An examination of the role, dynamics, and outcomes of performance-related pay in the UK public sector : a case study approach

• Main Author: Metawie, Miral
• Published: University of Kent 2011
• Subjects: 331
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.587528

For the past forty years, the public sector in the UK has been the subject of continuous reform. The aim of these reforms has been to control public sector expenditure, and introduce a culture more akin to management in the private sector. This shift in management practices has often been referred to as New Public Management (NPM (REF). Changes to pay determination in the public sector, and the introduction of performance-related pay (PRP) have been central to these new management practices. This thesis examines the role, dynamics and outcomes of PRP in the public sector in the UK, using Kent County Council (KCC) as a single case study. Despite extensive research on PRP since the 1980's, research studies have not comprehensively examined the unintended outcomes ofPRP schemes, such as employee demotivation. Most existing research relies on economic theories of pay determination and/or psychological theories of motivation, which do not lend themselves to the examination of the dynamic features of reward systems; but rather capture a static picture of particular aspects of pay schemes. This study develops a framework of the employment relationship to examine the role, dynamics and outcomes of Total Contribution Pay (TCP), the PRP scheme within KCC. The aim of this research is to examine the totality of TCP (i.e. role, dynamics and outcomes) within the conflictual and problematic nature of the employment relationship. The research concludes that there is a significant gap between the rhetoric and the reality ofTCP. An examination of all the dimensions of the employment relationship reveals that TCP has a number of unstated objectives including: controlling the wage bill; demonstrated political accountability; and renegotiating performance elements inherent within employees' zones of acceptance. Consistent with consecutive conservative and labour governments' ideologies of free market principles, the introduction of TCP within KCC, appeared to be driven by the desire to cope with external market demands, at the expense of internal labour demands, and in particular, employees' psychological contracts. Consequently, a . number of distorted outcomes were evident in KCC, such as withdrawal of discretionary effort, diversion of effort and work intensification.