See also:

• Job Evaluation

Performance Related Pay (PRP)

Feb 06

 

• See Staff Side Report to Annual General Meeting 2006

 

 

(D)

The following misgivings can be found on the Employers Organisation for Local Government website (- you can see the full details at www.lg-employers.gov.uk/rewards/schemes/performance.html - opens in a new window).

The emphases are ours:

"Local Government experience with performance pay

• bonus incentive schemes for many blue-collar employees have been used since mid-60s
• were initially based on work measurement, latterly contract-driven
• is predominantly applied to males in full-time occupations
• has led to equal pay headaches with £multi-million implications
• was introduced for white-collar employees in several councils (mainly South East) in the late 1980s / early 1990s as a result of local market-driven initiatives. In 1993, 26% of authorities used PRP
• recurring problems include:
  • difficulties of assessing performance;
  • de-motivation of the unsuccessful;
  • unevenness of management judgements
• some local schemes have withered on the vine; others continue
• top-down initiatives on performance pay for chief police and probation officers have foundered on:
  • the lack of in-service cultural support
  • the absence of a comparative frame of reference for local judgements on the performance of a handful of senior staff
• the police scheme lasted only a few years. The probation scheme limps on, but contributes little to performance or productivity
• consequently there is widespread managerial (and political) misgivings over the practical efficacy of PRP, but strong support for performance management
• has seen considerable interest in experimenting with pay structures and linking pay and competency / responsibility level
• show some interest in moving away from pay scales or, if they are to be continued, tighter application of satisfactory performance rule in relation to incremental progression
• well established local honorarium arrangements to recognise special one-off achievements

Advantages

• it provides a direct incentive for employees to achieve defined work targets
• the contribution an employee makes is recognised with a tangible reward
• a performance culture can be developed with its introduction
• line managers can derive assistance from a corporate framework for setting goals. It should improve individual productivity and performance
• employees are more likely to focus on what they need to do to improve if this is directly linked to pay
• a good PRP system will reward the best performers
• it is an effective way of dealing with poor performance
• establishing a means of rewarding high performance can assist in retaining the most industrious staff

Disadvantages

• it reduces pay equity and can make an authority liable to costly equal pay challenges if not operated fairly
• the appraisal process can be affected detrimentally because of the focus on financial reward rather than developmental needs
• employees can be de-motivated if the goals set are too hard to achieve
• too much of the process relies on the quality of judgement made by a line manager
• co-operation and teamwork can be hindered
  as reward is made for short-term quantifiable goal, it can be too narrowly focused
• there is a danger that employees can expect an additional payout year on year. In a low inflation climate the rewards might not appear to be that great summary
• performance pay was the big idea of the late 1980s - viewed as the answer to motivating people and developing performance
• IPRP spread, often replacing across the board increases. 40% of organisations used it in 1998 (CIPD survey) for management; 25% for non-management. 37% of public sector organisations used it for management, and 18% for non-management
• the tide turned against IPRP in the 1990s when the 1980 schemes were not delivering the expected results. Several research studies failed to demonstrate any causal link between IPRP, performance and productivity.
• some organisations are introducing second generation schemes aiming to avoid earlier mistakes
• others are questioning IPRP and trying team based PRP, and / or competence related and career development pay, often in a broad banded structure
• the search goes on "

Not quite a ringing endorsement of Pay Related Performance schemes! So - why are Devon County Council so keen to bring one in?

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11 Aug 05 - Branch Press Release

Devon County Council is at the moment insisting that two separate processes - Job Evaluation and Performance & Reward - will be tracked together.

Our view is that an agreement is an agreement and that the Job Evaluation agreement pre-exists Performance and Reward and that these two projects are not compatible.

Job Evaluation

With regard to the ongoing agreed joint union and employer panels to oversee this process we have trained stewards to carry out this task. Our agreement states that all panels must have a union representative on them. However far too many panels have taken place without any trade union presence. This places a huge question mark over the fairness and viability of these panels and could lead to a large number of appeals, further delaying implementation of the process.

We also have concerns that the Job Evaluation process has not been given due priority and importance in schools, where all support staff are affected. This is one of the areas where we could be bringing equal pay claims. Now that Devon County Council seems to have decided to postpone the implementation of the Job Evaluation until 2007, we do not feel bound to hold back equal pay claims. We are likely to consider such claims from staff that were on hold while job evaluation was in process.

Performance Related Pay

We completely oppose the intended Performance Related Pay element of the County's Performance and Reward process that Devon County Council wish to run in parallel with Job Evaluation. Performance related pay, which is in use mainly in the private sector, has been shown to risk making payment divisive and unequal, and is unlikely to lead to the good professional and consistent service that the public expects from our members and staff generally. This is in direct contradiction to the idea that Job Evaluation should operate to make things more equal and provide a sound basis for funding local government services and staffing.

In any case, a mechanism already exists to assess people's performance - it's called regular appraisal – and we suggest the Authority start by ensuring their current policies on performance and appraisals are managed to an acceptable standard.

Contact:
Roberto Franceschini, Vice-Chair, Tel. 01392 382000
Andy Bowman, Communications Officer, Tel. 01392 382000

Notes for the editor:

UNISON Devon County Branch is the largest Branch in the South West, with over 7,000 members. Devon County Council is the largest employer in the South West.

Branch Chair is Carol Jackson (on leave at present).

We have reached the point of seemingly irresolvable disagreement with Devon County Council over their proposed simultaneous introduction of the Job Evaluation results and of the Performance and Reward changes. This is a situation we believe to be very serious. Between them, Job Evaluation and Performance & Reward, will impact on all but the teachers working for the Council. So far as we are aware no other local authority has similarly yoked the two processes together, let alone decided that the Government's required introduction of a Performance and Reward strategy has to include performance related pay.