The purpose of our reward system is to provide remuneration and other rewards, which attract, retain and motivate the people we need to deliver on our vision. As managers, our role is to ensure our people are appropriately rewarded through their remuneration and the other elements of our total rewards approach. Set out below is the information and guidance you need to play your part in rewarding our people for their contribution.
Our total reward approach
There is more to life than money. To encourage, recognise and support our team we offer five programs in addition to remuneration. We support people’s well-being and development and provide a range of valuable benefits. We also strive to provide a culture in which our team can enjoy themselves, thrive and do their best work. In addition, we enable people to recognise and reward each other’s contribution to living our values and achieving our Vision. Hover over the icons below to see the detail of these programs.
Remuneration
The purpose of our remuneration system is to reward people fairly for their responsibility, performance and wider contribution. It’s about attracting and retaining and motivating people to help us achieve our vision. Set out below are the principles of our system and an overview of how it works including how you play your important role.
Remuneration - guiding principles
- Transparent and understood by all: People must know how it works and see how outcomes are achieved – no black boxes
- Sustainable: Attracts, retains and motivates people over the long term.
- Objective: While performance appraisal is inherently subjective, we make full use of objective measures and moderation to achieve fairness.
- Fair and consistent: The Policy is fair in that similar inputs will yield similar outputs.
- Affordable: The Policy balances a commitment to internal, external and performance equity with the organisation’s need to live within its means.
- Salaried roles: Remuneration is driven by responsibility (job size), contribution and performance. Consequently, good performance is rewarded and poor performance is not.
- Waged roles: For union members covered by our collective agreements remuneration is driven by collective bargaining plus an annual individual review of performance, contribution and responsibility. For those covered by individual agreements, an annual remuneration review considers market movements as well as performance, contribution and responsibility.
Your responsibility
- Understand our remuneration system and your role
- Explain our system so that your team know what they need to do to grow their remuneration
- Really understand the performance, contribution and potential of your team members
- Talk regularly with your team about their contribution, connection, capability and career
- Make well researched and considered Talent Scenario assessments
- Ensure your remuneration recommendations are consistent with our principles (above)
- Discuss your remuneration review outcomes with your team members – take responsibility for these outcomes
- Deal promptly and effectively with requests for pay rises outside the annual review process
Organisational Development and Capability team's responsibility
- Source and interpret market data for our annual review
- Facilitate the remuneration review process
- Undertake job evaluation
- Advise on Talent Scenarios
- Provide remuneration spreadsheets and guidelines to managers
- Support our moderation processes
- Prepare letters communicating remuneration changes and action these with payroll
- Monitor the effectiveness of our system and recommend improvements
- Advice and support to managers
Our remuneration system – salaried roles:
Set out below are the key elements and machinery of our remuneration system for salaried people.
What is base salary?
It is the person’s basic remuneration, paid fortnightly without the inclusion of any additional payments or benefits.
What is total remuneration?
Applies and describes the total package value to the employee of salary and all benefits (e.g. employer contributions to Council’s preferred superannuation provider and/or Kiwi Saver) including those by way of salary sacrifice (e.g. additional weeks holiday or private vehicle use).
What is salary sacrifice.
Our
salary sacrifice for leave policy allows people to trade a salary increase for additional leave or, in certain circumstances, for private use of the council vehicle.
We use job evaluation to size and compare jobs
We use a common
job evaluation (Strategic Pay SP5) approach to assess the size of jobs so we can compare remuneration internally and against the external market. Job sizing measures all jobs against five factors (accountability, expertise, job complexity, relating to others and responsibility for people).
Your job sits within a remuneration range:
Once we know a job’s size, we identify a remuneration range for that job (and other jobs of similar size). Ranges reflect lower remuneration for new and developing people and higher pay for those exceptionally skilled and effective in the same job. Each range has a midpoint which equates to the remuneration a competent person performing to our expectations in that job would be paid. Our pay ranges spread from 80% to 115% of estimated market value. Salaries may be outside this range for exceptional circumstances with the approval of the CE. Note: people at or above the top end of their range may receive lump sum payments instead of annual percentage increases. Other than this, we don’t pay bonuses.
Your talent scenarios strongly influences your remuneration
Talent scenarios are a holistic evaluation of each team member, reviewed annually and used for both development and remuneration purposes. These manager led assessments, which include 360° feedback, think about both past and future performance and place a team member at one of four levels (Talent Scenarios) ranging from
Outstanding Contributor to
Needs Improvement. These assessments shape individual development plans and remuneration recommendations. For example, a
Talent Scenario of “
Valued Contributor” is considered to be in the performing zone and carries total remuneration between 95-105 % of the range for their job.
What drives annual rem reviews?
Annual salary reviews take account of the organisations performance/budget, external benchmarking (i.e. what the market pays for similar roles), internal benchmarking (what we pay similar roles), the individual’s talent scenario and any retention concerns.
What influences a manager’s remuneration recommendations?
Our annual review of both Talent Scenario and remuneration levels are manager led activities. We rely on managers to know these systems and make robust assessments and recommendations.
