Fiscally driven compensation reform and threats to human capital capacity in the public sector

Document Type

Article

Publication Date

3-1-2015

Abstract

Compensation systems serve a critical role in strategic human resources management, and over the past twenty-five years, there have been an increasing number of public sector reform efforts aimed at better aligning compensation practices with institutional workforce needs. While many past reforms have been performance driven, the nation’s most recent economic downturn has served as potent catalyst for a renewed focus on public sector compensation, particularly reforms to public sector retirement benefits. However, given the traditional importance of public sector retirement benefits within broader bureaucratic structures, these new reforms hold the potential to substantially alter human capital capacity in the public sector. Using wage and retirement benefit data from the U.S. Census Bureau’s Current Population Survey and National Compensation Survey, this paper finds that state and local governments face significant threats to their long-term human capital capacity in light of potential benefit reforms that place a disproportionate emphasis upon competitive wage rates.

Publication Source (Journal or Book title)

International Journal of Organization Theory and Behavior

First Page

22

Last Page

46

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