National charity, United Kingdom: Comprehensive approach
The organisation presented in this case study is a national charity working to support and assist older people in the community. It operates as a federation of over 400 separate organisations and charities that are managed at local level. This study reviews operations at the organisation’s national headquarters, which is primarily concerned with fundraising and campaigning for the charity, but which is also one of the 400 separate bodies. Each of the member organisations varies considerably in size: some organisations have paid workforces, while others operate mainly through the assistance of a small number of volunteers. Both the national headquarters and the charity’s retail division together employ about 800 workers; just under 500 employees work at headquarters, and about 300 people work in retail. The retail division sells goods in high-street charity shops and has a mix of paid managers and volunteer staff. The national body has fieldworkers operating across the UK, supporting local member organisations of the federation.
At present, the retail division has an older age profile than that at headquarters. Overall, more than a third of the workers are aged between 35 and 49 years, while a third of employees are aged between 50 and 59 years. About one fifth of the workforce is aged between 18 and 34 years.
Each organisation in the federation manages its own business affairs including human resource management (HRM). Occasionally, smaller local member organisations outsource this function to external agencies.
The charity nationally recognises a trade union, with which it negotiates pay issues. It develops policy through a consultative group, which also involves trade union representatives. In addition, the charity runs staff forums in its retail division, although these need to be reconstituted so that they can become the legal means for formal consultation processes.
The original initiative
Focusing on the operations of national headquarters, this study looks at its policy developments, campaign efforts and provision of support to local branches of the charity. To retain membership of the federation, each local body is required to meet a quality standard in respect of its management of both employees and volunteers. Moreover, the charity expects all 400 member organisations to adhere to the mainstream employment policies of the parent organisation.
In the past, the national office has had informal flexible working arrangements in place for employees. Over time, these arrangements have been replaced by a more clearly structured system. The flexibility offered by the charity aims at offering varying working arrangements to suit employees’ lifestyle needs. The organisation has extended the right to apply for flexible working arrangements to all members of staff, and does not require individuals to specify the reasons for wishing to vary their contracted hours.
Pre-retirement programmes have also been run by the organisation for many years for its own staff members, through the subcontracting of services from various external organisations.
From the outset, the charity has been supportive of the health and well-being of its staff members and has an employee assistance programme in operation.
Participation in management training courses is one area that has failed to progress further within the charity. A number of older middle managers have stated that they are reluctant to take part in training courses if they are retiring in the next two or three years. The organisation has struggled to persuade them to adopt a more positive approach to training opportunities.
Good practice today
At present, two important new initiatives are in progress within the charity. First, a new ‘broad-banded payment system’ for staff has been introduced, according to which pay progression is measured by each individual’s contribution to the organisation. Second, the normal retirement age has been abolished.
The new pay system has replaced the previous wage policy, which was based on incremental progression. However, the new system also allows employees who are stuck at the top of an incremental pay scale to be rewarded fairly for their contribution to the organisation. Pay increases will no longer be based on the time served by individuals; instead, this system allows staff to be duly rewarded for the work they do. Annual changes in pay are based on a yearly review, and are related to each person’s contribution to the organisation. In addition to the new pay arrangements, a wider range of contracts is available for the recruitment of new staff. This is intended to offer staff the opportunity to have greater flexibility of working hours.
The organisation has also abolished the normal retirement age. Previously, employees could work beyond the age of 65 years, but this was subject to a request from the individual employee. In practice, applicants were not refused. Current figures show that 7% of the workforce is aged 60–65 years and a further 2% of employees are aged over 65 years.
The organisation currently has two types of pension schemes in place. The older scheme, which was closed to new entrants some time ago, allows staff to retire from the age of 60 years without loss of pension benefits. Others who leave under either scheme prior to the age of 60 years will have their pensions reduced through an actuarial adjustment.
The appointment of a new charity director has been the driving force behind the recent internal policy amendments. In addition, legislative change has been a catalyst and a driver of HR policy reform in the organisation. Several policies were out of date and needed to be brought into line with current legal requirements. Moreover, the organisation wished to show that it was applying best practice principles in its operations.
At present, the organisation is reviewing its practices and procedures in terms of the legislative change, which allows older staff members to continue working while simultaneously claiming an occupational pension. It is uncertain yet how popular this new employee right will be, since it only came into effect in April 2006.
The charity has a relatively stable workforce and an annual staff turnover of about 16%. Its main charity office in London finds it difficult to recruit staff from the local labour market; many people seem to be keen to work on the fundraising side, but there are currently lots of charities and the competition for these prospective employees is therefore strong. In general, the charity manages to fill vacant positions, but does not tend to receive a large number of applications for each job advertised.
Although the charity specialises in issues related to older people, and thus has a collective social awareness, its HR policies do not appear to have a life-course or age-management element to them. In relation to health and well-being, it was the employees who prompted the management to extend its public support of active ageing for the benefit of its own staff.
At present, it is too soon to conclude if the reform of the pay structure or the abolition of the retirement age have had a demonstrable impact on the workforce. The introduction of new information technology systems may enable greater and faster access to management information on human resources.