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Equal Pay Audit - summary report for pub 12 07 04

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Equal Pay Audit - summary report for pub 12 07 04

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									            SCOTTISH PARLIAMENTARY STAFF
                   EQUAL PAY AUDIT

                           SUMMARY REPORT

                                  JUNE 2004
Executive Summary
   This summary report concerns an Equal Pay Audit commissioned by the
   SPCB and carried out by independent human resources consultants Towers
   Perrin during February to April 2004.

   The audit comprised a series of tests designed to detect areas of equal pay
   risk within the SPCB’s existing pay system for men and women doing equal
   work. Additionally, it tested the current pay and grading structure and any
   links with the performance management system.

   The audit found no evidence of equal pay risk in the vast majority of areas
   tested. Whilst no area was found to be at serious risk of non compliance with
   the Equal Pay Act 1970, four areas of limited concern were identified. The
   areas of greatest concern were known previously to the Personnel Office and
   actions to address them were already included in the office’s forward plans
   prior to the audit being carried out.

   In addition to reporting the findings of their audit, the consultants also made a
   series of recommendations which address both the areas of concern they had
   identified as well as other observations on the Parliament’s existing pay
   policies, procedures and practices made during the course of their
   investigations.

   A proposed action plan drawn up in response to these recommendations
   concludes the summary report. Additionally, it provides a focus for equal pay
   related discussions with both the SPCB and the Trade Unions in those areas
   highlighted by the audit.




                                           1
1. Background to Audit

   1.1    As part of its commitment to equalities issues as set out in its own
   Equalities Framework, compliance with the 1970 Equal Pay Act and in
   accordance with pay management best practice, the SPCB acknowledges the
   importance of achieving equal pay for its employees doing equal work. It also
   acknowledges that the pay system it operates should be transparent, based
   on objective criteria and free from gender bias.

   1.2    In recognition that these criteria are best tested by an independent and
   expert body, the SPCB invited qualifying organisations to tender for a contract
   to carry out an equal pay audit of all its employees. Additionally, it was
   specified that the audit be carried out in accordance with the equal pay review
   model recommended by the Equal Opportunities Commission. A contract was
   subsequently let to Towers Perrin, a leading human resources consultant, in
   February 2004.

   1.3    The audit and delivery of a final report was carried out during the period
   February to April 2004. This report is both extensive and technical.
   Additionally, it contains sensitive information which could identify individual
   members of staff. An abbreviate version of the report therefore follows
   together with an outline action plan to address the areas of concern.


2. The Audit
   Aims

   2.1     The overall aim of the audit was to test if the SPCB’s existing pay
   system, including its reward mechanisms, is in line with current equal pay
   legislation. In particular, the audit sought to:

         •   review the pay of men and women doing equal work as defined by the
             Equal Pay Act of 1970 and the Equal Opportunities Code of Practice on
             Equal Pay; and
         •   test the pay and grading structure adopted by the SPCB in April 2002,
             including any links between the performance management system and
             rewards such as pay progression and variable pay opportunities.

   2.2       Additionally, the contractors were tasked with:

         •   explaining any identified equal pay or reward discrepancies; and
         •   proposing solutions for addressing any discrepancies which were not
             objectively justified.




                                             2
   Approach

   2.3    Using SPCB provided data on 455 employees (including 20 employees
   on secondment from the Scottish Executive i.e. those secondees on SPCB
   pay terms and conditions) current at January 2004, a series of 21 individual
   tests were carried out by Towers Perrin consistent with the scope of the audit.
   A complete listing of the tests performed together with details in each instance
   of the data sample size used, the main findings and where applicable, the
   recommended actions is provided in Annex C.

   2.4    The contractors were supported in their work by a project team which
   included the Parliament’s Equalities Manager. Both the contractors and the
   project team reported directly to a project board chaired by the Head of
   Personnel.

   2.5   Following evaluation of each test, Towers Perrin used the traffic light
   system to indicate the degree of risk of equal pay compliance/non-
   compliance. The risk attributed to each traffic light category is as follows:

   Green                   Indicates no evidence of equal pay risk in an area of test
                           or investigation.

   Amber/Green             Indicates minimal equal pay risk in an area of test or
                           investigation which merits a minor adjustment to existing
                           practices.

   Amber                   Indicates risk of equal pay non-compliance in an area of
                           test or investigation but its impact is small and it can
                           be easily addressed and made compliant.

   Red                     Indicates equal pay non compliance in an area of test or
                           investigation, its impact is significant and the process for
                           eliminating the risk involves substantial change that is not
                           easily undertaken.


3. Results of Audit Tests
   3.1       The findings of the audit were largely very positive. In particular:

         •   17 of the 21 areas tested scored a green light meaning no evidence of
             risk to the SPCB was found in terms of equal pay.

   3.2       Of the remaining 4 tests:

         •   3 areas tested scored an amber/green light, indicating that they have
             the potential to pose a small equal pay risk for the SPCB




                                              3
      •   1 area tested scored an amber light, highlighting a risk of equal pay
          non–compliance, that would have only a small impact and which is
          easy to rectify.

3.3       Most importantly, no test scored a red light.

3.4   Listings of the tests applied grouped by the assessed risk are given
below. Full details of each test are given by numerical order in Annex C.

