PUBLIC SECTOR
CIPD urges public sector to forge stronger link between pay and performance
Efforts to reform public services will be undermined unless public sector employees recognise that their salaries should also reflect their performance rather than simply tracking the cost of living, says the Chartered Institute of Personnel and Development in a survey published today.
Charles Cotton, rewards adviser at the CIPD, warned: “Establishing a closer link between pay and performance in the public sector is a key element to improving service delivery and value for taxpayers.” He added: “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.”
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The CIPD’s fifth annual survey of employee attitudes to pay is based on a poll of 3,016 working adults, across all industrial sectors. Key findings include:
The survey also found that how individuals would like to get paid also influences how they think other workers should get paid:
But Cotton acknowledged that it’s no easy matter getting the performance assessment process right:
“Of course, it is one thing to say that you pay for performance; it is another thing to do it. Just three in ten employees believe that their organisation is good at assessing their or their team’s performance, while just two in five believe that it is good at assessing the contribution of senior managers. There could also be a mismatch between how employees define performance and what their employer means by performance.”
Cotton also highlighted the fact that applying performance pay systems in some parts of the public sector is not all plain sailing:
“While linking individual achievements to pay can be appropriate where work is simple, specific and measureable, many jobs in the public sector are not so easy to measure and even in the private sector the trend is away from such work, as the economy becomes more volatile, uncertain, complex and ambiguous, and businesses have to become more nimble and resilient. This may mean that team and organisational performance will become just as, and possibly more, important than individual success. In addition, rather than simply focusing on what has been achieved, employers will also have to look at the values, behaviours and attitudes that underpin sustainable performance at an individual, team and organisational level”.
Survey results
Other findings from the annual survey include:
Commentary on survey findings
Anne Gibson, past President at the Public Sector People Managers Association (PPMA):
“Different attitudes between employees in the public and private sectors have been shaped by historic differences in approach between the sectors, including the existence of national pay review bodies for groups such as teachers, police and fire-fighters.
“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.”
A final word
“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.
“Public sector employers would need to be prepared to invest in explaining why it thinks such reforms are needed and communicate the changes in the wider context of changes in the public sector ‘employment deal’. On the other hand, with younger employees more likely than older generations to expect to see their pay reflect their individual achievements, the public sector could face issues recruiting staff in the future if it does not start linking pay to performance.” - Charles Cotton, rewards adviser, CIPD.
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Title: Employee Attitudes to Pay, Chartered Institute of Personnel and Development, January 2013.
Survey details: The survey is based on a poll of 3,016 working adults, across all industrial sectors. The survey was carried out between 29 October and 12 November 2012 and is “representative of the UK workforce in relation to sector, size and industry type”.
Availability: The report is available to download from www.cipd.co.uk/hr-resources/survey-reports/employee-attitudes-pay-2012.aspx.
The Chartered Institute of Personnel and Development (CIPD) is the “world’s largest Chartered HR and development professional body, setting global standards for best practice in HR”. With over 135,000 members across 120 countries, the CIPD is focused on supporting and developing those responsible for the management and development of people within organisations. For more information visit www.cipd.co.uk.