We use job evaluation to evaluate posts within scope of the Agreement of the Scottish Joint Council for Local Government Employees (SJC) in order to allocate an appropriate grade to each post. Posts within the scope of the Scottish Joint negotiating Committee for Craft (SJNC) are also evaluated locally using this scheme. Using this analytical job evaluation scheme ensures the Council is meeting its obligations in relation to equal pay. Other posts have their salaries set at a National Level e.g. Teachers and other professionals as covered by SNCT.

On occasion, it may be necessary to increase the total pay of a job beyond that appropriate to the evaluated grade for the post. This is where it can be shown that the salary level is having an adverse impact on our ability to recruit and retain the appropriate calibre of staff in the job.

Temporarily paying an addition to basic pay in order to bring the salary closer to the 'going rate' in the market is generally referred to as a market supplement. This Policy explains how market supplements may be applied.


Any market supplement paid will require to be objectively justifiable, and will not be attached to any post unless the following criteria are met:

  • The market supplement will be considered and agreed by individual post title.
  • The market supplement will be paid as a temporary allowance, which will be set in relation to comparative market data and paid as a fixed amount. The grade of the post will not change.
  • Any market supplement allowance must be agreed by Corporate Management Team, in conjunction with the relevant Chief Officer, following a clear business case for a market supplement having been established. The business case must include confirmation from Finance of funding availability. Corporate Management Team will consider requests on the recommendation of the Chief Governance Officer. Trade Unions should be advised when a post is being considered for a market supplement.
  • To ensure compliance with the Equal Pay Act, market supplements will be time limited and the continued need for the supplement normally reviewed annually. A market supplement can be withdrawn or increased/decreased if a review indicates that current evidence does not support the supplement continuing, or its continuation at the same level. There may be occasions where this review is undertaken at an earlier stage, for example, if the grade for the post changes.
  • Where it is identified that the supplement is no longer appropriate, or it is to be increased/reduced, the employee(s) in the relevant posts will be entitled to three months notice of the cessation of the allowance or its increase/reduction. It is important therefore that employee expectations of market supplements are realistic. To support this, and before a market supplement is awarded to an employee or a group of employees they must agree to, and sign, an amendment to their contract of employment.
  • If a market supplement is introduced to a particular job, it shall automatically be applied to all current employees in that job. The law requires that all of the "genuine material difference" in pay arising from a market supplement can be objectively justified. In the case of existing staff in the specific post this may be related to potential retention difficulties.
  • Market supplements form part of an employee’s pay and will be superannuable. Market Supplements will be taken into consideration in the calculation of all statutory pay entitlements such as sickness and family leave. However, any overtime will be paid at the substantive grade and will not include the market supplement element. The market supplement allowance will be used to calculate any relevant payment for leave.

Justification for Market Supplement

Market supplements are designed to support recruitment and retention of staff where there is objective evidence that the rate of pay offered directly contributes to increased workforce turnover or an inability to recruit. Market supplements will only be used when a clear business case is identified and recruitment and retention issues cannot be better addressed through the total benefits package, job re-design or changes to the work environment i.e. opportunities for development or support and improvements to facilities. Services should consult Trade Unions when considering alternative options.

Objective evidence must be more than a belief that there are recruitment and retention difficulties. There must be documentary evidence, over a reasonable period of time, such as the following.

Evidence of Recruitment and Retention Difficulties

Evidence of a poor response to adverts both in terms of quantity and quality of candidates. To qualify, a job will have had to be advertised on at least three previous occasions (at least one of these attempts should include the use of external media) with an unsatisfactory response. Adverts should continue to be placed during the period of any market supplement to evidence ongoing recruitment difficulties.

Turnover levels

Evidence of high staff turnover and high vacancy levels in the last 12 months demonstrated to be linked to salary levels. This will be evidenced through exit interviews/ questionnaires. Where exit interview/ questionnaire information is limited, consideration should be given to writing to those who have left post within the past 12 months to ask them to complete an exit questionnaire.

Market data

Evidence of the ‘going rate’ in the market must be gathered and assessed. Normally comparative salary data from more than one source should be used, and comparisons should be made on the basis of appropriate criteria such as type/size of organisation, location, job type, economic sector etc. Below are some examples of data sources though the list is not exhaustive, e.g.:

  • Benchmarking with appropriate comparator organisations (job content and overall package should be compared to ensure comparison is like with like);
  • Independent salary data, e.g. New Earnings Survey and Incomes Data Services;
  • Sector specific and occupational surveys e.g. social care or national housing surveys and professional journals;
  • Local and national job advertisements.

It is anticipated that there are limited occasions where the payment of a market supplement will be the most appropriate course of action to address a recruitment and retention issue. Recruitment and retention issues are often caused by factors other than pay and should always be addressed in the first instance through proactive management of individuals and teams and by effective advertising and job design.

Procedures and Approval

The need for a market supplement may be identified with the relevant Chief Officer in conjunction with the Chief Governance Officer.

The relevant Chief Officer should put forward their case for seeking the application of a market supplement to a specified post, supported by the evidence detailed above to Human Resources. . A business case template is available for this purpose. Human Resources will endeavour to assist in the collation of data and can provide management information on request e.g. turnover and recruitment statistics.

HR will assess the Business case to ensure that the criteria above are met prior to this being considered by the Chief Governance Officer. In some instances, advice may be sought from external reward and equal pay specialists to ensure that the Council complies with it’s equal pay requirements. This may also include benchmarking salary surveys. HR will arrange for appropriate consultation with the relevant Trade Unions to be undertaken.

The Chief Governance Officer will submit a recommendation to Corporate Management Team for final decision on whether a market supplement is appropriate based on the evidence presented, which would justify the “genuine material difference” in pay from the evaluated grade rate for the job. Human Resources will maintain a database detailing all market supplements applied, their evidential basis, and the outcome of each annual review.

Review of Market Supplements

Payment of the market supplement should be reviewed on an annual basis to ensure that market conditions still justify the additional payment. From a practical perspective, this means that any review must begin 6 months after the introduction of a market supplement to allow time for the review process and relevant notice. Human Resources will retain a list of market supplements to ensure that this review process is undertaken with Services requiring to submit an updated business case.

Reviews will normally be undertaken in the following circumstances:

  • After the allowance has been in place for six months to ensure there is a need for its continuance, and to identify any case for its adjustment;
  • Once the supplement has been paid for one year, it should be reviewed annually on an ongoing basis;
  • If market conditions would suggest a review may be appropriate;
  • As part of the recruitment process when a vacancy arises.

Where a market supplement is terminated, increased or reduced the individual(s) in receipt of the payment will be given three months notice of the termination or the reason for the change.

Trade Unions will be advised when a market supplement is being reviewed.