Senior
public sector pay freeze
Pay freeze is a short term measure; long term challenge is to create a
coherent, consistent and transparent pay strategy for the public sector

The Chancellor, Alistair Darling, announced on 6 October that there
would be a pay freeze for senior members of the judiciary, senior civil
servants, senior NHS managers, GPs and other senior public servants. According
to the government, the more junior public sector employees will receive a
nominal pay increase of between 0 and 1 percent.

“The
government’s proposal is in line with experience in the private sector through
2009. According to our data, over half of the companies in the UK have
frozen pay during 2009 and the perception is that the public sector has yet to
shoulder its share of the burden,” commented Chris Johnson, head of Mercer’s
human capital business. “In light of pressures on public spending, it’s no
surprise that the government is taking this approach.

“Long
term, the government can learn from the private sector,” he continued. “After
pay freezes in 2009, private companies are now more focused on developing
sustainable pay policies that reflect the needs of their businesses. It is
important that the public sector, too, has sustainable,
stable reward policies that will enable it to recruit, motivate and retain its
fair share of talent.” 

With
executive reward in the public sector currently set and monitored through
different mechanisms such as pay review bodies, remuneration committees,
management processes and political decisions, Mercer believes the process has
little coherence, consistency or transparency.

“What
appears as a piecemeal tactical approach to public sector pay will encourage
the false impression of ‘fat cat’ pay, will weaken its ability to attract the
best people and will fail to convince the public that senior public servants
are delivering value for money,” argued Mr Johnson. “Pressures on public
expenditure and the need to deliver services at reduced cost to the taxpayer
require more than a freeze in pay; what is needed is reform of public sector
pay. That is the big challenge.”

10 October 2009

Human Resources news brought to you by theHRDIRECTOR – the only independent strategic HR publication.