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 .........................................................................................1

Introduction ....................................................................................................2
The LSC Scheme .........................................................................................2
The Scheme Year ........................................................................................2
Performance Ratings....................................................................................3
Scheme principles ........................................................................................3
Eligibilty..........................................................................................................4
Eligibility for participation in the Scheme .....................................................4
Special groups ...............................................................................................4
Employees on Maternity Leave ....................................................................4
Part time staff ...............................................................................................4
Staff on long term sick ..................................................................................4
Joiners during the Scheme Year ..................................................................5
Staff retiring ..................................................................................................5
Employees on other types of leave ..............................................................5
Leavers.........................................................................................................5
Secondees ...................................................................................................6
Promotions/changes of hours during the Scheme Year ...............................6
Combination of various types of leave..........................................................6
Payouts under the Scheme ...........................................................................6
Scheme Payment Date ................................................................................6
Scheme Cut-off Date....................................................................................6
Calculation of the overall budget ..................................................................6
Distribution of the budget..............................................................................7
Bonus Payments ..........................................................................................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.
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”). The Performance
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:
• AE – Approached Expectations
• EE – Exceeded Expectations
• ME – Met Expectations
• SBE – Significantly Below Expectations
• NR – No Rating
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 1st 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 1st 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 1st 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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Learning and Skills Council

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
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Learning and Skills Council

Rights - DPA
Disposal 2004-09-09

Staff Bonus Policy v 2.0

Team: Human Resources
Issued: 2004-03-09
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