Ref: D&P/G&RSC Pay and Grading Policy October 2015 The Methodist Council Pay and Grading Policy Page 1 of 13
1. Introduction It is important to have a framework for the planning, design and evaluation of total remuneration packages for the Council s employees which reflect: Signalling and driving the right behaviours, desired performance levels, encouraging colleagues to excel in their role, achieving our success through people Using reward to position us a good employer, where staff encourage other talented individuals to come and work for The Methodist Council. Colleagues feel valued and, are committed to the future of The Methodist Church and understand how their individual efforts contribute to The Methodist Council s success and impacts their own remuneration These guidelines have been produced to allow for the consistent and effective management of reward which is both in line with similar organisations and with Connexional Team s values. We recognise that different things motivate people: pay and benefits job content - the role they are doing; level of responsibility; meaningful work personal needs - career opportunities; vocation, development; working relationships work environment- culture of the organisation; recognition; supportive; enabling work/life balance We want to ensure that we offer reward that: is transparent and ensures consistency and fairness incorporates a holistic approach, taking full account of both financial and non-financial elements rewards employees in line with their performance, based on what they achieve through their objectives and how they perform through their behaviours is fit for purpose and easy to understand 2. Responsible and Authorising Managers Throughout this policy the terms responsible and authorising are used. These terms refer to: Responsible Manager - The manager responsible for pay and grading decisions for a post eg approving a new job description. Authorising Manager - The manager responsible for authorising pay and grading decisions for a post. 3. Job evaluation The Methodist Council operates a formal job evaluation process using the Hay Job evaluation scheme. Job evaluation provides a means of: determining internal relativities of different jobs across the Connexional Team Page 2 of 13
designing and maintaining equitable pay structures ensuring that jobs are fairly graded on the basis of objective evidence avoiding sex discrimination and unfair pay cases against the Council Note that job evaluation does not take account of the personal circumstances or performance of individual job holders. The Hay Group method of job evaluation is a means of comparing different jobs. It is an analytical, points-based scheme, which measures the size of jobs within an organisation. While the evaluation of jobs can never be entirely scientific, and will always be based on a series of judgments, the Hay method provides a highly-structured organising framework to ensure that such judgments are made in as objective, consistent, and equitable a way as possible. The Hay evaluation approach breaks roles down into 3 distinct areas: 1. Know-how - The knowledge and skills required to do the job. 2. Problem Solving - The kind of thinking needed to solve the problems the job routinely faces. 3. Accountability - The responsibilities assigned to the job specifically reviewing the impact the role has upon the success of the organisation. Appendix 1 gives further details about the Hay Job Evaluation. 4. Job evaluation panels Job evaluation panels are created in order to undertake the task of evaluating new and existing roles within the Council on an on-going basis. The composition of the panels will comprise: 3 x Job Grade Evaluators from the wider Church, 1 of which must be a member of the Grading and Remuneration Sub Committee GRSC) and 1 of which must be a member of the Strategy and Resources Committee (SRC) 1 x Staff Association representative, to be nominated by the Staff Association. 1 x Lead Staff member, from within the Connexional Team that can represent a broad view of the work of the Connexional Team. 1 x Member of the HR and Development team to act as panel member and secretary to the panel. The panel will be chaired by one of the GRSC members. The GRSC is responsible for maintaining and training a team of Job Grade Evaluators and bringing names of new members to the Methodist Council for approval. 5. Deciding job evaluation outcomes The basis of deciding job evaluation outcomes is to obtain a consensus view from the panel with regard to the technical evaluation outcome. All members of the evaluation panel carry equal decision-making responsibilities, but in the event that a consensus cannot be obtained then the panel chairperson would decide the evaluation outcome. Following the creation of an agreed and approved role profile each responsible manager is asked to attend the job evaluation panel in order to answer any questions relating to the role being evaluated. The panel decides the evaluation outcome following direct access to the responsible manager during the evaluation process. The evaluation outcome is then communicated back to the responsible manager by the secretary of the panel (HR). Page 3 of 13
