One fact in his reply to the JEP is significant.
“Mr Duhamel made no mention of the five per cent interest Andium pays on loans from the Treasury – far above current rates attainable in the private sector – nor of the significant sum of money Andium returns to the Treasury each year – some £28 million,’ he said. “‘This far exceeds the £16 million paid to us in income support for those of our tenants who qualify for this benefit. Andium is therefore a significant net contributor to the States and certainly not a drain on Jersey taxpayers.’
I noticed this flow of funds from the States to Andium in income support some time ago, and how some of it is returned. The net figure is still substantial, but the accounts of Andium do not mention the income support component of their rental income in their accounts which I strongly feel they should. This is something the Chairman should address.
My analysis of the figures can be found here:
http://tonymusings.blogspot.com/2017/09/andium-more-transparency-on-income-flows.html
It is to Mr Walker’s credit that he does acknowledge this element of “money-go-round” in the above statement.
Below I publish in full his letter in the JEP. It makes very good points, but the one weakness which I would like to see addressed is that of “the rigorous process the board went through to establish appropriate salary levels” which I am sure did take place, but unfortunately leaves the reader in the dark as to how it works.
Without going into exact details of sums involved, which might open the door to headhunting and competitors poaching executives, what is missing, which hope Mr Walker will supply in due course, is the methodology of how this is done.
I give two examples after the letter, one from Valerie Williams and Stephen Grimaldi in “A Quick Breakdown of Strategic Pay” (Workforce, December 1999, and another from Kevin Gaunt in “Consultation - A Toolkit for Setting Remuneration” (New Zealand Management, March 2008)
To give the basic steps by which “comparable salary levels” can be evaluated would not break any commercial confidentially, but it would provide a more substantial basis for understanding the salary increases, which from the perspective of the general public, lacks appropriate transparency. That does need to be remedied.
Letter from Frank Walker in reply to Rob Duhamel
Published in JEP
This is the first time that I, as chairman of Andium Homes, have felt it necessary to comment on an article that has appeared in the media. The recent article by Robert Duhamel (JEP 5 September) was particularly disappointing. It was so inaccurate and misleading that I felt a response was necessary.
One of his major criticisms was that our chief executive and finance director are overpaid. I couldn't disagree more. They are both highly competent individuals running a multi-million pound company.
Although some dismiss the provision of affordable housing as only a social enterprise, it is much more than that. Of course, landlord services form a major part of what we do, but so does the complexity of asset management, site acquisition and capital procurement, running into many millions of pounds.
The capital programme is some £500 million, over ten times what it was just four years ago, when the provision of social housing rested with what was then the Housing Department. It has an income of £52 million and assets under management in excess of £800 million.
The executives, together with their teams have produced an impressive set of results. The restructuring of the company and the services we offer our tenants have been constantly evolving throughout a very busy four years and certainly the Board of Andium is delighted with the progress that has been made and the culture of achievement. This has not happened by accident
Regrettably, Mr Duhamel carefully avoids the delivery of outcomes and instead takes a scattergun approach to his criticisms, which completely misses the mark. Certainly, he has no knowledge of the new private-sector type of employment that our executives have signed up to, the rigorous process the board went through to establish appropriate salary levels, the performance against which the executives are measured or the way in which they are held to account by the board.
Instead, his article refers to redundant civil service posts and equally historical pay levels.
We think our two executives are doing an outstanding job, and that, following four years when they were paid at considerably lower levels than their position and performance justified, they are now, when measured against any comparable salary levels, appropriately remunerated.
Importantly, these are two local people who have progressed through the organisation on merit and performance, which should be celebrated not vilified.
There is a housing crisis in Jersey, with far too many young people being unable to afford to buy their first home. Andium has already announced that, given the requisite planning consents, it will build 2,000 new homes by 2025, of which at least 1,000 will be affordable first-time buyer homes.
This is by far and away the most ambitious housing programme Jersey has ever seen and will make a real difference to the lives of many young Jersey families.
Andium Homes has a great future. The board of Andium is committed to working with the Treasury Minister and all States Members to ensure that it plays its part in delivering the strategic aims of the new government and to providing high-quality homes for our tenants and for first time buyers-
Examples of setting salaries in an organisation
Example 1: Valerie Williams and Stephen Grimaldi in “A Quick Breakdown of Strategic Pay” (Workforce, December 1999
First, the appropriate competitive market must be identified. Companies must consider various scope factors including their industry, geographic location, total employment, and annual revenue when identifying their competitive market. In addition, it's important to consider not only business competitors, but people competitors as well-- those organizations you get talent from or lose talent to, regardless of their size, industry or location.
