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STAFF BONUS POLICY

Summary

This policy guidance document on the LSC Bonus Scheme is aimed at managers and employees. The LSC’s performance related reward strategy includes the payment of performance related bonuses to employees. This document contains the rules that govern the operation of the bonus scheme, although the contents do not form part of any employee’s terms and conditions of employment. The document gives information on the scheme year, performance ratings, scheme principles, eligibility for participation in the scheme, the treatment of specials groups (eg. employees on maternity leave, part time staff, staff on long term sick leave), scheme payment date, scheme cut-off date, calculation of the overall budget, distribution of the budget, and bonus payments.

Human Resources Team

v1.0 Issued 2004-03-09

Learning and Skills Council

Staff Bonus Policy Introduction 2

1

The LSC Scheme

2

The

Scheme Year

2

Performance Ratings 3

3

Eligibilty 4 Eligibility for participation in the Scheme Special groups Employees on Maternity Leave Part time staff Staff on long term sick 4

4

4

4

4

Scheme principles

5

Staff retiring 5 Employees on other types of leave

Leavers 5 Secondees Promotions/changes of hours during the Scheme Year Combination of various types of leave 6

Payouts under the Scheme 6

6

Scheme Cut-off Date 6

Calculation of the overall budget Distribution of the budget 7

7

Document Information 8

Introduction

The LSC Scheme

1 The Learning + Skills Council (“LSC”) has a stated intention of having a market driven and performance related reward strategy. In common with the private sector and now in the senior civil service, this includes the payment of performance related bonuses to employees. This document contains the rules that govern the operation of the LSC Bonus Scheme (the “Scheme”).

2 The LSC makes all determinations relating to the Scheme in its sole discretion, including the decision as to whether or not a Bonus Payment is to be made and if so, the level of such Bonus Payment. The contents of this document do not form part of any employee’s terms and conditions of employment.

6

6

6

5

Joiners during the Scheme Year

Scheme Payment Date

Bonus Payments

3 The LSC reserves the right to vary, discontinue or withdraw the Scheme from any or all employee(s) without notice and without compensation.

The Scheme Year

4 The Scheme operates by reference to the performance review period 1 April to 31 March (“the Scheme Year”).

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Performance Ratings

5 Following the completion of the Scheme Year, each employee will be

given a performance rating (“Performance Rating”).

Rating will be allocated to each employee in accordance with the LSC’s annual performance review process, or where appropriate, in accordance with the rules of the Scheme. As part of this process each employee’s performance is measured against objectives set by an employee’s line manager. The following abbreviations are used to refer to the Performance Ratings given to each employee. Please refer to the Performance Management Guidelines for further explanation:

The Performance

– Approached Expectations

AE

– Exceeded Expectations

EE

– Met Expectations

ME

– Significantly Below Expectations

SBE

– No Rating

NR

6 The Performance Rating will be one of the factors used to calculate the bonus payment (“Bonus Payment”) that each employee will be eligible to receive for the Scheme Year. The other factors include the employee’s salary band, the LSC’s ability to pay out Bonus Payments and current economic conditions. Where it has not been possible to agree objectives or assess performance against agreed objectives due to the employee’s absence from work, the employee will receive a Performance Rating of NR for the Scheme Year.

Scheme principles

7 Subject to the rules of the Scheme, the following principles have been

8 adopted for the Scheme:

9 All staff in pay bands 1 to 4 on LSC terms and conditions are eligible to receive a Bonus Payment

10 The level of Bonus Payment paid to each employee will depend on the Performance Rating given to each employee

11 The LSC may review and amend the Scheme at any time and this will normally take place on an annual basis. Employees will be notified of any changes to the rules of the Scheme as and when they occur

12 There will be no payments, pro-rata or otherwise, for employees whose employment terminates during the Scheme Year, with the exception of staff who are retiring. Retiring staff will be eligible for a bonus payment subject to the rules set out in paragraph 26 and 27 of the Scheme.

13 Bonus Payments made under the Scheme will not be included as part of an employee’s pensionable salary.

14 Payment of a Bonus Payment to an employee under the Scheme in respect of the Scheme Year, does not mean that the employee will receive a Bonus Payment in subsequent years

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Eligibilty

Eligibility for participation in the Scheme

15 An employee will normally be eligible to participate in the Scheme if the employee is:

employed on LSC terms and conditions;

employed on the Scheme Cut-off Date;

allocated a performance rating of NR, AE, ME or EE in respect of the Scheme Year.

