of my miss-keying. The software is also very useful when filling in forms and the like. Instead of moving hand to mouse to place the cursor in the box, hand back to keyboard to type and then back to mouse to select the next box I can just leave my hand on the mouse and say the words as I select each box in turn.

The software I bought is Dragon NaturallySpeaking (other programs are available) and my only complaint is that the microphone headset that came with the box was designed for a much smaller head than mine. Luckily I had a suitable, adult-sized one already. Oh yes, and do remember to switch the microphone off when you’re on the telephone.

That nanny state again

If you were wondering how MPs are filling their time now that they have less to write on their expenses look no further than Labour member Ashok Kumar. He has tabled a motion that employers should be legally compelled to contact all applicants both to acknowledge receipt of application and again after selection has been made to notify applicants whether they have been successful. This may be good practice, and good manners, but think of all the red tape and opportunities for litigation that would follow. But why stop there? Why not impose a legal obligation on all teenagers to write prompt letters of thanks for Christmas and birthday presents? Not only would that breed a more polite society but might help fill the hole in Royal Mail’s business left by all those disgruntled customers who, thanks to the strikes, now pay all their bills online.

Read faster, learn quicker

I attend most Richmond Group sessions and I certainly could not resist attending one with the title “Speed through your workload”. The session, last Monday evening, presented by Helen Whitten, MD of Positiveworks left me with several good intentions for improving my efficiency (sadly, I have a very long list of good intentions). The session focused on techniques for speeding up your efficiency at reading documents and reports and on helping you to remember the content and facts and figures generally.

The efficient reading element explained how we often fall into the error of trying to read every word in the order written when an initial scan of the contents to learn the shape of the document would allow a more selective, and speedier, reading. The remembering part centred on the use of mind maps to structure information. I do use mind maps when planning proposals or reports but am the first to acknowledge that I have only dabbled and resort to a normal page-based list of headings and bullet points at an early stage. I have now resolved to persevere for longer with the full-blown multicolour variety and to become more proficient in using the software that I have.