Incremental Pay Progression Policy and Procedure

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1 Incremental Pay Progression Policy and Procedure Date Impact Assessed: Version No: 1 No of pages: 14 Date of Issue: March 2015 Date of next review: March 2016 Distribution: All employees Published:

2 Contents Page 1 Introduction 3 2 Scope 3 3 Policy Statement 3 4 Roles and Responsibilities The CCG Human Resources Managers Employees 4 5 Appraisal, Performance and/or development reviews 5 6 Objective Setting SMART Objectives 6 7 Principles of Pay Progression Pay Bands 8C, 8D and 9 Only 7 8 Deferring Incremental Pay Progression 8 9 Managing Performance / Capability 9 10 Exemptions 9 11 Right to Appeal Equality and Diversity Monitoring 10 Appendix 1 CCG Appraisal Documentation 11 Appendix 2 Appraisal Cycle/Timeline 12 Appendix 3 Confirmation of Intention to Defer Incremental Pay Progression 13 Appendix 4 Appeal Form 14 Incremental Pay Progression Policy and Procedure 2

3 1 Introduction NHS West Cheshire Clinical Commissioning Group, hereafter referred to as the CCG, provides a range of services that are guided by statutory duty and legislative requirements. These services are delivered within a framework of policy, procedure and practice to ensure compliance with these requirements. The CCG recognises that these services could not be delivered without the successful recruitment, retention and development of people with the necessary skills, knowledge, experience and qualifications. As an employer, the CCG is committed to ensuring that a fair, consistent, systematic and objective approach to the development, appraisal and application of incremental pay progression (in line with National Terms and Conditions of Service) of its staff. It is advised that this policy is read in conjunction with the following CCG policies and procedures and national NHS Guidelines: Equality and Diversity Policy NHS Terms and Conditions of Service Handbook Section 6 and Annex W Incremental Pay Progression 2 Scope This policy applies to all staff employed by the CCG who are covered by the Agenda for Change Terms and Conditions of employment Bands 1-9. This is to ensure that there is a fair and consistent approach adopted throughout the organisation. Before this policy is applied line managers must ensure that the employee is engaged in an effective and fully supported appraisal process. This will assist individuals to achieve performance outcomes required for their post. This policy does not apply to independent contractors (consultancy, agency staff or any other individuals within the organisation who is employed on any other pay framework (e.g. Medical and Dental, Senior Manager, etc.) 3 Policy Statement The CCG recognises that highly skilled, experience and motivated staff area essential to enable us to deliver its services and essential to its growth and success. The CCG is committed to ensuring the development, appraisal and application of incremental pay progression for individuals is undertaken as efficiently and effectively as possible, and in line with all legal, statutory, terms and conditions of service and good practice guidance requirements. In line with Annex W of the NHS Terms and Conditions of Service incremental pay progression for all pay points will be conditional upon individuals demonstrating that they have the requisite knowledge and skills/competencies for their role and that they have demonstrated the required level of performance and delivery. In addition, progression into Incremental Pay Progression Policy and Procedure 3

4 the annually earned pay points (the last two pay points in pay bands 8C, 8D and 9) are also conditional upon individuals demonstrating that they have the requisite knowledge and skills/competencies for their role on an annual basis. In line with the National Terms and Conditions of Service there will be no quotas for the numbers of staff who progress through their increment; this should be decided on an individual case by case basis and not subject to any real or perceived targets for an organisation. This policy aims to set out a framework and procedure to support the implementation of incremental pay progression within the CCG which is supportive of the Personal Development Review (PDR) / appraisal procedure. 4 Roles and Responsibilities 4.1 The CCG The responsibility for the monitoring and provision of this policy initially rests with the Governing Body of the CCG. The CCG will ensure that all its managers undertaking appraisals, performance and/or development reviews are appropriately trained to do so. 4.2 Human Resources Human Resources are responsible for providing advice, guidance and support to managers in the application of this policy and procedure. 4.3 Managers Mangers are responsible for ensuring the application of this policy and procedure is carried out in a fair and equitable manner. In addition managers must ensure they consistently apply the policy and procedure when undertaking any appraisals or reviews relating to incremental pay progression. Managers must make fair and informed decisions in line with the policy and procedure. Mangers must seek advice from Human Resources for all cases where consideration is being given to the deferment of incremental pay progression. 4.4 Employees Employees are responsible for raising awareness of their incremental date with their line manager a minimum of four months prior to their incremental date thus ensuring a date is agreed for their appraisal 3 months prior to the incremental date. Incremental Pay Progression Policy and Procedure 4

