Government plans to reduce civil service headcount by introducing performance-related pay should not be necessary, an employment expert has warned.
Jim Moore, employee relations expert at HR consultants Hamilton Nash, said that the introduction of performance-related pay sends a signal to all staff that their current performance is not deemed good enough.
“Applying performance-related pay and setting pay criteria in practice is a minefield, as individuals suddenly prioritise their targets and neglect jobs that won’t score points. Unlike a performance-related discretionary bonus, any change to base salary to make it performance-related may constitute a change to the contractual terms and conditions of employment, which would require employee consent.”
He added: “When it comes to pushing out those who don’t meet the grade, there is already a process for negotiating a mutually agreed exit of an employee.”
Moore explained that employers can have ‘protected conversation’ under Section 111A of the Employment Rights Act 1996, which is an opportunity to present the employee with a choice.
Employees can go through a performance management process where the outcome is uncertain, or agree a mutual parting of ways, usually with some financial compensation for loss of office, a neutral reference, and an agreement to keep the details confidential, he said.
“Given that the employer has to pay the employee throughout the duration of the performance improvement process, it is often the case that a financial settlement to secure an early exit is an affordable option and an incentive to the employee to agree to part on good terms.
“Employers must follow a fair process for addressing performance concerns, including giving appropriate warnings and supporting staff through the process to avoid facing an unfair dismissal claim.
“Performance management should be about setting clear expectations, providing feedback, and supporting improvement. Pushing people out of the door should not be necessary if managers had been managing performance properly.”
Civil service union the FDA has criticised the government’s plan for reform saying it is not a credible plan for change.
Dave Penman, FDA general secretary, said: “If the government is serious about transforming public services they must set out what the substance of reform looks like, not just the retreading of failed ideas and narratives.”