Green Light Risk

3.5       The following tests found no areas of equal pay risk.

      •   Test 1        Starting salary and bonus pay documentation
      •   Test 2        Job description recording and the link to the evaluation
                        system
      •   Test 3        Organisational review of gender split
      •   Test 4        Grade population – by gender
      •   Test 5        Job Family / Office analysis
      •   Test 6        Base pay distribution within grades
      •   Test 7        Salary levels of males and females
      •   Test 9        Starting salaries
      •   Test 10       Part time workers
      •   Test 11       Promotion – total population
      •   Test 13       Pay rise by grade
      •   Test 14*      The link between bonus and performance
      •   Test 15*      Performance scores
      •   Test 18       Benefits
      •   Test 19       Training
      •   Test 20       Equal value and job evaluation review
      •   Test 21       Maternity provisions

* These tests will be repeated during August 2004 using the first data
available from the revised performance management system (i.e. for the
period March 2003 – April 2004). The test results will be provided as a
supplement to the main report.

Amber/Green Light Risk

3.6    The following tests indicated areas of minimal equal pay risk, which
merit minor adjustments to existing practices.


      •   Test 8        Comparison of career/salary progression
      •   Test 12       Salary upon promotion
      •   Test 16       Paid overtime




                                           4
   Amber Light Risk

   3.7    The following test indicated a risk of equal pay non-compliance which is
   easy to rectify.

      •   Test 17      General allowances and additional payments

   3.8      Collectively, the 4 tests which scored either amber/green or amber
   traffic lights indicate the areas of equal pay concern within the current pay
   system. In particular, they highlight to the SPCB where action needs to be
   taken in order to meet the objective of achieving equal pay for its employees.


4. Areas of Equal Pay Risk
   4.1   The audit identified 4 areas of concern in regard of equal pay risk within
   the Parliament’s current pay system. These are:

      •   Amber Risk The payment of general allowances for skills rewarded by
          the previous employer and pay supplements in recognition of the
          market value of specific skills. Both of these have equal pay/value
          implications.

      •   Amber/Green Risk The “leap-frog” effect of pay on promotion. Newly
          promoted staff can currently receive higher pay than experienced staff
          doing the same job.

      •   Amber/Green Risk A trend highlighted by the audit showing that
          women seem to be statistically more likely to be promoted in the more
          junior grades and men in the more senior grades.

      •   Amber/Green Risk    The distribution of paid overtime whereby
          proportionately women receive fewer overtime payments than men.

   4.2   More detailed information about the findings relating to each of these
   areas of risk is provided below in section 5.


5. Detailed Information on the Four Identified Areas of Risk
   General Allowances and Additional Payments (Test 17)

   5.2   Within the parliamentary staff organisation, allowances fall into four
   categories:

      •   those red circled from previous employment in the Scottish Executive ;
      •   official pay supplements dependent on function and experience;



                                          5
   •   individually negotiated supplements; and
   •   shift and responsibility allowances.

5.3     This test reviewed the distribution, according to gender, of all
allowances (other than overtime), throughout the audit population and
identified some basic equal pay/equal value risks. In particular:

   •   Of the red circled allowances, the typing allowances are all awarded to
       women. This is a potential risk as new recruits are not eligible for this
       allowance. Some recipients of the other red circled allowance, (the
       former ADP allowance) are also entitled to the SPCB IT Pay
       Supplement. The IT Pay Supplement is reduced to offset the amount
       paid in the red-circled allowance. This is a greater risk as technically
       each discrete element of the reward package can be compared in
       isolation.

   •   The majority of the allowances bill (over 55%) is based on general skill
       supplements to some staff in the Business IT Office, Media Office and
       Procurement Office. Around 35% of this is paid to females. These
       allowances were carefully considered before being introduced and
       were designed to respond to genuine job market factors and skill
       shortages. However, the audit has highlighted the importance of
       reviewing such allowances regularly to ensure that the SPCB does not
       face an equal value risk from employees in roles which score equally
       on the Parliament’s job evaluation system (TRIDAS) but which do not
       attract a premium.

   •   There are 2 instances of individual supplement negotiations within the
       organization entered into at the time of start up. This situation is both
       historical and unique a nd will not therefore re-occur i n the future.

   •   Review of the shift and responsibility allowances payable in Security
       did not highlight any risk associated with these payments.

The distribution of allowances (excluding legacy allowances and individually
negotiated supplements) amongst SPCB staff is illustrated in Table 5.3.1.




                                       6
Table 5.3.1 Distribution of Allowances Awarded by SPCB

               Skills Supplements                   Total
               Business IT                          £89,768
               Media Office                         £13,000
               Procurement Office                   £35,000
               Total Skills Supplements             £137,768

               Shift Supplements                    Total
               Security Office                      £87,424
               Total Shift Supplements              £87,424

               Responsibility Allowances       Total
               Security Office                 £4,640
               Total Responsibility Allowances £4,640


The Personnel Office was aware, prior to the audit, of some potential areas of
equal pay risk resulting from the payment of both SPCB and legacy
allowances. Whilst it had already planned to carry out a review of skills based
allowances during 2005 to address these particular issues the Personnel
Office was looking to the Equal Pay Audit to deliver some guidance and best
practice to assist this exercise.