5 Employees must also engage with all aspects of the appraisal system as a failure to take part without good cause could result in their incremental progression being deferred for a period. 5 Appraisal, Performance and/or Development Reviews Regular appraisal, performance and/or development reviews will continue to be the basis for determining whether an individual has met the standards required of them for incremental pay progression. All individuals covered by this policy must have a formal appraisal, performance and/or development review every 12 months as outlined in Appendix 2. The appraisal should focus on organisational values and objectives linked to the achievement of the CCGs vision, values, aims, and objectives and the standard appraisal documentation (Appendix 1) should be utilised to capture, record and agree the discussions and outcome of a review. During this review managers will assess an individual's performance and may consider not just whether individual objectives have been achieved (or not) but also how they are achieved. Information on performance throughout the year will need to be taken into account in the performance appraisal and development review process, so that undue influence of experiences close to the review are avoided and as such managers and staff will need to build a picture of performance during the course of the review period. It is acknowledge that timely recognition of accomplishment (or feedback about poor performance) is more effective/motivational and therefore managers should seek to address concerns at the earliest possible opportunity. All those staff demonstrating and applying the required levels of performance and delivery consistently during the performance review period will benefit from incremental pay progression on their individual incremental date (anniversary date). Where performance is not met managers may see appropriate to defer the progression to the next increment (see Section 8). 6 Objective Setting As part of the review process it is important to set and regularly review objectives for individual members of staff. Developing sound objectives is critical to managing performance and ensuring a robust framework for assessment is in place when considering incremental pay progression. Individual objectives should be clearly linked to the CCG s corporate objectives, aims, values and vision. Incremental Pay Progression Policy and Procedure 5

6 6.1 SMART Objectives All objectives should be SMART (specific, measurable, achievable, resultsfocused/realistic, and Time-bound) Specific: Objectives should be specific, which means they should be simplistically written and clearly define what is going to be required. Specific is the What, Why and How of the SMART Model. Measurable: Objectives should be measurable so that there is tangible evidence that the individual has accomplished (or not) the objective in the short-term or smaller measurements built into the objective. Achievable: Objectives should be achievable; they should stretch slightly so that individuals feel challenged, but defined well enough so that they can achieve them. The appraise must possess the appropriate knowledge, skills and abilities needed to achieve the objective. If an objective is impossible to achieve, individuals may not even try to accomplish it and this can have a significantly detrimental effect on motivation. Achievable goals motivate employees Results-focused/realistic: Objectives should measure outcomes realistically, not activities. Time-bound: Objectives should be linked to a timeframe that creats a practical sense of urgency, or results in tension between the current reality and the vision of the objective. Without tension, the objective is unlikely to produce a relevant outcome. When setting SMART objectives the manager should ask themselves the following questions: What will the objective accomplish? How and why will it be accomplished? (Specific) How will they measure whether or not the objective will be reached? (ideally list at least two indicators) (Measurable) Is it possible? Have others done it successfully? Does the individual have the necessary knowledge, skills, abilities and resources to accomplish the goal? Will meeting the goal challenge without defeating (Achievable) What is the reason, purpose, or benefit of accomplishing the objective? What is the result (not activities leading up to the result) of the objective? (Resultsfocused/realistic) Incremental Pay Progression Policy and Procedure 6

