Pay glossary

Across the board increase
an increase that applies to all staff and is not related to performance.

All-merit increases
pay increases related wholly to performance (personal appraisal) with no other increase offered. The bringing together of the annual cost of living settlement with the other increases given to staff in the year.

Allowance
a payment in addition to basic pay, perhaps to reward a particular qualification or use of skills, to recognise the higher cost of working in a particular location, or because of a particular requirement of a post, e.g. the need to use protective` clothing.

Anomaly
literally an irregularity or abnormal circumstance. In pay terms, anomalies can arise when pay rules and arrangements are changed, leading to differences in treatment between those affected either side of the rule change, and sometimes resulting in relative pay positions, as between individuals, appearing to be unjust or unfair.

Arbitration
the process of referring a pay dispute to an independent third party, typically ACAS. New pay agreements should include such a mechanism for the resolution of disputes. Arbitration can, depending on the prior agreements of the parties, be binding or non-binding.

Assimilation
the process of moving from an old pay arrangement to a new pay system.

Average earnings
a Great Britain average earnings index is calculated by dividing the total employee wage and salary wage bill by the total number of employees paid. This measure includes overtime worked, bonus payments, shift premium, grading increments and other productivity or incentive payments, except profit related pay and other non-taxable elements.

Bargaining units
the individual delegated areas where pay is negotiated between PCS and the employer.

Basic pay
the annual rate of salary without any allowances or additional payments added.

Bonus
a payment in addition to normal pay. Often related to performance and typically paid as a one-off lump sum that is not consolidated into normal pay and is not pensionable. Often paid at management discretion and can vary from year to year.

Box marking
the overall marking produced by the annual staff report, and used to determine performance pay.

Competency based pay
pay based on the acquisition of competencies (the skills, knowledge, traits and behaviour considered necessary to perform a job) or an appraisal measured against core competencies deemed necessary for the job. Similar, but wider, than skills-based pay. There is growing interest in competencies but the jury is still out on the desirability of linking pay to them.

Consolidated increase
an increase that is added into basic pay. Some pay deals and arrangements have included an unconsolidated element, payments that have not been combined into the point used to determine usual monthly salary, but have been paid addition.

Cost of living increase
a pay increase to offset the increased cost of day-to-day expenditure, because of higher prices. Individuals living costs vary depending on their pattern of expenditure. Changes in the living costs for an average household are measured by the retail price index (RPI)

Delegated pay
arrangements where individual departments agencies and bodies have been given the responsibility for pay and certain pay related conditions of service.

Equal pay
the payment of the same rate of pay regardless of sex, because a woman is doing ‘like’ or ‘broadly similar’ work to a man, because her job has been given an equal rating to a mans under a job evaluation scheme, or because her work is judged to be of equal value to a man’s in terms of the demands made.

Equity share scheme
a performance related pay scheme where the value of the award (the shares) will not be known in advance, changes annually, and is the subject of negotiations.

Green circling
this deals with a phasing in of a pay rate.

Headline rate
the overall size of a pay deal in terms of the announced average level of percentage increase. The rises for individual members may vary from this.

Inflation
a process of steadily rising prices resulting in diminishing purchasing power of a given sum of money. The most popular measure of inflation is the annual percentage change of the retail price index (See RPI).

Inter-quartile range (IQR)
the middle 50% of a range. Typically used in relation to the mid range of pay settlement outside the public sector, as recorded by the Office of Manpower Economics survey.

JEGS
Job Evaluation and Grading support, the job evaluation system designed for the Treasury.

Job evaluation
a process of ranking posts in a hierarchy, often by giving them scores based on a number of factors.

Levels survey
a survey of the actual levels (rates) of pay being paid for comparable jobs to those in the civil service, as found outside the public sector.

Local pay addition
a payment made to staff in certain specific locations that have had difficulties in recruitment and retention.

London pay area
the area covered by the three London weighting zones.

London weighting
a salary addition that used to be paid to staff working within three defined areas of London called zones. Each zone had a different rate of weighting.

Mark-time pay
a rate of pay an individual is allowed to keep following a change in circumstances such as grade or location to avoid a drop in pay. The mark-time rate is retained until the substantive rate (what pay would have been otherwise) catches it up. However under the old national arrangements mark-time pay could be increased for a box 1 or 2 performances, by the difference, from a box 3 performance.

Maximum
the highest level of pay, or pay point, for a particularly pay scale or band.

Minimum
the lowest level of pay, or pay point, for a particular pay scale or band.

National pay area
all locations outside the London pay area.

Non-consolidated bonus
a single payment, often a lump sum, that does not become part of basic pay and typically does not count for pension purposes. Under the old performance pay arrangements non-consolidated bonuses were paid to box 1 and 2 performers, when individuals had reached the band maximum. Members had to quality for a bonus each year by getting the required box mark.

Pay band
the range of pay values, or pay steps, applying to a particular grade, group of grades, or group of workers. The range from the band minimum to the maximum.

Performance bar
a point in the salary structure, or pay band, which can only be passed, given a particular level of performance. e.g. a box 1 or 2.

Performance pay
pay related to performance, typically the appraisal box mark.

Progression
movement through a pay scale, incremental system or pay band. Typically the speed of movement is now determined by performance.

Recruitment and retention allowance (RRA)
an allowance paid because of difficulties in recruiting or retaining suitable staff.

Red circling
an arrangement to give guaranteed entitlement to a rate of pay or condition that might otherwise be changed. Used sometimes on a more out of a London pay area.

Revalorisation
a change in the value of all the points on a pay spine, or pay scale. This has been the form of usual pay deals in the past and has typically been an increase in the value of all the points on the spine, by the same percentage.

Reserved right
an entitlement to continue to receive a payment or to a condition of service, even though it has been replaced or changed. Staff covered by national arrangements, continue to receive many of the old allowances, replaced by RRAs, on such a basis.

RPI
the retail price index is a monthly produced index which monitors changes in prices of goods and services purchased by households.

RPIX
The retail price index excluding mortgage interest payments. This is sometimes denoted as the "underlying rate" by government officials and the media because it strips out the rather erratic movements of mortgage interest rates.

Seasonal adjustment
an adjustment made to the values of statistical series to allow for changes due to the period of time at which the data were recorded. For example, the number of workers unemployed is recorded each month of the year and usually rises sharply in winter and falls in spring. In order to remove these seasonal influences, statistical methods are used to smooth the series.

Settlement date
the date from which an annual pay rise is due to take effect.

Spine
a sequence of numbered pay points or steps, with different salary values attached. Typically the higher the spine step, the higher the salary.

Standard pay
simply a point in the pay band. It may be a point where performance arrangements, increase or eligibility to then change. Originally under the national agreement it was the step within the pay band, above which performance related progression, for a given box mark, slowed.

Three month rolling average
statistical data averaged over the past three months. Often used to smooth data which fluctuates erratically on a monthly basis.

TPI
the tax and price index measures how much income has to rise in order to maintain purchasing power. This measure therefore attempts to take account of changes in direct and indirect tax changes.

Underlying average earnings
average earnings adjusted to take account of temporary influences, such as arrears of pay, variation in the timing of bonuses, and industrial disputes.

Underpinning element
a minimum guaranteed increase of a set amount
 

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