The Civil Service salary structure is inflexible and does not reward performance. This is perhaps the most important finding to emerge from the work of the Public Service Productivity Panel team, whose remit was to recommend improvements to incentive reward schemes.The team found that skills in the four agencies they looked at can be gained in 2 to 3 years, but it can take 25 years to progress to the top of the salary scale. This creates frustration and has a negative impact on performance.
Another weakness in the salary structure is the absence of regional variations. Because salaries in London and the South East are uncompetitive, staff turnover is high, reaching 21% in some areas. Many staff do not complete the initial 13 week training period and this has a harmful effect on productivity. Similar situations exist in other cities.
The report urges that the salary structure should be more flexible by rewarding performance rather than length of service and that it should be more market facing. It is clear that any attempt to create a performance culture must be preceded by structural change in the total system for rewarding staff.