Performance pay strings divide sector

Performance-related pay is set to be introduced in universities as part of a series of measures to tackle poor teaching and stop the threatened brain drain of top academics. Lecturers' leaders and some senior academics "deplore" the plan and are warning that the national pay system is under threat.

PRP - already controversially introduced in schools - has been recommended as one of a number of strings to be attached to the £330 million funding available over three years for lecturers' pay and professional development.

A Higher Education Funding Council for England consultation paper, Rewarding and Developing Staff in Higher Education, makes clear that it will be released only on a "something for something basis".

Funds will be released as a conditional grant on the basis of individual three-year staffing strategies from institutions, approved and monitored by Hefce. Strategies should include plans to develop equal opportunities targets and to address recruitment and retention problems. The report makes it clear that the strategies "should" cover "annual performance reviews of all staff, with rewards connected to the performance of individuals". Also included should be measures for dealing with poor teaching. Institutions will be left largely to devise their own schemes. Detailed PRP systems have not been widely modelled.

A Hefce spokesman said: "It's up to institutions to put in place monitoring arrangements. We want these arrangements to present the minimum of burdens but we need to know that we are getting a return on our investment."

Performance-related pay has already been mooted for lecturers and researchers. Hefce chief executive Sir Brian Fender said last year: "Human resource management in higher education needs regular reviews of staffing requirements, annual individual performance reviews with appropriate rewards, action to tackle poor performance and measures to address recruitment and retention difficulties."

Sir Howard Newby, vice-chancellor of Southampton University, who will succeed Sir Brian in October, supports performance-related pay.

But Tom Wilson, head of universities at lecturers' union Natfhe, said:

"Natfhe deplores the inclusion of performance pay in the consultation." He is concerned that the national pay system could be undermined by "piecemeal distribution of money by Hefce".

Malcolm Keight, assistant general secretary of the Association of University Teachers, said his union's research showed that PRP schemes did not work, and that they would be even less successful in higher education, where across-the-board pay rises were long overdue.

The unions have taken heart from the fact that PRP would not necessarily be compulsory. Leslie Wagner, vice-chancellor of Leeds Metropolitan University, said performance-related pay was an essential ingredient in the effective running of an institution. "The key is to set objectives that are linked to the institutional plan," he said.

But Peter Knight, vice-chancellor of the University of Central England, said: "Pay systems that are based exclusively on performance are expensive, difficult to manage and inappropriate for most activities in higher education."

Dr Knight said that there was not enough money and too many compulsory demands: "The total extra money that has been made available next year is less than 1 per cent of the HE pay bill. It is simply ridiculous to suggest that such a paltry sum will address the issues identified in the Hefce circular."

A Hefce advisory panel will approve the initial plans and universities will report on their performance against their targets. During 2003-04, Hefce will "evaluate the effectiveness of the investment throughout the sector".

Ministers announced the £330 million package as part of its year 2000 spending review. It announced £50 million for 2001-02, rising to £110 million in 2002-03 and to £170 million in 2003-04.

• University pay bargaining chief Peter Humphreys has announced his resignation and said that local pay bargaining is almost certain to become the norm, writes Alan Thomson .

Mr Humphreys, who joined the Universities and Colleges Employers Association in 1997, will step down at the end of February for personal reasons.

Mr Humphreys said he was disappointed that the government had not funded the full £1.4 billion cost of implementing all the recommendations of the Bett inquiry into pay. Local pay bargaining would happen through a process of evolution, he said.