The second step is to conduct an assessment of market pay practices for similar jobs within the identified competitor group. Accurate job documentation and defining the duties, skills and impact levels of each job analyzed is critical to the quality of the data. In a market assessment, the organization compares its current pay levels to competitor pay levels for jobs of similar size, scope and impact level.
As the third step in this process, using the results of the market assessment as the basis, a company can develop a framework-typically referred to as a salary structure-for managing competitive base pay levels for all jobs across the organization.
A salary range usually consists of a salary minimum, maximum and a midpoint or control point. The minimum represents the lowest competitive rate for jobs within that range and is typically used as a starting point for less experienced employees. The maximum represents the highest competitive rate for jobs in the range. This is typically a premium market rate where top performers and those with extensive experience may be paid. The midpoint or control point represents the competitive market rate for fully performing employees in jobs assigned to that range. The midpoint provides a guideline for slotting various jobs and individuals in appropriate salary ranges.
A typical salary structure is comprised of a series of pay ranges or bands that reflect competitive rates of pay for specific jobs in the marketplace and provide an opportunity for salary growth. Jobs of similar value from both a market and internal perspective are grouped together. Then a competitive salary range is developed around the market rates for those specific jobs.
Example 2: Kevin Gaunt in “Consultation - A Toolkit for Setting Remuneration” (New Zealand Management, March 2008)
Remuneration setting is a key role of management and an essential part of any manager's toolkit. To do this well you need to know the size and scope of the job and its relationship with the other roles in the organisation. That is, is it bigger or smaller? This lets you match the job with an appropriate salary compared with other roles. Then you need a reference base for attaching an appropriate salary level. You also need some flexibility to be able to set an appropriate salary for new and as yet unproven recruits and yet also, at a later date, be able to recognise and reward their growth and development in the role.
There are some essential tools that are required for this to work.
http://tonymusings.blogspot.com/2017/09/andium-more-transparency-on-income-flows.html
It is to Mr Walker’s credit that he does acknowledge this element of “money-go-round” in the above statement.
Below I publish in full his letter in the JEP. It makes very good points, but the one weakness which I would like to see addressed is that of “the rigorous process the board went through to establish appropriate salary levels” which I am sure did take place, but unfortunately leaves the reader in the dark as to how it works.
Without going into exact details of sums involved, which might open the door to headhunting and competitors poaching executives, what is missing, which hope Mr Walker will supply in due course, is the methodology of how this is done.
I give two examples after the letter, one from Valerie Williams and Stephen Grimaldi in “A Quick Breakdown of Strategic Pay” (Workforce, December 1999, and another from Kevin Gaunt in “Consultation - A Toolkit for Setting Remuneration” (New Zealand Management, March 2008)
To give the basic steps by which “comparable salary levels” can be evaluated would not break any commercial confidentially, but it would provide a more substantial basis for understanding the salary increases, which from the perspective of the general public, lacks appropriate transparency. That does need to be remedied.
Letter from Frank Walker in reply to Rob Duhamel
Published in JEP
This is the first time that I, as chairman of Andium Homes, have felt it necessary to comment on an article that has appeared in the media. The recent article by Robert Duhamel (JEP 5 September) was particularly disappointing. It was so inaccurate and misleading that I felt a response was necessary.
One of his major criticisms was that our chief executive and finance director are overpaid. I couldn't disagree more. They are both highly competent individuals running a multi-million pound company.
Although some dismiss the provision of affordable housing as only a social enterprise, it is much more than that. Of course, landlord services form a major part of what we do, but so does the complexity of asset management, site acquisition and capital procurement, running into many millions of pounds.
The capital programme is some £500 million, over ten times what it was just four years ago, when the provision of social housing rested with what was then the Housing Department. It has an income of £52 million and assets under management in excess of £800 million.
The executives, together with their teams have produced an impressive set of results. The restructuring of the company and the services we offer our tenants have been constantly evolving throughout a very busy four years and certainly the Board of Andium is delighted with the progress that has been made and the culture of achievement. This has not happened by accident
Regrettably, Mr Duhamel carefully avoids the delivery of outcomes and instead takes a scattergun approach to his criticisms, which completely misses the mark. Certainly, he has no knowledge of the new private-sector type of employment that our executives have signed up to, the rigorous process the board went through to establish appropriate salary levels, the performance against which the executives are measured or the way in which they are held to account by the board.
