A Study of the Effects of Pay Reform in the National Health Service

Agenda for Change was a document, released in February 1999 by the Department of \nHealth, outlining major pay reform in the National Health Service (NHS). A central \ntenet of reform is flexibility, in terms of job roles and tasks, where existing and \ntraditional demarcation was judged to be a serious inhibitor to a modern health \nservice. According to the current labour Government the NHS pay scheme is too \nrigid with an incremental pay structure based only on longevity of service. \nProgression through the pay scales is not currently linked to individual or team \nperformance. This has inhibited new skill acquisition and has restricted employees \nfrom assuming extra responsibilities that new technology or modern working \npractices might demand. \nThe focus of this research is centred on the way, in which the new pay framework \nwill operate and on what basis staff will be allowed to progress up the pay spines. \nThe guidelines describe modern flexible career paths and continuing professional \ndevelopment as the determining factors for progression and these will be bound in a \nperformance-related pay structure. Researchers in the field of HRM assert that there \nis a lack of analytical work on the impact of performance-related pay in the public \nsector and this is particularly acute in relation to the NHS. \nThis paper will analyse and evaluate the current reward management practices \nprevalent in the NHS to identify the advantages and disadvantages in terms of \nperformance, motivation and reward. It will also identify and establish if the new \npay structure achieves its' "principles and intentions" of increasing flexibility, \nmeeting the needs of patients, achieving a quality workforce with the necessary skills \nand motivation, consistent with wider national HR strategies.