SENIOR CIVIL SERVICE
HR PRACTITIONERS’ GUIDE TO
SCS REWARD, BENEFITS &
RECRUITMENT for 2010-11
COVERS THE BUSINESS YEAR 1 APRIL 2010 – 31 MARCH 2011
This document is provided for guidance only – it is not a legal document.
CONTENTS
Section
1
2
3
4
4.2
4.3
5
5.1
5.2
5.3
5.4
5.5
6
7
8
Annex A
Annex B
Title
Purpose of HR Practitioners’ Guide
SCS reward
Structure of the SCS base salary framework
Page
3
3-4
4-5
Figure 1 Appointing staff
Figure 2 SCS Pay Bands 2010/11
Annual Pay Arrangements
Base pay, including the use of recyclable savings
Non-consolidated variable pay, including differentiating
performance
Further Department Flexibilities
Promotion
Dealing with job changes
Return after extended absence
Individuals on loan
Individuals on secondment
Departmental moderation
Appeals
Departmental annual report
External recruitment
Contact Information
6
7
8
8-10
11
11
12
12
12
13-14
14
14-15
16-17
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This guidance sets out the central framework within which Departments must operate. More
detailed guidance is provided by individual Departments.
2
1.
PURPOSE OF THE HR PRACTITIONERS’ GUIDE
1.1
This Guide is designed to help Human Resource (HR) practitioners responsible for advising
departmental management on Senior Civil Service (SCS) reward, and should be read in
conjunction with ‘Managing Performance in the Senior Civil Service – A Guide for HR
Practitioners, Managers, and Members of the Senior Civil Service including Permanent
Secretaries’. It sets out the central framework within which Departments must operate.
More detailed guidance is provided by individual Departments.
1.2
This HR Practitioners’ Guide to SCS Reward, Benefits & Recruitment 2010/11 covers:

the structure of SCS reward – not only base pay and variable reward, but pension and
other less tangible elements of the total reward package;

the principles that underpin the reward structure;

the reward flexibilities available to Departments;

advice on advertising salaries and setting starting salaries; and

related issues, such as external recruitment and secondments.
2.
SCS REWARD
2.1
The total reward package for the SCS is designed to attract, retain, engage and motivate
senior leaders, professionals, and specialists of the right calibre in order to continuously
improve performance and to deliver business objectives.
2.2
The total reward package comprises four elements:
Pay
made up of base salary which is consolidated, pensionable pay (for some
members of the SCS not all base salary is pensionable), and variable pay
which is a non-consolidated (in other words, it is non-pensionable and
conditional) one-off award to recognise performance;
Conditions
made up of pension which is defined benefit and index-linked, and other
contractual benefits such as annual leave;
Benefits
including taxable benefits and allowances that are paid to staff; and,
Intangibles
made up of (and necessarily limited to) a commitment to work/life
balance (for example, contractual and informal flexible working patterns);
interesting and socially valuable work; commitment to development; and,
a supportive work environment made up of a diverse workforce.
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2.3
The Minister for the Civil Service has not delegated SCS pay and conditions to individual
Departments. The SCS is a corporate resource employed with a common framework of
terms and conditions and central arrangements for career management and training.
Departments operate the common SCS pay framework in line with the principles set out in:

this reward Guide;

the Performance Management Guidance for Permanent Secretaries and the SCS;

the Civil Service Management Code; and

HRDG letters which expand upon or inform Departmental HR of revised policy.
HR practitioners are strongly encouraged to contact colleagues in the Cabinet Office’s Civil
Service Capability Group/Workforce Directorate if they wish to discuss issues or cases.
Contacts are: Mike Watkins (mike.watkins@cabinet-office.x.gsi.gov.uk and 020 7276 1518)
and Julia Wood (julia.wood@cabinet-office.x.gsi.gov.uk and 020 7276 1945).
3.
STRUCTURE OF THE SCS BASE SALARY FRAMEWORK
3.1
The SCS base salary structure is based on simple broad bands, underpinned by a
tailored job evaluation scheme, JESP (Job Evaluation for Senior Posts). JESP provides a
consistent basis for comparing the relative value of jobs within and across Departments. It
ensures that people with particular levels of responsibility broadly have access to salaries
within the same range and supports equal pay.
3.2
Most Departments use the following three core SCS pay bands:

Pay Band 1 (PB1) – Deputy Director;

