Workforce Remuneration Policy

Transcription

1 SH HR 74 Summary: Keywords (minimum of 5): (To assist policy search engine) Target Audience: This document sets out the Trust s position in terms of its remuneration policy for staff and non-executive Directors. It sets out objectives and how these will be delivered via national and local terms and conditions, including the approval and monitoring arrangements for variation to remuneration schemes. Remuneration, Pay, Terms, Conditions, National, Local. All Southern Health NHS Foundation staff and nonexecutive Directors. Next Review Date: March 2019 Approved & Ratified by: Nominations and Remuneration Committee JCNC Date issued: Date of meetings: Author: Sponsor: Sandra Grant, Director of People and Communications Sandra Grant, Director of People and Communications 1

2 Version Control Change Record Date Author Version Page Reason for Change Reviewers/contributors Name Position Version Reviewed & Date Nominations and Remuneration V1 Committee Members Louise Jones Senior HR Manager V1 2

3 CONTENTS Page 1 Introduction 4 2 Scope 4 3 Definitions 4 4 Remuneration Schemes: 4 Nationally agreed NHS terms and conditions of service Differential Pay SHFT local terms and conditions Executive Directors and Very Senior Managers terms and conditions of service Historical and acquired terms and conditions of service 5 Additional Rewards linked to performance 6 NHS terms and conditions of service Nationally agreed pay flexibilities 6 Non-executive Director Remuneration 7 7 Monitoring compliance 7 8 Policy review 7 9 Associated documents 7 10 Supporting references 7 Appendices A Criteria for setting the remuneration levels for Executive Director 8 posts within Southern Health NHS Foundation Trust B Equality Impact Assessment (EqIA) 11 3

4 1. Introduction Southern Health NHS Foundation Trust (herein SHFT) recognises that the overriding objective of its remuneration policy should be to ensure the Trust employs and retains competent and appropriately remunerated staff at all levels to enable the successful delivery of the Trust s objectives and sustainability of the organisation. This policy should ensure transparency with regard to remuneration arrangements for Trust employees, with particular clarity where decisions are subject to national or local decision. As there are increasing challenges to the affordability and suitability of the NHS national pay framework (Agenda for Change), Foundation Trusts need to explore whether they need to develop local arrangements which better suit their needs. 2. Scope This policy applies to all SHFT staff covered by NHS terms and Conditions (Agenda for Change) and staff within the remit of the Doctors and Dentists Review Body, those on local terms and conditions (i.e. TQtwentyone the Trust s social care Division), executive Directors and other very senior managers. The policy also applies to remuneration of non-executive Directors, although they are not employees of the Trust. 3. Definitions Agenda for Change: Nationally agreed NHS terms and conditions of service for NHS organisations, except very senior managers and staff within the remit of the Doctors and Dentists Review Body NHSPRB: NHS Pay Review Body covering staff other than very senior managers and staff within the remit of the Doctors and Dentists Review Body (DDRB). DDRB: NHS Pay Review Body covering Doctors and Dentists. TUPE: Transfer of undertaking (Protection of Employment) Regulations that protect employees' rights (including terms and conditions) when the organisation or service they work for transfers to a new employer. 4. Remuneration Schemes SHFT will meet its objectives in terms of pay and remuneration by way of a mixed offer of terms and conditions packages, relevant to particular staff groups. These are: Nationally agreed NHS terms and conditions of service For the large majority of staff, SHFT will offer Agenda for Change (nationally agreed NHS terms and conditions of service for NHS organisations). Medical and dental staff employed by SHFT will be covered by the relevant national medical and dental terms and conditions of service. There are a number of different national agreements for the 4

