Using Quit Rates to Set Compensation Levels in the Public Sector.
Abstract
The government can not base the amount it pays its employees on the market value of the services it provides. Instead, it tries to set pay for each job at a level equal to pay for comparable work in private employment. Although a survey of pay for private sector workers is taken each year, there are indications that the survey is faulty and that government pay levels are too high. One indication is that quit rates are considerably lower in the government than in the private sector. Quit rates are a function of pay levels. Other things equal, comparable quit rates indicate comparable pay. The evidence presented in this paper shows that one reason for the lower quit rates in the government is that the government is such a large employer. Large firms have lower quit rates, probably because transfer and promotion are easy within a large firm. Even when firm size is taken into account, however, the quit rate in the government remains lower than the quit rate for equivalent private sector workers, suggesting that compensation (pay plus other benefits) for government is above private compensation. The differential--shown in this paper to be 15 percent--is in line with findings in other studies that make direct pay comparisons, but these results must be considered tentative until other factors that influence the quit rate have been included in the analysis.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1981
- Accession Number
- ADA100450
Entities
People
- Kathleen C. Utgoff