Performance related pay and local government

Well the cat is well and truly out of the bag now. Going beyond the issue of banker bonus the government is now taking a ‘serious look’ at rewards systems in the public sector. (BBC news 13 February 2012.) We need to be alert to the fact that the research evidence for linking performance to pay is at best a little sketchy and at worst downright misleading. Where performance is exceptional then little doubt remains that if it is not rewarded properly then you run the very real risk of losing your most talented people – an argument that is paramount in the banking industry. But there are other reasons – I myself was engaged in some work in recent years that involved talking to senior high earning staff in the financial services industry and it did not take long to uncover the uncomfortable truth that in for some high bonus rewards are a product of the fear of losing some of your very sensitive commercial knowledge to a competitor. This seems never to be spoken about by those giving voice to the defence of the bonus culture. However, this is an argument that carries little weight in the public sector, true some staff may be party to sensitive information but it was not too long ago that we had a culture that if we invested in staff through a mixture of necessity and a desire to offer ‘implicit’ reward through access to training and development – that if someone who had benefited from this left and moved employment to another council then local government as a whole benefitted. The recipient individual and council would benefit but it left the door open to recruit someone who may have benefitted from another sponsors investment.

There may be little appetite for extending performance related pay in local government but we also do too little to think about the mechanisms we have to hand to reward through saying “thank you”, through offering interesting and challenging work through job design and through actually engaging people beyond the core of the job function we undertake. Sadly, in a climate of extracting the last ounce from individuals and the personal tragedy that downsizing is for thousands we have forgotten that many in local government do work for us because they want to – the work is of value and if we underpay we pay the price in de-motivation and loss of discretionary effort. So please keep the banker bonus question out of local government – it does not apply and if you are being rewarded through PRP then good luck to you – but make certain you earn it through the implicit rewards you can offer those less fortunate than yourself.

Ian Briggs - Inlogov

Ian Briggs (Senior Fellow)
Research interests lie in The development of effective leaders, leadership assessment and the identification of potential; Performance coaching, organisational development and large scale leadership development interventions; Organisational change and the establishment of shared service provision.

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