Member Article

Public sectors attitudes towards performance-related pay revealed

Last year, the Office for National Statistics published data that showed a typical public sector worker made £4,500 more per year than their private sector counterparts.

Now, a study by the Chartered Institute of Personnel and Development found that 36% of public sector workers think salary should reflect individual performance, while 54% of private sector workers think this should be the case.

Private sector and voluntary works were also significantly more likely to view their pay level as fair, at 57% private sectors believed so, compared with 42% of public sector workers.

The Chartered Institute of Personnel and Development (CIPD) champions the introduction of performance-related pay in the public sector.

Charles Cotton, rewards adviser at the CIPD, comments: “Establishing a closer link between pay and performance in the public sector is a key element to improving service delivery and value for taxpayers. “What’s more, unless the public sector starts linking pay to performance or better engages with those in the private sector about why their taxes should reward public sector workers differently, public sector employers could find it hard to legitimise pay decisions in the eyes of the private sector.

“However, linking pay to performance does not come without its management challenges. It’s encouraging to see that there is some appetite in the public sector for performance related pay, with one in three workers agreeing that their salary should reflect their performance, but if performance related pay is introduced, public sector managers will undoubtedly find it challenging to retain levels of motivation and engagement amongst those who think other factors should determine their pay.”

Elsewhere in the survey findings, 20% of public sector workers got a pay rise in 2012, compared to 73% in 2008; whereas 56% of private sector workers got a rise in 2012, compared with 64% in 2008.

Anne Gibson, past President of the Public Sector People Managers Association (PPMA) added: “Many public sector organisations are re-thinking their approach to pay and reward, recognising that the reward systems of the past are no longer fit for purpose. Now more than ever they need employees who are motivated to do the best they can, are committed to public service and are resilient enough to thrive through the continuous cycles of change.

“Pay, reward and recognition are not the only factors in a necessary ‘new deal’ for public sector workers, but they have an important part to play. Reward systems need to build on the commitment public sector workers have to the job they do in order to drive up performance and productivity, and therefore make them affordable.

“There is an emerging focus in the public sector on segmented pay to suit different groups of staff - but we will need to weigh carefully the impact of further or more radical change to reward in the public sector on employee engagement and motivation, which is such a key factor in organisational performance. One way or another, pay and reward are going to be under the spotlight, not just because of the need to contain costs, but because getting it right will support employee engagement and performance.”

This was posted in Bdaily's Members' News section by Tom Keighley .