There has been a strong, positive and supportive reaction to Will Hutton’s recent report on fair pay, suggesting the need for greater use of performance related pay in the public sector.
Hutton lays down an intelligent and thoughtful set of recommendations to reform public sector pay. It is said that tempting top employees within the public sector with rewards for exceptional performance, will improve their efficiency and maximise their potential, where rewards reflect personal and collective achievements.
However, with the recent uproar caused by the excessive bonuses distributed within both private and public sectors whilst the economy is low, it is unlikely that the taxpayer will take warmly to the scheme.
Despite initial thoughts that taxpayers will dislike the scheme, it is said that they will actually benefit if variable pay is effectively tied to performance measures that can demonstrably improve the delivery of public services. To ensure their support, it is essential to clearly explain the reasons behind senior pay, in order to help build confidence amongst taxpayers that their money is being well spent.
In addition to the obstacles that taxpayers may cause, there are challenges in setting meaningful and stretching performance targets and methods of assessment. However these challenges can be met in a way that ensures pay set in this way does what it is meant to do — which is to drive improvements in performance. So how can the public sector go about this without causing drama amongst the community?
It is essential to ensure that bonuses are used as an alternative, through complementary reward tools. They should not simply replicate or replace what is already being rewarded and recognised through pay awards and promotions.
Hutton’s recommendations may come into play as the results would drastically improve the public sectors workforce efficiency. However the scheme may be impossible to implement as the government make drastic public sector cuts.