Performance Related Pay at Lambeth Council is a bad idea and here is why
The top brass at the Council have recently produced a new ‘workforce strategy document’ that is designed to make us a more efficient workforce capable of dealing with the changing nature of local government, digital disruption and whatever else is thrown our way.
One of the options being considered for improving the workforce (though certainly not improving workforce morale!) is performance related pay (PRP).
We can tell because in the draft workforce strategy it says for the section on Performance and Reward: “Review pay and evaluation model to meet modern business context” and “Review applying Hay scheme throughout and market benchmark”. Now whenever we see a document that says ‘review pay and evaluation for the modern business context’ that just screams PRP. The Hays scheme is also a PRP model that is in use in Southwark and a handful of other places.
We also know because UNISON asked Andrew Travers the new CEO and he said it was ‘an option that is being explored’. So there it is.
Whilst some staff might be lulled into a false sense of optimism with the promise of more perhaps getting more pay UNISON is opposed to performance related pay for several reasons.
No evidence that it works
The first criticism of PRP is that there is zero evidence whatsoever that it works. In 2000 a government reported into pay incentives by John Mackintosh conclude that they were “ineffective and discredited”. Furthermore whilst people associate PRP with the private sector, the reality is that since 2000 fewer and fewer private sector companies have been using such workplace incentives for staff. Academics have also looked into why organisations keep going for PRP when there is so little evidence to justify that it has any serious benefits. People might want to read David Marsden’s essay; The paradox of performance related pay systems: ‘why do we keep adopting them in the face of evidence that they fail to motivate?’
Why fix what isn’t broke?
Second of all we already have a pay model, using the GLPC job evaluation scheme to set grades on the Inner London pay spine. In the context of local government cuts (which according to the new Chief Executive Andrew Travers at a staff conference in early 2018 – may never be reversed) coming off the NJC towards some other ‘competitive pay model’ can only be an excuse to cut pay for some staff.
The GLPC job evaluation scheme – which is used by the majority of London Boroughs – was jointly designed between the employers and trade unions at London level to be suitable and appropriate for the local authority context. It is a public sector product which is free to Lambeth to use, whereas the Hay scheme is the property of a private company, is less transparent and makes no provision for trade union involvement. As a joint owner of the GLPC scheme (through the London Employers) the Council is in a much better position to update its job evaluation process to meet the “modern business context” by sticking with the public sector option rather than privatising job evaluation.
Serious equalities concerns
Another issue is that in the context of a growing race relations crisis at the Council it would be a very big mistake indeed to give an overwhelmingly white management which in some cases is suffering from unconscious bias the power to determine an overwhelmingly black staffs pay rises or not. There is already a huge issue with allowing black staff to work from home, let alone the prospect of ‘punishing’ some staff by refusing them a pay increase. The Council has promised to do an Equalities Impact Assessment on the impact of PRP for black staff at Lambeth. I can save them money by telling you now – it will not be good.
Contracts?
Finally it would be a huge change to all of our contracts and terms and conditions so they would have to make everyone redundant and sign new contracts which obviously the unions would fight tooth and nail causing serious disruption and a break down in industrial relations at the Council.
Why go through the stress for something that hasn’t been proven in any public sector institution to make a positive impact?
Lambeth UNISON 
You claim that unconscious bias is a problem, so why not let the black community redress the balance by getting paid according to their performance under PRP as opposed to relying on others to recruit them to higher paying positions?
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Hi Clive, the issue is that if there is an overwhelmingly white management structure and many black staff are feeling like they are being discriminated against then many would also feel that there was no chance that they would get affair hearing for a pay increase. In the public sector there are a myriad of issues with PRP in terms of how you measure performance, especially in a team working environment or where outcomes are dependent on other factors (how would a social worker be judged?) – these leaves it open to the subjective view of the manager which of course can lead to all manner of discrimination claims.
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The perceived discriminatory subjective view of managers can be eliminated for the most part with specific measurable performance criteria e.g. number of forms processed, number of cases taken on, number of hours worked for example. Perhaps not all jobs can be specifically measured I agree but it could be implemented on a case by case basis.
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But no study has demonstrated that PRP actually drives up performance or productivity – so even if you could on a ‘case by case’ basis make it work across the entire council it wouldn’t achieve the end goal which is to make the workforce more efficient. As the article points out, fewer and fewer private sector companies are using PRP so when senior managers look to the private sector as a way of trying to improve things they need to realise that things that were popular 20 years ago are becoming far less popular now.
Simon H
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Surely , the role of any union is education , and in reference to the issue of racism , members need the space to dissect the nuanced nature of racism and how its played out in the work environment .Especially for black workers , their perceptions of racial discrimination will be met with denial , supported by policies and individuals who are there to suppress.
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