Incentivizing the Poor Relation: ‘Performance’ and the Pay of Public-Sector ‘Senior Managers’

Abstract

This article discusses the principles and practices of pay determination for senior managers in the public sector. A central theme of the article is the analysis of performance-related pay (PRP) in the pattern of pay determination for this group. The discussion of this approach to pay is set in the context of New Public Management (NPM) and the emphasis on installing performance measurement and management as a central element in the ‘reform’ of public-sector services. The exemplary material is drawn from the United Kingdom, as it represents a national case in which NPM techniques have been applied over a quarter of century under successive governments. The article argues that while there are logical connections between PRP and performance measurement and management the practice of pay determination for senior public-sector managers is less coherent than such connections might suggest. The article locates the causes of such incoherence in the complexity of patterns of pay determination for senior public managers and the conceptual and methodological problems inherent in assessing the performance of public-sector services.