7 What is the established completion date and odes that completion date create a practical sense of urgency (Time-bound) Mandatory objectives for all individuals should include full compliance with statutory and mandatory training requirements. 7 Principles of Pay Progression Incremental pay progression for all pay points, within each pay band, will be conditional upon individuals demonstrating that they have the requisite knowledge and skills/competencies for their role and that they have demonstrated the required level of performance and delivery during the annual review period. Provided the appropriate level of performance and delivery has been achieved during the annual review period, as evidenced in the appraisal documentation (Appendix 1), individuals will progress from pay point to pay point on an annual basis. For pay bands 1 to 7, 8A and 8B For pay bands 8C, 8D and 9 This will apply to all the pay points in each pay band. This will apply for the first 4 pay points in the band only. The final points in the band are annually earned. 7.1 Pay Bands 8C, 8D and 9 Only Pay progression beyond the first four pay points in pay bands 8c, 8d and 9 will be dependent upon the achievement of locally determined levels of performance. Pay progression to the last two incremental points will have to be earned annually, and only retained where the agreed level of performance is attained. Those already on one of the top or penultimate incremental points at 31 March 2013 have full protection in line with nationally agreed terms and conditions of service. Progress on the annually earned increments is subject to the same criteria as progress up other increments and is based on individual performance. Where someone has achieved the top increment, then gets a not satisfactory appraisal, they may move down one increment, not two at once. The last two pay points in pay bands 8c, 8d and 9 (the annually earned points) awarded after 1st April 2014 will not be subject to pay protection. Where an employee is down banded from a band 8c, 8d or 9 post and pay protection applies they shall receive the annually earned incremental point until the completion of the year they were receiving the entitlement. At the normal review date the protection no longer applies. For example: Employee A is receiving an annually earned pay point from 1st June to 31st May. From 1st January employee A accepts a post at a lower band. The higher band post annually earned point payment continues to be paid until 31st May. From 1st June the pay protection relating to the annually earned point ceases. Incremental Pay Progression Policy and Procedure 7

8 8 Deferring Incremental Pay Progression Pay Progression at incremental points will occur as per the Agenda for Change Terms and Conditions Handbook, which does allow deferring incremental pay progression in exceptional circumstances relating to significant weaknesses. In order to defer incremental pay progression the manager must demonstrate that the individual has significantly failed to meet the expected standards as required of them to fulfil their role. Pay progression should not be deferred on performance grounds unless there has been a prior documented discussion between the individual and the person during their review, regarding failure to meet the required level of performance and the employee has been given a reasonable opportunity to demonstrate the required improvement before the decision on pay progression is taken. Any issues of performance, competencies or skills should be raised well in advance of the review meeting and line managers should ensure there are no surprises at the review. The whole review period should be assessed, rather than recent events, ensuring there is timely recognition of accomplishment or feedback on poor performance. This prior discussion would need to identify areas for improvement and any reasonable developmental support the individual may require to operate at the required level of performance. A written record should be kept of these discussions. The action plan should: outline any training or development programmes that should be attended state timescales to reflect the work required set out review periods clearly identify the personal development objectives and levels of performance to be achieved Any delay in appraisal that is not the fault of the employee will not delay incremental progression. By deferring an incremental progression the CCG will commit to providing the individual with appropriate training and support for staff who fail to meet performance requirements in assessing an individual s performance, line managers should be mindful of factors that have been outside the control of individual staff. An increment may be deferred until the end of the agreed review period usually between 3 6 months, during which time further formal reviews will take place to assess whether the required levels of performance and delivery during the performance review period have been achieved. If there is a failure to meet the required level of performance, after the employee has been given support and a reasonable opportunity to demonstrate improvement then they will not be entitled to progress up the pay band for that given year. In cases where deferral of pay progression is being considered it is advised that the manager discuss the case with their line manager and a member of Human Resources. Incremental Pay Progression Policy and Procedure 8

