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Volume 447: debated on Thursday 15 June 2006

To ask the Chancellor of the Exchequer pursuant to the answer of 24 May 2006, Official Report, column 1842W, on bonuses, why (a) the total amount awarded in bonuses to staff rose and (b) the total number of awards dropped between 2003-04 and 2005-06. (77200)

The payment of end-year bonuses is linked to an individual’s overall performance mark in their annual performance appraisal for the previous year. Prior to 2004-05 HMT operated a system for staff below Senior Civil Servant (SCS) with the following categories:

Top 5 per cent.

Next 30-35 per cent.

Next 50-55 per cent.

Next 5-10 per cent.

with those in the top two categories being awarded a bonus.

The categories in appraisal year 2004-05 were changed to:

Top 20 per cent.

Next 60 per cent.

Bottom 20 per cent.

with only those in the top category being awarded a bonus, which were paid in 2005-06. As a result the average size of end-year bonuses increased significantly.