Rewards and employee relations
Achieve is a charity which mainly provides social care for people with learning disabilities, but also has a role in lobbying Government and raising public awareness of disability issues more generally.
It employs some 550 people, including 350 ‘front line’ staff who provide direct support and care to clients, mostly in the home of the client. As a people-intensive organisation, pay accounts for 77% of overall expenditure. The overwhelming majority of Achieve’s income (91%), comes from Government/local authority funding, as part of its statutory obligation to provide care to the most vulnerable people in the community.
The reputation of the organisation depends greatly on how clients perceive its front line care staff. Historically, these staff have been vocationally committed to the mission of the organisation and this is reflected in continuing low levels of employee turnover (11%). Additionally, the pay levels of these employees is around the median of 10 identified comparator organisations, so on the surface, basic pay does not seem to be a problem.
Non-pay benefits available to all staff include a degree of flexible working, individual learning accounts on request, family-friendly working polices and a number of salary-sacrifice schemes (e.g. loans to purchase a bicycle). This raft of other benefits has grown over time, often in response to new legislation, rather than by any strategic design.
Nevertheless, there are some problems emerging across all staff groups, including the fact that the first tier of front line management in the organisation, ‘Team Leaders,’ are not systematically trained to carry out their people management roles; and there is a universal perception that internal communications are poor, which means that a significant number of employees, including those on the front line, are unclear about issues such as the organisation’s overall priorities and their own career progression.
These issues really came to prominence in a recent staff survey, which suggested strong dissatisfaction on a number of issues, in particular:
•An increasing sense of ‘them and us’ between the main workforce and the Management Team, including concerns that employees do not have a ‘voice’ in the organisation and are unclear about the future direction of travel of the organisation.
•A perception that the current reward system is outdated (each post is attached to a grade which has 3 incremental points on it), and does not reflect the issues that are important to an increasingly diverse workforce.
The HR Director accepts that the reward package is outdated and is more like a traditional Public Sector reward system, i.e. pay is currently based on length of service only; and a small bonus, paid annually, is based purely on overall organisational performance and is not widely appreciated or understood.
Additionally, she is concerned that the other benefits referred to above, (which go beyond minimum legal requirements), are not positioned as part of the overall reward package and not communicated effectively. The lack of an overarching approach in these areas also means that there is no culture of developing staff or enabling them to identify potential career pathways.
With regard to employee relations, there is no internal mechanism to share information with staff beyond an occasional company newsletter, and no opportunity to listen to staff concerns or harvest their ideas about how to improve either their working experience or the organisation’s performance.
Simultaneously, the Senior Management team is concerned about a noticeable rise in client complaints, which could in the longer term affect the viability of the organisation. Coupled with recent increases in absence rates and grievances, they are becoming increasingly concerned about the future.
The need to address these issues has become more acute because the Government has announced proposed changes to the way in which it allocates funds: whereas in the past organisations such as Achieve have been given bulk grants to provide care for a designated group of clients, in future it is proposed that the funds will go directly to the clients, who will in theory be able to choose a range of services – a ‘menu’ approach – from a number of different providers. This means that Achieve needs to improve its performance in order to gain a competitive edge which will enable it to retain and, hopefully, grow its client base.
In light of these issues, the HR Director has decided to take a strategic approach in order to move forward positively. She has expressed interest in whether Total Reward might be an effective model to adopt. Additionally, she recognises the need for an appropriate Employee Relations Strategy which both addresses the concerns of staff and strengthens the organisational culture. In both cases, it will be vital to ensure alignment with the ethos and values of the organisation and the increasingly diverse employee demographic.
As Deputy Director, you have been asked to analyse the current situation, and discuss relevant theories, models and practices in order to make appropriate recommendations.
Following the structure of a Corporate Report, you should address the salient points from the case study covering the following areas:
1. A critical review and analysis of Total Reward, which will determine whether this is an appropriate model to adopt strategically in this environment.
2. A discussion of the potential benefits of an ER strategy.
3. Based on points 1 and 2 above and the current operating environment, recommend the main elements of strategies for Total Reward and Employee Relations.
Your Report MUST include the following sections:
•Table of contents
•Main Body (to include relevant literature and application to this issue in question)