Salary on Promotion (Test 12)

5.4    This test compared the base starting pay of those staff who received a
grade promotion during the 12 month period of the data sample. This test
focused on the pay individuals received following promotion to a new grade. In
particular the analysis showed:

   •   The SPCB’s current policy of increasing base pay by 12% or to the
       minimum of the new grade could lead to difficulties with an “equal
       value” or “like work” test especially when the staff promoted are at the
       top of their existing grade. Essentially, this can lead to a “leap-frog”
       effect in terms of pay for newly promoted staff over existing
       experienced staff doing equal work.

5.5   The Personnel Office became aware of this anomaly shortly after the
implementation of the new pay and grading arrangements in April 2002 and
looked to the equal pay audit to recommend options for resolving the issue.

Comparison of Career/Salary Progression (Test 8)

5.6    This test compared the salary/career progression over time for a
sample of men and women to assess whether one gender was statistically
more likely to have advanced in pay or grade terms. It found that:




                                       7
   •   Whilst there are many reasons why pay can vary over a long period
       (e.g. promotion/performance/market pressures) and the sample for this
       test was small (48 employees) there was a statistical difference
       between men and women and the progression of their careers during
       the period studied.

   •   In particular the women promoted were largely in the lower grades
       whilst at the more senior level it was the men who mainly gained the
       promotion. This is illustrated in Table 5.6.1.

Table 5.6.1 Comparison of Employees’ Current Grade with Starting Grade

  Grade upon joining (number in                    Current Grade
  audit sample)
  Women                                 1     2    3    4    5    6     7   8
              A1 (6)                    3     3
              A3 (5)                          2    2    1
              B1 (2)                                    1    1
              B2 (8)                                    2    4    2
              B3 (2)                                         2
              C3 (1)                                                    1
  Grade upon joining (number in                    Current Grade
  audit sample)
  Men
              A1 (6)                    4     2
              A3 (5)                          2    3
              B1 (2)                               1    1
              B2 (8)                                    5    3
              B3 (2)                                         1    1
              C3 (1)                                                        1


In view of the small sample size, especially amongst the senior grades, and
the other variables that can affect an individual’s pay over time, these findings
should be considered as indicative of a trend that needs to be monitored
rather than a risk area to be addressed directly.

Paid Overtime (Test 16)

5.7. This test reviewed the gender distribution of paid overtime hours
througho ut the audit population.

The findings, illustrated in Figure 5.7.1 show:

   •   whilst 46% of the workforce are women, only 24% of the paid overtime
       hours go to women workers.




                                        8
Figure 5.7.1 Comparison of Paid Overtime by Gender with Office Gender
Profile


                                               Percentage of hours allocated to males/females - selected departments


  100%




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   60%
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                                                                                                                                                                       Female % of overtime hours
   40%




   20%




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5.8    Additional analysis comparing the hours of paid overtime by gender
with the gender balance of the offices concerned, illustrated in Figure 5.7.1
shows:

                 •    Women make up nearly 40% of the Finance Office workforce yet
                 receive less than 20% of the overtime hours

            •    Women make up over 30% of the Business IT Office workforce
           and yet receive less than 10% of the overtime hours

            •    Women make up just under half the Official Report Office
           workforce and yet receive just over 10% of the overtime hours

            •    Men make up around 60% of the External Liaison Unit workforce
           and yet receive less than 10% of the overtime hours

             •     The remaining job families appear to have even overtime
           distribution.

It is stressed that the analysis took no account of “TOIL” – time off in lieu. This
may be the preferred choice of women workers and could be causing the
results to skew. There is presently no data available on “TOIL” to test this
possibility.


                                                                                  9
6. Recommendations Based on Audit Findings

   6.1    As part of their final report, Towers Perrin proposed a comprehe nsive
   set of recommendations. These address not only the areas of equal pay
   concern highlighted by their audit but also reflect their observations on SPCB
   existing pay policies, processes, procedures etc. made during the course of
   their work.

   6.2    Details of the individual recommendations made against each of the 21
   tests applied are given in Annex C


7. Next Steps
   7.1   An action plan, drawn up by the project team and indicating how those
   recommendations which have been accepted by the Head of Personnel will
   be addressed, forms Annex D of this summary report. This plan has been
   approved in principle by the SPCB <subject to SPCB approval> and will be
   discussed in detail with the Trade Unions.

   7.2     It is proposed that the areas of equal pay risks identified for action be
   prioritised as follows.

             1.   pay on promotion
             2.   allocation and payment of overtime
             3.   all pay allowances and supplements
             4.   career/salary progression

   7.3    Actions to address the equal pay risk of pay on promotion have been
   given priority in acknowledgement that the identified “leap-frog” effect needs
   to be rectified urgently in the interest of all staff that may be affected by this
   anomaly. It is anticipated that these particular actions will commence in the
   Autumn of 2004 and be completed by the year end.

   7.4    In prioritising all the remaining recommendations, consideration has
   been given to the complexity of the issues to be addressed and the likely
   related effort required to reach a resolution in each instance. Although no
   action is scheduled to commence before migration to Holyrood, all actions
   except one are expected to be completed by the Summer of 2005.

   7.5     Whilst the resources required to support the action plan are yet to be
   fully quantified, every effort will be made to complete all actions within the time
   period defined in the plan. Detailed costings will be provided to Directors, the
   SMT and SPCB, as appropriate, when considering in detail how these
   recommendations will be taken forward.




