One early influence was the development Hay-style approaches to job evaluation backed up by cross-company pay comparisons. This is not necessarily to single out Hay (other systems are available) but, of necessity, good job evaluation involves reducing jobs to their generic factors. Especially when turned into points scores, the temptation is then to believe that all jobs of, say, 1000 points must have the same pay market value.

The report focuses on those at the top of the biggest companies. But in reality if it’s conclusions were implemented there would be great pressure to apply them more widely; especially in organisations operating in the public arena.

Another change over the years is an explosion in the number of senior jobs. Many aspects of working life which, once upon a time, either did not exist or were carried out within the public sector are now handled by stand-alone organisations each with their own Chief Executive and directors. This is true of both central and local government. In most of these the technicalities of the delivered service are relatively straightforward and the key executive skills required are generic ones of planning, organisation, negotiation and leadership rather than sector knowledge. The result is a much wider range of opportunities, than once was the case, for anyone wanting to build a successful executive career. This wider job market naturally produces upward pressures on executive pay.

Going back to FTSE 100 sized organisations. It is the case that most of them really do operate on a global basis and there is relatively little difficulty, or inconvenience, in Taking the headquarters elsewhere. Too intrusive a set of requirements around setting executive pay could easily backfire.

Another factor that has pushed up executive pay is that it is now so much easier for the Chief Executive who feels they are not getting enough money to find backing to start their own company or to lead a management buyout. Consequently, pay levels for CEOs tend to mirror the financial benefits of ownership

I am not attempting to cover all elements of this topic nor to produce my own solution; merely to highlight some of the relevant factors. But be careful what you wish for. What if the new transparent and more representative remuneration committee concludes that the CEO’s £4 million package is at the right level? Will the average worker feel more sanguine about the differential because there was an employee representative on the committee? Could just have the opposite effect.

I started my career not long after the introduction of Industrial Training Boards by the Labour Government in the sixties. It was a costly bureaucratic nightmare. The current Government frequently talks of the need to reduce central control across many aspects of life, remove surplus red tape and get police away from form-filling and back on the streets. These suggestions go in the opposite direction – creating a series of industrial Ofsteds.

Back in the sixties and early seventies Industrial Training Boards were set up on an industry by industry basis. Even if the basic idea had been sound the difficulties of defining an industry (somehow local and national government were also seen as ‘industries’) led to much duplication and confusion. A sector-based approach is being considered again!

Most ITBs chose to adopt levy and grant systems. Each employer was liable to pay a levy which with luck, and a great deal of form-filling and creative writing, could be recovered if sufficient training of an approved nature was carried out and recorded. Naturally extensive teams of inspectors needed to be set up (plus, of course, head offices and management teams). The theory was that this would transfer money from those companies that did very little training to those, usually larger businesses, that did.

The only ITBs that really made a significant difference were  concerned with those industries with lots of small businesses and transient workforces (Road Transport, Construction and Hotel and Catering). They took an approach of running their own practical training centres with lots of short courses on offer.

Visiting a restaurant in Edinburgh the other day I was faced with a notice on the door saying that, for evening dining they will insist on “cloakrooming” outer coats.

There is, at the time of writing, a large traveller-occupied site where the travellers are resiting removal by the local authority. I heard a BBC newsreader say that …further action would be taken if the travellers did not “evict” by a certain date.

Ugh!!

Being something of a literalist I regularly groan when I here people in a shop, bar, or the like ask “can I get a …” rather than can I have. I keep trying to persuade my local landlord to respond with “no but I’ll get it for you”. To date he has not taken my campaign seriously.

But the import of the CIPD’s message applies in all sectors. Some organisations use total remuneration systems to get over the problem of staff not really understanding their full range of benefits but in most cases people are not aware of the full cost of their employment, nor of the real-life competitiveness of their package. In general it would be better if they were.

Of course getting the message across is not easy. Apart from the time and effort involved in collecting the facts it is difficult to strike the right balance between a) appearing to boast (possibly OK if you are absolutely sure you have something to boast about), b) not being believed (the gentleman doth protest too much) or c) confirming their suspicions that your package is, at best, just run of the mill (which is the right thing for many organisations – not everyone can be above average).