Our moderation process ensures fairness and consistency
Both the Talent Scenario assessment and annual remuneration recommendation for each team member are reviewed against all other recommendations before being finalised. This is to ensure fairness, consistency and objectivity both. Ultimately remuneration changes are reviewed by the executive team and approved by the CE.
What drives salary progression?
People progress by change in their Talent Scenario or promotion. This happens through growing their value to the organisation against the 4C’s – Contribution – Capability – Connection – Career. Our talent scenario based remuneration guidelines, above, show what changes are required in the 4C’s to enable someone to progress to a higher talent scenario and related salary range.
Annual salary review process
P&DP is a year round process making our setting of objectives and priorities in a way that is more agile and responsive to changes around us. The diagram below explains the key elements of the process as they happen through the year. It also explains the link between P&DP and our remuneration review process, which is driven by the talent scenario assessments produced by P&DP around August each year.
1. While PDP is a year round process it is vital we use it to align team and individual effort behind the business plans and budgets set for each financial year and which are derived directly from our LTP. By April each year, these plans and budgets are close to final.
2. Within council’s overall annual plan and budget, group managers and their teams have priorities, plans, budgets and KPIs for each area of our business. As these are confirmed with the executive team and CE they flow, through our In Formation process into the priorities, plans, budgets and KPIs of each team within the Group.
3. While our In Formation process operates throughout the year it’s particularly important as we prepare for the start of a new financial year that we engage with our teams to ensure team and individual effort is aligned with and will deliver on the organisations annual plan. This allows managers to involve their teams in modifying existing mission, priorities, KPIs, objectives, plans to align with our annual plan. In Formation activities include discussing and agreeing what the team priorities will be and how they will be achieved.
Talent and Remuneration Review Meeting. The individual talent scenario you assigned to each employee, is then reviewed and moderated at a Talent Review Meeting, convened by the Group Manager and facilitated by a member of the Organisational Development & Capability Team. The outputs from this meeting are a group-moderated Talent Scenario Assessment for each employee. These assessments are then used to create succession plans for key roles, to inform individual development plans, and as the basis for remuneration review recommendations. To begin the remuneration review, Organisational Development and Capability prepare spreadsheets indicating budget available and identifying for each employee; current remuneration, talent scenario, current position in range and asking managers to recommend remuneration changes (salary or lump sum). Managers then make their recommendations which are moderated and approved by their Group Manager and then by the executive. If this moderation process results in any changes to the recommendations approved by the Group Manager these will be discussed by the group manager with the manager who made the original recommendation.
Report back to the employee. The Organisational Development & Capability team then generate individual letters for each employee, with the letters provided to the managers for distribution to their employees in one-on-one meetings. On receipt of these letters, you hold a one-on-one meeting with each team member to discuss their talent assessment and any remuneration changes and talk about their individual development plan
Remuneration Changes. Remuneration changes are implemented by payroll. Remuneration changes resulting from this process generally take effect from October but are typically backdated to 1 July.
The annual wage review process
Our wage review process for non salaried people varies depending on whether they are covered by collective agreements or individual agreements:
- Employees covered by collective employment agreements (CEAs). The mechanism for annual reviews for people covered by our CEAs is set out in their CEA. Essentially they receive any annual increases negotiated in those agreements. In addition, they receive an annual wage review taking into account performance, contribution, growth and capability and any changes in role or responsibility.
- Waged employees on individual employment agreements (IEAs). People on IEAs also receive an annual wage review. Considerations include their performance, contribution, and growth in capability, any changes in job responsibility plus changes in the relevant remuneration market.
Handling requests for pay rises
The question of pay rises is dealt with at remuneration review time, but team members sometimes ask for a pay rise between cycles. It is important to respond promptly and resolve these issues. Generally, remuneration reviews outside the annual cycle will not be available however, you may make a case for a change in remuneration for your team members. Examples might be where a person has taken on additional responsibilities, or someone new in a role has made excellent progress in six months and it’s appropriate to review their remuneration at that time. In some cases, we commit to these reviews in the letter of offer. The application accompanied by evidence and/or justification for the increase should be discussed with and must be approved by your group manager. Once approved Organisational Development and Capability will action any increase made. Your response to a request for a pay rise should depend on the reasons given for wanting a pay rise:
Requests based on change to job content
For changes in job content to warrant a pay increase they need to represent a significant increase in responsibility, job complexity, decision-making authority, skill or experience required. Simply adding more work of a similar level of complexity, responsibility doesn’t make the job ‘bigger’. For example if the size of the person’s team increases from three to four that probably doesn’t make it a significantly bigger job. If during the year, somebody’s job becomes substantially more complicated or includes substantial increases in responsibility then we would
re-evaluate that job, using
Strategic Pay’s 5 Factor Job Evaluation Methodology and that process might identify that remuneration increase is appropriate.
Requests based on an external job offer received
Occasionally team members say they have an external offer, for more money and ask if you will match it for them to stay. Ask for information from the team member about the role so you can gain some understanding of the position compared to the team member’s current role. Discuss these requests with your manager and Organisational Development and Capability. It’s also important that you emphasise to them the various benefits and rewards of working for us. Often people forget about the many benefits we offer and simply compare remuneration. Experience shows that most often these team members will leave soon after whatever your response.
Requests based on their being a high performer
These should be dealt with at the next annual review.
