CIPD calls for greater use of performance-related pay, regional pay variations
The Chartered Institute of Personnel Development has called on the government to make greater use of performance related pay and bonuses in the public sector, not less.
The CIPD said much more regional flexibility in public sector pay should also be introduced to taken into account different labour market conditions and cost of living.
According to the CIPD, the moves are necessary to maximise value for the taxpayer while at the same time driving through public service reforms.
In its report Transforming public sector pay and pensions: Building productive public sector workplaces, the Institute found significant variations between the public and private sectors when it comes to expectations of how pay should be determined.
According to the CIPD’s research:
- Only 36% of public sector employees believe they should be paid based on how well they personally perform, compared to 60% of private sector employees
- Only 6% of public sector workers see the performance of their organisation as an appropriate factor in determining their pay, compared to 35% of private sector workers
- More than half of public sector workers highlight the cost of living as one of their preferred determinants of pay, compared to 33% of private sector employees
- A quarter (26%) of public sector workers say a trade union negotiated deal is one of their preferred determinants of pay, compared to 4% in the private sector.
The CIPD report also called for “urgent” reform of public sector pensions and a freeze in the public sector pay bill, although it urged a flexible approach and not an across-the-board freeze.
Charles Cotton, reward adviser at the CIPD, said: “The public sector workforce is going to have to find ways of emulating the kind of restraint the private sector workforce demonstrated during the recession to have any chance at all of minimising the inevitable job losses to come.
“However, by allowing emotive headlines about ‘snouts in the trough’ to ensure any kind of performance related pay in the public sector becomes morally unacceptable, ministers are simply conceding that poor performance and excellent performance should, fundamentally, be rewarded equally.”