                                           10
                                                                          Annex C


LISTING OF ALL AUDIT TESTS AND FINDINGS

Test 1: Starting Salary/Bonus Pay Documentation

   1.1     Collectively the following two checks tested whether or not a valid audit
   trail exists for pay decisions. The two components were:

             (i) Selecting the last five employees who received offers to join the
             parliamentary staff organisation and ensuring their offers were
             documented and that the relevant policies and procedures were
             followed.
             (ii) Taking a sample of “exceptional” graded people and “unacceptable
             performance” people and reviewing the associated decisions and
             documenta tion.

   Audit Sample Size: (i) 5 employee records.
                          (ii) 7 Box 1 and 3 Box 4 employees.

   1.2       Audit Findings

   Risk Assessment: Green

   In both tests, proper documentation existed and policy and procedure had
   been followed.

   SPCB has put in place adequate checks and procedures to ensure a clear
   audit trail exists for pay decisions on starting salaries and the award of bonus
   payments.

   This will provide the necessary information to defend any challenges SPCB
   may receive on setting pay levels and the justification of both bonus and
   supplement payments made above the bottom of the appropriate salary scale.
   Line managers appear to be aware of the importance of following the defined
   process and all such decisions are made in conjunction with Personnel.

   1.3       Recommendations

         •   Keep all employee records for a minimum period of 5 years

         •   Regularly review process for paying new recruits more that the salary
             scale minimum on account of experience and record this supporting
             evidence




                                           11
         •   Continuing process of communicating recruitment policies and
             practices to all line managers especially those having such
             responsibilities for the first time

         •   Maintain existing process of documenting the award of bonus
             payments to provide an audit trail.

   1.4       Personnel Office Response

   Agree with the recommendations with the exception of point 3 which is
   irrelevant since these discussions are all managed by the Personnel Office.
   Furthermore, all managers sitting on recruitment panels receive appropriate
   training and up-to-date briefing.

             Action

             None required - existing practices and procedures meet the terms of
             the remaining recommendations.


Test 2: Job Description Recording and the Link to the
Evaluation System

   2.1 This test selected a sample of job roles and reviewed documentation of
   job description and job evaluation scores to ensure they were up to date and
   in place.

   Audit Sample Size: 5.

   2.2       Audit Findings

   Risk Assessment: Green

   The SPCB has a thorough and complete methodology for recording both job
   descriptions and job evaluation scores. This thorough approach is essential
   to the provision of a defence against possible equal value claims.

   2.3       Recommendations

         •   Review and update all job descriptions at least every other year to take
             account of any additional responsibilities connected to the role

         •   Continue to document appeals against existing evaluations

         •   Be aware that as more employees approach the top of the salary scale,
             an increasing number are likely to try to grow their both their job and
             the role.




                                            12
   2.4       Personnel Office Response

   Agree with the recommendations.

             Action

             None required - existing practices and procedures exceed
             recommendations.


Test 3: Number of Male v Number of Female Employees
   3.1    This test provides a general overview of the gender split between men
   and women in the organisation and is used as the benchmark for subsequent
   analysis.

   Audit Sample Size: 100% - all 455 employees covered.

   3.2       Audit Findings

   Risk Assessment: Green

   SPCB has a 55%:45% male: female split. From the data provided, there does
   not appear to be a risk associated with the staff profile of the whole
   organisation.

   3.3       Recommendations

         •   None.


Test 4: Grade Population – by Gender
   4.1     This test examines the gender split by grade, by ana lysing the
   distribution of men and women in the parliamentary staff organisation grade
   hierarchy.

   Audit Sample Size: 454 employees (Clerk/Chief Executive excluded).

   4.2       Audit Findings

   Risk Assessment: Green

   Overall the gender split in the organisation’s grade distribution is consistent
   with the general population split and presents no obvious evidence of gender
   imbalance.




                                           13
   4.3       Recommendations

         •   Continue periodic review of the gender split and investigate any gaps
             that may appear to ensure no underlying problems with recruitment or
             promotion.

   4.4       Personnel Office Response

   Agree with the recommendation.

             Action

             Directors will receive an annual breakdown of the composition of the
             organisation by gender.


Test 5: Job Family / Office Analysis

   5.1    A review was undertaken of the gender split within specific offices of
   the organisation e.g. Business IT, Security, Procurement, etc. by grade and
   gender.

   Audit Sample Size: 454 employees (Clerk/Chief Executive excluded).

   5.2       Audit Findings

   Risk Assessment: Green

   Men dominate some of the higher grades in some offices as do women in
   others there is no evidence to suggest any gender bias exists.

   5.3       Recommendations

         •   Carry out regular reviews of recruitment and promotion procedures for
             fairness within individual offices in particular, ensure gender make-up is
             not reinforced
         •   Monitor the frequent rotation of clerks/team leaders between
             Committee and Chamber Offices to ensure that all grades of men and
             women have the opportunity to work in both offices.

   5.4       Personnel Office Response

         Point 1 is irrelevant as recruitment and promotion procedures are a
         Personnel function and are not carried out at the level of individual offices.
         However, the findings would suggest that external recruitment should be
         favoured over internal means of filling vacancies if existing gender bias
         within particular offices is to have a better chance of being addressed.
         Agree with point 2.



                                             14
             Action
             Revise the procedures for filling staff vacancies to enable gender
             balance to be taken into account when considering whether to use
             external/internal recruitment methods.
             Put in place a procedure to monitor the gender and grade balance of
             staff rotating between Committee and Chamber Office.