5 following groups; medical and dental staff, consultants, speciality doctors and associate specialists. Nationally agreed terms and conditions are reviewed by either: The NHS Pay Review Body (NHSPRB) covering staff other than very senior managers and staff within the remit of the Doctors and Dentists Review Body The Doctors and Dentists Review Body. Each year the National Pay Review Body s consider factors relevant to determination of appropriate terms and conditions of service (including an annual cost of living award) taking account of; The context in which the NHS is operating, including national reports and reviews and Government response/ policy The context for reform and cultural change required by NHS employers such as the link between pay progression and performance, seven day patient services and flexibility. The context of financial and efficiency challenges, amongst growing demand. Labour market evidence for pay increases and differential awards (i.e. recruitment and retention premia) Staff engagement indicators (i.e. staff survey results) SHFT reserves the right, as permitted by nationally agreed principles (in respect of pay flexibilities) to apply variations to national terms and conditions of service. Differential Pay (recruitment and retention premia) within national pay frameworks Agenda for Change incorporates scope for NHS organisations to pay recruitment and retention premia, as an addition to the pay of an individual post or specific group of posts, where market pressures would otherwise prevent the employer from being able to recruit staff to and retain staff in sufficient numbers for the posts concerned, at the normal salary for a job of that weight. The application of additional payments should be in exceptional circumstances. Recruitment and retention premia may also be awarded on a national basis to particular groups of staff on the recommendation of the NHS Pay Review Body (NHSPRB) where there are national recruitment and retention pressures. As part of annual workforce planning reviews, each clinical and corporate division should consider whether they will need to apply or remove any recruitment or retention premia for their workforce in line with the Agenda for Change protocol and in partnership with staff representatives. The Nominations and Remuneration Committee will operate as the body responsible for approving the application of any such payments. Once recruitment and retention premia (or similar payments outside of AfC) are awarded, they should be reviewed annually by HR personnel, relevant service/department heads and staff representatives and reported to the Nominations and Remuneration Committee for approval. SHFT local terms and conditions of service These apply to a defined group of staff, as deemed appropriate, where the flexibilities provided within the Agenda for Change framework do not meet the needs of a particular part of the Trust. Local pay arrangements will be benchmarked by each Division affected every two years to ensure they remain fit for purpose. Local arrangements will clearly define any link to national pay review body recommendations in respect of annual pay award and its duration. It is not mandated that local terms and conditions of service are linked to 5

6 national recommendations, however benchmarking will take account of the context in which the Division is operating and will be guided by factors such as: Relevant reports/ reviews and Government response/ policy The context for reform and cultural change required by the Division. The context of financial and efficiency challenges. Labour market evidence for pay increases and differential awards (i.e. recruitment and retention premia) Staff engagement indicators (i.e. staff survey results) Non-application of national pay cost of living awards is considered to remove staff from the national AFC framework and therefore local pay Executive Directors and Very Senior Managers Executive Directors and (under exceptional circumstances) other very senior managers will be paid outside of Agenda for Change terms and conditions. Senior Remuneration, outside AfC, will be reviewed annually in the Spring by the Nominations and Remuneration Committee using Foundation Trust Network (FTN) Salary Review data which provides remuneration comparators across the Country, including the Trust turnover and workforce levels. The Nominations and Remuneration Committee will receive a report from the Chair regarding the Chief Executives level of remuneration and performance related pay that will take account of FTN salary review data, satisfactory completion of objectives and any exceptional issues such as increased areas of responsibility. The Nominations and Remuneration Committee will receive a report from the Chief Executive regarding Executive Director (and very senior manager) levels of remuneration. This will take account of FTN salary review data, satisfactory completion of objectives and any exceptional issues such as increased areas of responsibility. In exceptional circumstances, interim changes to Executive Salary levels may be proposed, where appropriate, to the Nominations and Remuneration Committee for approval to reflect temporary changes to the Executive Structure. Historical and acquired terms and conditions of service These apply only to staff on historical grounds, for example; non assimilation to Agenda for Change (Whitley Council) or protected transferred employment (TUPE). In normal circumstances no new members will be admitted to these schemes, although in some circumstances this may be required whilst plans for assimilation as considered. 5. Additional Rewards linked to performance For additional rewards, SHFT will maintain a Reward and Recognition strategy to ensure there is clear correlation between the total reward package available to our staff and their achievements in: delivering the Trust s objectives displaying the desired behaviours required by the Trust being an exceptional clinician (i.e. clinical excellence awards available to consultants under their national terms and conditions for performance over and above the standard expected of their role) and being an exceptional leader. 6

