Benchmarking should reward the individual

Economics: Oscar Wilde was absolutely right: comparisons are odious, utterly odious. For decades pay negotiations across the public sector were bedevilled by comparisons between pay levels and rises for totally unrelated staff.

No sooner had gardaí been awarded a pay increase than prison workers wanted one as well. The bin men envied the bus conductors. The park wardens despised the postmen. Tuppence looked down on ha'pence and everyone was unhappy, while successive governments were left tearing their hair out in frustration.

The first benchmarking deal promised to end all that. Concluded in 2002, it awarded public service workers a once-off average 8.9 per cent hike in pay, costing the taxpayer a cool €1.1 billion. The payback to the taxpayer was that public sector pay bargaining would no longer suffer from pointless and irrelevant comparisons. But two developments this week cast doubts on whether benchmarking has a future.

The first is a letter written by Liam Doran, secretary general of the Irish Nurses Organisation (INO) to the Health Services Executive (HSE). The second is a warning by Taoiseach Bertie Ahern that unless the latest social partnership deal is ratified, benchmarking payments to public sector workers cannot be taken for granted.

In its letter to the country's largest employer, the INO has argued that nurses should earn more than social care workers, most of whom are represented by Impact. Impact national organiser Kevin Callanan denounced the INO in no uncertain terms: "Of all of the eight claims being pursued by the INO, the one that is the most insidious is that seeking to establish a differential for nurses over the grade of social care worker." In case anyone was in doubt about how angry Impact was, Callanan went on to say: "Regardless of the attitude of the INO, this will not be tolerated by our unions or the workers concerned."

The INO could have based its pay claim on plenty of other factors. Recent data on house prices suggest that the goal of house purchase is now well out of reach of many lower-paid public servants, including most nurses. Instead of using rational arguments, an ill-conceived comparison with other public sector workers has been made. The consequences of this go beyond the bitter sentiments revealed in the quotations above.

Some weeks ago the Central Statistics Office revealed that average weekly earnings in the public service in 2004 were €42,303, a massive 41 per cent higher than the average industrial wage of €30,057. And that was before the first benchmarking was fully implemented. As Callanan warned, conceding to the INO's latest demand would lead to a host of other similar demands. "We wanted to make clear to the HSE employers that if there was going to be a question of concessions to one group, then clearly other groups would stand up and say 'we want to make claims too'," he said.

The private sector already feels the effects of what benchmarking has done to date. On Monday Larry Broderick of the Irish Bank Officials' Association (IBOA) said his members wanted a share of the financial institutions' rising profits. Claiming a share in employer profits is what he is paid to do. But Broderick went further, warning that his organisation would seek further pay increases to bring them in line with equivalent workers in the public sector.

The last benchmarking deal was concluded just after the election and vital evidence on pay differentials between public and private sector workers was not published, so voters had no chance to give their verdict on the idea at the last election. Now the differences are hitting home at a time when the cost of living is rising higher and higher.

Public sector unions justify those differences by pointing to the higher qualifications of their members. In the private sector, where qualifications are linked to specific job specifications, such arguments are powerful.

In the public sector, qualifications are far less a guarantee of good performance. That sector's poor record at matching skills with responsibility and its old and cumbersome structures mean that many well-educated public sector workers are wasting their sweetness on the desert air.

In fairness, Doran is not comparing oranges and apples; more oranges and tangerines. Social workers and nurses do inhabit the same, albeit large, ball park in terms of work area. But consider this comment: "A degree is higher than a diploma - end of story . . . The Labour Court has accepted that, traditionally, nurses were always paid more than social care workers."

Nurses do indeed have degrees and social workers have diplomas. But is this relevant to the care they provide their patients?

Social workers may not possess the academic qualifications of nurses. But rising family and community breakdown creates new needs for interpersonal skills that may be just as important. Nurses are not better than social workers nor are social workers better than nurses. Growing differences in job roles make comparisons such as these increasingly redundant. Surely, what matters is the difference between well-trained nurses and incompetent ones, hard-working social workers and lazy ones.

The first benchmarking exercise shifted resources from private sector workers to public sector workers through pay increases applied to entire categories of public sector workers.

The second benchmarking exercise should take an entirely different approach, rewarding individual workers rather than categories of workers.

But before that can happen, fair systems of appraising and rewarding staff need to be established. This is where a second benchmarking body should focus its efforts: longstanding linkages between different staff types need replacing with performance benchmarking and incentive structures for individual staff. Public sector recruitment must link requirements for educational and training on the one hand with needs of the job on the other.

This may go some way towards justifying the public-private sector pay gap that baffles most of us.