CIPD branded unfair as chief gets bonus despite pay freeze

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The Chartered Institute of Personnel and Development (CIPD) has been branded "unfair" after it emerged that chief executive Jackie Orme received a bonus despite other staff suffering a freeze on such rewards, Personnel Today can exclusively reveal.

The CIPD banned discretionary bonuses for employees this year because the organisation did not hit its financial targets. It also froze base pay for the majority of its staff - including Orme - in a bid to minimise the need for redundancies and to help finance a freeze in 2009 membership fees.

But the damning revelation that Orme received a bonus linked to performance targets has sparked outrage. A source told Personnel Today. "It's incredibly unfair... especially as it is cutting back on benefits."

Orme took up the £300,000-a-year top job in March 2008.

However, CIPD president and chair of the institute's remuneration committee, Vicky Wright, defended the bonus payment. Speaking to Personnel Today, she pointed out that Orme's remuneration package was smaller than that paid to outgoing director-general Geoff Armstrong last year.

Wright also said the package contained a "significant element linked to stretching short- and long-term performance targets", adding that the chief executive's performance was assessed against a scorecard of membership, financial, service development and strategic measures and targets.

"We've thoroughly reviewed Jackie's performance, including development of our membership proposition, the development and launch of the CIPD HR Profession Map and the revitalisation of CIPD relationships with key HR leaders," Wright said.

"On the basis of this review, and the substantial progress made, but also taking into account the economic context, the remuneration committee decided to recognise Jackie's performance in her first full year at the CIPD with a bonus that reflects her achievements."

Wright added that the vast majority of CIPD employees were not currently eligible for a performance-related bonus and said their base pay reflected this.

Read the full CIPD statement here.

What do you think about this? E-mail mike.berry@rbi.co.uk or comment below in HR Space.