The Chartered Institute of Personnel and Development (CIPD) welcomes the acknowledgement in the Chancellorís Comprehensive Spending Review (CSR) that national pay determination can limit the ability of public sector employers to respond to local labour market conditions and reward high performance.
However, while an increase in local pay flexibility can contribute to ensuring that higher pay is matched by an improvement in public services, reform must be handled with care. CIPD research shows that team working and a combination of team and individual performance related pay are crucial ingredients of high performance workplaces in the public and private sectors. Both must be integral to the process of public sector reform.
Although ëthe new localismí offers the prospect of improved productivity and performance, it could open up a pay gap within the public sector and de-motivate those staff that perform less well. As the CSR suggests, re-organisation of work practices and improved staff training can help poor performers to raise their game. But in addition far more emphasis should be placed on team working and team reward.
Commenting on the CSR, CIPDís Chief Economist John Philpott said, ìAs the CSR seems to appreciate, a high performance early 21st Century public service canít be built on an outdated mid-20th century approach to pay. Organisations undertaking reform must learn from the considerable body of evidence on effective people management. This shows that team working, continual learning, and a mix of individual and team performance related pay systems are the key to improvements in productivity and customer service. Organisations will have to recognise this if the ënew localismí is to succeed in translating Gordon Brownís extra billions into better service delivery.
Public sector needs teamwork and performance-related pay
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