“There is a much stronger case for linking pay to performance at the senior levels of public organisations, as opposed to the rest of the workforce”.
He believes that senior people “have the autonomy and discretion to influence outcomes in a way that frontline staff may not”, which makes it “easier to link individual performance to organisational goals”.
He also argues that by restricting performance pay to the top echelon any scheme will be “considerably less resource intensive and bureaucratically unwieldy” and more likely to be self-financing.
HSJ has made this case before in the context of ill-informed political attacks on performance related pay and we hope that the government will listen to Mr Hutton’s counsel.
His idea of “earn-back pay” - losing some of your salary if you do not meet agreed targets - is unlikely to seem attractive at face value. But it might prove a clever way to reassure the public that performance schemes provide value for money.
The approach has, incidentally, proved relatively successful in motivating doctors to deliver efficient services in other parts of the world. One could - with a bit of a stretch - see the element of the quality outcomes framework linked to productivity and the proposed “quality premium” for good commissioning behaviour as in the same vein.
As clinical staff are given greater responsibility over resources they should also expect an increasing part of their remuneration to be linked to performance.
Indeed, greater use of performance rewards for those occupying senior and influential positions - including GP commissioners and medical consultants - might be one answer to the financial impact of proposed changes to NHS pensions.
It is clear from our survey of subscribers that most think the pension reforms are unnecessary and unwelcome. But they are also probably inevitable, at least to some degree.
If the government decides that it needs to even up the playing field between public and private sector pensions, it must also consider allowing the same to happen with pay freedoms for senior public sector staff.