Why work for nothing? – unpaid overtime

Each year the TUC analyse official statistics to assess the amount of extra, unpaid overtime. This year they estimated this to be worth some £23 billion. They claim that of those who do put in extra time average just over seven hours a week; or £4,800 per year at the average wage. Naturally, being the TUC they see this as exploitation.

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?

Rate your ratings – appraisal systems reviews

I have posted before about the need to review what it is you are trying to measure through your appraisal/performance management system and to ensure that this is achieved in a consistent way. I have a more detailed article on this topic archived on my website. The article discusses how to review a system. A recent survey by Sibson Consulting and WorldatWork provides some additional background data to this topic.

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!

SMEs fear the public sector work ethic

A survey of SME employers has found a distinct reluctance to take on ex-public sector workers. The survey, by utility price comparison website uSwitch (no I cannot see the connection either), found that SMEs saw public sector staff as ‘over-indulged with unrealistic expectations of the work place’. Not only did they think that public sector workers would have unrealistic ideas about pay but also about holidays and employment terms; and generally be less productive.

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.

New year, new laws – some of this April’s new rules

Some HR initiatives that might have been found in today’s media (posted 1/4/2011):

• 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.

Fair Pay? – The Hutton Report

So the Hutton report into fair pay came out last week and was warmly welcomed by the CIPD in their press release. The aspects the CIPD particularly welcomed were the recommendation for greater alignment of senior public sector pay to an assessment of individual and organisational performance and the abandonment of any concept of maximum pay ratios (CEO pay to lowest or median pay) or the artificial benchmark of the Prime Minister’s pay.

Musings – dictation and web stats

Just a couple of unrelated jottings.

• 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.

It’s pay review time

Some reflections from a CIPD Reward forum seminar I attended this week. The speakers were all from private sector organisations some working on a UK-wide basis others were talking from a global perspective. Four points I would pass on from the session.

• At least two of the speakers stressed that it is important to focus on all aspects, financial and emotional, of the employment package. Especially in the current environment of low percentage increases. One quote was that a pay rise is forgotten after just 30 days (ie, until the first payslip at the new rate). Personally I would modify that by saying that much depends on how well you communicate the basis of any pay increase and that this 30 day rule only applies to those happy with the rise. For the disappointed or disgruntled is it probably more like 365 days.
• In most of the organisations described there was a high degree of linkage between personal performance and pay (basic and/or bonus). In at least two of the organisations performance ratings are clearly defined as competitive; not absolute. Outstanding, for example, would mean outstanding compared to your colleagues not the general population. I have a newsletter article on my website that discusses this topic in more detail.
• The organisations represented being private sector ones there was a common theme in relation to a bonus payments, and possibly even pay rises, that there had to be trading profits for money to be paid out – a lesson currently being imposed the public sector. Such a reminder that profit matters focuses people’s attention in their day-to-day tasks. More importantly it helps to tailor responses to new or additional tasks. Simply taking on more staff, or creating new sections, can quickly eat into profits.
• In one way or another the speakers underlined the, easily forgotten, textbook approach whereby pay rises should reflect future contribution but past year performance should be recognised through non-consolidated payments of one sort or another. Just because someone has had a particularly successful year doesn’t necessarily mean you should increase their pay for ever onwards.

Think it through – senior pay restraint

One of my daily displacement activities when building up to do some work is the Alex cartoon in the Telegraph. Today’s* (25/2/11) underlines a point I have made more than once in these posts. That one of the least effective ways of controlling pay is to set a maximum. Currently it is the government trying to limit senior pay in the public sector through the artificial construct of the Prime Minister’s salary (£150,000: but that is only his second job – he gets his MP’s pay on top).

As the cartoon illustrates, and I have said before, quoting a salary value simply becomes the norm and not the maximum. Anyone getting less is not only embarrassed in front of their peers and colleagues but, even more pressure-generating, in front of their family and friends. Those of us around in the late 60s will remember Jim Callaghan’s attempt to curb pay rises. He set a maximum pay rise of six pounds per week (yes, and beer really was two shillings a pint). His maximum was immediately taken as the standard and many workers got a bigger pay rise that year than if he had kept quiet.

The only things that will effectively control senior pay are income or budgetary constraints. After all in many public sector organisations it is not just the pay of the top person that causes the problem but the number in the next level or two down.

Of course some will always find ways around any limit. Remember when Tony Blair ran out of budget to appoint as many junior ministers as he wanted; one poor MP ended up working for no ministerial salary. Now, there is a concept that might be worth exploring. Unpaid internship, anyone?

* sadly I can’t find a way put a permanent link to this particular day’s cartoon strip. But everyday’s edition is worth a look.

2% all round: job done? – pay reviews

Booking onto an upcoming CIPD forum on the topic of pay reviews took me back many years to when I was Personnel Manager for a development division of a large international electronics conglomerate. One of the key tasks each year was to draw up a matrix of individual percentage increases that would, within a single figure award, recognise individual performance, reflect the going rate and fit within the budget. This was at a time of high inflation when the value of each year’s national going rate was much debated in the press (kicked off, as I recall, by the outcome of Ford’s, early autumn, pay negotiation).

There was no question of splitting the increase into general and performance components and the Company policy was to skew increases strongly in favour of high-performers. Salary ranges, which were not made public, were of the old HAY 80%-100%-120% type in which salaries around the mid-point were intended to match the market rate and only the ablest would reach the 120 maximum: and most of them would be promoted before reaching that point.

My task (in the days before a PC and Excel on every desk) was to develop a matrix of percentage increases that gave the highest increases to those lowest in the salary range but with the highest appraisal scores but those high in the range with low performance the lowest increase, or even zero. Of course, I still needed come up with values in the middle of the matrix (where most, perfectly acceptable, staff sat) that were not too far adrift from the perceived going rate. Oh yes, and then sell it to the managers who would argue forcibly for their favourites.

That was quite some time ago are there are not many places where that would work today. I am certainly recommending it. But the point of mentioning it is to remind you that how you handle a pay review provides one of the strongest messages you give to your staff. In particular, it says a lot about how much you value those who exceed expectations, and those who underperform; particularly in straightened times.

If yours is a dynamic organisation with lots of internal movement and promotions you can probably get away with a flat across-the-board, low percentage award. But if, like many today, opportunities for promotion are thin on the ground think about how you will get the message across to the high-performers you want to encourage and to the under-performers who need a nudge. However good the appraisal system it will lose its edge if there is no obvious benefit from good reports. This is especially true if your practice, in better times, was to link performance directly into pay.

Red rag to the taxpayer – Civil Service bonuses

Last year it was the Borders Agency. This year it is HMRC that is taking the flak. For quite a few years now Civil Service Departments have met their performance-pay obligations by paying additional non-consolidated, non-pensionable payments to individuals according to how well they have met their personal performance targets. Linked to their appraisal rating in other words. Unfortunately, for the Civil Service (CS), these are referred to as ‘bonuses’ and as such are easy fodder for press headlines.