The Competition and Markets Authority is reviewing its pay and reward and performance-management policies after being accused by three black employees of indirect discrimination.
Meanwhile, it has suspended all performance-related pay and in-year rewards.
The employees, all members of the Public and Commercial Services Union, claimed CMA managers had scored them unfairly in their appraisals. They argued this led to them not receiving performance-related pay.
While the CMA admitted no liability, it reached a settlement with the claimants before the case went to tribunal. The payouts to claimants total more than £10,000 for injury to feelings, plus the missing performance-related pay.
As part of the agreement, the CMA will review its pay and reward and performance-management policies. It will only introduce a new system following consultation with the PCS.
When the claims were first levelled at the CMA, its management team concluded that, while black employees had received lower appraisal scores and therefore less pay, this was not a result of discrimination.
However, PCS reps argued that black staff in the CMA were 30% less likely than white staff to receive a performance-related bonus.
In response, the CMA said there was no evidence to suggest unfavourable appraisals for black staff were the result of bias or a lack of cultural awareness. It also asserted that its performance-management system was not innately discriminatory.
Even so, the CMA has halted its existing processes while it reviews its policies. Once a new system is agreed with the PCS and launched, the CMA will monitor outcomes for two years, disclose evidence of such monitoring, and consult with the PCS on the reasons for any unequal outcomes for groups with protected characteristics. It will then take steps to mitigate them.
Speaking about the review, a CMA spokesperson said: “Our staff work tirelessly to ensure people, businesses and the economy benefit from competitive and vibrant markets – so it is right that exceptional work is fairly rewarded.
“That is why we are reviewing our approach to performance development and reward, and will develop a new approach with input from our colleagues as well as external experts.”