The diagram below outlines the proposed job evaluation process: 6. Appeals of job evaluation outcomes It is inevitable that the employee and line managers will sometimes disagree upon job evaluation outcomes. It is therefore appropriate to put in place an appeals process that allows the evaluation outcome to be reexamined at the next opportunity by a new job evaluation panel. Only a responsible manager with the agreement of an authorising manager is allowed to appeal an outcome of a job evaluation panel. 7. Publication of job evaluation panel outcomes The job evaluation panel secretary will publish the outcome of a job evaluation panel at the earliest opportunity following a panel meeting. The role of panel secretary will be undertaken by a member of the HR and Development team and therefore it will fall upon the HR function to ensure that panel outcomes, represented as a change of grade / level, and the rationale for the outcome are communicated to the line and authorising managers. The line manager will then confirm the evaluation outcome with the employee. 8. Grade structure Salary grades are a collection of pay grades, levels or grade/levels, linking related jobs within an organisational hierarchy that provides a framework for the implementation of reward strategies and policies within an organisation. The Methodist Council has a broad-banded grade structure. The structure has 7 levels in order to reflect the natural hierarchy of roles and structure within the Team. Each grade/level has been described in terms of the contribution, the leadership skills, knowledge, expertise and complexity typically attributed to roles within each level. The grade structure is attached as Appendix 2. Page 4 of 13
Link to Hay Job evaluation The Hay job evaluation process underpins the grades. Each role is evaluated and allocated a total points score. The total points from the job evaluation exercise allow roles to be placed within the new grade structure based upon bands of score points. 9. Market Comparisons To ensure our pay is in line with similar organisations, we need to look at the external market and more importantly define and monitor our chosen market. Making market comparisons will help us to: Review whether existing compensation levels and practices are in line with similar organisations Understand the full spectrum of compensation in the market across the various levels Create and maintain pay ranges that are meaningful and relevant We also use internal comparators, to ensure compensation is consistent with performance and contribution. The salary ranges take account of salary data from organisations within the 3 rd sector and public sector across the UK. The data is based of charity, government, local authorities and not for profit organisations from the Hay salary data. 10. Base Pay Base pay is the cash compensation paid to an employee on a regular basis throughout the year. It is a reward for basic skills and competencies. The annual pay review is the primary means of managing base pay. The Methodist Council aim is to pay its employees in line with similar organisations. Our market rate for similar jobs and levels of skills and experience will be the market median (50 th percentile). A salary range has been created for each level across the Connexional team, therefore 7 level related ranges exist. Each level is aligned to a single market anchor based on the median salary for each job. A pay range of 80%-120% applies to each of the jobs that are graded in level 3-7, and a range of 90% - 110% for roles graded in levels 1 and 2. Pay ranges bring rigour to our base pay management and enable us to pay our employees appropriately by recognising that they fit into different employment markets. Annual review of salary ranges: In order to maintain a link to what other organisations continue to pay for similar sized roles, the salary ranges are reviewed and updated annually. The GRSC is responsible for ensuring that the salary ranges for the following Connexional year are updated based on the Hay salary survey and other data that is available and recommended to the Spring SRC and Methodist Council Meeting as part of the Central Services Budget. 11. Pay Structure The pay ranges provide a guide to what should be paid across each band; they are not an exact replication of external pay conditions. A pay range of 80%-120% is typically wide enough to provide for appropriate differentials to reward specific skills, experience or responsibility and value to the organisation. The range also allows for recognition that people at the same level can perform differently and should therefore be rewarded accordingly. Page 5 of 13