9 The decision to defer pay progression should be communicated to the employee both verbally and in writing by the manager and documented on the Appraisal paperwork (Appendix 1) with both the appraiser and the employee signing. The line manager will need to provide information to support their decision which will be provided using the standard outcome letter (Appendix 3) 9 Managing Performance / Capability Whilst the management of individual performance and/or capability may be a contributing factor to deferring incremental pay progression the procedure for this sits outside of this appraisal process but may run in parallel with regular performance appraisal reviews. This framework does not automatically link policies on conduct and/or capability (disciplinary, capability and/or sickness) to incremental pay progression. It should be decided at the appraisal meeting whether any issues have affected the performance of the individual in their role. It should be noted that withholding increments should not be seen as a punitive measure and should not be used to manage poor conduct. Where incremental points are deferred this is not in place of, nor an outcome of capability or disciplinary action. Whilst performance may be discussed in a review meeting in all cases the management of performance and/or capability should not be left for the annual review. Concerns regarding an individual s performance or capability should be raised and addressed as soon as possible. Individual performance should be monitored throughout the year in the form of regular 1:1 meetings so that under performance is identified by all concerned and addressed appropriately as soon as possible. In assessing an individual s performance, line managers should be mindful of factors that have been outside the control of individual staff and, where appropriate, consider additional supportive measures such as Occupational Health. For further information on the process for the management of performance and/or capability please refer to the Capability/Performance Management and/or Attendance Management Policy. 10 Exemptions Where an employee is on maternity/paternity/adoption leave, the employee will still receive their incremental pay progression on the due date unless any concerns have previously been raised about their performance or that they were not demonstrating the required knowledge and skills. Managers should obtain advice from Human Resources on the potential risks associated with withholding increments in these circumstances and any decision should be subject to regular review. Where an employee has been temporarily redeployed into a different role due to an industrial injury, it is expected that the employee will still receive their incremental pay Incremental Pay Progression Policy and Procedure 9

10 progression as it would not be possible to appraise them against the requirements of their substantive post. Where training and development needs have been agreed at previous appraisals and have not been actioned by the organisation, the line manager must not use these issues as a means to defer pay progression. Where annual appraisals or performance reviews have not been undertaken prior to the incremental date the employee will automatically advance through the incremental pay progression. 11 Right to Appeal All individuals will have the right to appeal a decision and seek a review of any decision where the required level of performance is deemed not to have been met. An appeal must be made within 5 working days following confirmation of the intention to defer the progression to the next pay increment. Appeals should be made in writing using the appeal form (Appendix 4) and submitted to XXX 12 Equality and Diversity The Incremental Pay Progression policy and procedure should be read in conjunction with the CCG s Equality and Diversity policy. In applying this policy and procedure, the CCG will have due regard for the need to eliminate unlawful discrimination, promote equality of opportunity, and provide for good relations between people of diverse groups, in particular on the grounds of the following protected characteristics as outlined in the Equality Act (2010): age, disability, gender, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, and sexual orientation, in addition to offending background, trade union membership or any other personal characteristic. The CCG values the diversity of its workforce and aims to ensure that all staff understand this commitment and adhere to the standards. 13 Monitoring This policy and procedure will be reviewed periodically by Human Resources in conjunction with the CCG and Trade Union Representatives. Where a review is necessary due to changes with NHS Terms and Conditions of service or any other legislative changes this will happen immediately. The implementation of this policy will be monitored by the Human Resources Team in conjunction with the CCG. Incremental Pay Progression Policy and Procedure 10

11 Appendix 1 Appraisal Documentation LOCAL CCG APPRAISAL FORM HERE NB FORM NEEDS TO INCLUDE SECTION ON INCREMENTAL PAY PROGRESSION Incremental Pay Progression Policy and Procedure 11

12 Appendix 2 Appraisal Cycle/Timeline Individual / Line Manager Meet to Set Objectives Objectives Reviewed at Regular 1:1 Meetings Concerns addressed promptly throughout the year Support put in place to address concerns Formal Review Takes place (Every 12 months) Required Standards Met? Yes No Concerns reiterated to member of staff during the meeting. Incremental Pay Progression Achieved member of staff moves up one increment Letter issued to individual outlining full reasons why incremental pay progression is being deferred. Period of review set (X Months) Review date agreed and set Continuation of Review Process Right to appeal and process outlined Line Manager completes ESR3 and forwards to HR with copies of the letters to amend the incremental date Review Takes Place Incremental Pay Progression Policy and Procedure 12

13 Appendix 3 Confirmation of Intention to Defer Incremental Pay Progression LETTER TO BE INSERTED Incremental Pay Progression Policy and Procedure 13

14 Appendix 4 Appeal Form FORM TO BE INSERTED Incremental Pay Progression Policy and Procedure 14

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