One of the hardest messages to get across, particularly in the case of professionally-qualified staff is the extent to which the pay of similarly qualified people varies as careers develop. There is a reasonable degree of consistency in the starting pay for newly qualified maths and science graduates and the Government’s plan to pay extra to recruit, into teaching, those with firsts in these subjects will probably be achievable. But 10 years on? The pay of the contempories of those graduates will vary widely. Some will have gone into City dealing rooms and get paid a fortune, others into industry but, for all sorts of reasons, never got much beyond their first promotion, some will be working in jobs that have no relation to their original qualification. But guess which end of that spectrum those teachers will want to be compared to.

No doubt some of those unpaid hours will be claimed by people in jobs where a certain amount of additional hours is really covered within the basic salary. Teachers, for example, where some activities (marking, lesson planning, parents evenings, etc) will always have to be done outside standard hours.

Of course, there are jobs where attendance does equals work. These include most client-facing roles such as retail, call centre and the like where an essential part of the job is simply to be in place awaiting the next customer or phone call and additional hours are probably not unpaid. In most staff jobs this is not the case and it is wrong to see the employment contract purely in terms of the attended hours written in the terms and conditions statement.

There is all the, greater or lesser, detail written in the job description. Or targeted in the annual appraisal. Not to mention the implicit assumption that, within the nature of your role, you will help the organisation achieve its purpose. Obviously, that doesn’t mean you should be put upon by an aggressive boss who waits till five o’clock to give you an urgent task. But it does mean that there should be give and take on both sides and individuals should take a realistic view of how effectively they organise the discretionary elements of their role. I wonder how many ‘unpaid hours’ were needed to catch up following the next morning’s discussions of the royal wedding?

The survey covered some 750 senior HR staff across a number of industries and countries. I guess a predominately private sector population. Among many other aspects it covered what was done to evaluate consistency of ratings. It found:

• In only 37% of cases were ratings audited by HR department. That is sloppy. If HR is not even doing that it really does deserve to be thought of as a paper-pushing function.
• 30% specify a ratings distribution and 12% used forced rankings. This goes to the heart of the most common reason for ineffective systems: not being clear as to whether you are measuring comparative (within the company) or absolute performance (across the population of people in the marketplace). If absolute then, in theory, everyone can earn the top rating. This is a frequent confusion; often compounded by the wording used for the rating categories.
• In 29% managers calibrate their ratings (this does tend to need a largish department) and only 46% circulate overall distribution ratings to their managers. If you don’t do that how do managers know they are being realistic in their own ratings?
• Saddest of all only 30% of employees were thought to trust the system. And this, remember, is in the view of the senior HR staff!

In a way pay expectations are the least of the problem since the pay level offered will be accepted or the job offer refused. It is probably the employment terms and general attitude to work and conditions that worries the average SME. In some parts of the country where there are large public sector workforces small companies find that, even if they compete on pay, they are seen as employers of last resort because of hygiene factors such as holidays, lunch facilities and the like. Most, if not all, public sector employees work in large organisations with well-staffed HR and other employee-focussed support functions; they are probably widely unionised. Most SMEs have none of this.

All these things have their place in a large organisation but small company employers worry that a new recruit from the public sector will be a disruptive element who may not become reconciled to the less employee-centred ethos of the small firm. Compounding this worry is the, not always true, perception that public sector organisations tend not have the hard targets and deadlines of the commercial world.

Of course, there are many public sector workers who feel they are very harshly managed and see their working environment as anything but employee-friendly. But the problem is not whether SME’s views are correct but how to overcome them. Sadly the only solution is through time and experience (provided, of course, their fears are not realised). Perhaps any public sector body offering redundancy counselling should include a discussion of this survey.