Pay ranges often overlap, such that the minimum salary (bottom of the range) of a specific Band may be less than the maximum salary (top of the range, described as market rate plus) of the level below. This overlap acknowledges that an experienced person doing a good job at one level can be of more value than a newcomer to a role in the level above. In certain circumstances, it may be necessary to recruit low in the pay range or above the median pay range to reflect the skills and experience of the new employee. For example: individuals who are newly appointed to a role in a higher pay range will have their pay reviewed and positioned to reflect their ability and experience to undertake the new role. The gap between the mid point of the salary range and appointment base pay will typically reflect the amount of development required to undertake the role. recruiting a school or college leaver with no relevant work experience, may mean it is more appropriate to set a relatively low base pay in comparison to the mid point of the salary range. if recruiting someone from a similar organisation who has experience and skills that are highly valued, it may be necessary to pay above the market anchor. 12. Pay Reviews I. Annual Pay Review The annual pay review process for implementation on the 1st September each year is the primary means of managing pay and provides an opportunity to recognise and reward people for their contribution to the organisation during the year and address any inconsistencies. It is important to note that whilst there is a commitment to review base pay in September there is no automatic entitlement to a pay increase as part of the pay review. It is a 'review' - a review can conclude that considering all the factors the individual s current base pay is at the right level and no adjustment is made. II. Performance reviews and performance ratings The annual pay review process is performance based which means that we differentiate pay awards taking into account the performance of individuals over the review period. The performance rating will influence the salary review directly. III. Reviewing Pay The pay review budget is managed on a Connexional Team basis and authorising managers are required to manage the pay review within the cluster budget, which is derived from the headcount in their area. Individual awards can vary from 0% upwards and those over 10% will require Head of Cluster and HR and Development approval and will be reviewed by the Connexional Secretary. IV. Rewarding Performance One of the more challenging parts of managing pay is being able to differentiate levels of performance and the associated levels of reward. This will require authorising managers to use their judgement to consider their people in terms of how they perform their role and what they deliver. The performance management process underpins this and regular 1:1s should provide a good insight to the year s performance. Page 6 of 13
Overall Performance Assessment V. Salary Review Matrix An annual salary review guidance matrix has been created to support the Council to manage individual annual base pay adjustments. The matrix will essentially recommend a percentage salary adjustment based upon the performance of the individual of the employee and their existing pay relative to the mid point of the salary range. The matrix is to guide the responsible and authorising manager with regard to the salary adjustment to be applied. The responsible and authorising manager will not be able to spend beyond the overall budget agreed by the Committee and the Methodist Council and therefore the budget acts as a financial control mechanism. Typically the middle box within the matrix is often illustrated as being the budget for the entire review based upon the fact that most people meet expectations (successful) with regard to their performance and are paid around the mid point of the salary range for their role. Role Model Increase towards market rate plus Increase to market rate plus May receive an increase Success ful Some increase towards market rate Some increase (as the overall range moves) Less likely to receive an increase Develop ing Some increase (as the overall range moves) Unlikely to receive an increase Unlikely to receive an increase Below Equal to Above Current Position vs. middle of range Example Matrix: The following example illustrates how a salary review matrix might be constructed in order to deliver an average increase of 2.2% to an employee that is performing well (good) and is paid towards the middle (100% point) of the salary range being utilised. Performance Salary Position against mid of salary range 80% 100% 120% Role Model 3.70% 2.70% 2.20% Successful 3.20% 2.20% 1.20% Developing 2.70% 1.70% 0.00% Page 7 of 13
VI. Level 6 and 7 Employees For employees in levels 6 and 7 there is a Methodist Council Remuneration Committee made up of the Chair of the Methodist Council, the Chair of the Strategy and Resources Committee and the Secretary of the Conference. The committee is responsible for authorising the pay increase of the staff in levels 6 and 7 and any other changes to their terms and conditions or remuneration. They receive input from the responsible managers of those staff in level 6 and 7 roles to inform their decisions. The HR and Development Manager and the Chair of the GRSC advise the committee. 13. Out-of-cycle pay awards Although the annual pay review is the primary means of managing pay, it is acknowledged that a small number of out-of-cycle changes may be required throughout the year and the HR and Development team will support this process. However, all proposed increases are required to be signed off by the Connexional Secretary. Page 8 of 13