Test 6: Base Pay Distribution within Grades

   6.1    This test explores whether men and women working in similar roles at
   similar grade levels are paid equally.

   Audit Sample Size: 454 employees (Clerk/Chief Executive excluded).

   6.2       Audit Findings

    Risk Assessment: Green

   For most of the grades, the distribution of pay for men and women is evenly
   spread and the risk is low. Howe ver, the data for grade 7 suggests that men
   on average sit lower than their female colleagues in the salary scale but this
   was explained as being service related and that the individuals will catch up
   over time so there is no risk.

   6.3       Recommendations

         •   None.


Test 7: Salary Levels of Males and Females
   7.1    This test checks if men and women in similar roles at similar grade
   levels are being paid equally i.e. a test for glass ceilings.

   Audit Sample Size: 454 employees (Clerk/Chief Executive excluded).

   7.2       Audit Findings

   Risk Assessment: Green

   Based on the distribution of men and women in the parliamentary staff
   organisation, similar median salary levels within each grade would be
   expected. However, the m     edian salary for male incumbents in grade 7 is
   below that of females. The difference in median levels is explained by the fact
   that the women have a longer level of service and all women in this grade are
   at the top of the salary scale whereas the men are dispersed throughout the
   grade.



                                          15
   7.3       Recommendations

         •   None.


Test 8: Comparison of Career/Salary Progression

   8.1    This tests career/salary progression over time for men against women
   to see if one gender is more likely to advance in cash or grade terms.

   Audit Sample Size: 48 employees were found to have similar employment
   histories.

   8.2       Audit Findings

   Risk Assessment: Amber/Green

   This test is problematic as there are many reasons why pay can vary over a
   long period i.e. promotion/performance/market pressures. The selected 48
   employees had a similar profile at the chosen date. The test indicated that the
   pay progression system will ensure that the minor differences in pay will be
   equalised and therefore pose no risk.

   However, there seems to be a statistical difference between men and women
   and the progression of their careers during the period studied. This is
   illustrated in section 5.6 Table 5.6.1 of the main text.

   The existing system of awarding a pay rise of 12% on promotion leads to an
   anomaly when a member of staff at the top of a salary scale “leap-frogs” a
   more experienced colleague in the next grade. The result is a shorter
   progression time to the top of the salary scale for such newly promoted staff
   compared with the more experienced staff member who can not catch up until
   they themselves reach the top of the salary scale.

   8.3       Recommendations

         •   Put in place a mechanism to regularly review staff promotion statistics
             and account for any irregular patterns which may emerge
         •   Review existing policy of awarding a 12% pay rise on promotion and
             take into consideration the individual’s potential to move through the
             grade to a substantially higher salary as a significant reward in itself for
             promotion
         •   Consider awarding a 5% non-consolidated bonus in recognition of
             promotion rather than a 12% pay rise which is embedded in the system
             for all future pay increases
         •   Consider recalibrating salary scales over time to achieve minimal
             overlap. For example freeze the maximum levels and increase the


                                              16
             minimums until catch-up is achieved. This requires to be co-ordinated
             with market testing to ensure the pay structure remains competitive in
             the local market.
         •   Future pay progression should involve detailed scenario modelling to
             eliminate any potential problems before they arise.

   8.4       Personnel Office Response

   Findings accepted, it is important to note that the sample size in relation to
   promotions in the higher grades is tiny. Recommendations noted.

   There is no doubt that the existing rules for determining starting pay on
   promotion need to be reviewed and these recommendations for possible
   changes will be explored with the TUS in negotiation.

             Action

             Directors will receive an annual breakdown of staff promotion statistics.

             Discussion will be opened with the TUS in Autumn 2004 to revise the
             current arrangements for determining starting pay on promotion.

             Future changes to the pay system will be more fully modelled. This
             requirement will be built into the specification for any future HR system.


Test 9: Starting Salaries

   9.1     Test to see whether there is a gender bias in the award of sta rting
   salaries above the minimum of the salary scale, the current stated pay policy
   for starting salaries of new joiners.

   Audit Sample Size: data on 35 new starters reviewed.

   9.2       Audit Findings

   Risk Assessment: Green

   The results indicated that men are more likely to receive a higher starting
   salary than women upon joining but Personnel had justified the increase in
   every scenario as being due to a higher than expected level of experience
   amongst the appointees.

   9.3       Recommendations

         •   The process for paying candidates more than the salary scale minimum
             on recruitment due to experience should be reviewed regularly




                                             17
         •    Maintain current system of demanding supporting evidence before a
              higher starting salary is awarded as imported pay differentials from
              external organisations can pose an equal pay risk. Documentation of
              decisions remains critical.

         •    Starting salary policy should be explicitly communicated to all potential
              candidates to avoid false expectations on their part and ensure
              candidates do not feel in a position to negotiate a better deal.

         •    Salary ranges should be reviewed regularly to ensure they are broadly
              representative of the market place.

   9.4       Personnel Office Response

   The recommendations are noted.           However, the process for paying
   candidates more than the salary scale minimum on recruitment due to
   experience is reviewed regularly and each and every such decision must be
   signed off by either the H  ead or Deputy Head of Personnel. The starting
   salary policy is already explicitly communicated to all potential candidate and
   the salary scales are reviewed regularly to ensure they are broadly
   representative of the market place.

              Action

              None – other than to maintain and incrementally improve existing
              practices and bear these recommendations in mind when implementing
              the planned review of recruitment.

