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16.01.13

Performance related pay needed for public sector – CIPD

Public service reform could be undermined by workers’ reluctance to recognise that their salaries should reflect individual performance, the CIPD has warned.

Only one in three public sector workers think their salary should reflect their individual performance, compared to 54% of private sector workers surveyed.

Public sectors are more likely to think that their salary should be determined by inflation, the cost of living or experience.

In 2012, 20% of public sector workers received a pay rise, compared to 73% in 2008. For private sector workers, 56% received a pay rise in 2012, down from 64% in 2008. Of those who received a pay rise, only 26% matched or bettered the cost of living.

Charles Cotton, rewards adviser at the CIPD, comments: “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.

“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.”

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