Tuesday, 18 September 2012

It is MOD civil service bonus time again; cliches will fall when hit...

So once again news has broken in the media that the MOD civil service is to get a bonus, or more precisely £30 million worth of bonus payments this year. The Mail is outraged, and other newspapers seem to be gearing up for the latest instalment of  ‘lets all burn the civil service heathens’…

Despite appearances to the contrary this is not a ‘bonus’ in the Merchant Banker sense. Many years ago a decision was imposed on the MOD that as part of efforts to improve performance some of the annual pay award would be set aside, and instead of forming consolidated pay, which was pensionable, would instead be paid as a bonus (which was not pensionable). The theory was sound, more money = improved performance and a smaller pension bill. The reality has been 10 years of changing assessment methods, different criteria for qualification and a sense of frustration by many civil servants that they are being hung out to dry in the press for having the audacity to be paid.

Humphrey has never met a single MOD civil servant in 10 years who supports the bonus system. In its earliest iterations it was divisive, as it meant 50% of a team would get an award, while 50% would not. Latterly it has been awarded to everyone who has met their performance criteria – in other words, if you turned up to work, did your job and didn’t get into trouble, then you’d get a basic bonus. Put more effort in, which could be demonstrated in a short statement and confirmed by management, and you might get a bit more. The problem was that goalposts varied tremendously, as the definition of merit seemed to change from team to team.

Next year it is promised that things will change and that only the top performing 10-20% of civil servants will get a ‘bonus’. This seems an effort to move it away from the concept of providing a top up to basic salary, and instead rewarding real achievement. Even now though some of the authors friends think that 10% is too large a proportion – after all, if only 10% of staff get a bonus, then the temptation for report writers is to lead to grade inflation to try and get everyone in on the act.

Personally the author has a dislike of the bonus scheme – why not use the very effective system of rewarding good performance through thank you letters from seniors, GEMS payments, the honours system and the like? Why do we have to go through an annual process of being castigated in the press for receiving payments tied into doing our job? Bluntly, a short personal note from a senior officer acknowledging something the author has done would mean a lot more than a small cash payment.

Tired old Cliches
The one thing that has annoyed all of the authors acquaintances today is the way that the media have trotted out the same old ‘pen pushers’ clich├ęs. Apparently while the forces will ‘only’ get a 1% pay rise, while shivering to sleep at night in cold barracks, yet the civil service is laughing it up with their £30 million bonus.

Let’s be really clear about this – the civil service is now in a three year pay freeze, and within the MOD there is also a pay scale progression freeze. In real terms this means each civil servant in the MOD would usually progress one point up a pay spine each year, worth roughly 2.5% of salary. For the last three years, this has not happened, meaning that in broad terms, MOD civil servants are all being paid 7.5% less now than they were expecting to be back in 2010. At the same time it looks like a pay award is likely to be very small for the next two years, meaning in real terms most civilian staff are looking at best at a sub 1% pay rise, possibly as low as 0.1-0.5% in some cases. In the case of the bonus, this was part of the final payment from the last pay award, and was contractually obligated to be paid.

While this is going on though, although the military continue to have a pay freeze too, they have not had the same progression freeze on their pay scales, meaning they are still getting a real terms pay rise each year. Alright it’s not much, but the idea that the civil service is supping Bolly, while the military starve is as far from the truth as you can get. In reality the military are paid vastly more than their civilian counterparts.

 What has really enraged many of the authors friends today is the way that this news was leaked to the media before it had been announced to the MOD. Staff knew a payment of some form was coming, but to read in the Daily Telegraph more informed comment prior to being informed by their own management has really upset people.

The author has no idea who leaked this story; it could be a civilian, military or political background. But he is dismayed that once again it seems okay to try to do down the civilian component of Defence. It sounds silly, but the vast majority of staff who work for MOD are genuinely really proud of what they do, how they support the military and how in a small way they can help the armed forces achieve success. It really hurts to open the papers and find ourselves being cast in the worst possible light by the media, particularly when you suspect that that story can realistically only have come from somewhere within your own organisation.  It hurts to know that someone, somewhere, cares so little for the civilian component of defence, that they are willing to crush peoples morale and see people genuinely upset in order to achieve a desired effect.

The author knows people who are really upset about this. The public neither know, nor wish to know the intricacies of how the MOD CS get paid. They do get angry when they think that our military is suffering from a lack of funds and they blame the civil service. The person that leaked this doesn’t have to go and meet new people and admit, almost shamefacedly, that he is a civil servant. The last time the bonus system was in the media, the author discussed what he did at a black tie dinner party he was publicly lambasted for 20 minutes by his dinner colleagues for his own personal failure to support the front line in some undefinable way. Now, he knows it’s that time all over again as people will once again be incredibly rude and direct their anger on the civil servants who have no control over this policy, and not the people who came up with it in the first place.

The person that leaked this will not have to put up with peoples anger which is directed against the civil servants who have done nothing more than try to do a difficult job for very little money at a time when tens of thousands of their colleagues are being made redundant. They didn’t choose to implement a bonus policy, but they are the ones who will face public anger over today’s announcement. The anger is there and it is real, because the author has himself experienced it.