Test 10: Part-time Workers

   10.1 This tests if treatment of part-time workers is equal to that of full-time
   workers. Part-time workers are usually female therefore, any differences in
   their treatment has the potential to be an equal pay issue.

   Audit Sample Size: 23 Part-time workers were compared with the full-time
   population.

   10.2       Audit Findings

   Risk Assessment: Green

   Based on the data provided, the analysis showed that when drawing
   comparisons using the full-time equivalent pay rate, part-time staff are paid
   the same, if not slightly higher that their full-time counterparts.

   10.3       Recommendations

         •    None.




                                             18
Test 11: Promotion – Total Population

   11.1   This test compares the number of men and women promoted during
          the period of the date sample (excluding temporary promotions).

   Audit Sample Size: 18 employees who were promoted part way through the
   progression year.

   11.2   Audit Findings

   Risk Assessment – Green

   Promotions are available to staff of different offices at different points and
   there can never be a uniform pattern. However, within the statistics reviewed,
   there is no indication that one gender has better promotion prospects than the
   other within the parliamentary staff organisation.

   11.3   Recommendations

      •   Personnel Office should continue to monitor promotion statistics for
          gender bias within the parliamentary staff organisation

      •   Performance management reviews should offer clear guidance to
          employees on the goals and targets to be achieved to make them
          eligible for promotion

      •   Employees who have failed a promotions board several times, should
          be provided with feedback on the decision.

   11.4   Personnel Office Response

   The recommendations are all consistent with current Personnel practice.

          Action

          None.


Test 12: Salary upon Promotion

   12.1 This test checks the actual pay staff receive once they have been
   promoted into a new grade.

   Audit Sample Size: 18 promoted staff reviewed.

   12.2   Audit Findings

   Risk Assessment: Amber-Green


                                        19
   The risk assessment indicates the pay progression mechanism does appear
   to have a risk associated with it. In particular, the existing system of giving a
   12% pay rise on promotion may cause problems in respect of “equal value” or
   potentially “like work” comparisons. The problems are accentuated between
   grade 6 and 7 by a significant overlap in the salary scales of these two
   grades.

   12.3   Recommendations

      •   Change the current policy of awarding a 12% salary increase on
          promotion to avoid employees “leapfrogging” colleagues already in the
          role
      •   Consider adopting the approach that promotion provides an opportunity
          to increase pay in the future by moving through a higher salary scale
          rather than an automatic pay rise
      •   Alternatively, consider moving promoted staff to the grade minimum for
          the new scale or to the next point if this has been surpassed
      •   Provide a 5% non-consolidated recognition bonus rather than a 12%
          pay rise
      •   Recalibrate salary scales over time to achieve minimal overlap

      •   Future pay progression mechanisms should involve detailed scenario
          modelling to identify any potential problems.

   12.4   Personnel Office Response

   These recommendations echo those given in response to the findings of audit
   test 8 in respect of employee career/salary progression which was also
   highlighted as a risk area (level Amber-Green). This overlap illustrates an
   urgent need to address this particular pay anomaly which is already known to
   the Personnel Office. The recommendations for addressing the issue are
   noted and will be a useful basis for our discussions with the TUS on this
   matter. Our longer term pay strategy needs to address the wider issue of
   reducing or eliminating overlap in the salary scales.

          Action

          Discussion will be opened with the TUS in the Autumn to revise the
          current arrangements for determining starting pay on promotion.

          The need to reduce or eliminate overlap in the salary scales will be
          taken into account in our planned review of our current HR Strategy.


Test 13: Pay Rise by Grade
   13.1 This test compares the average pay rise on 1 August 2003 for all men
   in each grade against those of all women.


                                          20
Audit Sample Size : 216 individuals who were present on the 1 August 2002
and 2003.

13.2   Audit Findings

Risk Assessment: Green

All pay points rise by a specified amount in August each year. Analysing
changes in pay occurring from August 2002 to August 2003 taking into
account progression pay increases, no risks have been identified.

13.3   Recommendations

   •   Maintain current system and benchmark a selection of roles to ensure
       salary ranges remain competitive

   •   Maintain a rigorous appeals process against job evaluation scores

   •   Develop alternative ways of engaging with staff appealing against job
       evaluation scores and consider introducing recognition awards other
       than promotion

   •   Ensure at least one other member of the Personnel Office is familiar
       with the job evaluation methodology to cover for Deputy Head of
       Personnel and leave the Head of Personnel to handle appeals.

13.4   Personnel Office Response

The recommendations are noted and largely reflect current Personnel Office
practice.

Salaries are normally benchmarked on an annual basis but this is not required
at the moment because of the current three-year pay deal. The SPCB has
asked for the current benchmarks to be reviewed with a view to having more
regard to counterparts in the public sector.

With regard to reward, our current HR Strategy already commits the SPCB to:

        “Developing appropriate links between performance and reward,
       including developing innovative non-financial rewards and promoting
       the special bonus scheme in a way that that rewards individual and
       team performance in a timely manner”.

The Policy Development Officer has already been trained to use the job
evaluation methodology and does so regularly.




                                     21
          Action

          Conduct the planned review of pay benchmarks.

          Continue to explore and propose new/additional staff reward schemes
          as provided for in our HR Strategy.


Test 14: The Link between Bonus and Performance
   14.1   The test compares the average bonus payments of all men in each
          grade against those of all women and checks if the highest bonus
          correlates with the highest performance appraisal scores.

