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How to use pay and reward to drive staff performance in your practice

29 February 2024

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A more in-depth look at your surgery’s approach to pay is required if you want it to make a lasting difference on how you can hire and keep the best staff, advise HR experts Dr Duncan Brown and George Lepine

This article is about building an effective approach to pay and reward for the employees in your practice.  It has four themes:

  • Is what you have now working?
  • What are you paying for?
  • What are you offering?
  • How do you involve and communicate on pay and rewards with your employees?

But first a bit of background.

Why should I be concerned about pay and reward?

With pressures on general practice coming from all directions, focusing on pay and reward may not seem realistic. But a well thought out reward strategy may matter now more than it ever has.

Vacancies are slowly falling and unemployment gradually rising, but the former are still well above pre-pandemic levels and the latter still low by historic standards. We are experiencing significant skill shortages in just about all sectors.  Trevor Phillips, former chair of the Equality and Human Rights Commission, made the point that it’s increasingly the employer who needs to ‘sell’ their ‘wares’ to potential recruits and employees, rather than the other way round. 

Labour and skill shortages are becoming a huge barrier to organisation performance and national productivity in occupations from project managers through to pilots and plumbers.  For example, a new report from the Social Market Foundation found that staff and skills was the leading barrier to success for 69%, rising to 76% among ‘high-growth’ Small to Medium Enterprises (SMEs). 

Skills shortages look like they will be with us for the foreseeable future.  Lack of investment is identified as a key driver of the UK’s low productivity. 

Meanwhile, pay equity and fairness is gaining prominence.  Gender, ethnicity and disability pay gaps remain a cause for action by government and employers.  Employers who have taken a clear position on pay equity are more attractive in the recruitment marketplace, especially with younger workers, and promote diversity, fairness and inclusion.  

Seeing a career path to advancement – and believing the process is fair – motivates employees, studies show. Its absence, unfortunately, does the opposite in far too many employers and is one of the major drivers of historically high levels of voluntary quitting, as the Office for National Statistics’ quarterly datashows.

Addressing these issues demands employers have a clear plan and take the initiative.  A survey from the HR body, the Chartered Institute of Personnel and Development, on talent management shows responses to recruitment and retention shortages shifting much more broadly than just higher pay levels or bonuses.  Among the key findings of the report in terms of what employers are doing are:

  • Taking action to develop and update skills
  • Offering apprenticeships
  • Attracting career returners and mid-career changers
  • Providing flexible and hybrid working solutions
  • Increasing diversity and working proactively to attract a more diverse talent pool
  • Looking at job redesign.

Smaller employers, including GP practices, may lack the promotion and career opportunities for their employees that large multinationals can offer. But they often have greater flexibility in building truly rewarding ’good work’ that really motivates their employees as people and individuals. Additionally, they can build attractive job roles that suit people’s skills and strengths, provide more purposeful work and allow for more flexible working hours and conditions.

Assessing your current approach

We recommend that you initiate a discussion about pay and reward in your practice.  The table below 1 suggests some questions for you and the partners in the practice to answer.

Template for starting the discussion on reward

Reward goalImportance (1 = low and 10 = high)Current effectiveness (1 = low and 10 = high)
Does your approach reinforce the achievement of practice goals?  
Does your approach enable you to recruit employees of the required calibre?  
Have you succeeded in creating a strong relationship between pay and contribution?  
Is reward in your practice motivating and engaging for our employees?  
Does your approach to reward reinforce organisational values?  
Is your approach transparent and well understood by employees?  
Is your approach to reward managed effectively in practice by those responsible for it?  
Are you financially competitive with other comparable organisations?  
Does your approach reward employees fairly and equitably and reflect diversity?  
Does your approach contribute to measurable year on year increases in employee satisfaction?  
Is your approach to reward cost effective and efficient to operate/maintain?  
Add any other goals that are important for your practice? List here:    

We have listed some common goals that employers set out for their reward policies.  In the first blank column rate how important each goal is – the more important it is then the more important it is that you are delivering it in practice. In the second column rate the current effectiveness of that goal. Do add in any additional goals that are important for your practice.

Feedback from colleagues may help you assess how well your current approach is in attracting, retaining and engaging your employees. It will also help you begin defining and drafting future goals and priorities for reward in your practice.  You may find that people have widely differing views on what matters, and that importance and effectiveness scores don’t match each other.

A discussion around these questions will help you to work through the objectives for pay and reward and identify priorities for action.  Without agreement on these things no approach to reward will ever get off the ground. Try to get some evidence to help you to agree – what is your rate of employee turnover for example? How many job offers do you make that are turned down? And so on.

As well as low scores, the gaps between scores will highlight the areas you may want to focus, where you have an important aim that is not currently being delivered.

What are you paying for?

Management in Practice’s Practice Manager Salary Survey 2023/24 suggests that for about two thirds of practice managers, years of experience play a key role in determining individual salary levels. We believe that what you spend on reward and how you spend it should contribute to the achievement of your practice goals and values. 

Research suggests that linking pay to a person’s contribution can bring significant benefits over and above approaches that simply increase pay year on year or move people automatically through a pay scale. 

Contribution means both what an employee does and how they do it. It goes beyond the idea of relying exclusively on key performance indicators and other measures of ‘outputs’ – traditional performance-related pay – and includes things such as contribution to and demonstration of organisational values, individual behaviours and skills and competence.  The right mix for your practice will depend on what you have identified as your reward objectives and priorities. 

