Helen Giles: Can we really quantify good performance?
Helen Giles, January 29, 2015
The first social housing, homelessness and care sector benchmarking survey of 2015 was published this week, and it’s certainly made for interesting reading.
Entitled the Barometer survey, it was put together by reward specialist Twentysix consulting and social enterprise HR consultancy Real People.
The Barometer survey aimed to answer a question that has been around the sectors for a few years, namely “bonuses... who’s doing what?”
The survey found that more than half (52%) of respondents were using some sort of bonus or variable pay scheme. In half these cases the variable pay is used to reward individual performance.
Two-thirds of housing association respondents operate incentivised pay compared to less than a third of homelessness organisations. It would seem that housing associations have been quicker to adopt pay practices traditionally associated with the commercial rather than the not-for-profit sector.
Housing associations are also in a position to award higher cost of living increases – at an average of 2% predicted increase for 2015 compared to 1% for homelessness and care.
I am sceptical about the value of performance-related pay in general, and in particular in organisations offering social care. For me, using bonuses to improve performance has to be implemented within a clear and robust performance management framework, which can be operated without the stick and carrot of variable pay.
A major issue with performance-related pay is that it attempts to quantify ‘good performance’. This isn’t so much of a problem if an employee completes piece work and their output can be reliably measured by quantity. In other roles good performance is usually measured as something more intangible, like the quality of customer service.
For any organisation to manage performance systematically, a number of things need to be in place. But they have to be used well and consistently, which is a discipline that has to run through organisations:
- Every team should have some kind of service plan that sets out the actions they are going to take towards the achievement of the organisation’s goals.
- In addition, each team should have clear service standards, which define what users of the services can expect. These may be the clients of the organisation, or internal customers of business support teams.
- Individuals should be working to clear personal objectives and performance standards, which derive from business and team plans and standards.
- I also strongly advise organisations to have a set of core competencies that define the key qualities required of people. This will include things like teamworking and networking capabilities, analytical and communication skills, and customer focus.
The survey also threw up a few other interesting findings:
- Four out of five respondents used the external market to determine pay levels, with nearly three-quarters of these using the median as their desired market position.
- Despite the need to compete for, and retain the best staff at a time of below inflation pay rises, the Barometer found that just over a quarter of respondents had a formal reward strategy.
- Half of respondents had either never undertaken an Equal Pay Audit or had not done one in the past five years. Less than four out of 10 had undertaken one in the past three years.
Finally, let’s end with a positive statistic – a 16% increase in the use of the living wage. The Barometer found that 62% of organisations surveyed – and more than ever from outside London – are paying the living wage. Positive steps forward for a sector that works with some of the country’s most vulnerable people.
This is the fourth annual Barometer survey. Split into two halves, part two will be launched on 16 February 2015 to look at HR trends and practices across the homelessness, care and social housing sectors.
Helen Giles in executive director of HR at homelessness charity St Mungo’s Broadway, and managing director at social enterprise HR consultancy Real People. She is one of the HR Most Influential practitioners 2014