Kent County Council (KCC) governs the majority of the county of Kent, and comprises twelve District Councils and more than 300 town and Parish Councils. The Council’s headquarters are based in Maidstone. The overall population of the KCC area (excluding Medway), as estimated by the Office for National Statistics (ONS)

in 2010, is 1.4 million. The largest local authority district is Canterbury with a population of 149,700 people, while the smallest is Dartford with a population of 92,000 people (KCC Research and Intelligence, 2012). KCC employs a total of 45,000 employees, including those working in schools, who account for almost two thirds of KCC’s workforce (30,500 employees). KCC is further divided into four main directorates and one executive department. These are the Communities Directorate which has the largest number of KCC’s workforce with 4,277 employees; Children, Families and Education

(4,179 employees), Adult Services Directorate (3,777 employees), Environment and regeneration directorate

(902 employees), and the Chief Executive’s Department

(1,870 employees). Sixty per cent of KCC’s workforce are part-time employees and 80 per cent are female

(KCC Reward Manager, 2006). KCC is controlled by the Conservative party (KCC, 2009). The continuance of conservative domination has been a main feature of Kent politics since the 1980s (Atkinson, 2001).

Trajectory of pay determination in KCC:
economic and political implications

Prior to the 1980s, similar to the rest of the public sector, pay in KCC was characterized by centralized negotiations, through collective bargaining, at national level between the local authority and trade union representatives (Levinson, 1971). Increments and progressions in salary were linked to seniority and length of service.
Since the economic recession of the 1970s and the election of the Thatcher Conservative Government in 1979, the government sought to control the expenditure of the public sector. In local government in particular, there was increasing financial pressure through curbing expenditure, and in particular rate capping, on local authorities. In an attempt to increase flexibility and extend discretion to local bargaining, KCC was one of the first authorities to opt out of national agreements (Sheldrake, 1988) and replace the traditional incremental progression system by a performance-related pay system.
A nationally determined pay system was seen as inflexible, hindering the Council’s ability to respond to the government’s expenditure control strategy (Griffiths, 1990) and meet labour market conditions and demands.
Employers in the area of Kent were faced with pressures to compete with the London labour market in terms of recruitment and retention, due to their proximity to London (White et al., 2001). KCC, along with a number of authorities in the south-east of England, sought the introduction of local agreements as a means of dealing with labour market pressure (Jackson et al., 1993). Additionally, traditional automatic incremental progression systems were seen as being too remote from the performance culture adopted by KCC (Griffiths, 1990). As a result, in 1990, KCC introduced ‘Kent Pay Plus’ as the new method of pay determination (Griffiths, 1990).
Kent Pay Plus was characterized by four main features.
The first key feature of this system was the move away from local bargaining. Collective bargaining in general, was not seen as a relevant method of pay determination for the Council, as members of unions represented only one-third of the total workforce (KCC Reward Manager, 2006). Yet, the rights of recognized trade unions to negotiate conditions of service were maintained (Griffiths, 1990). The second feature was the introduction of a new flatter grading structure. The third feature of ‘Kent Pay Plus’ was that the Hay system of job evaluation at KCC was used to provide comparability of jobs at KCC with similar jobs in the region. Finally, there was a move towards a performance-based system and the introduction of PRP. Joining the Kent Pay Plus system was entirely voluntary for employees (Griffiths, 1990). With regard to PRP, individual performance was based on individual appraisals and assessed against three levels of performance ratings whereby levels one and two resulted in no pay progression (KCC Reward Projects and Development Manager, 2006). According to the KCC Reward Projects and Development Manager (2006), the system was partially budget-driven and was influenced by whether managers did, or did not have, enough money to reward those who they thought deserved the top-level assessment rating. Additionally, there was limited guidance as to how to measure performance, resulting in a lack of clear measurement against which employees were assessed, and, a lack of high-level moderation of the assessment results. For instance, managers who felt their team did well could award them a level 2 increment, but may not have had clear action plans or performance targets against which they could measure the assessment. Decisions regarding pay were perceived by employees as being fairly arbitrary. According to employees who were employed by KCC during that period (1990–5), PRP created inequalities and failed to measure all aspects of the job, particularly for those in lower grades (KCC Reward Manager, 2006). Additionally, the system was seen as remote by those at the top of their grades because it lacked any additional rewards.
Overall, PRP was seen to lack the consistency in measurement required of an appraisal system (KCC Reward Projects and Development Manager, 2006). As a result, not all managers engaged with the system, and it was abolished in 1996.
In 1996, KCC reverted back to the traditional, automatic, annual increments, where employee progression was based on length of service without linking to any formal performance review. The pay structure consisted of 12 grades for employees ranging from A to L (L–D included senior level employees and A–D included lower level employees – some jobs in grade D overlapped).
The eradication of PRP at KCC coincided with the loss of Conservative party control over the council from 1993 to 1997. During that period the council was under the control of a coalition of Labour and Liberal Democrats.
Three years after the Conservatives’ regained control over the council, KCC sought further changes to its grading structure as well as pay determination methods.
A new pay strategy – total reward strategy, was agreed in 2003 and introduced in 2005.