Instead, his article refers to redundant civil service posts and equally historical pay levels.
We think our two executives are doing an outstanding job, and that, following four years when they were paid at considerably lower levels than their position and performance justified, they are now, when measured against any comparable salary levels, appropriately remunerated.
Importantly, these are two local people who have progressed through the organisation on merit and performance, which should be celebrated not vilified.
There is a housing crisis in Jersey, with far too many young people being unable to afford to buy their first home. Andium has already announced that, given the requisite planning consents, it will build 2,000 new homes by 2025, of which at least 1,000 will be affordable first-time buyer homes.
This is by far and away the most ambitious housing programme Jersey has ever seen and will make a real difference to the lives of many young Jersey families.
Andium Homes has a great future. The board of Andium is committed to working with the Treasury Minister and all States Members to ensure that it plays its part in delivering the strategic aims of the new government and to providing high-quality homes for our tenants and for first time buyers-
Examples of setting salaries in an organisation
Example 1: Valerie Williams and Stephen Grimaldi in “A Quick Breakdown of Strategic Pay” (Workforce, December 1999
First, the appropriate competitive market must be identified. Companies must consider various scope factors including their industry, geographic location, total employment, and annual revenue when identifying their competitive market. In addition, it's important to consider not only business competitors, but people competitors as well-- those organizations you get talent from or lose talent to, regardless of their size, industry or location.
The second step is to conduct an assessment of market pay practices for similar jobs within the identified competitor group. Accurate job documentation and defining the duties, skills and impact levels of each job analyzed is critical to the quality of the data. In a market assessment, the organization compares its current pay levels to competitor pay levels for jobs of similar size, scope and impact level.
As the third step in this process, using the results of the market assessment as the basis, a company can develop a framework-typically referred to as a salary structure-for managing competitive base pay levels for all jobs across the organization.
A salary range usually consists of a salary minimum, maximum and a midpoint or control point. The minimum represents the lowest competitive rate for jobs within that range and is typically used as a starting point for less experienced employees. The maximum represents the highest competitive rate for jobs in the range. This is typically a premium market rate where top performers and those with extensive experience may be paid. The midpoint or control point represents the competitive market rate for fully performing employees in jobs assigned to that range. The midpoint provides a guideline for slotting various jobs and individuals in appropriate salary ranges.
A typical salary structure is comprised of a series of pay ranges or bands that reflect competitive rates of pay for specific jobs in the marketplace and provide an opportunity for salary growth. Jobs of similar value from both a market and internal perspective are grouped together. Then a competitive salary range is developed around the market rates for those specific jobs.
Example 2: Kevin Gaunt in “Consultation - A Toolkit for Setting Remuneration” (New Zealand Management, March 2008)
Remuneration setting is a key role of management and an essential part of any manager's toolkit. To do this well you need to know the size and scope of the job and its relationship with the other roles in the organisation. That is, is it bigger or smaller? This lets you match the job with an appropriate salary compared with other roles. Then you need a reference base for attaching an appropriate salary level. You also need some flexibility to be able to set an appropriate salary for new and as yet unproven recruits and yet also, at a later date, be able to recognise and reward their growth and development in the role.
There are some essential tools that are required for this to work.
First you need a job evaluation system that enables you to "size" each job in your organisation.
The second tool is a suitable salary survey appropriate to your industry. This needs to be in a format that enables you to use your job evaluation results to identify similar roles in the salary survey. This gives you a ballpark salary for the job and helps you see the movement in the market since the last survey.
Then you need a remuneration policy, which is usually signed off and overseen by the board in their governance role. The policy will describe the salary range for each evaluated role and explain how the organisation intends to implement the policy and what the boundaries are. The final tool is to have a good performance management system in place that enables assessment of the accomplishments of an individual which can then be used to determine a salary change based on performance.
To address your concern that there is a finite limit to how far someone can go in the salary range for their job, the point here is that you do need to be able to reward performance in the role, but once a person is doing the job well and has been doing so for some time there needs to be a top-end limit to their salary otherwise you will end up paying too much for the role in question
To address your concern that there is a finite limit to how far someone can go in the salary range for their job, the point here is that you do need to be able to reward performance in the role, but once a person is doing the job well and has been doing so for some time there needs to be a top-end limit to their salary otherwise you will end up paying too much for the role in question
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