Performance-related pay in the public sector … does it work?

English moneyBy Donna Gardiner

Pay accounts for a large proportion of public sector expenditure and so it’s perhaps unsurprising that in the current context of ‘do more with less’, there has been renewed interest in using pay to help drive performance improvements.

Indeed, as part of last year’s spending review, the government announced the introduction of performance-related pay for all civil servants by 2015-16. It is also working towards the removal of automatic pay progression in schools, prisons, the NHS and the police. In his Budget statement, the Chancellor called progression pay “antiquated” and said it was “deeply unfair” to others within the public and private sectors who did not receive it. Continue reading