While the discussion following the coalition’s recent budget has understandably focused on the brutal cuts facing ‘austerity Britain’, another measure seems to have sneaked through without the attention that the HR community might be be giving it. Hiding in the shadow of public sector job losses and lurking under the skirts of the two year pay freeze is the announcement that Will Hutton will lead a review of public sector pay. Having pledged that senior public servants will have their pay pegged to no more than 20 times that of the lowest paid person in their organisation, the Government seems intent on a wider re-balancing of the pay of civil servants.
Using the national minimum wage as a benchmark, the 20 times multiple still leaves the Chief Executive of a NHS Trust able to earn a rather handsome £222,000 odd, so the limitation itself is perhaps not as significant as the intention which might lay behind it: the idea that there should be a relationship between pay in the boardroom and pay on the hospital ward or call centre. This is novel. Market forces is the usual driver for salary decisions in the UK and there is no obvious reason for a relationship between the reward of leaders and those they lead beyond the rather tricky concept of fairness.
