Unite and Performance Related Pay

Your Union and Performance Pay

Particularly as we approach the annual pay ballot, Unite reps are often asked why the union is opposed to Performance Related Pay (PRP). Many union members only have experience of such pay systems, and we have been asked to explain why we are so against it.

Unite (and its predecessor unions such as Amicus) always had a policy position of opposing PRP – we could see that it was merely a method of keeping salaries low.

A majority of union members in Capita agree with this policy, as shown in successive pay surveys. (In the 2015 pay survey, only a third of respondents didn’t support the union’s position).

Unite believes that PRP is:

Divisive – in a working environment where we should be co-operating with our colleagues rather than competing with them, then PRP encourages the latter. An employee isn’t going to put down their task to help a colleague who is struggling if it means they will miss their ‘target’. A blame culture can develop, where we focus on who can be penalised for any mistakes, rather than avoiding mistakes in the first place.

Discriminatory – it is well known that being seen to go the ‘extra mile’ is a path to the elusive ‘1’ rating, and the potential £2 or so per week that this might bring. However, given that women generally have more domestic caring responsibilities than men, it is likely that more men than women will be able to create the impression that they have excelled. Therefore it is potentially more difficult for women to achieve a higher rating.

De-motivating and Demoralising – while it may bring a warm glow to those selected to receive a ‘1’ rating (think of that extra £2 per week!), then it has the opposite effect on the larger number deemed to be a ‘3’ rating. Most people, on being told that they are in the bottom 20% of employees, are not going to be motivated by this (regardless of how many times their manager insists a ‘3’ is a good rating).

Outdated – PRP is no longer the management favourite it used to be. The Chartered Institute for Personnel and Development (CIPD) states that “in some circumstances, PRP has proved a rather crude instrument”. A number of well known companies have abandoned PRP - Accenture, Google, Microsoft, National Australia Bank.

Academic research on PRP has shown it can be counterproductive. It can deliver inaccurate assessments of employees’ capabilities, undermine teamwork and co-operation, and can lead to the creation of an often hostile work environment. There is significant potential for PRP to result in illegal discrimination.

In a submission to academic researchers in the US, Microsoft said PRP resulted in “capricious rankings, power struggles among managers, and unhealthy competition among colleagues”.

However, your union is not opposed to the principle that employees should be told whether or not their performance is meeting Capita’s expectations.

Our issue is with the idea that this should have a bearing on the pay which people take home, with people expected to tolerate real terms pay cuts so Capita can appear to reward those perceived to be the ‘top performers’.

Your union believes in fair pay. For all.

If you have any questions on this or any other matter, please contact your local union reps or our central e-mail at uniteincapita@capita.co.uk.