The Auckland Regional Council has won the national award for Strategic Remuneration in the 2000 HRINZ Human Resources Initiative of the Year Awards.

Judges of the Award said that the ARC’s remuneration system challenges the traditional pay practices in organisations and looks beyond normal remuneration boundaries.

“The team developed their own competency model around the strategic goals of the organisation and linked it to remuneration,” says Robyn Leeming, one of the national judges.
“The result is a remuneration system that is closely linked to other HR Management processes; provides a forum for discussion between managers and employees; and is open and transparent allowing employees to know how their performance is linked to their pay.”

Lesley Slade, Director of Organisational Development at the ARC, believes that the award acknowledges that government bodies and agencies today should be recognised as innovative and leaders in best practice.

“At the ARC, we reward tangible performance – and today it is not just based on technical competencies, but also innovation, leadership, customer focus, political acumen, outcome orientation / accountability and communication.”

Ms Slade says that the new system came about to overcome internal inequities and a system that failed to meet the needs of a dynamic, flexible organisation.

“We began with our strategic plan and adopted a future oriented approach,” says Ms Slade. “We asked what competencies would be necessary for the organisation to achieve its strategies and goals – the resulting core competencies where then used as the basis of the strategic remuneration system.”

Ms Slade says that the new system recognises the value added by all employees in a range of competencies relative to one another and to the market.

“Our new model is simple and flexible. Basically, it is a combination of a competency and performance-based pay system.

Ms Slade explains that the seven organisational competencies are weighted differently to reflect organisational priority, with leadership been given a double weighting to reflect the importance of that competency to the Auckland Regional Council.

Every role has a competency profile which is determined through a role analysis interview. Roles are then placed within one of nine remuneration zones (these zones were created using broadbanding methodology) based on the ‘size’ of the role.

“The final step to determining an individual’s remuneration is for the manager to undertake an assessment of how the individual’s competency levels match up with the levels identified in the role, all in consultation with the individual.”

Ms Slade concludes that this new system allows managers to directly acknowledge and reward those strategic competencies which underpin the organisation’s ability to deliver successful results and to provide a consistent mechanism to differentiate between poor, good and excellent performers.

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