Appendix 1 Hay Job Evaluation Overview What is Hay? It is a means of comparing different jobs. It is an analytical, points-based scheme, which measures the size of jobs within an organisation. The Hay method provides a highly-structured organising framework to ensure that such judgments are made in as objective, consistent, and equitable a way as possible. The Hay job evaluation approach is the most utilised in the UK for the public and third sectors. Hay Job Evaluation in Detail The Hay evaluation approach breaks roles down into 3 distinct areas: 1. Know-how - The knowledge and skills required to do the job. Depth and range of know-how: The depth and breadth of specialised knowledge required to perform the job. Planning and organising: The planning, organisation, supervision, and coordination required by the job, and the extent to which it has to integrate different activities, resources, or parts of the organisation. Communicating and influencing: How much and at what level the job is required to work with and through others. 2. Problem Solving - The kind of thinking needed to solve the problems the job routinely faces. Thinking environment: Assesses the scope within the job to identify and address the problems it typically faces. The thinking environment depends on the absence or presence of policy, procedure, supervision, or other guidance. Thinking challenge: Assesses the inherent nature of the problems which typically need to be dealt with, ranging from simple, repetitive problems to complex and novel situations. 3. Accountability - The responsibilities assigned to the job. Freedom to act: How much authority the job has to take decisions without referral to others. Magnitude: The size of the area of the organisation on which the job can have an impact, typically measured as the size of Revenue or Budget under direct control. Type of impact: The strength of that impact, i.e. direct or indirect. Page 9 of 13
Appendix 2 - The Methodist Council Proposed Grade Structure Grade 7 6 Level Descriptor Strategic Management Executive Management Level Overview/Contribution Knowledge and Expertise Complexity Leadership The focus for Level Seven roles is on the strategic intent of The Connexional Team roles are accountable for ensuring the well-being and viability of the organisation by setting the strategic ambition and organisation culture and delivering this over a five to ten year period. Level Seven roles shape the model of the Connexional Team and determine the landscape in which it participates. The roles have to interpret and moreover influence the external, environmental trends to weave them into the wider connexion or functional agenda. These roles have high level of impact on The Methodist Church. Level Six roles creates the strategies for a specific cluster or function that Level Five roles will operationalise in the Connexional Team. This level requires a depth and breadth of understanding of the Methodist Church and the Individuals require a full understanding of the breadth and complexities of the Connexional Team and its function and relation for which it exists to serve to the wider church. Strategic thinker with deep knowledge of the church and the relationship with the Connexional Team. Knowledge of the Church, Charity / 3rd sector in relation to the functional operations. Translates this knowledge into localised Connexional Team area priorities and operational delivery. Will have a full understanding of Engages in a wide range of diverse activities that require complex judgements and interpretative thinking, to develop the Connexional Team and to find solutions appropriate for the Church. Analyses a wide range of diverse activities that require complex judgements and interpretive thinking. Adapts problem solving approach to the demands of the situation. This is a key leadership role, influencing and shaping the Connexional Team by providing strategic direction and technical thought leadership, applying a full understanding of the impact on the wider connexion and connexional issues. Roles will lead Executive Management level. Head of a function or operating division. Provides leadership and direction through managers/technical experts. Will typically be part of the Senior Leadership Group Page 10 of 13
Connexional Team's long term strategic goals. how their own function contributes to achieving the overall objectives of the Connexional Team and the Methodist Church and how it interacts with others. Technical expert will hold deep technical knowledge and experience within own discipline. Pre-eminent knowledge of existing and emerging technologies and research resulting in new opportunities for the Connexional Team. 5 Senior Management / Senior Professional The focus of Level Five roles is to manage a flow of work and the end-to-end processes, often across different areas or functions and within the agreed strategy. Post holders are required to take ownership of a distinct unit and integrate the work of sub-groups that sometimes have conflicting objectives. Level Five provides the lynchpin between operational and strategic work. Jobholders are held to account for operational work while contributing to the Connexional Team's longer term objectives. It is, in effect, where strategy is turned into Requires comprehensive