Workers in the private sector are well used to receiving cash
bonuses to reward good performance, writes Mark
When the DIY chain B&Q reported a 17 per cent rise in
pre-tax profits last year, £28 million in bonuses were shared
among the company’s staff. Tesco paid out £91 million in
cash and shares bonuses last year, and Marks & Spencer gave
65,000 members of staff bonus payouts totalling £43
All of which pales into insignificance when compared with
investment bank Goldman Sachs, which recently rewarded one of its
traders with £30 million in bonuses and share options.
That’s equivalent to the average annual earnings of more than
Back in the real world, public sector workers can count
themselves lucky if their good performance is even recognised, let
alone rewarded by a cash bonus.
One of the rewards offered to local authorities whose social
services department achieves three-star status is the freedom to
award cash bonuses to staff in recognition of good practice.
However, Community Care’s recent survey of three-star
authorities revealed that few had taken advantage of this
Elsewhere, other public sector workers report a similar story. A
spokesperson for the Royal College of Nursing says bonus payments
for nurses in trusts that achieve three-star status are so rare
that “I’ve never heard of it happening in the two years
since the star ratings have been in place”.
In education, the national school achievement awards scheme, in
which £60 million of bonuses were awarded to the staff of
high-performing schools, was scrapped last year after an evaluation
found “there was no hard evidence about the scheme’s
continuing impact on teaching and learning, and school
Public sector pay lags behind
Overall, the level of public sector pay has closed the gap
slightly on the private sector in recent years. But there is no
doubting that public sector pay generally still lags far behind the
Whether this is having a damaging effect on services is
difficult to judge. Research by the Royal Economic Society in 2002
suggested that falling pay levels were reducing the quality of
public sector staff. But this was only true of men. The quality of
the women workers seemed unaffected by how much they were paid.
So, does any of this matter? Are public sector workers looking
for cash incentives to reward good performance? According to a poll
by Community Care’s website, social care staff are evenly
split on the issue – 53 per cent voted in favour of bonuses
for achieving three-star status, 47 per cent against.
“I don’t think many social workers are looking for
these types of token gestures,” says British Association of
Social Workers director Ian Johnston. “Most are committed to
their jobs anyway.”
He would rather see investment put into the salary and training
of social workers right across the board, not just those working in
the three-star authorities.
“The star ratings system is a pretty crude way to deal
with complicated problems, and it doesn’t necessarily reflect
on the performance of staff,” he says.
Union dismisses idea
Unison is also so vehemently opposed to the
“unreliable” star rating system and the “name and
shame” ethos that underlies it, that it dismisses the value
of one-off bonuses for social care staff.
“The power to offer bonuses is so little used that most
people don’t even know it exists,” says a spokesperson.
“These are vital jobs that should be rewarded by a proper
salary scale and an investment in training and
Even management gurus Investors in People caution employers
against using bonus payments as a quick solution to boosting morale
and motivating staff.
“A common management assumption is that cash perks are the
best way to reward staff when an organisation achieves its
targets,” says UK chief executive Ruth Spellman.
“But research shows that most employees prefer to be
managed properly and offered career development opportunities.
Properly structured training and support programmes for staff will
help keep people motivated and encourage them to choose to stay
within their organisation rather than seek out financial rewards
The only three-star authority to take full advantage of the
ability to offer cash incentive payments has been Kent, which gave
all frontline staff a bonus of £150. Exceptional staff were
treated to other rewards such as celebratory meals and trips to the
“If you rubbish your staff you disempower
For social services director Peter Gilroy these rewards are just
part of a programme to raise the status and morale of social care
staff. He says: “£150 is just a small gesture but the
symbolism is very important. The more you celebrate staff the more
you empower them. And if you rubbish your staff you disempower
Gilroy’s “whole-system approach” has seen
Kent’s staff awarded some of the highest salaries in the
country – up to £35,000 for social workers, a new
consultant practitioner grade on £42,000 and extra bonuses
available to staff showing particular excellence.
But he is keen to emphasise that financial motivation is only
part of the story. “It’s not simply about financial
rewards. We also have a staff care package that offers health
checks, gym membership and training in stress management. We have
introduced a Marks & Spencer style induction programme for all
new staff (a two-day course) and exit interviews to try to
understand why people leave.”
Certain roles have been “civilianised” to free
frontline staff from paperwork and allow them to spend more time
with clients. Gilroy has also tried to make working patterns more
“About 85 per cent of our staff are women, so we have
introduced more flexible working arrangements, such as working from
home and career breaks.”
Gilroy has also made a huge investment in staff training by
devoting 2 per cent of his budget to this. Another key element of
the strategy has been to raise the profile of the social services
department and to portray social workers more positively. Quality
service awards have been introduced to recognise achievements, with
a county-wide ceremony each year.
The value of Kent’s approach to rewarding staff
performance can be seen in the way the county’s vacancy rates
have bucked the national trend and plummeted from 40 per cent to 4
per cent over the past five years. Staff turnover has fallen from
14 per cent to 1 per cent. It is partly due to the money saved on
recruitment that Gilroy has been able to spend so much on staff
retention and development.
“What would I rather do – spend £100,000 a year
on recruitment advertising or put that money into developing the
staff we have?” he asks.
Whether it is the bonus payments, the flexible working or the
commitment to training, Gilroy’s approach seems to be getting
something right. A recent survey of employee morale found that the
happiest staff at Kent Council were those working in the social