Results of trial of team-based pay in the NHS

TEAM PAY

An experiment with team-based pay in the national health service produced mixed results but a number of valuable lessons for managers, according to a study published in a recent issue of the US reward journal Compensation & Benefits Review.

The seven-page article describes an extensive two-year trial of team pay in the UK health service set up by the Department of Health. The exercise aimed to test whether performance improvements could be encouraged through the use of rewards in settings where individual performance-related pay might be inappropriate. The pilot used a number of different sized teams and a variety of occupational groups and reward options -- from cash to improvement funds.

The evaluation exercise was carried out for the health department by the authors of the report, Peter Reilly, director of consultancy at the Institute for Employment Studies, and Jane Phillipson and Peter Smith, who are senior consultants at the Hay Group.

Mixed bag of results

The authors conclude that many of the pilots delivered valuable benefits for patients, for trust management and for staff. At its best, team pay encouraged closer teamworking and co-operative behaviour as well as enhancing discretionary effort.

But the authors acknowledge that some sites did not deliver as well as others. There were a number of difficulties with targets. "Some hospital administrators found it hard to specify output, let alone outcome, measures," the authors say. The authors also point to a further problem with team pay: identifying teams.

Conditions for success

The authors conclude by examining the success factors that might be applicable elsewhere:

There needs to be a clear scheme purpose and leadership in the context of staff trust in management.
Clear and simple targets need to be established, supported by reliable data.
Good quality project management must exist, including skilled communication.
Optimal team size and structure depends on the scheme’ s objectives.

Want to know more?

Title: "Team-Based Pay in the United Kingdom", by Peter Reilly, Jane Phillipson and Peter Smith, Compensation & Benefits Review, Vol. 37, No. 4, 2005.

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Posted 3 October 2005