Policies and practices governing public sector compensation planning

Compensation planning requires transparency, fairness, and a genuinely inclusive approach – especially during times of austerity. Informed decisions that can be justified to stakeholders require social dialogue. While union involvement would reduce resistance to proposed changes, labour negotiations are normally not the best setting for restructuring pay programmes. Information on labour market trends is central to remaining competitive, although data quality issues, differences in demand, and the frequent lack of counterpart jobs in the private sector must be taken into account. Transition to performance-related pay is perhaps the most difficult change initiative for a public employer, but policy formats such as a “merit matrix” can help facilitate the changeover. Employees need to know as much as possible about plans for the near future and what they can expect. Maximising the total rewards of the work experience can enhance the performance of personnel truly committed to the organisation and its success.