Cost and expense

Not only is PM branded by unions as ineffective and damaging to workers, it is also extremely expensive. When performance ratings are linked directly to pay, employees have no option but to make sure they invest time and energy that could otherwise be spent doing their job, instead keeping their own record of their performance and preparing thoroughly for review meetings. Management time is also used up, for example, preparing for meetings, “calibrating” ratings in meetings with other managers, and dealing with appeals against poor ratings. This wasted time is particularly perverse at a time when the pay pots available for distribution are very small. The PCS made this case very effectively in the context of the Ministry of Defence (see Chapter 2 page 27) by calculating that the department was spending £98 million each year administering its performance-related pay system, to distribute a pay pot of just £17.5 million.