understanding of concepts and principles in own subject area in order to resolve issues and help to define the standards and specifications around which others will operate. Technical expert in their field and an acknowledged authority. Understands key issues requiring sophisticated analytical thought in order to develop or define new solutions. Compares and selects alternatives from the resulting qualitative and quantitative material. Creates workable plans to address operational issues. Technical roles will require complex judgements and solutions based on sophisticated analytical thought. In-depth analysis to define problems and develop innovative solutions. Core management and professional roles, accountable for delivery against prescribed targets; programmes and budgets. Typically 5-10 years post qualification experience. Some strategic input is expected although the role is likely to be responsible for setting policy and recommending improvements to processes and procedures within their area of specialism. Page 11 of 13
appropriate activities for the Team. 4 Middle Manager / Professional The focus is on delivery and development. Establishing service level expectations, providing a quality service and maintaining and improving it. The role requires professional knowledge gained through applicable work experience, supplemented by formal knowledge, in order to apply principles and concepts in resolving issues. The procedural framework in which these roles operate will not cover every eventuality and job holders will be expected to solve problems based on knowledge, experience and the analysis of diverse information and good reasoning. These roles will need to work with a wide variety of people and groups across the Connexional Team and the Methodist Church. The roles will help those individuals and groups to develop different aspects of the life of the Church. Professional with up to 3-5 years post qualification experience, responsible for providing professional operational support and counsel to the Connexional Team implementing Methodist Council policy and developing procedures. These roles will exercise leadership in a particular disciples, area, region or specialism within the Connexional Team. 3 Practitioner Level Three roles will be experienced specialists dealing with different issues and the need to identify alternative approaches. To solve issues they will work within a defined policy framework and are required to interpret and implement the policy. Individuals at this level may be professionally part qualified or attain a level of technical expertise within a defined subject area. These roles will have a specialist knowledge in the roles area of work. This knowledge will have been achieved through experience and/or training. Able to apply the knowledge to the Church context of the roles. Able to solve problems / issues that require advanced knowledge and to make decisions based on practice and previous experience. To be able to develop new areas of work within their specialism. Some of these roles will work with a number of people in a variety of contexts Individuals dealing with a variety of different tasks within their context, primarily operating within accepted procedural boundaries. 2 Advisory / Facilitatory The majority of Level Two roles are operational roles. Post holders will have a good Individuals will be proficient in their area of specialism and act in an advisory capacity. Individuals will deal with a range of complex operational and technical issues that arise. Support role, dealing with complex queries or operational processes. Page 12 of 13
knowledge of their role and be able to respond flexibly to their work. They do this by breaking down the work they are accountable for into manageable tasks and periods. A few of these roles will have line management responsibility. Good understanding of processes, applications and techniques within the team and is able to make suggestions for process improvement. These roles will often be the first contact roles for those in the Methodist Church making contact with the Connexional Team. 1 Team Support The focus of work is on Quality providing a quality service. Roles address the needs of these colleagues or 'customers' to achieve specific goals. Job holders at this level require proficient knowledge of well defined work routines and procedures relevant to the role and how to apply these in day to day activities. Resources tend to be tangible, such as the equipment, systems and materials needed to do the job. The most important resources are the jobholder s own time and skills. Individuals will deal with tasks requiring the recall of specific learned activities in repetitive situations. They will pay attention to detail. Established policies, procedures, processes, and systems will guide the job holder. Individuals responsible for providing routine support services or basic administrative support. Front line employee equipped with basic skills carrying out service related activities for customers. Jobs requiring familiarity with basic routines and the operation of specific equipment. Works within clearly defined processes and procedures, generally under direct supervision. Page 13 of 13