Changing the British Army’s Pay System — An Evolutionary Approach?

Part one

A strategic, operational and tactical need. Those were the findings of recent research[1] that considered whether the British Army needed to take a different approach to managing its pay, one that didn’t have rank at its heart, to better support those wishing to take a more specialist career path. Rank, after all, is the primary driver for determining a soldier or officer’s wage, but because of this, the Army is finding it increasingly difficult to attract, retain and motivate its workforce to the point of improving productivity, especially in areas where deeper specialism is required.

There are several reasons for this. A changing strategic picture that places greater emphasis on technical skills, empowerment, creativity and innovation; shifting workforce expectations across all employment sectors to one that is more employee-centric; a military culture that over-emphasises the importance of rank; and structural inflexibility created by an embeddedness to the pay-rank system. The resultant conclusion is that “pay should be linked to skill and experience rather than rank”[2], at least for some.

Whilst easy to say, the concept is not so straightforward. There is good reason why the pay-rank system is in place, not least because it is simple, affordable and manageable. Being military and a public entity, rank also has an obvious place in terms of command and control, responsibility, accountability and authority. Yet if things don’t change, then the Army’s operational effectiveness will be increasingly impacted.

The aim of this blog series is not to justify this position but to offer two potential solutions to it — one that is evolutionary, building on the current system and which will be covered in this blog and one that is revolutionary, requiring a complete rethink of what’s currently in place, which will be considered in the second blog. Neither eradicate rank in entirety but both do require a shift in thinking to enable the reward proposition to be more skills and people focussed.

What exactly is meant by an evolutionary approach? As the name suggests, it builds on its grounding meaning base pay will continue to be associated with an individual’s rank, but in addition, a suite of reward options will be made available to those specialists that miss out on pay increases because their promotion options are limited due to their trade. This option also allows the Army to reward specialisms that sit outside the traditional trade boundaries, offering a wider consideration of skills than is currently the case.

This is not exactly a new concept. Some financial options do exist out-with base pay now, such as language awards or recruiting and retention pay (RRP) but these are few and far between and for the latter especially, they are designed as short to medium term fixes that require years of evidence to justify. Instead, what this option proposes is a pot of financial and non-financial rewards available to heads of profession[3] or another suitable provider that can be used to target individuals or groups to better reward or incentivise them for their skills and effort. Instead of being funded in addition to current base-pay rates which would create extra expense (and therefore, unlikely to be supported), it could be paid for by syphoning of a percentage off the yearly pay rounds, with those paid more, contributing more.

Delegating reward decisions offers a more personalised approach and empowers the reward owner to decide how best to allocate their bounded resource, based on a more engaged[4] understanding of motivations and needs, both from an employee and employer perspective. An example of where this would benefit is 17 Port and Maritime Regiment (17 P&M)[5], where those with valuable niche skills often find themselves stalled from progressing up the ranks because the limited numbers of posts available, impacting their retention. Offering a financial reward to those stuck would recognise their continued effort and encourage them to stay. Equally, those who have no desire to progress up the rank structure (perhaps because they enjoy their current employment) or lack the leadership qualities to do so but who remain highly valuable, could be additionally rewarded as a thank you for a job well done.

Royal Electrical and Mechanical Engineer (REME) Artisans, Royal Military Police (RMP) specialists Royal Engineer (RE) Geospatial Engineers and Capability and Acquisition staff officers are just some of the other examples where such an approach would benefit. It would not only generate a sense of investment but remove suggestions that individuals need to move back to more generalist roles to benefit from the financial rewards that only come with promotion. Dwelling in rank and post will dramatically improve the more technical and specialist skills required of today’s modern Army. Rewarding skills more would also help shift the level of importance away from leadership and management roles, forcing a more collaborative and empowered environment instead.

There is a danger to all of this of course. By delegating reward decisions to the point where employee engagement is best achieved, it has the potential to miss how decisions impact across the whole force as well as losing the strategic oversight required to determine where reward effect is most needed. Yet arguably, the Army doesn’t achieve this now[6] and both points could be overcome by setting organisational reward values and principles fixed to the strategic aim[7].