• All Cabinet and Shadow Cabinet appointments will in future have to be advertised in the national and European media and the recruitment process subjected to comprehensive equality monitoring.
• Future changes of government will be subject to full TUPE consultation and employment protection rules.
• Following complaints that the new MPs’ expenses system is too onerous, all members’ administration and support (including staff) will be outsourced to CAPITA.
• In future all public sector jobs will be slotted into a 20-band grade structure with salary points expressed in mpms. [1000 mpms (mini pm’s salary) = 1pms (pm’s salary). By definition the maximum point on the highest salary band is 1pms.
• To avoid falling foul of the new Bribery Act all those who stand for parliament will have to be able to show that none of their pre-election promises could be shown to offer any financial inducement to prospective voters. Bribery lawyers say that it will not be an adequate defence to argue that none of the promises were actually kept.

The Prime Minister’s pay, around £150,000, has always been a false notion, ignoring the fact that this is in addition to his MP’s salary and that there has never been a poor ex-PM, even among those who started out with little money. The idea of maximum pay ratios was also a nonsense given the wide diversity of workforces that can be found. The Chief Executive of a 1000-strong workforce consisting mostly of street sweepers might have a lower maximum than the head of a 5-strong team of scientists. Or at least until he or she had the bright idea of outsourcing the sweepers. Yes, I know that other factors come into play in assessing job weight but all artificial rules can be manipulated.

The CIPD, in welcoming the report’s focus on greater linkage between pay and performance, is a bit more cautious about the difficulty of identifying such alignments than is the report. Both talk of linking an element of basic pay to performance. But that has its difficulties. Quite apart from any complications in assessing pension entitlement there is the pressure that that might have on recruitment. Accepting a job in which the level of the bonus might vary is one thing; accepting one in which your mortgage-paying money might go down is quite another.

The CIPD press release talks of tying variable pay to performance measures using meaningful and stretching targets. That is of course, as the CIPD accepts, easier said than done. The ability of the Sir Humphreys of this world to manipulate politicians’ wishes to their own ends (for the good of the country, of course) were great fun in the Yes Minister series; but not necessarily fictional. And doesn’t the new government keep pointing out how much unintended collateral damage has been caused by the previous government’s love of highly specific, politically-driven targets. A&E maximum waiting times leading to trolleys in corridors, for example.

I’m certainly not against performance linkages into pay. Indeed a significant proportion of my assignments are based around achieving just that. The hardest part is finding the right basis for the linkage. Except in tightly-focused commercial functions, the systems that are least effective are those that focus uncritically on quantified personal targets. They either have unexpected consequences (eg, A&E waits) or fail to reflect the relative difficulty of one person’s targets compared to those of another.

The Hutton report, in a quest for greater transparency, calls for much greater public detail on both basic and variable pay and wider involvement in the setting of targets (unions on the remuneration committee, for example). I’ll write a post, perhaps, on another occasion about the report’s philosophy and its focus on centralised control and standardisation, but the more that levels of success have to be a publicly proven the less scope there is for judgment and the greater the danger of artificial targets.

• I have posted before about how useful I find Dragon Naturally Speaking text-to-speech software and that I understand they have an App for the IPhone (don’t have one myself). I came across a good example over the weekend of how useful the App can be in the right circumstances. A young family friend is an up-and-coming journalist and uses the App to say her reports into her IPhone and then just text them into the office. So will such software become the norm for all business communications one day – just talk to your email? Possibly, but a word of caution. Between my journalist friend and the published word stands a sub-editor. Between your staff member and a client, say, is only the ether. Proof-reading is all.

• My website collects data about visitors which I analyse every so often. I normally just look at what search terms visitors have used and which pages they have visited. Occasionally I dig further. I did that the other day and discovered that, for my visitors at least, Firefox is now a more popular browser than Internet Explorer: 46% as against 36%. Also of interest is the growing number of people browsing from their mobiles. Only 1.8%; but they never used to figure in the stats at all.

• Also of interest, and something I have mentioned before, are the number of hits generated by people searching for information about the pair-comparison technique about which I have an archived newsletter article on the site. Around 13% of hits since Christmas were on this topic.