Public Sector Pay Challenges and Solutions

Created for WAGE by Jill E. Carter

What do we want to do today?

• Discuss the Following Challenges Related to Public Sector Pay:• Base Salary Increases

• Pay for Performance (really?)• Compression• Pay Equity

• Pay Structures Keeping Current with the Market

• Market Reference Points• Competency-based• Skills-based• Longevity-based

• The Role of the Policymaker• Public Perception• Potential Solutions• Acquire Relevant Market Data• Hire Competitively• Educate the Policymaker• Educate the Workforce

• Answer Your Questions Throughout

Base Salary Increases

• Issue: Keeping Employees’ Base Salary at a Living Wage Level• Pay for Performance

• Conditions that must exist prior to Paying for Performance

• Failure to Launch• Cost of Living Adjustments

• Outdated Term• Public Perception

• Merit Increase• Defined

• Compression• Pay Equity

Pay Structures

• Issue: Keeping competitive with the market• Pay Structure Philosophy: Lead, Lag or Current with Market• Significance of the Pay Structure Midpoint (Market Reference

Point/MRP)• Pay Range Length• Steps vs. Open Pay Ranges• Base Salary Movement and Pay Structure Movement• Compression in the Range• Internal Equity vs. External Equity

The Role of the Policymaker

• Who is the Policymaker?

• How does the Policymaker See Her/His Role?

• What is the Most Efficient Role of the Policymaker?

• Evolving the Role of the Policymaker

Public Perception

• What is the Public’s Perception of Public Sector Pay?• Why is that the Public’s

Perception?

• What are Effective Ways of Managing Public Perception?

Potential Solutions

• Acquire Relevant Market Data• Third-party Providers• In-house Survey

• Hire Competitively

• Educate the Policymakers

• Educate the Workforce