- If any of the 3-links are weakened, then “pay-for-performance” is called into question 3) Pay determination -Most significant goal of any remuneration system is fairness - An organization confronts 2 types of decisions in management of compensation to achieve this goal: pay level and pay adjustments - Compensation in any jurisdiction is a product of: a) Pay philosophy, as informed by law and policy b) Labor market forces (external competitiveness) as reflected by manipulation of supply and demand c) Job content (internal consistency) as assessed by job evaluation techniques d) Individual contributions, as influenced by longevity, merit, skill, and group pay - Decisions about level of pay are a consequence of philosophy, market, and job evaluations - Decisions about pay adjustment emphasize an employee’s place in the salary structure - Together these judgments should represent the greater good by aligning the interest of the public and its servants. 4) The Great Pay Debate (I would recommend reading the section as well on pg. 248) -Salary war: Government personnel compensation has become a political issue due to high unemployment, stagnating pay, recession, budget deficits - 75% of citizens believe that federal employees get better pay and benefits than people doing similar work outside of the government - Private vs. Public Sector
- For this reason, civil servants have become a symbol of government excess, leading to limits on hiring, pay freezes, furloughs, salary reductions, pension cutbacks and outsourcing. - In contrast the US Office of Personnel Mgmt. (OPM) counter that the public workforce is not only older but also more educated, unionized, and white collar than business employees. - The pay for an average private sector worker cannot be fairly used as the standard for public service pay. c) Experience is valued - Seniority: critical element of pay-for-performance systems - Not very popular in government owing to the emphasis given on performance and results Merit Pay - Annual increment to the base salary, an annuity that compounds for as long as the employee remains with the department.- It is important to recognize that there may be no final solution to pay and benefit issues for public and private sectors due to subject in market forces and wages/benefits. - The issue is to develop a transparent way to determine the comparisons and to assess the potential effects of change before reform is adopted. - The debate is a proxy fight for what role government should play in society - Whatever may be decisive in policy change, it should meet these principles of a) Transparency b) Equal pay for equal work c) No political influence d) Ability to recruit and retain a well-qualified workforce - and Government can act as a model employer – one that offers fair and competitive pay/benefits - The ultimate goal should be that every working person receives reasonable pay and benefits 5) Pay banding - Made popular by downsizing and de-layering that characterize many restructured organizations.
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