Why I...believe university pay needs to reflect performance

January 16, 2004

Pay management in higher education is clinging to tradition. Sadly, tradition here means that men tend to be paid more than women, that long service is valued above ability and results, and that universities lack the flexibility they need to attract and retain the best people. Something must be done. To be fair, governments have been pressing for reform for many years and, in 2000, the Higher Education Funding Council for England even granted significant funds to universities that could demonstrate they had a strategy to address this thorny topic. But only a handful of universities have been brave enough to act on their strategies. The majority have consigned pay to the "too difficult" box and perhaps hope that the protracted national negotiations will conclude and provide them with the answer.

Such reticence is understandable. Many university human resources directors find themselves in an invidious position, sandwiched between the finance director, who believes that pay reform means unsustainable expense, and the staff, who suspect that change is all about cost savings. Changes to pay structures raise strong emotions, and common sense is often the first casualty.

Nevertheless, two things at least clearly need to happen: the disparate range of pay structures in use within each institution needs to be unified or at any rate harmonised to address equal-pay concerns; and the sector's archaic approach to pay and career progression needs to move away from service-related increments towards rewarding people in line with their contribution and responding to market pressures.

Unifying or harmonising pay structures is relatively uncontroversial and is the principal goal behind the common pay spine and proposed pay structures discussed at national level. At issue here is the way this is done rather than the principle behind it. The pay and career progression challenge is more problematic. The recent reaction to the University of Nottingham's move to modernise its human resources and recognise the contribution of its staff shows how strongly some people feel about this.

This is a curious reaction to a perfectly reasonable approach to pay management and rather ironic in view of the fact that institutions have, for many years "rewarded" excellent academic achievement with additional research facilities and recognition through early promotion, for example.

It is time to apply some consistency. Clearly, performance matters in higher education as much as it does in any other sphere, especially in view of the current mania for league tables and research assessments that can so affect funding and student applications. Linking pay to the achievement of the organisation's objectives communicates that individual contribution is important. Naturally, there are problems to be overcome - what to measure and how to measure it above all - but surely this is a more sensible way forward than perpetuating a system where the principal driver of pay progression is length of service?

A crucial area for differentiating pay on the basis of individual contribution is among academics. The difference a big name academic can make to the kudos of a department or success of a research team can be the difference between a selective university and a recruiting one - for both students and staff. Management and leadership skills, too, should be more highly valued than hitherto and not treated as a rather irritating distraction to the business of teaching or research. Effective pay management for academics, including incentives and pay based on contribution, can help to attract and retain the big name, and encourage people to develop and deploy managerial skills without fear that this might damage their careers.

Tradition is a powerful thing, and often a great asset, but when it comes to pay it is time to break with it.

Mark Thompson, head of reward,  Hay Group people management consultancy.

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