since there’s no way on this planet that they’d ever get employment in the private sector!

Which is precisely the problem they try to address by offering competitive salaries. You pay peanuts, you get monkeys.

Case closed, your honour.

To be fair, In my experience there’s a significant proportion who would, since there’s no way on this planet that they’d ever get employment in the private sector!

Because as well know you need to be a model of efficiency and probity to work in the private sector

Remind me, how much of a payoff did St fred Godwin get for losing £28Bn, and how much were the directors of Northern Rock paid to drive it into bankruptcy?

And when all those ex public sector squaddies leave the army, where do they go and get jobs?

so if your lowest paid worker is £8 000 pa WTE then the best paid cannot be more than £80 000 total earnings

Abject stupidity.

for me the answer is a legal obligation for ratios of total remuneration between the highest and lowest paid in any organisation. 10 :1 ????

so if your lowest paid worker is £8 000 pa WTE then the best paid cannot be more than £80 000 total earnings WTE

So, 10 x minimum wage max? If you include under-18s, who are not entitled to mim wage, you might be seeing a rather big pay cut.

You’d also see a lot more top staff paid via dividends…

so if your lowest paid worker is £8 000 pa WTE then the best paid cannot be more than £80 000 total earnings

Abject stupidity.

Please elaborate

for me the answer is a legal obligation for ratios of total remuneration between the highest and lowest paid in any organisation. 10 :1 ????

so if your lowest paid worker is £8 000 pa WTE then the best paid cannot be more than £80 000 total earnings WTE

So, heads of multi billion corporations you might as well just F–k off to the states and work there without the constraints – you’d be back to the 1970’s brain drain! indeed, why even bother having your company in the UK, just get stuff manufactured abroad in romania at bargain wages and ship it in, no need to pay the inflated UK prices – oh, again we’re back to the 1970’s!

so TJ – when you’ve killed UK manufacturing once and for all, and offloaded all your call centres to india – who’s gonna pay the wages for the public sector?

its a global market now TJ!

So, heads of multi billion corporations you might as well just F–k off to the states and work there without the constraints – you’d be back to the 1970’s brain drain! indeed, why even bother having your company in the UK, just get stuff manufactured abroad in romania at bargain wages and ship it in, no need to pay the inflated UK prices

so its ok to limit public sector pay as that will not mean we loose the best and brightest, but its different for private sector pay?

for me the answer is a legal obligation for ratios of total remuneration between the highest and lowest paid in any organisation. 10 :1 ????

so if your lowest paid worker is £8 000 pa WTE then the best paid cannot be more than £80 000 total earnings WTE

In a past role I managed over 50 employees with an average earnings of £40-50k, but there were people in the firm on minimum wages. So you need a lot broader band, to give the right heirarchy/incentive, ‘cos above me was my boss, then our Divisional CEO and above that the plc Board.

But I don’t disagree with your approach (obviously owner/managers can pay themselves what they like), but plc and public sector Directors/Managers ought to be more ‘moderate’.

So you need a lot broader band, to give the right heirarchy/incentive, ‘cos above me was my boss, then our Divisional CEO and above that the plc Board.

In 1970, CEOs made $25 for every $1 the average worker made. Due to technological advancements, production and profit levels exploded from 1970 – 2000. With the lion’s share of increased profits going to the CEO’s, this pay ratio dramatically rose to $90 for CEOs to $1 for the average worker.

As ridiculous as that seems, an in-depth study in 2004 on the explosion of CEO pay revealed that, including stock options and other benefits, CEO pay is more accurately $500 to $1.

So why do our hierachies/incentives need to be so much broader than they used to be?

so its ok to limit public sector pay as that will not mean we loose the best and brightest, but its different for private sector pay?

dunno, what’s the international market for chief constables like at the moment? A lot less healthy than the market for bankers I’d be willing to bet.

so its ok to limit public sector pay as that will not mean we loose the best and brightest, but its different for private sector pay?

This is the key point. Can you answer this Zulu?

We need high quality managers in the public sector, I think we all agree management standards are not great in the public sector.

According to right wing dogma we must pay the best very well to attract and keep them in the private sector. Why does this not apply in the public sector?

Germany has a much lower ratio of remuneration highest to lowest than we have BTW – and a far more successful economy.

