University of Nottingham unveils new job family structure
The University of Nottingham has undergone a radical transformation to a performance-based reward system, accompanied by a job family pay structure, according to a new case published by e-reward.
Organisation profile
Name: The University of Nottingham.
Employees: 6,000 in the UK.
Locations: Nottingham, Malaysia and China.
Interviewee: e-reward interviewed the University of Nottingham’s Head of HR Policy and Projects, in May 2006.
Challenges
The University of Nottingham aims to "provide the finest possible environment for teaching, learning and research". But it is doing this in an increasingly competitive environment. The challenges facing the higher education sector in the UK are many and varied, including:
the globalisation of academic talent
a need to attract and retain exceptional people in the run up to the next research assessment, due in 2008
finding new income streams
the changing basis of student funding, bringing with it higher expectations of students that are contributing ever more to the cost of their tuition.
Reward reforms
Changes in the competitive and economic environment have coincided in the last few years with moves to modernise pay arrangements in the higher education sector. Two major reports undertaken in the late 1990s, the Dearing and Bett reports, identified the pressing need for change, including the importance of making salaries in the sector more competitive, and in providing equal pay for work of equal value.
Historically, under the national bargaining arrangements, negotiations had taken place separately with the sector’s seven recognised trade unions, giving rise to a multiplicity of pay scales and differing terms and conditions of employment across jobs of similar size.
HR strategy
In 2002, the sector’s funding body, the Higher Education Funding Council for England (HEFCE), required all higher education institutions to submit a human resources strategy. In formulating a strategy, universities were required to address a number of key areas, including:
recruitment and retention
staff development and training
equal opportunities - including job evaluation
staffing profiles
performance and reward management.
The University of Nottingham had already started along the path of change in the late 1990s. When its medical school was established in the 1970s, some of the new staff, although employed on a University of Nottingham contract, were on pay and conditions more aligned with the NHS. In particular, this resulted in the 500 technical staff working in the medical school having different pay rates, terms and conditions and promotion opportunities than the technical staff employed through the rest of the university.
Addressing pay disparities
By the late 1990s, the university had decided that it needed to address the most obvious pay disparities between technical staff, some of whom worked side-by-side but were on different employment terms. However, at this stage the work had not yet been placed in the context of an overall reward or human resources strategy - the objectives at the outset were simply to reduce and simplify the number of pay structures and local pay reviews for this group of staff.
By 2000, the university was starting to examine the broader picture and to develop a human resources strategy. So, the university was well placed to formalise its HR strategy for the HEFCE in 2002.
In fact, by then Nottingham had made significant progress in developing a technical staff job family and was looking further at how to pursue this approach across the university as an alternative to more formalised job evaluation. What's more, the university had also started to articulate a strong message about performance improvement and rewarding high performance to support its strategic objective of reinforcing its position as a major world-class player.
HEFCE made additional funding available to universities to implement their human resource strategies. The University of Nottingham used this opportunity to further develop and implement a new pay, grading and reward structure.
Standing out from the crowd
In many senses, Nottingham was ahead of the sector, both with respect to developing a response to the emerging national pay arrangements and in deciding to introduce a performance-based reward system. Many institutions were following the well-trodden route of full-blown analytical job evaluation for all staff, and were cautious about exercising the potential offered by the new national arrangements to reward contribution.
Nottingham was therefore faced with the prospect of standing out from the crowd by committing to a radical transformation to a performance-oriented culture, in a sector where there was little or no history of radical change and where there was a high degree of scepticism about the value of relating reward to performance amongst the unions and, in many cases, staff and management.
What you will find in this 25-page report
This case study describes the development path that the University of Nottingham followed, the challenges that they faced along the way and the learnings that the reward team has drawn from its work. In particular, our report examines:
objectives of the new integrated pay, grading and reward structure
incremental approach to implementation
job family structure and its objectives
job evaluation and the job matching process
using job evaluation to underpin the job families
designing the remuneration structure
implementing the new salary structure
measuring contribution through an assessment of achievement against goals
rewarding contribution
checks and balances - appeals and monitoring processes
communication and involvement
lessons learnt.
Some commentators and organisations call the Nottingham structure a career family approach to distinguish it from a job family approach where typically there is flexibility to apply different pay arrangements in each family.
Want to know more?
Title: “Implementing job families at University of Nottingham”, e-reward.co.uk research report no. 46.
Availability: The case study is published as part of an annual subscription (11 issues a year) to e-reward’s research report series. Visit the Research Report Zone to find out more.