Chapter 16: Traditional Pay In Public Organizations: Should We Try Something Else or Try Doing It Right?

In the first place, among all the techniques, methods, and approaches that were identified with the New Pay, the only thing “new” was broadbanding. As the term suggests, all grades in a structure are collapsed into three or four bands. Typically individual pay administration is decentralized to line managers so they will have more flexibility in responding to market pressures and in implementing techniques such as job-sharing, self-directed work teams, and job rotation necessary to increase efficiency and satisfy customers. In practice, however, broad-banding was certainly no panacea and in many cases the unintended consequences outweighed the benefits, especially when organizations replaced traditional pay structures with broad bands without regard to the work flow, culture, and objectives of the organization. The approach is best suited for agile, entrepreneurial, delayered organizations that must constantly innovate and adapt to external conditions. Undoubtedly some government and public sector organizations have successfully implemented this model and while others say they have, it would likely come as a surprise to their employees, lower level managers, and customers who don’t see things being done any differently. The fact is, most public organizations are hierarchical, jobbased and departmentalized and the nature of the work remains rather stable over time. In other words, even when the leadership talks a good game they retain most features of the industrial-age model. Discarding a traditional pay system along with the techniques that have become associated with these systems in favor of an approach that is new and different can cause more problems than it cures. As an illustrative example, let’s say a patient was diagnosed with a disease and referred to a surgeon for a procedure (a “technique”). Unfortunately the surgeon was not skilled in performing the procedure and botched the operation. The only alternative was (as they say in the OR) to “go in again” and do the procedure over. The patient might then abandon traditional medicine in favor of a radical new therapy but a better idea might be to locate another surgeon, preferably one who has performed the procedure many times with few complications.