The Challenges and Trends in Compensation in the Public Sector

1946 Words8 Pages
The purpose of this research paper is to review the challenges and trends in compensation in the public sector from an interdisciplinary view of local, state, and federal agencies human resources. Public sector human resource management continues to experience many challenges in the ever-changing workforce. Through the phases of the employee life cycle, human resource managers are required to keep compensation to the forefront in forming a strategic organization. Of those challenges, budget cuts, which affect pension plans, and tenure, are some of the areas of concern for human resources amongst government agencies. The nature of work public agencies provide, makes it imperative that policies and procedures are defined and
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Steps can be taken to manage budget cuts without impeding pension package in government agencies. One step is to provide both defined benefit and defined contribution packages. Define benefit package, while generally more costly to the government agency, provides a comprehensive amount of benefits in a short period of time (, 2013). This plan, in the public sector, is paid after the employee retires. This plan is generally the more known and accepted plan for employees to select this package. Defined contribution packages, on the other hand, are set up so that the employee can contribute to their pension plan and have the freedom to invest a vested amount into mutual funds. The government will also contribute a percentage in this case but it is a joint effort. Allowing for different option make the employee feel they have a better opportunity to invest their earnings base don their own wishes rather then limited to one choice.

In the public sector tenure is what most decisions to promote or give merit are based upon. Employees who have more years in service tend to be the first considered for a merit increase. While this has been the general practice of the public sector, the newer performance based model uses productivity and performance as the measurement tool. This new approach is becoming more and more common in the workforce. The programs used in the government work
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