7 NHS terms and conditions of service - Nationally agreed pay flexibilities As part of its Reward and Recognition strategy, SHFT will ensure that nationally agreed pay flexibilities are explored and implemented as appropriate to Trust objectives and desired behaviours (i.e. the implementation of the incremental pay progression policy). 6. Non-executive Director remuneration Non-executive Directors are not employees of the Trust. Their remuneration will be in line with recognised best practice and sufficient to attract and retain high-calibre nonexecutives. It will be set by reference to the responsibilities undertaken by the nonexecutive. The remuneration of Non-Executive Directors is determined by the Council of Governors. Non-Executive Directors can reclaim any essential expenses incurred as part of their role; they should not receive any benefits in kind. 7. Monitoring Compliance The Nominations and Remuneration Committee will be responsible for final approval of the reward frameworks offered by SHFT and subsequent variation. The Nominations and Remuneration Committee will hold a duty of oversight in respect of remuneration for those within the scope of this policy. To enable appropriate discharge of this duty the Director of People and Communications will present annually an overview of workforce remuneration and an update on the reward and recognition strategy. 8. Policy Review The policy and processes contained within this document will be in place for 3 years. An earlier review can take place should circumstances arise and/or if there are legislative changes that make it unfit for purpose. 9. Associated Documents Incremental Pay Progression Policy SH HR Supporting References NHS terms and conditions of service handbook (NHS Agenda for Change) Terms and conditions of service Consultants Terms and conditions of service Medical and Dental staff Terms and conditions of service Specialty Doctor Terms and conditions of service Associate Specialist NHS Employers website and submission to the NHS pay review body 2014/2015 Foundation Trust Network influencing and policy related to workforce pay, terms and conditions Advisory Committee on Clinical Excellence Awards 7

8 Appendix A Criteria for setting the remuneration levels for Executive Director posts within Southern Health NHS Foundation Trust 1. Purpose The majority of staff within the Trust has their remuneration levels determined by National agreement. For very senior staff within Foundation Trusts there is no such agreement. Various forms of guidance and recommendations exist but, subject to the Trust remaining outside of any special conditions imposed by its regulators it is for the Nominations and Remuneration Committee to establish the appropriate remuneration for Executive Director posts. This document describes the criteria the Nominations and Remuneration Committee will follow in determining the remuneration level for its Executive Director posts. 2. Background The subject of senior salaries and remuneration packages within the Public Sector has been the focus of much debate and political comment in recent years. The rising expectation of our leaders and increased regulation regime has caused significant turnover levels with an increasing reliance on the interim market. It is important that we consider what recent history tells us in addition to the current and future needs of the organisation when deciding upon the market factors that most impact upon our ability to recruit and retain the leadership team we need. We know, for example that given the size, broad geographical and service context for this Trust, we typically attract and lose our leaders within either the local market or to national armslengths bodies. We also know that the workforce levels of our organisation when compared to others is a better indication of the skills and experience we need from our leaders rather than the size of budget they have managed within for example the acute sector. On average the acute sector has 60-70% of workforce costs as their total budget whereas in this sector this is closer to 90%. Given the type of organisation we are it is usual for us to recruit experienced Directors from other Trusts/organisations and not unusual for them to be in broader roles within smaller organisations. Further, we are increasingly looking to our medical workforce to undertake Director Roles outside of their traditional portfolio of responsibilities, often with salaries and additional allowances in excess of the level of remuneration felt applicable to that post. Both of these factors can cause a distortion to our usual considerations of the value of a post. This should not, however, prevent us from recruiting the right person, nor cause us to realign all other posts within the Very Senior team. The Committee should however note the remuneration package applicable to that post whilst recognising the additional factors relevant to that individual. 3. Criteria 3.1 Framework As a guide for the appropriate remuneration level, the Department of Health use a document entitled NHS Hospital Trust: Boardroom Pay written annually by a company called E-reward.co.uk Limited. The Trust will use this as a framework for determining Executive Director salaries and will consider the section most relevant for the Trust, for example: English Foundation Trusts employing employees or English Foundation Trusts employing between 5,000 and 7,000 employees 8

