Linking the stay of senior staff to national objectives would be an “unhelpful distraction”, according to the NHS managers’ union.

Greater use of performance related pay was proposed by Work Foundation executive vice chair Will Hutton in his Better Pay review, published on Tuesday.

The report said senior managers should have a proportion of their salary withheld if performance targets were not met.

This would ensure that public sector executives had “skin in the game”, unlike private sector equivalents who were rewarded for success but suffered no “downside” if they failed to deliver.

But Managers in Partnership national committee chair David Amos said: “Linking senior managers’ pay to top-down objectives from outside organisations is an unhelpful distraction.

“It might let politicians off the hook but it wouldn’t do anything to address public concern about senior pay accountability.”

However, MiP welcomed the fact that the Hutton commission rejected the idea of a cap on senior salaries of no more than 20 times the wage of the lowest paid member of the same organisation.

Mr Hutton, who in his interim report agreed with the cap originally proposed by the government, said it would not promote fairness across a diverse public sector.

Organisations should instead be required to publish all median to senior level pay alongside clear justification on how pay levels are set, the report proposed.

It said this data should be published online and collated into an annual fair pay report, starting next financial year, by a senior salary review body which should have the power to directly intervene where pay does not appear to be justified.

Arbitrary benchmarks for assessing senior pay, such as the prime minister’s salary, should be binned and the government should create a new set of independent benchmarks ready for use by July, the report recommended.

Chancellor George Osborne said: “The government is committed to striking a balance between value for money for taxpayers and fair pay for public sector workers. We will give careful consideration to his recommendations and respond in detail in due course.”