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Current trends in the compensation of public employees in OECD countries

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Abstract:

Compensation of public employees ‐ which is key to attracting, motivating and retaining qualified workers ‐ will likely be affected by the budget crisis, through cuts/freezes in pay/benefits or possible reductions in staffing levels. Fiscal consolidation through budget cuts can be a double‐edged sword if staff reduction (for short‐term needs) is severe, or "rightsizing" initiatives result in a loss of capacity to deliver needed services or a demoralised workforce. Review of measures implemented in OECD countries suggests that it is more the style and practices of management and/or the composition of the public workforce ‐ not its size or the level of operational expenditure ‐ that stand out as causes of budget imbalances in the first place. Involving public employees in decision making regarding salary and workforce reduction measures can be a useful means for ascertaining how far they are willing to go to avoid job losses and accept salary reductions or freezes.

Document Type: Review Article

Publication date: 2012-11-01

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