Delegating responsibility also requires a great deal of trust between management and staff and is not always welcomed by employees, especially by those in the civil sector[8]. Where individuals feel their efforts are not being fairly rewarded against their peers or their expectation of reward are not met, perhaps because the pot has run dry or the skill value has dropped, trust, which is so important in a military setting, would likely diminish. Good management and employee engagement would be essential to overcome this. Offering clear, pre-determined assessment criteria such as a high-performance grade or selection at a board, based on the normal annual reporting process could also help off-set concerns.

Using the appraisal system does have the potential to simply continue the criticisms that arise from the current promotion process. These include suggestions of nepotism and toxicity as people strive for success[9] and the demotivating effect for those just missing out. The risks lie in the subjectiveness of the system but applying more objective tests, such as performance indicators, would be extremely hard to do in a military setting and risk the fail-learn culture the Army is trying to instil. Solely performance related reward systems do also have questionable effectiveness when it comes to producing organisational and individual improvements[10] and for financial bonus schemes especially, many fervently reject them[11].

Yet this option is not solely that. Whilst pay remains a significant motivator[12], the reward need not be financial. Instead, the suite of rewards on offer should be focussed on what motivates the individual or group the most, such as personalised gifts[13], additional leave, pension credits, paid for accreditation or personal and professional development opportunities. Indeed, many commentators[14] suggest that delivering a flexible and obvious ‘total reward’ effect will best target broad demographics and provide the most competitive offer in the fight for talent, especially since the Army is unlikely to challenge on the wage front. Furthermore, by using the current appraisal system, it also offers a known, broadly transparent mechanism by which to judge opportunities for reward beyond rank promotion.

Provided the Army is careful in its management and remains open and honest about what it is trying to achieve, then this evolutionary approach could be a reward option to take forward. It is not the only one on offer, however, and the next blog will consider a more revolutionary view.

[1] Conducted by the author of this blog.

[2] Taken from the Armed Forces Pay Review Body (AFPRB) consideration of Allied Health Professionals. UK. Office of Manpower Economics (OME). AFPRB 49th Report 2020. (London: OME, 2020), 57. AFPRB_49th_Report (accessed October 02, 2021).

[3] A proposal being considered as part of CASTLE, the Army’s talent and people modernisation programme.

[4] Employee engagement is a must in determining motivation and reward requirements according to Duncan Brown, “The Future of Reward Management: From Total Reward Strategies to Smart Rewards”, Compensation and Benefits Review 46, no. 3 (2014), 147. The_Future_of_Reward_Management (accessed August 21, 2021).

[5] Interview with member of 17 P&M, July 2021.

[6] For more, see United Kingdom (UK). CASTLE. Army People System Blueprint. Version 2.3. (Andover: British Army, 2020), 28.

[7] An effective reward system should have the organisational strategy at its heart. Michael Armstrong and Duncan Brown, Armstrong’s Handbook of Reward Management Practice. 6th ed. (London: Kogan Page Ltd, 2019), 10.

[8] Laurie Mullins and Gill Christy, Management and Organisational Behaviour, 11th ed. (Harlow: Pearson Education, 2016), 44.

[9] Comments made in an internal survey conducted as part of the research.

[10] Michael Armstrong, Employee Reward. 2nd ed. (London: CIPD, 1999), 273.

[11] Such as Lucy Adams, “Busting Bonus Myths”, Disruptive HR. Busting Bonus Myths (accessed April 24, 2022).

[12] The research found that specialists placed pay as the third highest motivator behind pension and professional development investment. Those who considered themselves more generalist however, placed it fifth, with leave entitlement and a good annual report being more important.

[13] When given a broad list of rewards to consider, the research found that personalised gifts were the least valued offering, but this may be because they are not currently used and therefore, individuals do not fully appreciate the motivating effect. Personalised rewards are becoming more common place in the civilian sector which could make them a military workforce expectation in the future.

[14] For example, Tampoe and Coyle in Armstrong, Armstrong’s Handbook of Reward Management Practice, 265 and Blue Board, “Motivating Employees Through the Ages”, Blue Board. Motivating-through-the-ages (accessed August 11, 2021).

Lieutenant Colonel Sarah Ballantyne is a Royal Military Police officer with a background in personnel policy. Her last staff role, which inspired this work, was in Programme CASTLE, the Army’s people transformation programme.

This BLOG is an academic study conducted as part of the KCL Master by Research programme on the Advanced Command and Staff Course at the Defence Academy of the United Kingdom. The views expressed are those of the author; they do not constitute the opinion of, or a representation by the British Army or the Defence Academy of the United Kingdom.