PERFORMANCE PAY AS A COORDINATING MECHANISM IN THE AUSTRALIAN PUBLIC-SERVICE

Public sector management is in a state of flux. Pressures for greater efficiency and a stronger customer service orientation have led to cha nges to the structures and planning and reward systems of public secto r organisations. In the milieu of reform, performance pay for managers has been given prominence in a recent critical report by the Senate S tanding Committee on Finance and Public Administration which recommend s a return to a more standardised approach to management salaries in t he APS. I argue instead that performance pay should be considered as a third- or fourth-order coordinating mechanism and linked to the strat egies of individual departments in the APS. A policy for greater decen tralisation of the design, implementation and management of performanc e pay schemes in APS organisations is presented.