It would be nice if there was some kind of defence, some strong statement standing up for the MOD civil service and an effort to remind the public at large that we are all part of UK defence, no matter whether we wear combats or pinstriped suits.

The MOD civil service is an amazing organisation, filled with some of the brightest, funniest, astute and dedicated people the author has ever met. They are almost all passionate about their work, they are hugely proud of serving their country and they genuinely do care about Defence. They deserve far more respect than they get in the media, because they too play a vital role in keeping this country safe. Don’t judge them by their payment system, judge them by what they do for this country, and remember that even if they don’t wear uniform, they too play a vital part in the defence of the UK.


  1. A well constructed piece Sir Humphrey. Personally I feel a good job deservers a bonus and that in turn motivates people therein raising efficiency and productivity. Though as always the media has its "easy targets" and even the smallest story they will blow out of proportion and bend the truth.

    But the problem remains though that some terrible decisions have been made between, the top civil servants, politicians and chiefs of the armed forces , which had led to a massive short-fall in the budget.On top of this many high profile cases of extravagant waste of resources/money. Not that I believe all MOD civil servants are responsible for this or that they should pay the price but sensationalist journalism has unfortunately become a normal part of our society these days.

  2. Have to agree with most of your points Humphrey. The tricky thing is how do you measure the extra effort compared with 'doing your job'?

    If there are rewards for success, are there consequences for failure? It appears that there are none. This seems to me, the reason the MOD gets a bad press. You have to admit some very well paid people have gotten away with some very expensive errors of judgement and in extreme cases actual criminal fraud.

    Case in point, pretty sure the MOD at the time justified the closure of the UK arms factory on the grounds on cost. Did those who supported Foxley at the MOD continue their careers?

    ht tp://en.wikipedia.org/wiki/Gordon_Foxley

  3. Great article. The situation is unfortunately much worse than the one you have portrayed; may offer a further 2 points: [1] The portion set aside out of the main pay pot for performance pay is 2.7%, the Defence Secretary decided this was too much and the £30 million only represents 1.7% of the pot therefore, MOD civilians are currently only receiving 99% of their annual pay which apparantly was deemed legal. Most believe in fact that it is an illegal deduction of wages. [2] The two tier system of bonus's paid this time around is unfair. Those who scored a '5' e.g. outstanding in their report were rewarded with a higher bonus, but those awarded a '4' which meant they exceeded the standards of their grade were awarded a basic bonus along with those who were awared a '3' whom just met the standard of their grade.

    There are many other points why this is a total farce, but they are the two additional points that I feel are most worth a further mention.

  4. The problem is not with bonuses paid for genuine achievment. Press coverage should be ignored as ingorant pandering to the masses.

    The real question is why the civil service continues in the grip of Baumol's cost disease. Why should a civil servant get a pay rise, i.e. advance up a "pay spine" for getting a year older if they still do the same job? This doesn't sound like inflation indexing but an unmeritted reward for continuing to breathe.

    1. So why, then, does a member of the armed forces not only get two pay increments a year, but also have his/her pay annually 'revalorised' - ie increased so as roughly to equate with inflation - while still doing the same job? And why exactly is this perfectly OK for a uniform but beyond the pale for a civilian worker in Defence? And why is it OK for coppers, nurses, teachers et al ad sodding nauseam to get annual pay increments - because, fairly bloody obviously I'd have thought, even though they might be 'doing the same job', they do it better the longer they do it - plus, in most cases, annual revalorisation of the pay scales? But an MOD civil servant doesn't even deserve to be paid a salary that doesn't diminish in real terms every year?

      OK, I understand that you're probably trying to provoke a frothful reaction with this stupid and downright nasty remark, but please do go away and be nasty to some other public sector target. A hell of a lot of us in the MOD CS are being steadily impoverished whilst in work by this pay freeze and are being forced to contemplate poverty in retirement, and are consequently in no mood to listen to this sort of crap.

    2. (new anon - not either of the earlier ones)

      I don't necessarily think anon1 is attacking in the same way DM and others have done when he questions incremental pay. Outside of the public sector incremental pay is considered old-fashioned, both the previous and the current Govts have expressed wishes to move away from incremental systems, and even NEM for the military is considering something different in the distant future.

      To address the question posed, why increment at all, the answer is that this reward system is designed to match pay to experience in grade, with the assumption being that a newly promoted person arriving in a job would not be as productive as someone coming in with more experience at that grade from previous like appointments. It also arguably helps retain experienced people.

      If you move away from an incremental system to something where basic salary is the same or similar for all in a potentially wide range of roles and performers then there will be more pressure to introduce something else to reward the better performers or othse doing the most difficult jobs in a particular grade grouping - i.e. bonuses which absolutely no-one in MOD likes and which attract huge levels of negativity from DM and sections of the public. Also, if you just go with a pay system of spot rates for grades then recruitment & retention will probably suffer and the overall quality of the workforce will go down as a result (although the pension will always act as an additional draw whilst their remains little provision in the private sector).

