Time to review your pay policy?

Changes in the maintained sector could lead to more and more independent schools introducing performance-related pay

Posted by Dave Higgitt | January 13, 2014 | Law, finance, HR

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This article looks at the current issues around pay in the independent school sector, including the link between performance and pay.

Historically, in the independent sector, many schools have operated without a clear or transparent pay structure, or alternatively used teaching pay scales with automatic incremental progression for each year served, including some which are very lengthy.

The introduction of performance-related pay in the maintained sector has acted as a trigger for many schools to review their pay scales and ensure they are effective and sustainable for the future, with many taking this opportunity to explore whether the option of linking pay to performance is a route they wish to adopt.

Performance-related pay in the maintained sector

The School Teachers' Pay and Conditions Document 2013 has introduced some fundamental changes to the way in which pay rises will be awarded for teachers in the maintained sector from September 2014. Although the independent sector is not bound in statute to the STP&CD, many independent schools still have regard directly or indirectly to the STP&CD and it will potentially lead to a wider shift in approach to teachers' pay in the sector.

The STP&CD 2013 affects pay on appointment and pay progression through the main and upper pay ranges. There are a number of key changes:

• Schools can determine starting salaries for new teachers depending on the nature of the post and the skills and experience required for that post and the market conditions. Unlike previously, schools are not obliged to match existing salaries. Equally, higher salaries may be paid for posts where there is a particular demand or skills shortage
• Automatic annual increments based on time served are abolished
• Teachers’ pay progression will be directly linked to their annual appraisal and achievement of individual objectives

Undertaking a pay policy review

The starting point for schools when reviewing their pay policy is to analyse what works well at present, and what doesn’t, and identify the school’s objectives. The approach to pay policy should then reflect these objectives. It is important to undertake a staffing audit to analyse the current and proposed implications for staff and properly understand the consequences for the staffing budget and individuals.

Introducing performance-related elements is only one aspect which schools may wish to consider. A range of approaches to reviewing pay scales is now coming into play, with many schools reducing their length, restricting the number of allowances and separating out the senior leadership team.

There is also a number of different ways in which schools can introduce performance-related elements. One route is that adopted by the maintained sector to ensure that annual progression is linked to sustained good performance and objectives being met. A more modest option is to introduce some thresholds, which act as a bar to automatic progression at certain points in the scale, unless evidence of specific responsibilities or expertise is produced.

Effectively linking pay to performance

For schools to link pay to performance successfully, it is critical that there is a clear and transparent understanding of the job roles and expectations which are being measured, and a well-embedded and trusted appraisal process.

The first two articles in this series looked at some of the tools for an effective appraisal process. Perhaps one of the most difficult aspects of the process is establishing consistent and measurable objectives and this is crucial if they are to be taken into account when assessing pay.

Schools also need to establish what evidence will be taken into account when determining whether objectives have been met. This ideally needs to be as objective as possible and may include self-assessment, lesson or other observations, pupil data and/or views of parents and pupils. None of these elements is likely to work in isolation, but used together they can create a fair and balanced pattern of evidence to enable fair decisions to be reached.

It is necessary that a conclusion or outcome to the appraisal is reached: this then translates into a pay decision.

Implementation

If schools do wish to implement a new pay policy, they need to ensure that they consult collectively with the staff in order to comply with the law, but also to ensure ‘buy in’ from staff. Such changes inevitably cause concern and anxiety, and time needs to be given to ensure these are addressed. Where more than 20 staff are affected, a consultation period of 30 days is usually required as a minimum, with a minimum of 45 days for 100 staff or more. However, best practice is for a consultation period of at least a term, before issuing staff with notice of the change. If schools do formally recognise trade unions, then the revised pay policy will need to be negotiated through the agreed collective bargaining mechanism.

Conclusion

Introducing a new pay policy should not be undertaken lightly but there are good reasons for schools to review their current policy and ensure that it is fair and meets their needs. The topic of performance-related pay has obviously met significant resistance from the teaching trade unions and polarises opinion. Veale Wasbrough Vizards works with some schools that have successfully introduced performance-related pay, whilst others cannot contemplate ever adopting this approach. However, the drivers for change and the shift in approach in the maintained sector mean that over the next few years it is likely that an increasing number of independent schools will introduce some form of performance-related pay.

Alice Reeve, partner, and Caitlin Anniss, senior associate, are from leading education law firm Veale Wasbrough Vizards. Alice can be contacted on 0117 314 5383 or at areeve@vwv.co.uk Caitlin can be contacted on 0117 314 5264 or at canniss@vwv.co.uk