It depends entirely on the job – like I say, can you really equate being a chief constable to running a profitable business? Can you equate running a hospital to running a large hotel? you need to choose your comparator salary very, very carefully – especially where there is no direct private sector comparison, since for example there are no “private” police forces.

In the private sector, you pay people as little as possible to stay competitive… seems that the same should apply in the public sector.

Edit – you also need to remember its the overall renumeration package, including job security and expected tenure that you need to take into account, in the private sector you don’t have the same pension benefits and more often than not you have less job security (how often to public sector managers get sacked?)

Perhaps the direct comparator for public sector wages should be a european one?

but we know you arent talking about policemen or even doctoors

its bbc/ local council/nhs middle management/ directors types that get people all upset and their jobs are directly comparaple to a lot of private sector managers/ ceos

So you can’t answer that then Zulu. what a surprise. Public sector there is no competition hence how can competitiveness be measured?

I would say that hospitality and healthcare are very good comparators. So a Ceo of a hospital trust turning over millions a year would be well compared to a similar role in a hotel chain.

Police? Lots of private security firms.

in the private sector you don’t have the same pension benefits and more often than not you have less job security (how often to public sector managers get sacked?)

Bullshit! look at the pension packages CEOs in board mebers in industry get – and in the public sector the CEO gets the same pension deal as the workforce unlike private sector.

Again – senior managers get sacked easily and often – probably less security than in the private sector as the political interference means people get sacked for polititcians

Well, actually TJ, I think you already know that my solution to the problem of there being no direct comparator between the public sector (eg NHS) and private sector would be far more radical and decentralising than the one you suggest, and would have the effect of introducing the competition you so desire – but possibly might not go down too well with the unions 😆

Does the low wage for the PM explain the quality of our “leaders”?

But can you answer the point. Why do we have to pay very high salaries to senior folk in the private sector to attract and retain the best talent but not in the public sector?

Can you answer this? Why does this work in the private sector and not in the public sector?

Why do we have to pay very high salaries to senior folk in the private sector

Largely because they get hired and fired based upon on performance – if they don’t perform, they get rid, quite simply that does not happen to the same extent in the public sector.

Answer the question! Or can’t you?

Thats bullshit. Look at the CEO of The RBS and look at COEs of various NHS trusts and social work depts. Shoesmith for one – sacked without notice or pension for a failing within her dept compare that to goodwin who trousered millions.

TJ you should probably try and catch the latest edition of “more or less” from Radio 4. They reported on some analysis of public an private sector wages and it was found that when pensions were included public sector workers were better paid (although remunerated might be a more appropriate term) then private sector workers.

For some reason however the people who did the comparison then excluded those private sector workers that did not receive any pension benefits and re-did the comparison and found the opposite. To be honest this seemed like a case of manipulating the data to obtain the desired result. I think a far more valid comparison would have been to add in all the other benefits that are recieved by both public and private sector workers (company car, private medical etc) and then re-run the analysis on the basis of the total package of benfits. There was also little attempt at comparing “similar” roles which renders any comparison questionable at best.

mark_b – Member

If you really want to whinge about other people earning more than you i’d recommend complaining about all the bankers bonuses paid to the staff working for banks that were bailed out by the public purse

OK – tell us just how much it has actually cost the government to “bail out” the Banks.

I just did TJ.

If you want an example, see Maidstone and Tunbridge Wells NHS Trust!

do you think that the CEO would have received the same contract and severance package if that had happened in the private sector?

I’d be willing to bet she’s be in prison actually!

But can you answer the point. Why do we have to pay very high salaries to senior folk in the private sector to attract and retain the best talent but not in the public sector?
Can you answer this? Why does this work in the private sector and not in the public sector?

Profit is the simple answer. Private sector is geared towards maximum revenue and profit. Salaries on offer reflect this. Public sector isn’t as profit orientated.

gonfishing – thats a distorted analysis because in the public sector there are higher numbers of white collar workers. Compare like with like and its pretty similar with public sector workers losing out a small amount.

I think a far more valid comparison would have been to add in all the other benefits that are recieved by both public and private sector workers (company car, private medical etc) and then re-run the analysis on the basis of the total package of benfits. There was also little attempt at comparing “similar” roles which renders any comparison questionable at best.

I agree.

– anyway the debate here is about those at the top earning hundreds of thousands – not the people in the middle.

