"Why can't a woman be more like a man?" laments Professor Higgins in the film My Fair Lady. Similarly, the government, in its Modernising Government White Paper in 1998, asked why the public sector could not be more like the private sector. The public sector, it said, should be less risk averse and more performance and customer-oriented like the private sector.
Yet the government's stance has proved just as futile as Professor Higgins's. A new book, Rethinking Reward*, shows that, when it comes to human resource management (HRM), the public/private sector divide has widened over the past decade, not narrowed.
To start with the basics: pay in the private sector has become largely determined unilaterally by management. In the public sector, pay is determined either by management/union bargaining or by pay review bodies, the independent committees that make recommendations to government. In the past decade, we have seen yet more pay review bodies: a new body for prison officers was created in 2001, while the nurses' and other health professionals' review body was extended to virtually all NHS staff in 2007.
Grading structures increasingly differ too. Pay spines based on analytical job evaluation with service-related increments and separate annual cost of living and performance increases (rather than the two being rolled into one) are hallmarks of the public sector. However, the private sector is increasingly adopting broadbanded pay structures – without incremental points – and an annual increase that intertwines performance and cost of living, often through non-consolidated variable payments.
Perhaps the most marked difference in HRM between the public and private sectors is with pensions. Defined benefit – or final salary – provision is increasingly restricted to the public sector, while defined contribution schemes are essentially a private sector phenomenon. Furthermore, over the past decade, the number of members in private sector schemes declined by more than one million, while the number of members in more favourable public sector schemes rose by nearly two million.
On equality, too, the differen