      I personally would like to keep incremental scales but have them earned through performance rather than automatic - so if you are doing the job but showing no improvement or development then you stand still but if your reports show you are improving over time then you can progress. This would mean the end of annual increments for all but give people something to strive for without falling foul of the bonus culture and everything that brings.

    3. You know, it's been so long since I had occasion to look at the pay scales, I'd forgotten that these were infact actually 'revalorised' in each year of the five-year and then the three-year deals. Stuck in the here and now of trying to make ends meet on the same salary since 2010 or whenever it was this nightmare started, the happy days of 2.5% and a slight move upwards are but a distant dream.

      I'd keep the system as it operated during those pay deal periods, but reduce the size of the 'bonus pot', incorporating part of it into pay proper (and therby undoing the last lot's salary-and-pension-stealing by sleight of hand) and using the sum retained in the 'pot' to give performance rewards to a smaller percentage who actually do put in performance above and beyond. This is more or less what they've indicated will be what happens from 2013 onwards (though what's the betting the 1.2% or whatever that's not being paid in bonus this year - which is actually part of the sum allocated to the three-year deal, so how this isn't breach of contract is a moot point - will simply be 'taken as a saving' - god how unattractive is the soft language of corporate accountancy. It'd still be divisive - and we all know that enhanced bonuses depend to a huge extent on the commitment and integrity of a staff-focussed line manager and/or 2nd RO, none of which qualities can be guaranteed - but, by making receipt of a 'bonus' exceptional, this might go some way towards reducing resentment, should it exist.

  5. Personally, I've never been troubled by the bonus system, but that may be largely the result of working in an environment where one has - with a few arsey exceptions - respect for colleagues and understands where someone may have worked their tits off or taken on a substantial burden for the corporate good. The real difficulty with bonuses in my opinion, whether talking about a standard modest sum for turing in a creditable and honest day's work for 12 months (infintely preferable though it would be to use this money for basic pay), and a rather more significant sum for the higher achievers, or about the next-year-onwards system of only giving a (presumably significant) reward to the high-achieving minority, is that the opportunity to make an outstanding, beyond-normal-requirements contribution to the business of defence is not open equally to all, and is somewhat arbitrarily distributed. So, for example, if I happen to work in a particular sub-unit, I might be asked to take part in something like a 'task force'. This might consequently result in my having to do shiftwork, weekends, long hours and generally get pretty tired and stressed. I would, of course, get the various allowances and overtime payments that were my contractual right. But the chances would be high that I might also be nominated for an enhanced (or from next year, just any) bonus, just for having worked jolly hard after having been asked to do so in response to events. But my colleague in a slightly different sub-unit, who hadn't been asked to join the task force, work shifts, long hours and get paid for doing so etc etc, might have stayed at his or her desk, working equally as diligently and creating wel-received high-quality product as per usual, but, because the role remained 'business as usual', would receive no recognition, and might think 'wish I'd been asked to do that'. Similarly, and somewhat depressingly, anecdotal evidence suggests rather strongly that somebody working in a private office, close to a nexus of influence and in a position to get noticed by one of the big dawgs, may well end up being nominated and rewarded for exceptionality that may not be entirely and objectively justified. We who do not exist in such rarified habitats can only speculate about this sort of thing, and we do. Equality of access to opportunities to get noticed aside, though, reduction of the size of the bonus-rewarded pool seems like a better idea than the current shambles.

  6. The average bonus that an MoD civil servant will be paid amounts to about £300 (after tax). That works out at 85p a day - less than the price of a cup of coffee! A non story once again.

    Now if you look towards the top end of the civil service, well that's a different story altogether.

  7. The CS pay system has evolved into the worst of all possible scenarios; Basic pay, incremental increases in same, bonuses and expenses. All are debatable rewards and all are subjective and all all been tried by the private enterprise system to improve quality, productivity or staff appeasement. They have all been distorted, bent or corrupted by management, unions or individuals. In other words, the CS presents the largest, widest and deepest of all possible targets and the track record of competence has not, unfortunately, been up to scratch on a number of extremely well documented occasions.
    Don't blame the messenger. People who spend other peoples' taxes are never popular unless they die doing so.

  8. Can't wait for the usual Civil Servant kicking to start in the press again. You have to admire the wit of a the individual who creates a system that reduces the pension pay bill, makes you work hard for a year on a promise that may not be met, reduce morale - AND get you vilified in the national press.
    They must of got an exceptional award for that year.

  9. My ribs are still aching at the "Civil Service impoverished in their old age" line. I agree with much of what Sir Humphrey says but some of the responses are risible. Working as middle management (SEO) grade in the Civil Service I can safely say that my pension will not result in me heating up cans of soup over a calor gas burner. The Civil Service have a fine pension scheme, the terms and conditions of service are excellent, albeit they are being swiftly eroded, and for anyone who feels he is hard done to - put pen to paper, hand your resignation in and get a job on the customer service desk at Carphone Warehouse where you are required to book out if you want to go to the toilet for 5 mins! Wake up and smell the roses Ladies and Gentleman and just consider, for all your whines and gripes the day you resign in a fit of pique there will be 100 applicants applying for your "stressful and low paid" job

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