Public Employee Compensation and its Role in Public Sector Strategic Management

Beginning with the decade of the nineties, the idea of strategic management of government and nonprofit organizations burst upon the scene. Traditionally, governments have been thought of as being unchanging, resistant to change, or at the most, changing by reaction to pressure. Strategic management suggests both the idea of adaptation to change forces as well as defining mission and concerting future organizational design and behavior accordingly, perhaps even changing the environment. Work force management is an important dimension of this new approach. Both direct and indirect compensation of this work force to achieve an array of possible objectives is a critical aspect of work force management.

The strategic approach to public organizations is also concerned more than ever with obtaining optimal performance, however it may be defined. Compensation, as a subset, is very much part of this quest for organizational performance and performance improvement. Thus, there is a linkage of subparts, each with many potential alternatives: organizational mission/objectives, compensation objectives, compensation system design, and the role of pay in obtaining desired type and levels of performance. This design chain is the focus of this book.