Total reward strategy: key features and objectives

KCC Total Reward Strategy has three key features. The first is the introduction of single status for former manual workers with the aim of harmonizing pay and terms and conditions of employment between manual and nonmanual workers. The second feature of the total reward strategy is the implementation of a new approach to job evaluation based on job families and profiles. The KCC Reward Manager explained that the purpose of developing job families is to enable individuals to compare their grades and roles across KCC and to see a bigger and clearer picture of their own progression within their ‘family’. Linked to the new job evaluation system was the introduction of three additional grades, with the aim of shortening the length of, and minimizing the overlap between, job grades. The number of pay bands changed from 12 grades (A – L) to 15 grades (KS1 – KS15)
(see Figure 6.1).
Equating to each of these 15 grades were 15 job profiles. Job analysis and job evaluation defined the relative difference between grades based on four key areas: problem-solving and accountability, skills and knowledge, supervision and management, and competence.
The third feature of the total reward strategy is the introduction of a new PRP system – TCP, the most fundamental element of the total reward strategy (KCC Reward Manager, 2006).
The KCC reward strategy had two main sets of objectives:
recruitment, retention and recognition, and broad organizational change. Within the objective of broad organizational change, KCC sought structural and cultural change. With regard to structural change, KCC aimed to reduce bureaucracy, through the introduction of a new grading system and pay structure.
With regard to cultural change, the total reward strategy was perceived as a tool for promoting a performance oriented culture through shifting the focus from performance outcomes to performance input (KCC Reward Manager, 2006). TCP intended to achieve this shift through the integration of behavioral competencies into the performance assessment criteria of TCP (KCC TCP Guide, 2005)........

Question

1 Discuss the implications of the external environment on pay determination in KCC.
Here students can discuss the economic and political pressure placed on KCC. Students should also mention the role of collective bargaining and unions in the acceptance/rejection of PRP plans.
2 Considering the demographic profile of KCC’s workforce, what do you think the impact of the system will be on internal alignment and equity?
Students should examine how part-time workers and women can be disadvantaged by the system 3 Assess the alignment of TCP with the Council’s strategy and culture.
Students should highlight the difference between private and public sector culture. Did KCC adopt a best practice or best fit approach? How can the long term projects be measured? Wider contribution etc…
4 Compare KCC’s old reward system Kent Pay Plus with the new Total Reward Strategy. How effective/ successful do you think the new system is?
There are four main differences: phased implementation; total reward package (raising awareness of employee's benefits); input performance measures in TCP; and, moderation process. However, students should also note the possible negative implications of those four features of the new system. For example, how does conducting a statistical moderation affect performance assessment results, fairness? How can input measures be SMART? Etc….