   Audit Sample Size: All staff are covered by existing rules.

   14.2   Audit Findings

   Risk Assessment: Green

   Currently there is a low risk for performance bonus. A new performance
   management system is currently being implemented. The risk from this
   system will be assessed once the performance marking and bonus setting is
   finalised in May/June 2004.

   14.3   Recommendations

      •   Continue to link bonus payments to performance management scores

      •   Repeat this test using the first data available from the revised
          performance management system i.e. for the period March 2003 – April
          2004 to check for any change in the risk level.

   14.4   Personnel Office Response

   Agree with recommendations .

          Action

          Provide new data sample from returned performance management
          reports 2003-2004.


Test 15: Performance Scores

   15.1 This test compares the average performance scores within the
   appraisal system of all men in each g rade against those of all women.



                                          22
   Audit Sample Size: 401 staff reviewed i.e. all those in receipt of a score during
   the period of the data sample .

   15.2   Audit Findings

   Risk Assessment: Green

   The distribution of high and low performance or box mark scores showed that
   neither gender is more likely to achieve a higher or lower assessment. From
   an equal pay perspective, the existing performance management system and
   the distribution of box marks generated show no associated risk. A new
   performance management system is currently being implemented, the data
   from this system will be analysed once the results of the performance marking
   and bonus setting is compiled by the Personnel office in June/July 2004.

   15.3   Recommendation

      •   Repeat this test using the first data available from the revised
          performance management system i.e. for the period March 2003 – April
          2004 to check for any change in the risk level.

   15.4   Personnel Office Response

      •   Agree with recommendation.

          Action

          Provide new data sample from returned performance management
          reports 2003-2004.



Test 16: Paid Overtime

   16.1   This test reviews the distribution of overtime hours throughout the audit
          population on a male versus female basis.

   Audit Sample Size: All those in receipt of overtime (168).

   16.2   Audit Findings

   Risk Assessment: Amber/Green (after further investigation)

   Just under one quarter of the overtime hours go to women (24%), yet 46% of
   the workforce comprises women. Although this statistic seems like a risk, the
   analysis only looks at paid overtime and not overtime taken as “TOIL” – time
   off in lieu. It is possible that women workers prefer to take time rather than
   money which may skew the results of the test.




                                          23
   Additional analysis of paid overtime hours by job family showed significant
   differences between the gender split and the proportion of paid overtime
   hours. This is illustrated in section 5.7, Figure 5.7.1 of the main text.

   16.3   Recommendations

   Line managers responsible for allocating overtime should ensure they are:

      •   Aware of all staff members who would like to be considered for
          overtime to avoid it always being given to just a few
      •   Monitor the distribution of both overtime cash payments and “TOIL”
      •   Employees should consult with their supervisor before working
          overtime in line with business management best practice.

   16.4   Personnel Office Response

   Agree with recommendations. Staff are already required to have overtime
   working agreed in advance. Whilst we can collect information on overtime
   worked we have no method of collecting information on “TOIL”. This may be
   addressed by the introduction of an electronic Working Time Recording
   System.

          Action
          Inform all Office Heads of the audit findings
          Invite the Heads of those Offices featured in this particular audit test to
          respond to the findings and report these to Directors
          Request all Office Heads to put systems in place to monitor and report
          the use of “TOIL”

          Office Heads to report annually to Directors on the gender distribution
          of overtime and “TOIL” in their areas of responsibility.


Test 17: General Allowances and Additional Payments

   17.1   This is a repeat of test 16, applied to all allowa nces other than
          overtime. It tests whether women who are eligible for these get the
          same allowances and payments as eligible men.

   Audit Sample Size: 214 allowances tested.

   17.2   Audit Findings

   Risk Assessment: Amber

   Allowances within the parliamentary staff organisation fall into four categories:



                                          24
    •   those red-circled from previous employment in the Scottish Executive
    •   official pay supplements dependent on function and experience
    •   individually negotiated supplements, and
    •   shift and responsibility allowances.

Some of these present risks as follows:

•   Red-circled allowances, pose a potential risk as new recruits are not
    eligible for these allowances and best practice is to phase them out over
    time. An additional risk is caused by the recipients of the typing allowance
    being all women
•   In some instances where other allowances, such as the IT allowance, is
    offset against the amount paid in the red circled allowance, the risk is even
    greater as technically each discrete element of the reward package can be
    compared in isolation
•   Shift supplements have been reviewed and there is no risk associated with
    these payments
•   The majority of the allowances bill (over 55%) is based on general skill
    supplements as illustrated in section 5.3 by Table 5.3.1 in the main text.
    SPCB must regularly review the market need for these supplements or
    face an equal value risk from employees in roles which have similar job
    evaluation scores but which do not attract a premium
•   Unless the SPCB’s records can show that regular market testing has
    proven that these roles need to attract a premium if the SPCB is to remain
    competitive, skills supplements will remain an equal value risk.

17.3    Recommendations

    •   Red circled allowances should be phased out
    •   Red circled supplements should be phased out
    •   Review the current allowances paid and their contractual status
    •   Review the need for the various skills supplements and maintain only if
        supported by recent market benchmarking
    •   Employees receiving a supplement and promoted /transferred to a new
        role with a different focus should lose the allowance.

17.4    Personnel Office Response

Agree with recommendations save for the last mentioned – the rules for
awarding pay supplements already make it express that the supplement will
be lost in these circumstances.