16 An employee will not normally be eligible to participate in the Scheme if the employee:

is employed on terms of a predecessor organisation as a result of a TUPE transfer

is no longer employed by the LSC on the Scheme Cut-off Date

has been allocated a Performance Rating of SBE in respect of the Scheme Year

joined the LSC on or after the 1 st February in the Scheme Year

Special groups

17 There are some special groups which require particular consideration in the way that they are dealt with under the Scheme.

Employees on Maternity Leave

18 In the event of an employee being absent from work due to maternity leave, for an aggregated period in excess of four weeks in the Scheme Year, the employee’s Bonus Payment will be pro-rated. The employee will be entitled to the proportion of the Bonus Payment which equals the proportion of the Scheme Year that the employee worked (together with the employee’s first four weeks of absence due to maternity leave).

19 The Office/Directorate from which the maternity leave commenced will be responsible for communicating the amount of the Bonus Payment to an employee on maternity leave.

20 The Bonus Payment will be paid on the Scheme Payment Date in accordance with paragraph 36.

Part time staff

21 Eligible part-time staff will receive a pro rata payment based on their contractual weekly hours, compared to the contractual hours of a full- time staff member (currently 37 hours).

Staff on long term sick

22 In the event of an employee being absent from work, due to sickness or injury, for an aggregated period in excess of four weeks in the Scheme Year, the employee’s Bonus Payment will be pro-rated. The employee

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will be entitled to the proportion of the Bonus Payment which equals the proportion of the Scheme Year that the employee worked (together with the employee’s first four weeks of absence due to sickness absence).

23 The Office/Directorate from which the sickness absence commenced will be responsible for communicating the amount of the Bonus Payment to an employee on sickness absence.

24 The Bonus Payment will be paid on the Scheme Payment Date in accordance with paragraph 36.

Joiners during the Scheme Year

25

If an employee commences employment with the LSC during the

Scheme Year then subject to clause 2.1, the employee’s Bonus Payment will be pro-rated. The employee will be entitled to the proportion of the Bonus Payment which equals the proportion of the Scheme Year that the employee worked.

Staff retiring

26

If

an employee who is otherwise entitled to a Bonus Payment under the

Scheme retires during the Scheme Year (or after the Scheme Year but before the Scheme Payment Date), whether on their Normal Retirement Date (as defined in the employee’s terms and conditions of employment) or other date as agreed with the LSC the employee will be eligible to receive a Bonus Payment. Such Bonus Payment will be pro-rated and equal to the proportion of the Scheme Year that the employee worked.

27

Regardless of when the retiring employee’s employment terminates, the Bonus Payment will be paid on the Scheme Payment Date in accordance with paragraph 36.

Employees on other types of leave

28 In the event of an employee being absent from work due to a career break, paternity leave, Territorial Army Service or other unpaid absence, for an aggregated period in excess of four weeks in the Scheme Year, the employee’s Bonus Payment will be pro-rated.

29 The employee will be entitled to the proportion of the Bonus Payment which equals the proportion of the Scheme Year that the employee worked (together with the employee’s first four weeks of absence due to

a career break, paternity leave, Territorial Army Service or other unpaid absence).

Leavers

30 For the avoidance of doubt, if, at the Scheme Payment Date, the employee (whether employed on a permanent, fixed term or part time basis) has left the LSC’s employment, (whether due to resignation, dismissal or other cause with the exception of retiring employees) at the Scheme Payment Date, the employee forfeits any right to the Bonus Payment in respect of the Scheme Year.

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Secondees

31 Outward. Subject to the rules of the Scheme, an employee who has been seconded from the LSC to an external organisation will be eligible for a Bonus Payment under the Scheme.

The terms of the agreement with the secondee organisation will need to be checked if it is proposed to charge on these costs.

32 Inward. Secondees from external organisations will not be eligible for a Bonus Payment under the Scheme.

Promotions/changes of hours during the Scheme Year

33 If an employee is promoted to a higher Band prior to 1st February in the Scheme Year or changes their contractual hours during the Scheme Year their Bonus Payment will be increased or decreased, as appropriate, on a pro-rata basis. If an employee is promoted to a higher Band after 1 st February in the Scheme Year, this promotion will be disregarded for bonus purposes.

