Money isn’t everything. Or is it?

by Trudy Stedman

Man in suit sitting on money reading the paper

It is almost universally accepted by pay and reward practitioners, that not all people are driven by money, and only some prioritise pay over, for example, job satisfaction.

How will this feed into the government’s plans to reform Senior Civil Service (SCS) pay?

The reforms first mooted back in 2018 but not yet introduced include capability-based pay progression rewarding staff for developing skills and expertise. This will sit alongside “milestone-based rewards” to incentivise senior staff to stay in their roles for the full duration of projects they are working on. So, is increased pay really the answer?

To go back to that first statement, most people aren’t motivated by money but can quickly become demotivated if they perceive some form of inequity or of being undervalued by their employer.

“The Monkey and the Cucumber” experiment shows monkeys reacting to the “inequity” of the reward they receive for passing pebbles to a researcher in exchange for a slice of cucumber. When one of the monkeys is rewarded with a grape instead, the other monkey who was previously perfectly happy with cucumber reacts quite dramatically throwing the reward back at the researcher.

So, how does this tie in with SCS pay?

The Forty-Fifth Annual Report on Senior Salaries 2023 makes interesting reading, with some, possibly predictable, statistics shown below.

  • The SCS is now a greater proportion of the civil service as a whole than ever before and this is in part is due to grade inflation (assigning SCS grades to roles that previously would have been part of the delegated grades because of the need to pay at a higher level for specific skills).
  • The increase has largely been met through internal promotion, as pay for SCS roles is below the private sector for comparable positions. SCS1 pay is 38% below the private sector median for base pay and SCS2 pay is 54% below the private sector median base pay.
  • Lower salaries are offered to those internally promoted as opposed to externally recruited (due to restrictions on pay increases when promoted)
  • The pay overlap with Grade 6 (again arising because of restrictions on pay increases & lack of pay progression) “causes resentment and reduces incentives for promotion” with a number SCS staff managing staff on higher pay than them.
  • The median tenure of SCS staff in their posts is 1.9 years with 67.9% being in post for less than 3 years. Turnover in this staff group is at 12.4% (21.7% if department to department moves are included)
  • Only 38% of the SCS staff group felt that their pay adequately reflected their performance.

SCS1 pay is 38% below the private sector median for base pay, with SCS2 pay even lower, at 54% below.

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For 2023/2024 the government has accepted the recommendations of the Senior Salaries Review Body for an across the board pay increase of 5.5% for all SCS staff. In addition, departments have been given the flexibility to use a 1% pay bill pot to target pay anomalies including those paid below the departmental Grade 6 maximum as well as an additional percentage for rewarding performance (non-consolidated).

The pay award for this year may go some way to addressing the perceptions of inequity internally, but a more radical approach will be needed to address the difference with private sector pay.

The proposals on capability-based pay progression are awaited with interest!

*Brosnan, Sarah F, and de Waal, Frans B.M 2003. ‘Monkeys reject unequal pay’
*Information taken from the Forty-fifth Annual report on Senior Salaries ‘Forty-Fifth Annual Report on Senior Salaries 2023
*Practitioner Guidance on the 2023/2024 SCS Pay Framework ‘Practitioner Guidance on the 2023/24 Senior Civil Service Pay Framework

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Trudy Stedman

Trudy Stedman is a Principal Consultant & Business Manager at Beamans.

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This article is filed under: Equal pay Job evaluation Reward