Buyers back performance-linked pay

14 November 2002
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14 November 2002 | David Arminas

Four-fifths of purchasers want to see their pay more closely linked to performance, such as achieving cost savings, according to an online SM poll.

Seventy-nine per cent of the 167 respondents voted in favour of performance-related pay (PRP), against 19 per cent who said no and 2 per cent who didn't know.

Steve Flather, managing director of Staffordshire-based Croner Reward, which carried out a major pay survey for CIPS earlier in the year, said he was not surprised by the finding.

"Most people who work hard consider they should be paid according to results," he said.

"But how many organisations provide PRP? I would expect only 50-60 per cent of companies pay PRP for any function."

John Beeson, director of global procurement at Cable & Wireless, which uses PRP for purchasers, said the issue of who gets credit for cost savings.

He told SM: "At Cable & Wireless we have assisted savings measurements, where the actual savings may have been made to another department's budget but credits go to purchasing people who actually helped to make the savings."

Roger Keeling, a senior consultant with PMMS Consulting Group, who has held senior procurement roles with Esso/Exxon, Whitbread and British Rail, said PRP should be based on measures other than cost savings, such as supplier relationships, rationalisation and development programmes.

"In the end, performance should be driven by what the business actually needs and not what the procurement department wants."

• To take part in our next online poll, click here

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