Performance pay plan criticised

The Cayman Islands government will strive to be more business-like when it comes to employee salaries and rewarding workers for good performance, according to Leader of Government Business Kurt Tibbetts.

Mr. Gough

Mr. Gough

Mr. Tibbetts said the old pay increment system used by the government is a waste of time.

‘If there’s an annual increment which has nothing to do with performance…somebody can actually stay in a job until they’re ready to retire – doing nothing more than what they started off doing – and the salary certainly does not relate to the responsibility.’

But one top government manager who specializes in human resources is wondering whether such a plan will actually prove worthwhile.

‘Performance-based pay has never worked in the civil service,’ Department of Employment Relations Director Walling Whittaker told the CaymanianCompass last week. ‘You are hard pressed to find one instance, in any jurisdiction, in any country, where performance-based pay in the civil service has been successful.’

Mr. Whittaker openly questioned the government’s civil service law reform, which took effect 1 January, in a speech to the Cayman Islands Society of Human Resources Professionals earlier this month.

In the speech, Mr. Whittaker acknowledged a changing approach toward employee compensation in the private sector. But he said that change was in moving away from performance pay.

‘We’re not seeing much of that (performance-based pay) out there, even though, guess what?….Government is going towards that way.’

He said companies were handing out more bonuses, and paying specialized workers such as lawyers, accountants and IT professionals for their knowledge and expertise; rather than giving pay raises for production.

‘Performance-based pay is more related to the performance of the organization…than the performance of the individual,’ Mr. Whittaker said. ‘It’s very hard to be able to accurately ascertain that that individual is responsible or not responsible for the performance (of the organization).’

Deputy Head of the Cayman Islands Civil Service Peter Gough said he expects some doubters of the new system, even though he said it has not yet been fully implemented.

The law essentially puts more individual control over departments in the hands of administrators.

Each department director is given a particular set of responsibilities and goals to meet, within certain budget parameters.

‘Chief officers will have performance contracts with the Cabinet,’ said Mr. Tibbetts. ‘These are the outputs you are expected to achieve, and this is the basket of funds you have to achieve those outputs. If you can deliver this and save me some money, then we can talk about your salary.’

Mr. Gough said that approach will eventually trickle down to all levels of government. He also said government ministers responsible for various departments would have the ability to withhold payment to departments that didn’t meet their goals.

By 2009, Mr. Gough said the government will be able to pay up to 10 per cent of a person’s salary in a one-time bonus if they exceeded expectations for that year. He said those bonuses would not replace cost-of-living pay adjustments.

It’s expected the government won’t realize full efficiency from the performance-based pay plan for another five to 10 years.

‘We’re now moving responsibility to the managers,’ Mr. Gough said. ‘Overnight you don’t turn an administrator into a super-duper manager just by changing the way you do business.’

He noted government plans to open up a Civil Service College to help train managers and potential managers in the new system. The expected opening date is September.

Mr. Whittaker said even extensive training may not provide government managers with the answers.

‘Performance-based pay is a very confusing area, and in many areas it is not proven to do what it was intended to do,’ he said.