9 The median salary level for each post will be applied unless the committee agree that there are specific reasons why remuneration for a particular post should be higher or lower (such a reason could be a broader portfolio of responsibilities for a Director within this Trust compared to a typical Director with that title across most other Trusts). 3.2 Other market factors In addition to the above document the Trust may consider other market factors such as remuneration levels within neighbouring trusts/arms-length bodies which recent history tells us is the key competitors and suppliers of our Very Senior staff. 3.3 Affordability All remuneration decisions will need to take into consideration affordability. It may be noted that remuneration levels could be increased according to the criteria set out in this policy but that this is not affordable by the Trust at the time of the review. Where this is the case a date should be agreed for a further review. 3.4 Timescales The Trust will review any Executive Director posts which do not fall within Agenda for Change arrangements annually unless there is a significant change to the organisation (such as a major acquisition), or a significant change to the portfolio for an individual. 4. Remuneration levels 4.1 New appointments When considering recruitment to a new post or vacant post, the Nominations and Remuneration Committee will take into account the following criteria to determine the remuneration level prior to the selection process commencing: The median remuneration level for a Director post of that type as described in the NHS Hospital Trust: Boardroom Pay document described at section 3.1 above Any broader/lesser portfolio responsibility which may require payment above or below the median level Any other reason relating to the Trust or individual Director post requiring remuneration above or below the median level The market value according to a comparison of remuneration levels across the local area The current salary of the preferred candidate (NB a further Committee discussion will need to take place should the salary exceed the range agreed prior to the selection process commencing). 4.2 Existing post holders An annual review will take place using the criteria outlined in 4.1 above (with the exception of 4.1.5). The review will be in the first quarter of the financial year for the Trust, with a commencement date for any salary change to take place from April that year, or at a different date to be agreed by the committee where there is a circumstance such as phasing in of a full portfolio or a need to demonstrate the required level of performance. 4.3 Exceptional circumstances Exceptionally, there may be a need to review the remuneration level for a particular post holder prior to the annual review. Should this be the case, the Chair or the Chief 9

10 Executive will propose this to the Committee for consideration demonstrating clear reasons why this is required. 5. Additional payments 5.1 There may be rare occasions when the basic level of remuneration will be considered insufficient to attract of retain the desired Executive Director. The framework as described in 3.1 above allows for a salary level higher or lower than the median should this be required and wherever possible the Committee will decide salary levels according to this. 5.2 Exceptionally a performance related bonus may be required and this will be by agreement through the Committee using the criteria defined through a specific paper describing the business case for allocating such a payment. 6. Review of this process This process will be reconsidered by the Nominations and Remuneration Committee on a 3 yearly basis, commencing March

11 Appendix B: Equality Impact Assessment The Equality Analysis is a written record that demonstrates that you have shown due regard to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations with respect to the characteristics protected by the Equality Act Stage 1: Screening Date of assessment: July 2016 Name of person completing the Louise Jones assessment: Job title: Senior HR Manager Responsible department: People & Communications Intended equality outcomes: Fair and Equal Pay in line with the Trusts duties under the Equality Act 2010 (the Act) and the Public Sector Equality Duty. Monitored by workforce analysis via the diversity scorecard and The Trusts Equality Delivery System outcome of ensuring pay and related terms and conditions are fairly determined for all posts, with staff doing equal work and work rated as of equal value being entitled to equal pay Who was involved in the consultation of this document? JCNC Please describe the positive and any potential negative impact of the policy on service users or staff. In the case of negative impact, please indicate any measures planned to mitigate against this by completing stage 2. Supporting Information can be found be following the link: Protected Characteristic Positive impact Negative impact Age Guidance to ensure pay and reward systems must not be applied in a discriminatory way. Any gaps in pay must be objectively justified in consideration material factors set out in this policy - ie performance related pay, market forces, TUPE transfer (not indefinite justification), skills and experience. Disability As above As above Gender reassignment As above As above Marriage & civil partnership As above As above Pregnancy & maternity As above As above Race As above As above Religion As above As above Sex As above. Men and women As above performing work of equal value should receive equal pay Sexual orientation Guidance to ensure pay and reward As above systems must not be applied in a discriminatory way. Any gaps in pay must be objectively justified in consideration material factors set out in this policy - ie performance related pay, market forces, TUPE transfer (not indefinite justification), skills and experience. Stage 2: Full impact assessment What is the impact? Mitigating actions Monitoring of actions 11