Pay Band 2 (PB2) – Director; and

Pay Band 3 (PB3) – Director General.
3.3
A small number of Departments and Agencies use an optional fourth Pay Band 1A (PB1A),
nominally captured within a JESP range of 11 to 14 but varying within that range from one
Department to another to reflect particular organisational structures or business needs.
Once adopted in a particular way, the pay band structure applies to all SCS members
within the Department. The JESP ranges underpinning Pay Band 1 and Pay Band 2 must
be adjusted accordingly.
3.4
Departments may apply higher minima for SCS posts within the M25 if they have decided,
on the basis of business need, to pay London rates. Some Departments pay a separate
4
London allowance rather than higher London rates. A Department cannot do both.
Departments must set out their policy on this in their SCS pay strategies.
3.5
Within this framework Departments have flexibilities over:

whether to use optional PB1A to reflect organisational structure or business needs;

the precise JESP range that underpins PB1A;

whether to pay higher London minima within the M25 area for Pay Bands 1 and 1A or
separate non-consolidated London allowance, or whether to not pay any additional
rates for London; and

what arrangements to make to position an SCS member moving to London on a level
transfer where the higher minimum will not result in a pay increase but the department
operates the London minima.
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Figure 1: Appointing staff
IMPORTANT TO NOTE:
You must contact the Cabinet Office Civil Service Reward team
(see Annex B for contact details) to discuss and agree a course of
action if:
 you are recruiting externally to the SCS and need to adopt a
higher starting salary. Departments and Agencies wishing to
recruit externally and set salaries for Deputy Directors above
£90,000 at PB1 and above £100,000 at PB1A, salaries for
Directors above £120,000, and salaries for Director-Generals
above £140,000 must contact Cabinet Office to seek agreement
before the possibility of higher salaries is advertised or
communicated to potential individuals and, in any event, before
any offer is made;
 due to pressing business needs, or in order to address pay
anomalies, especially equal pay issues, you wish to consider
repositioning salary in-year for existing SCS staff. Action in one
Department can have a significant effect on a wider corporate
level. It will also be important, before finalising any arrangements,
to take legal advice as Departments and Cabinet Office need to
be content with the possible ramifications of any action taken.
Prior approval must be obtained from the Chief Secretary of HM
Treasury if you are considering offering packages of £150,000 or
more.
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Figure 2: SCS Pay Bands 2010/11
Note: this table sets out the 2010/11 pay bands and the Cabinet Office Referral Point for
2010/11.
Deputy
Director
Deputy
Director
Director
DirectorGeneral
Pay Band 1
Pay Band 1A
Pay Band 2
Pay Band 3
Ceiling
£117,800
£128,900
£162,500
£208,100
Cabinet Office
Referral Point
£90,000
£100,000
£120,000
£140,000
Minimum
£58,200
£67,600
£82,900
£101,500
7 – 12
11 – 14
13 – 18
19 – 22
JESP range
Permanent Secretary
£141,800 – £277,300
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4.
ANNUAL PAY ARRANGEMENTS
4.1
Each year the independent Senior Salaries Review Body (SSRB) makes
recommendations to the Prime Minister on SCS pay which cover the pay bands, increases
to base salary and variable pay in the light of economic evidence and movements in
the private and wider public sector markets for senior executives. In light of SSRB’s
recommendations, the Government makes decisions about SCS pay.
4.2
Base Pay
This section relates to base pay that will apply through 2010/11.
4.2.1
There will be no increase in the pay bill per head for 2010/11 and therefore no base pay
increases are available for members of the SCS in 2010/11 except as set out under the
“Recyclable savings” heading below.
Recyclable savings
4.2.2
Recyclable savings cannot be used to reward performance or to provide an underpinning
base pay award for staff.
4.2.3
Monies available from recyclable savings in 2010/11 must be targeted towards dealing
with any instances where a pay anomaly has arisen that does not reflect market
value. Departments should seek Cabinet Office approval on how they intend to use this
money. All such repositioning should be carried out against clear criteria and the reasons
recorded. Examples could include concerns over equal pay issues or large
discrepancies in the salaries of individuals engaged in the same type of work,
requiring the same skills and with similar lengths of service and performance
assessment. These records should then be forwarded on to Cabinet Office. This is to
allow the effect of this measure to be reported back to the Senior Salaries Review Body as
part of the annual evidence, in line with their recommendation.
4.2.4
If a Department believes that the pay anomalies could give rise to equal pay
concerns they must liaise closely with the Cabinet Office to resolve these issues.
4.2.5
If any base pay increase places the salary on or above £150,000 prior approval must be
sought from the Chief Secretary of HM Treasury.
4.3
Non-consolidated variable pay relating to performance in 2009/10
This section relates to variable pay that will be payable for performance in 2009/10, assessed now,
at the end of the 2009/10 performance year. Details on this were set out in the HR Practitioners’
Guide to SCS Reward, Benefits and Recruitment for 2009-10 published on 31 March 2009. The
notes below summarise and update this guidance.
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To Note: Consideration is still being given to the interaction between relative
performance and the level of non-consolidated award. Departments should
therefore ensure that the performance management and assessment process
proceeds, but should refrain from making, or promising, any payments until
further guidance has been issued.
4.3.1
Delivery of performance against objectives is rewarded through non-consolidated variable
pay. The Senior Salaries Review Body continues to support the emphasis on nonconsolidated pay as the primary reward for delivery of annual business objectives.
Individuals who make the biggest contribution receive the largest payments; individuals
who make the weakest contribution receive the smallest payments or none at all.
Performance related reward reflects the individual’s relative contribution based on
delivery of their annual performance objectives. The monies available for the nonconsolidated budget should only be used for paying end of year awards and should
not be used to make any in-year payments.
4.3.2
The criteria used for non-consolidated variable pay awards are the same as for
performance assessment. These are:

Whether objectives in the corporate, business and capacity parts of the common
framework have been met or not, and to what degree.

Whether the leadership behaviours and professional skills part of the common
framework have been demonstrated or not, and to what degree.

Additional consideration may also be given to the degree of difficulty or ease of
meeting the objectives in the light of actual events.
4.3.3 Performance related rewards are to recognise performance delivered by the individual. An
element of the performance related reward can be used to recognise all members of the
SCS within a Department for the collective delivery of a corporate objective aligned to
specific business need. Where a Department adopts such an arrangement the scheme
must be approved by Cabinet Office. Communication of such a scheme to their SCS
members is a matter for the Department and should be read alongside this guidance.
Differentiating performance
4.3.4 Whatever variable pay arrangements are adopted Departments should continue to
differentiate awards at the individual level so that the strongest performers get the highest
awards. To determine relative performance it is necessary to rank SCS members from
strongest to weakest. When comparing the relative contribution it is important to ensure
that individuals are compared with their peers, i.e. those within in the same pay band, and
then ranked in a performance group accordingly. There are four performance groups:

Group 1 - Top 25% of performers
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
Group 2 - Next 40% of performers

Group 3 - Next 20-30% of performers

Group 4 - Bottom 5-15% of performers.
4.3.5
All members of the SCS with an acceptable level of performance must be assigned to a
performance group. Poor performers should not be assigned to a performance group. SCS
members in Group 4 are not poor performers. However, relative to their peers and
colleagues these individuals are the weakest performers. As a result they should not
receive any non-consolidated variable pay. Where there are issues over performance
individuals should not receive any non-consolidated variable pay and have action taken to
address under performance or ongoing poor performance, including the drawing up of a
Performance Improvement Plan.
4.3.6
The level of the variable pay award given to each performance group is for the
Department to determine in light of its judgement of how it has performed overall, the
appropriate degree of differentiation to adopt and the instructions on limits and distributions
issued by Cabinet Office. When differentiating between the strongest and weakest
performers it may be helpful to consider how challenging in-year objectives have been,
whether there were significant difficulties which the individual had to overcome, and how
the achievement of objectives have contributed to the organisation’s success. Prior
approval must be obtained from the Chief Secretary of HM Treasury, via the senior pay
team in the Cabinet Office, for any non-consolidated pay award of £50,000 or more.
4.3.7
Managers should complete a Performance Group Recommendation Form giving evidence
to the Department moderation committee on the assessed relative performance of the job
holder in terms of performance grouping. Inevitably this is a provisional input to a
moderated pay committee process and so, to manage expectations, these
recommendations should not be shared with individuals before the moderation committee
has sat. Where a manager is responsible for a sufficiently large number of jobholders, they
should ensure that the proposed Performance Groups across their area match the
distribution outlined above.
4.3.8
Any member of the SCS who is in post for the majority, or all of the reporting period
remains eligible to be considered for a non-consolidated variable award even if they are
leaving the Department or are about to retire.
4.4
Non-consolidated variable pay relating to performance in 2010/11
4.4.1
We are currently considering the approach to be taken on non-consolidated and
performance related awards for performance in 2010/11. Guidance on this will be issued in
due course.
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5.
FURTHER DEPARTMENTAL FLEXIBILITIES
5.1
Promotion
5.1.1
Departments should publish their rules for pay on promotion in their SCS pay strategies.
For individuals promoted to a job in a higher pay band, their base pay will increase by the
greater of:

the minimum of the higher band; or

a promotion award of at least 10%;

if the promotion is from PB1 to PB1A or from PB1A to PB2, the promotion
award will be at least 5%, depending on the Department's rules.
5.1.2
In deciding the annual award for recent promotees Departments will take into account the
length of time in the SCS. If this is more than 6 months, for example, they may wish to
include the individual in the normal arrangements. If it is less, they may choose to
reconsider starting pay on promotion in the light of the pay increase they would have
received in the lower grade.
5.1.3
Existing Civil Servants who have been successfully recruited to an externally advertised
post must be appointed within 10% of the advertised circa salary level. This supersedes the
rules on promotion.
5.2
5.2.1
5.2.2
Dealing with job changes
If an individual moves jobs in-year, it is important that their contribution in both roles is
recognised and rewarded. Departments can either :

ensure that a break report is prepared and made available to Departmental
management when pay decisions are made at the end of the year under review;
or

a single composite report is drawn up by both line managers at the end of the
year. Where there is a difference in the assessments of performance in the two
posts, agreement should be reached about the appropriate pay
recommendation. Normally, the line manager with responsibility for the greater
part of the year should finalise the report.
If the move is to another Department, there should be clear agreement at the outset on how
appraisal and pay arrangements will operate.
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5.3
Return after extended absence
5.3.1
Departments need to decide where in the pay range to position SCS members who return
from extended periods away from work (for example, maternity leave or career breaks etc).
It is for Departments to decide how to do this and to publish their policy. Simple
revalorisation for each year of absence is unlikely to be sufficient or appropriate in
many cases; the reason for the absence and previous performance need to be considered.
Departments should take care to ensure that their approach does not discriminate
against particular groups of SCS members. They should also consider the need for
consistency with policies for staff below the SCS.
5.4
Individuals on Loan
5.4.1
When an SCS member goes on loan to another Department, the parent and loan
Departments need to agree arrangements for performance assessment and pay decisions
at the outset. This is particularly important when one Department operates the optional
fourth Pay Band 1A. The individual will thus be assessed relative to others with similar
levels of responsibility in the loan Department and included in that Department’s
performance group distribution.
5.5
Individuals on Secondment
5.5.1
At the beginning of the secondment the parent Department and the host organisation
should agree the arrangements for appraisal and pay determination, and these
arrangements should reflect the purpose of the secondment. The line manager in the host
organisation should assess the contribution of SCS members temporarily working outside
the Civil Service on secondment. Assessments should normally be recorded on the
standard SCS performance review record, but other methods can be agreed as long as
there is a formal record of performance and contribution.
5.5.1
At the end of the review year the parent Department will take into account evidence from
the host organisation on performance in coming to a judgement on pay. The parent
Department should allocate the individual to a performance grouping. It may not be
possible to make a relative assessment against others in their SCS, but the Department
should aim for a fair pay outcome based on the host organisation’s assessment.
5.5.2
While outward secondees are still eligible for non-consolidated variable pay they should not
be included in the parent Department’s performance group distribution; neither should
variable payments be made from the Departmental variable pay budget or “pot”; payments
should be made from a separate Departmental allocation. If there are many secondees it
may be better for the Department to make separate arrangements to consider their annual
awards.
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6.
DEPARTMENTAL MODERATION
6.1
The role of Departmental moderation, especially in the form of senior pay committees is to:

determine and publish the Department’s SCS pay strategy;

assess the relative contribution of its SCS members;

authorise decisions on individual pay decisions in light of the criteria outlined in
both this guidance and the SCS Managing Performance Guidance;

ensure the average increase to the SCS paybill is within the centrally determined
budget;

monitor pay outcomes to ensure that any differences are justifiable;

monitor the identification of those SCS members needing extra help and support
to improve their performance;

ensuring that line managers receive feedback on final pay decisions so that they
can explain to individuals how these have been reached;

comment on the quality of mangers’ evidence and recommendations so that if
necessary, improvements are made for the next year; and

report to Management Boards and the Cabinet Office on the operation of the pay
round and any lessons for the future.
6.2
Depending on size and functions, Departments may have several pay moderating
committees, though the main committee will decide the SCS pay strategy and oversee the
process. As well as making decisions on the level of awards the committee is expected to
moderate performance objectives and ensure there is a rigorous assessment of
performance. Departments are encouraged to appoint at least one independent
committee member from another Department or from outside the Civil Service, for
example Non-Executive Directors.
6.3
As well as recording pay decisions made in case of appeals Departments should monitor
pay outcomes and should, where possible, analyse awards by:

pay band;

gender;
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
ethnicity;

disability;

working pattern;

business unit;

job specialism;

length of service in the SCS and the Civil Service; and

location.
7.
APPEALS
7.1
It is for Departments to decide the membership of the appeals panel but it should include
an external member.
7.2
If an appeal is upheld, the individual is allocated to the appropriate performance group
and/or awarded a performance payment. There is no further review of others’ awards to fit
the required performance group distribution. Earlier decisions stand even if this means that
the Department has allocated too many or too few to a particular performance group.
7.3
Departments will be expected to report annually to the Cabinet Office on the
numbers of appeals heard and upheld and the grounds.
8.
DEPARTMENTAL ANNUAL REPORT
8.1
Each autumn the Cabinet Office reports to the SSRB on the operation of the SCS
performance management and reward systems. The Government evidence comprises
detailed statistics on the results of the most recent pay round and qualitative
information about how the arrangements have worked in practice. To produce this
evidence the Cabinet Office requires Departments to complete an annual report, usually in
the form of a questionnaire, in the summer after pay decisions have been taken. This
covers areas such as:

flexibilities used by the Department and their effectiveness;

any changes made in the light of experience;

performance pay outcomes, including average costs and performance group/tranche
distribution;
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8.2

qualitative feedback on the pay round;

views of pay committees;

action taken to tackle poor performance and promote continuous improvement;

appeals considered, upheld and reasons;

how the “recyclable savings” were used within the department;

reasons for the departure of staff together with other data from exit interviews; and

any equal pay issues and action taken to address them.
Departments should ensure that the information provided is accurate as it informs the
Government evidence to SSRB. The SSRB has shown concern at some of the omissions
in the data that has been presented to it in previous years, in particular exit interviews.
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Annex A
EXTERNAL RECRUITMENT
Negotiating higher starting salaries for recruits into the SCS – issues for
Departments and Agencies to consider
1. Departments have discretion, based on market evidence, to set starting pay for recruits to
the SCS through open competitions between the pay band minimum and the Cabinet
Office Referral Point (CORP). In 2010/11 the CORP for PB1 is £90,000, for PB1A is
£100,000, for PB2 is £120,000 and is £140,000 for PB3 (also see Figure 1: Contacting
Cabinet Office and Figure 2: SCS Pay Bands). Departments must obtain prior approval
from the Chief Secretary of HM Treasury for any appointments offering a package of
£150,000 or more.
2. If a post would attract a premium in the market because the skills or experience required
are scarce, the Department or Agency must contact Cabinet Office for agreement to a
stating salary above the CORP. In coming to a view on a higher starting salary the
Cabinet Office will take into account any market evidence provided by Departments. It will
also draw on external market advice where necessary as well as its wider knowledge of
executive reward elsewhere in the SCS and in the wider public and private sectors.
3. In negotiating starting salary with preferred candidates Departments should take into
account :

the value of the overall reward package, including pension, opportunity for
performance payments and intangible rewards;

whether the appointment should be permanent or for a fixed term;

internal relativities with other SCS members with similar levels of responsibility;

any potential equal pay issues;

the scope for further headroom for future consolidated pay increases; and

the best arrangements for future annual awards, including the balance between
base pay and non-consolidated pay.
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Other key points:

Departments should involve the Cabinet Office as soon as possible if there is any
likelihood of needing to appoint above the CORP, providing full details of the job and
the person specification;

Departments must seek approval from the Cabinet Office on non-standard contracts or
bespoke performance pay arrangements;

In providing advice head-hunters may include a significant recruitment premium in their
assessment of salary to encourage candidates to consider changing jobs;

Departments should record the reasons for negotiating higher starting salaries in case of
future equal pay claims; and

Where existing SCS members are successful in open competitions for posts with higher
starting salaries the salary on appointment can be informed by the expected external
appointment rate. You should also take into account internal relativities and the fact that
there may be different role expectations of a Civil Service candidate.
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Annex B:
CONTACT INFORMATION
If you have any queries about this guidance or the forthcoming pay round, please do not
hesitate to contact Mike Watkins (mike.watkins@cabinet-office.x.gsi.gov.uk) on 020 7276 1518
or Julia Wood (julia.wood@cabinet-offcie.x.gsi.gov.uk) on 020 7276 1945
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