Combination of various types of leave

34 A combination of various types of leave could occur when an employee may take, by way of example, maternity leave followed by sick leave followed by unpaid leave.

35 In that situation, and for the avoidance of doubt, if an employee is absent from work due to taking a combination of various types of leave such as maternity leave followed by sick leave followed by unpaid leave, for an aggregated period in excess of four weeks in the Scheme Year, the employee’s Bonus Payment will be pro-rated. The employee will be entitled to the proportion of the Bonus Payment which equals the proportion of the Scheme Year that the employee worked (together with the employee’s first four weeks of absence due to taking such combined leave).

Payouts under the Scheme

Scheme Payment Date

36 The Bonus Payments will normally be paid out on the normal pay day in July following the end of the Scheme Year (the “Scheme Payment Date”)

Scheme Cut-off Date

37 The “Scheme Cut-off Date” is the 1 st July following the end of the Scheme Year

Calculation of the overall budget

38 The LSC has included an estimation of the amount required to pay out the Bonus Payment amounts shown in paragraph 40 and 41. These amounts are advisory rather than mandatory and any payout under the Scheme is subject to the funds being available and current economic conditions. The LSC reserves the right to vary these amounts as it

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considers appropriate. All changes to the Bonus Payments will be notified to employees who are eligible to participate in the Scheme.

Distribution of the budget

39 The budget allocated to each Office and Directorate will be based on the actual distribution of posts by band and a standard distribution of performance ratings. Therefore if the performance ratings for a particular Office/Directorate have a top end bias, all the individual payments for that Office/Directorate will be scaled back accordingly.

Bonus Payments

40 Subject to the rules of the Scheme as set out in this document and any other rules regarding the Scheme as notified to the employee from time to time, the LSC will aim to make the Bonus Payments according to the scale set out below, which is based on a full time employee who has been employed for the whole of the Scheme Year. The indicative figures shown below may be reduced or not paid depending upon overall affordability within the LSC administration budget for the year.

41 The payments for each band and Performance Rating will be reviewed annually by the LSC, and will take account the LSC’s ability to pay the Bonus Payment and current economic conditions.

Rating

SBE

AE

ME

EE

NR

Band 1

0

£337.50

£450

£675

£450

Band 2

0

£525

£700

£1,050

£700

Band 3 *

0

2.25%

3.0%

4.5%

3.0%

Band 4 *

0

3.75%

5.0%

7.5%

5.0%

The percentages relate to an employee’s Basic Pay as at the 31 March

2004.

If you require any further guidance on this policy please initially contact the HR Advice Centre.

Issued by:

The Performance and Reward Team

Date:

January 2004

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Document Information

Title

Staff Bonus Policy

Description

This policy guidance document on the LSC Bonus Scheme is aimed at managers and employees. The LSC’s performance related reward strategy includes the payment of performance related bonuses to employees. This document contains the rules that govern the operation of the bonus scheme, although the contents do not form part of any employee’s terms and conditions of employment. The document gives information on the scheme year, performance ratings, scheme principles, eligibility for participation in the scheme, the treatment of specials groups (eg. employees on maternity leave, part time staff, staff on long term sick leave), scheme payment date, scheme cut-off date, calculation of the overall budget, distribution of the budget, and bonus payments.

Creator

Alan Wands

Team

Human Resources

Modified

19/04/2004 12:15

Category

Working hours, terms and conditions|Careers and career development

BACode

Performance & Reward Policy|Annual Salary Awards

Subject

bonus scheme|performance reward|bonus scheme eligibility|bonus scheme payment

Project

 

Document Type

Policy

Coverage

National

Version

2.0

Issued

2004-03-09

Change Reason

 

Audience

 

Authority

Alan Wands

Rights – Privacy

No private information content

Rights - FOI

Internal document, authorised for public release

Staff Bonus Policy v 2.0 Team: Human Resources Issued: 2004-03-09 FoI ref: 1

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Rights - DPA

 

Disposal

2004-09-09

Staff Bonus Policy v 2.0 Team: Human Resources Issued: 2004-03-09 FoI ref: 1