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Jim McCafferty's column: Operational Excellence is a starting point for fair remuneration model

Jun 25, 2024 |

Hello everyone,

I hope you are all well.

The Operational Excellence Incentive (OEI) commences with August trading. The NFSP first lobbied Post Office Ltd (PO) in 2019 followed by persistent recourse with many discussions since then. PO subsequently conducted a study in the summer of 2023 and we now have the recognition of the administrative back-office work carried out by postmasters.

Providing we achieve compliance in all areas of Operational Excellence, there will be estimated savings of between £16m to £20m which will fund the payments to the branch network.

The percentage on offer, however, at up to 5%, has been rejected at NFSP regional and national meetings as being set too low. I raised this last Tuesday when I was part of a panel discussing Operational Excellence at PO's Postmaster Conference, and this has also previously been communicated to PO but they have yet to review the current rate. We will pursue PO, as according to their results, 26% of a postmaster's time is spent on back-office activities.

We view this incentive not in isolation, but as another step to progressing to a remuneration model that reflects the fair pay required for our branches.

In the meantime, it is important for everyone to ensure we meet the four metrics to ensure the maximum extra remuneration of 5% is added to your variable pay. The metrics are completion of daily cash declarations, keeping minimum (but operational) overnight cash holdings (ONCH), correct cash pouch remittance preparation and completion (on time) of your monthly trading statement. Everyone will begin at 100 points with point deductions made for metric failures, and payments will only be made for those achieving 81 points or more.

It should be noted that, unlike the Mails Segregation Incentive, OEI is branch-specific, meaning it’s entirely up to you without depending on the performance of the entire network, to get it right. Also, unlike the Mails Distribution Agreement MDA2, we are not at the mercy of a third party, Royal Mail, dictating the terms.

Hopefully, as PO realise significant savings are made and maybe other metrics for back office work are introduced, we can convince them to increase the percentage to you along with attention being drawn to other areas of remuneration on the products and services we provide.

Take care,

Jim McCafferty
Non-Executive Director Northern Ireland