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PUBLIC SECTOR PAY IN 2004-05: GUIDANCE FOR SCOTTISH PUBLIC SECTOR PAY GROUPS
ANNEX B
PAY REMIT - BUSINESS CASE CHECKLIST
- 1. Where the proposed earnings growth is 3.5% or above you are required to submit a detailed business case in support of your proposals. Please that your it includes sufficient information to support your proposals. If not, it could result in delay of your pay remit being approved. Organisations are encouraged to put remits together in consultation with business planning and performance management sections within their organisation, as well as personnel, finance and others involved in the planning and policy development of pay policy for their bargaining unit. To ensure that the salient points are covered here is a checklist of the key areas that you should include in your business case:
Provide a summary of the organisations core business. Explain briefly the main role of the organisation and your business.
Provide an outline of any forthcoming pressures which may face your organisation and how these will impact on the paybill. Explain on which areas of your business/staff the pressures will impact and how you intend to use the paybill to address them.
- An explanation of how the paybill impacts on the delivery of services. This will include how the paybill directly translates into achieving the delivery of services and the impact on the organisation if the services are not delivered.
- Explain how your remit plans help meet your key objectives targets and how they link to the parent department's objectives.
- A clear indication of how reward policies and practices will help achieve strategic goals should be explained; what the goal is and how the department plans on achieving the goal.
A description of the number and type of staff in the bargaining unit e.g. clerical, executive etc. Also include a brief description of current performance pay arrangements applying to staff in the bargaining unit: this is particularly helpful where the remit proposes changes to the existing arrangements.
Settlement date(s) for staff covered by the bargaining unit and the date when negotiations expected to commence. Note: Bodies must not enter formal negotiations with the TUS until the remit has received Ministerial approval.
Provide an explanation for all remits which have been submitted more than 2 months after the settlement date.
- Settlement details for previous year
Include a summary of the main features of the previous remit with your business case (see Annex C). In particular could you provide the Headline (with a detailed breakdown of the main component elements), Earnings Growth and Paybill per head figures. Also include details of the reforms made and progress against any actions or conditions.
The standard pro forma should be completed in respect of the worst case scenario a copy is attached at Annex A.
Provide a description of the key points of the maximum settlement to which management are prepared to agree, including any changes to pay and conditions, details of any transitional arrangements where settlement dates are being altered and any consequences for jobs or services.
Show the impact of pay, bonuses and the use of non-consolidated payments with an indication of the criteria for awards (e.g. achievement of team's objectives).
Provide details of how the remit is to be spent in the remit year (or for each year of a multi-year proposal). We understand that plans may alter slightly during negotiations, but we would expect to see a clear management plan including any specific implementation dates. In particular we would ask that you detail the allocation of money on the following:
Description | Percentage |
Consolidated increase | % |
Non-consolidated bonuses | % |
To address recruitment and retention | % |
To progress staff towards target rate for the job in the remit year | % |
Non-pay elements, for example maternity, paternity and annual leave | % |
To address Equal Pay | % |
Total Headline Cost | % |
Provide detail of how the proposals in their proposed remit support Public Sector Pay policy.
Where appropriate, you should make an assessment of the effect of the maximum settlement on other closely related bodies.
- Affordability and Funding
Provide an explanation of how the pay remit is to be funded. Proposals must be affordable and funded from existing administrative cost limits.
Details of agreed efficiency gains/savings - where appropriate, organisations can use agreed efficiency gains/savings in support of a justified case. What is the effect on delivery of services? Any efficiency gains must be added to the headline figure and included in the projected paybill figure (see Annex A for details). What element of the remit is made up of these savings?
If the remit covers more than one year, set out the rationale for the proposed deal and the implications for costs in future years. Remit details must be provided for each year, which form the multi-year deal (see proforma in Annex A).
Confirm that the maximum settlement can be accommodated within the paybill level agreed with the Department.
- Pay and Performance Management Systems
Describe the performance pay arrangements in your organisation. There should be a clear link between the proposed remit, and within the organisation, team and individual rewards and business targets. It is important to distinguish between consolidated performance pay and non-consolidated payments, for example bonuses.
Provide a clear indication of the distribution (for example, the upper and lower quartile of awards, not just highest and lowest awards) should be given - this should be done for both consolidated and non-consolidated awards to demonstrate the scope of differential payments.
It is important to provide sufficient details to enable Finance Pay Policy to quantify the performance pay arrangements in terms of the number of staff affected and the variations in awards. In particular we would expect you to address:
Pay Bands and Basic Pay
- Provide a table showing the minima, maxima and target rate of the pay ranges.
- How are staff progressed - e.g. a metric related to performance contribution, value or competence?
- Where do the progression arrangements take staff to?
- Are all staff taken to the same point?
- What is being done to establish the validity of the pay ranges and in particular, the point(s) to which staff are progressed?
- Are pay ranges being shortened?
Performance Pay
- Is there a significant element of non-consolidated (bonuses)?
- Does the bonus scheme(s) incentivise and reward staff properly?
- Is there a meaningful performance pay element differential between the levels of performance (markings)?
- Is the performance pay targeted accurately and appropriately at the highest performers?
Non - Pay Rewards
- Are other measures being introduced to improve the total reward package for staff?
- Recruitment, retention and motivation
If you are experiencing any recruitment and retention difficulties please explain the negative impact it has on your ability to meet business objectives and the detrimental impact it has on your organisation. You must demonstrate that you have a clear strategy for managing recruitment, retention and motivation difficulties, and that attention is given to targeting within that strategy:
Provide clear and quantified (i.e. not anecdotal) evidence of recruitment and retention difficulties addressing each of the following:
- Turnover rates - the number of leavers in a set period divided by the average number employed in that period (as a percentage).
- Vacancy rates - the percentage of posts vacant for a particular function/grade and the average length of time they have existed for since action was taken to fill them.
- Information on the business's ability to deal with this, including its strategy relating to non pay factors.
- How extra pay for the identified staff group will help and in particular what are the relevant labour market comparisons.
Demonstrate what other measures (for example improved conditions, training etc) are being used or considered to address recruitment and retention difficulties. Pay is rarely the only problem.
Please provide detail on how any equality pay issues impact on the paybill. This should include details of the issues and the rationale for the proposed pay response. Specifically on gender issues we would expect this should fall out from your action plan which was submitted in April 2003.
- Industrial relation and presentational issues
Please provide a note of any potential industrial relations issues which may arise from the maximum settlement. Ministers will wish to know if they are likely to be faced with awkward headlines.
- Other bargaining Units within the organisation
A brief description of how the pay of other bargaining units (if any) within the organisation will be determined. A separate remit is required for each bargaining unit within your organisation.
Demonstrate that the proposed pay settlements for all bargaining units can be accommodated within the agreed gross paybill for the organisation. (For example: cost of settlement for Bargaining Unit 1 + cost of settlement for Bargaining Unit 2 + existing paybill commitments for each Unit = agreed paybill level).
Provide any further information or particular issues you would like to highlight in the remit.
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