CONTROLLING GOVERNMENT'S WAGE AND MANPOWER BILL
| Date | 01 February 1963 |
| Published date | 01 February 1963 |
| Author | T. L. Johnston |
| DOI | http://doi.org/10.1111/j.1467-9485.1963.tb00916.x |
CONTROLLING GOVERNMENT’S
WAGE
AND
MANPOWER
BILL
T.
L.
JOHNSTON
I
As
with other government expenditure, the treatment of manpower
and salary problems in government employment usually takes
as
its
starting-point the datum that any excessive drain on the public purse
is
to
be avoided. In salary questions
in
particular, however,
a
moral
overtone becomes immediately evident because of the commonly
accepted view that the government,
as
the representative of the people,
should in some sense be
a
good, even
a
model, employer. There are,
of
course, moral overtones to be found in the pricing process for
other forms of government purchasing
as
well, but they seem to become
particularly pronounced whenever the
‘
human
’
factor of production
comes under scrutiny. Economy and equity become intertwined.
Our
purpose here is to examine government’s manpower and salary
budgeting from the point of view
of
appraisal and control. For
purposes of clarifying the issues the discussion will be confined to
non-industrial civil servants. After
a
brief introductory statement we
shall examine and evaluate the British system and then take up the
problems of appraisal and control in
a
more general and, it is hoped,
less parochial way.
I1
The first feature of government employment, that of economy and
frugality, tends
to
focus on the cost of labour services, without too
much attention being paid
to
the relationship between these costs and
the output
or
benefits which the government receives from its employees
in return. There are peculiar difficulties in measuring returns
in
the
government sector and quantifying concepts such as cost per unit of
output,
for
(a)
there may be
no
product market in which to value
the output;
(b)
the output of the labour force may consist of indivisible
community
goods;
(c)
productivity may be difficult to measure; and
(d)
the government may be
a
monopoly seller of any output forth-
coming. Thus there is
a
general tendency
to
take refuge
in
the maxim
that wage costs and the labour force are best appraised and controlled
86
CONTROLLING
GOVERNMENT’S
WAGE
BILL
87
by keeping them at a minimum, and the main emphasis in devising
machinery for control purposes has accordingly been placed on
controlling the cost of labour inputs. The productivity, return-over-
cost, aspects tend to be given less prominence. Great attention
is
paid
to
numbers and total wage bills, while the test of efficiency relative
to cost must be implicit.
Added to these difficulties are the wider welfare aspects associated
with the concept of good employer-employee relations in the public
service. Frugality must have its place; but civil servants must also be
given
a
fair deal, for they are not only scarce means, and therefore
to be economised. They are also part of the great end
of
the Common-
weal which the government is expected to promote through the
administrative apparatus (production function) of which civil servants
form the labour component. The pricing process in this labour market
thus becomes subject to additional hazards. It has to be rigged, usually
through the contrivance of appropriate institutional arrangements,
so
that an outcome
is
produced which is acceptable to the government,
the civil servants, and the public. In Britain, for example, the straight
recruitment-retention test for civil service pay which was popular
with the Anderson committee in
1923
has been augmented by the kind
of welfare view explicit in the Priestley Report.’ This fuzzy mixture
of economics and welfare runs through nearly all attempts to grapple
with the control and appraisal aspects of government employment.
The goal is
‘
an efficient Civil Service, fairly remunerated
’.z
How
then is appraisal and control to be carried out?
The machinery of appraisal and control of public manpower and
salaries varies between countries, its form depending, for example, on
the constitutional provisions regarding the division of powers between
the Executive and Legislature, and on the view taken of the use
of
collective bargaining devices, such as the strike, by employees of the
Royal Commission on the Civil Service,
1953-55,
Report, Cmd.
9613.
‘We think that in the conduct of wage and salary negotiations concepts of
fairness and
of
the existence
of
a
wage and salary framework not governed solely
by the “law
of
the mal;Fet” play
a
large and increasing part.’ (Para.
94).
‘
We have used the term fairly remunerated
”.
We think that this means that
the interests
of
the community in general,
of
those responsible for administering
the Civil Service and
of
the individual civil servants themselves should be kept
in balance. The community must feel that it is getting an efficient service and
that it is not being asked to pay an excessive price for it. Heads
of
Departments
must have sufficient suitably qualified staff to carry out the tasks demanded
of
them.
The
individual civil servant must feel that his remuneration is not
unreasonable.
It
is difficult and perhaps unnecessary to define this tripartite
relationship
of
fairness more closely. We think that
a
correct balance will
be
achieved only if the primary principle of civil service pay is fair comparison
with the current remuneration of outside staffs employed on broadly compar-
able
work, taking account
of
differences in other conditions
of
service.’ (Para.
96).
Ibid., para.
67.
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