Top of the heap – public sector pay

Today’s Times has an article on the topic of whether any public servant should be paid more than the Prime Minister. It is a two-part article with one writer arguing the case against, another the case for. The question, of course, arises from the fact that quite a lot of them already do.

Once you start debating senior pay in this way, and in public, you end up with all sorts of highly emotive but inappropriate comparisons. Just how many nurses is the Prime Minister worth? How many times the minimum wage should the person running your local council be paid? Once you go down this route you inevitably end up with truncated salary structures, and much bickering.

The salaries paid to public sector chief executives (local government, the NHS, quangos, etc.) should, as in all sectors, be based on: the skills and experience needed; what is paid for such people elsewhere; and the difficulty, or otherwise, of attracting good candidates. Whether or not you think the correct answer has been arrived at for these executives you have to admit that the third part of the test, the ease of finding candidates, goes out of the window if you make the PM’s salary the yardstick. At the very least there are the 300+ MPs who would love to reverse their initials; possibly even take a pay cut for the privilege.

Save your local bin man – reacting to the recession

Personnel Today* reports on one local council that is asking staff to work fewer hours, or take unpaid leave, “to help save jobs”. In the same article they quote the CIPD, the CBI and the Bank of England as cautioning (not necessarily referening to this council) that this sort of action may only be delaying redundancies rather than saving jobs. I would add another concern.

By taking this approach the council is implicitly assuming that all its jobs are needed and that as soon as the economy picks up the status quo can resume. If you are manufacturing widgets and orders turn down there will be a fairly simple correlation between orders and production hours. In administration and the public sector the connections are much more complex.

The danger is that, if the economy does not pick up as hoped, the council will be forced to make savings quickly. If this happens the cuts will have to be in the larger staff groups. These, of course, are the ones that deliver the ‘real’ services that we all want – refuse collection, gardeners, teachers, etc. – not all those nice-to-have jobs with obscure titles that proliferate across local government. These latter jobs, often resulting from one political pet project or another, are scattered around in smaller groups so any culling inevitably takes longer. To protect real services they need to start reviewing these areas now.

* I’m eternally grateful that this publication has avoided the temptation to become HR Today

Publish and be damned – local government pay

I read that the Government is proposing the remuneration of senior local council employees be published in the annual accounts. The intention is that “…. this will put a brake on spiralling pay packets and perks” (John Healey: Local Government minister). Well, I wonder. I suspect the law of unexpected consequences will have something to say about that.

The idea that publishing the fact that Council Chief Executives can get more than the Prime Minister will generate an unstoppable public backlash, or shame them into accepting less, is optimistic at best. Highlighting the differences in senior salaries between councils is just as likely to result in claims from those in the less ‘generous’ authorities as restraint among the ‘fat cats’.

Salary benchmarking is the basis of all good reward practice but, once you have the data, it must be moderated by a whole range of specific factors such as the true demands of the posts, the quality of the individuals and affordability. When the jobs in question are your most senior executive ones there is a natural tendency to overestimate the demands, avoid facing down the individuals and, as the salaries represent a small percentage of overall costs, play down the cost issues.  Local authorities are probably more susceptible to these tendencies than many other organisations.