The review of pay supplements is already provided for in the agreed HR
Strategy which commits the SPCB in the period 2003 - 06 to :


                                        25
          “Carrying out a fundamental review of our pay supplement regime”.

   The timing of the review was linked to the Holyrood migration which has
   slipped. The review is now in plans for early 2005.

          Action
          Consult our lawyers on the contractual position on all allowances to be
          reviewed.
          Agree with the TUS the scope of a review of pay supplements and
          relevant allowances.
          Tender for a consultancy to support the review, ideally linked to the
          planned review of pay benchmarks.



Test 18: Benefits
   18.1   This tests whether men and women are equally able to receive all
          benefits ranging from annual leave to pension.

   Audit Sample Size: Policy reviewed for all staff.

   18.2   Audit Findings

   Risk Assessment: Green

   Analysis of the benefits and perquisites available to all staff on various
   contract types based on the data provided, showed there to be no differences
   in the treatment of the genders for either full or part-time staff.

   18.3   Recommendations

      •   None.


Test 19: Training
   19.1 This test checks whether men and women have equal access to training
   opportunities. This was examined in the context of the courses which are
   normally available and appropriate for each grade level or job family tested.

   Audit Sample Size: 435 staff reviewed.

   19.2   Audit Findings

   Risk Assessment: Green




                                          26
   Based on the data provided, the number of training courses attended during
   the period of the data sample, were found to be almost directly proportional to
   the number of men/women in the parliamentary staff organisation. This
   coupled with all staff being eligible to attend training gives the area a low risk.

   19.3    Recommendations

   None.


Test 20: Equal Value and Job Evaluation

   20.1 In this test, pairs of jobs with similar internal job evaluation scores from
   each grade were selected and average salary levels were compared.

   Audit Sample Size: 9 job pairs, 18 staff reviewed.

   20.1    Audit Findings

   Risk Assessment: Green

   The analysis showed that although some jobs had equal evaluation scores
   there were differences in base pay levels. It was confirmed that these
   differences were connected to length of service. The progression system will
   ensure the gap closes over time and therefore the risk is minimal.

   20.3    Recommendations

   •   None.


Test 21: Maternity Provisions

   21.1 This test looks at a sample of employees who have been on maternity
   leave and checks whether they were given a performance score/pay
   rise/bonus in line with comparable colleagues.

   Audit Sample Size: All 17 staff who have been on maternity leave during the
   period of the data sample were reviewed.

   21.2    Audit Findings

   Risk Assessment: Green

   Comparing the average pay of women who have been on maternity leave with
   those who have not showed that those who have been on maternity leave are
   not disadvantaged in terms of pay.




                                           27
21.3   Recommendations

   •   None.




                         28
                                                                          Annex D

   SCOTTISH PARLIAMENT EQUAL PAY AUDIT

                             ACTION PLAN

This outline action plan, Table 1D overleaf acknowledges the need to address
the areas of equal pay risk highlighted by the human resources consultants
Towers Perrin and set out in section 4 of the preceding summary report.

The plan also takes into account less critical recommendations stemming from
observations made by Towers Perrin during the course of their audit these are
often related to best practice. Details of all recommendations by test number
are given in Annex C.

Action numbers are ordered by the forecast timescales of the resulting
activities but also reflect the prioritisation proposed in section 7 of the main
text.




                                        29
Table 1D Outline Action Plan to Address Equal Pay Risk Areas

       Action                         Designated                           Start/
       Number                           Action                             Finish
                                                                           Dates
          1      Provide Towers Perrin with new data sample from          July/Aug
                 returned performance management reports 2003 -           2004
                 2004 for re-run of tests 14 and 15. (Tests 14, 15)

          2      Revise the current arrangements for determining          Oct/Dec
                 starting pay on promotion in consultation with the TUS   2004
                 and SPCB if necessary. (Test 9)

          3      Put procedure in place to satisfy senior management      Oct /Dec
                 that overtime is being allocated fairly and monitored    2004
                 effectively. (Test 16)
          4      Conduct the planned review of pay allowances and
                 supplements by:

                    •   Consulting with our lawyers on the contractual    Oct/Dec
                        position on all allowances to be reviewed         2004

                    •   Consulting with the TUS on the scope of a         Jan/Mar
                        review of pay supplements and relevant            2005
                        allowances
                                                                          Apr/May
                    •   Tendering for a consultancy to support the        2005
                        review, ideally linked to the planned review of
                        pay benchmarks. (Test 17)

                    •   Implementing agreed review process                Jun/Aug
                                                                          2005
          5      Conduct the planned review of pay benchmarks in          Jan/Jun
                 consultation with the TUS and with the support of a      2005
                 professional consultancy. This will be done in tandem
                 with action 4. (Tests 12, 13)
          6      Revise HR Strategy to reflect all relevant               Oct/Dec
                 recommendations commencing with those relating to        2004
                 career/salary progression (Tests 8, 9, 12, 13)
          7      Include in the planned review of recruitment, the        Sept/
                 recommendation to take existing gender balance into      Dec
                 account when deciding on internal/external               2004
                 recruitment process (Tests 5, 9)
          8      Develop a set of annual statistics for Directors         Mar/Feb
                 focusing on gender distribution to include as a          2005/
                 minimum: by office, promotions and overtime worked.      2006
                 (Tests 5, 8)




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