Whatever your specific answers, you will need an effective approach to performance management, whether or not you choose to link it to pay.  An approach that enables people to grasp:

  • Their contribution to the objectives of the practice now and in the future
  • How what they do demonstrates the values of the practice
  • The strengths that they demonstrate in their work and the opportunities to grow those strengths and progress
  • Their development needs and how these will be met.

Arriving at clarity about this won’t be achieved by a standard ‘tick-box’ annual appraisal.  This requires a shift to a more positive, developmental, strengths-based and two-way, continuous process. It requires a meaningful conversation between people.  It may be ‘good to talk’, but real conversation changes things.            

What are you offering?

We work for money, have bills to pay and need to buy food to put on our tables – our basic security and safety needs. The cost-of-living crisis has raised the importance of meeting these needs for your lower-paid workers. Your pay levels also need to be competitive in our tight labour market.  But reward isn’t just about the money.  That’s the thinking that employee value propositions and total reward concepts are built on.

Figure 12 illustrates the idea of total reward.

The top two boxes cover the financial rewards package, which research indicates tends to be more important when you are recruiting people. When it comes to why staff stay and work hard for you, they will often emphasise the factors listed in the non-financial lower boxes, such as great colleagues, an open leadership style, interesting work, excellent training and so on.

If you were filling this table in for your practice, what would you be putting in the boxes? What messages and adjectives would you use for each quadrant if you were speaking to a new recruit?  How would your current employees describe your reward package in each area?  There are often differences between the two perspectives!

With this in mind, here are some ideas on steps to take to build a progressive, progression-focused and total-rewards-delivering practice.

1. Implement a systematic and structured approach to workforce planning.  What are the jobs, the people, and the skills and competencies that you will need over the next three years?  What have you got now? What and who are you likely to lose through turnover and retirement?  What are the gaps in service provision and how will you fill them?

2. Give some thought to the way in which jobs are described.  Could you make changes that would provide employees with new experiences, opportunities for learning and growth and greater job satisfaction, at the same time as meeting your future needs as a practice?

3. Put a greater focus on internal development and promoting from within rather than hiring externally. How could someone’s job be changed to broaden its scope and prepare them for a bigger role?  How could teamwork be improved leading to better patient service and care?

4. Explore alternative options for training and developing employees. Examples include apprenticeships, T Level placements (a new qualification for students aged 16 to 19 in England who have finished their GCSEs), or retire and return programmes.

5. Think about the career and pay progression of your lower-paid workers, which is a big cause of employees leaving more generally.  What future do people see in your practice and how do you make it clearer and more attractive for them to stay rather than leave you?

6. Promote equality, diversity and inclusion.  Identify where there might be barriers in terms of assumptions about what good look likes and any unconscious bias.  Work to remove the barriers, be willing to take positive action and benefit from expanding your talent pool,rather than fishing in the same pool for the same people as everyone else.  Really get to know your labour market locally and think creatively about where you might source your employees in future.

Involvement and communication

You can’t design an effective pay and reward system in a vacuum. 

We believe that it’s essential to involve everyone who might be affected from the start, so that they feel engaged in the process of development, design and implementation.  That way issues and concerns can be identified and addressed, rather than being allowed to turn into resistance.  Research confirms that changes to the way in which organisations approach pay are much more likely to succeed when employees are engaged in the change process, rather than telling them after decisions have been made.

No less important is pay transparency.  This begins at the point of recruitment.  According to the jobs site Adzuna, employers who put salaries in their job ads attract twice the number of online ‘clicks’ and get six times more applications than those who are secretive about their salary information.

But the case for pay transparency goes beyond job ads.  Research suggests that workers are more productive when your approach to pay and reward is as transparent as possible. Perceptions of pay fairness are closely related to the levels of disclosure.

What are the elements that make up pay transparency? We would list:

  • Being clear about the size of the pay and reward ‘pie’
  • Being clear about the process by which the pie gets sliced up – how you set salaries, adjust them over time, what the elements of the benefits package are, etc.
  • Being clear about how the slices get dished out so to speak, how pay decisions are made and what is required for people to progress and develop their roles and rewards.

We hope that we have given you some food for thought.  There’s more to reward strategy than we can put in a short article. But we recommend you start right away. Begin by developing an understanding of the background and current rewards situation in the practice, asking questions to clarify your objectives and priorities; then develop agreement about what you are paying for and how you will assess it; think creatively about the total reward package that will best suit your practice and your staff; and communicate it clearly and transparently.

After that, we believe that you will be far better placed to recruit and retain an engaged and talented workforce, which is so critical to the performance, sustainability and sheer enjoyment of your practice.

You will also be contributing to a more productive and fairer society.  So, there is a win-win-win for employers, employees and society in putting more emphasis on pay and purpose, and on wider rewards and career progression.  

Dr Duncan Brown provides independent rewards research and advice, is visiting professor at the University of Greenwich, and a principal associate at the Institute of Employment Studies. He has carried out analyses of pay setting methodologies for the Government covering significant groups of workers including doctors and dentists.

George Lepine is an associate with healthcare advisory and training company, Qualitas. To find out more about Qualitas’s work on high performing teams see here

  1. With acknowledgement to Michael Armstrong and Duncan Brown (2009), Strategic Reward, Kogan Page. London ↩︎
  2. With acknowledgement to Towers Perrin ↩︎