Managing compensation in a post “New Public Management” era

Rather than simply downsize, governments now must determine appropriate salary levels and performance expectations for all jobs affected by their restructuring efforts – and that will require adequate HR staff capacity. Policies that base salary increases on seniority or job tenure send a clear message that downplays the importance of employee performance. Salary banding introduces a dramatically different way of managing employees, since their pay does not depend on their job description – and that can enhance recognition of their worth. There have been difficulties introducing performance-related pay, the success of which depends on managers’ commitment and a review process to ensure fairness. Executive salaries and bonuses are a hugely contentious issue, but it should be recognised that government executive jobs are simply not comparable to executive jobs in the private sector. There have been advances in gender equality in the world of work, but the gender pay gap persists.