OK – tell us just how much it has actually cost the government to “bail out” the Banks.

It looks like ultimately the effect of bailing out the banks will put money into the public purse. It would appear that the savage cuts now being contemplated have a lot more to do with the last government spending well above its means for many years, rather than a specific economic trigger.

Zulu – no you didn’t.

Tell me again. Why do we have to pay very highly to attract talent int eh private sector but not in the public sector – and CEOs of NHS trusts gert sacked all the time on political whims and for very little – look at Goodwin for the example of the private sector.

Leaders in the private sector have to bring in revenue and efficiently manage costs – those in the public sector mostly (but not always) only have to do the latter.

CFO / Finance Director in Private and Public Sector – neither has responsibility for bringing in revenues?

epic steve – that may well be true but why is the justification for the multimillion pound remuneration of folk in the private sector that “we have to pay highly to get the best” not applicable in the public sector?

I think we all agree that the public sector needs better management. surely if we paid them much more we would attract all these talented people from the private sector and have better management in the public sector?

This is the basic point that no one has yet explained.

personally I believe its bullshit beyond a certain levela nd the obscene remueration of folk like Goodwin is nothig to do with attracting the best but is all about greed and power

In the commercial companies I’ve worked for the CFO’s have had an involvement in growing the business, in some cases pretty extensive.

I’m part of the leadership team for a small (£30M turnover) company and our FD is involved in all our strategy meetings.

TJ – I tried to make that point. I don’t think people acknowledge it as there is no effective counter argument.

I think you’re mostly missing the point. The top managers may be great but the real problems in the public sector management seem to be the middle managers who this sort of review aren’t picking up – you know, the empire builders, sitting toads, etc…

Yeah they’ll help with strategy, may even dictate it entirely but it’ll never be his responsibility to bring the cash through the door… I think they normally call that person the Sales Director, or COO?

The CFO will have the same responsibility / involvement for directing strategy in the Public Sector.

epic steve – that may well be true but why is the justification for the multimillion pound remuneration of folk in the private sector that “we have to pay highly to get the best” not applicable in the public sector?

It’s a bit of a chicken and egg situation I think. I’d personally be in favour of paying more for public sector managers if they were of a significantly higher quality than the average in place currently, however many (most) people look at the quality of those that are there and consider they they’re already often not getting value for money at current salaries.

The biggest problem is that the public don’t really trust the public sector to spend it’s money wisely. I recall reading a recent case where Glasgow City Council (ok perhaps one of the worst examples) employed a manager on £120K per year only to make then redundant two years later, handing out a payout of £278K at the same time…

TSY I know – its totally illogical the position that you have to pay very highly to attract and give incentive to get the best in the private sector but the same does not apply in the public sector.

IMO the answer is the obscene remunerations of folk like Goodwin is about greed and power not incentive and attracting the best. Onece you have a few million how much incentive is a few more?

epic steve – perhaps if the private sector argument is true then if we paid these positions more then we would have different and better people in these positions?

I would certainly like to see better managers in place int eh NHS. quality of management is poor.

Yeah he’ll help with strategy, may even dictate it entirely but it’ll never be his responsibility to bring the cash through the door… I think they normally call that guy the Sales Director, or COO?

It’s rare that any single individual is targeted with delivering growth. Certainly in our company the leadership team (which includes sales, operations and central service directors) are targetted more or less equally.

TJ – the management of a private company, even more so a PLC, is answerable to its shareholders – they can pay what they like, and if the business fails, they should lose their money, thats the best way to teach them to choose and invest wisely.

In the private sector, there is no penalty for failure, Shoesmith’s renumeration, severance and sacking is still with the courts, and Rose Gibb got a huge payout – and their cases were both absolutely remarkable, senior public sector and civil servants very, very rarely get laid off in the way that private sector staff do.

I maintain that in the private sector, Gibb and Shoesmith would both have lost their jobs, and been subject to charges of corporate manslaughter – in your own words, “the same does not apply in the public sector”

I would certainly like to see better managers in place int eh NHS. quality of management is poor.

Where do they get their management from? Is there a culture of promoting from within? If the salaries are so poor they can’t be attracting quality from the private sector? Do they lose good people to the private sector because prospects within the NHS are poor so the remaining people get promoted by default because there is no one else to do the job?