Organizational Culture in Private vs. Public
Reference made to organizational culture always has some abstract adherence to how employees are motivated to work in that firm and how they associate with one another. The same belief extends to scholars who view organizational culture as a very elusive phenomenon that is characterized by a distinct web of interaction or a social climate in an organization and which goes on to determine the work positions of employees in that firm (Mohelska & Sokolova, 2015). They believe that culture is a painful occurrence because it appeals only to emotions of workers in an organization and not their rationality. Nevertheless, individuals tend to ascribe to either the facts of the phenomenon or the trend associated with the issue at hand in an organization. Public sector just like the private sector employees have this concept of culture in their everyday endeavors, but the extent of its application renders more clinical exposition as to how they relate or differ in context for instance, regarding pay, bonuses and even turnover indices. In other words, organizational culture varies quite a bit in private and public sectors. Career opportunities, benefits, turnover and the pay scale are just a few examples of the cultural differences between the two.
Career advancement disparities between the public and private sectors are quite evident. One industry places more emphasis on career advancement the other just puts higher focus on meeting other competitive measures. According to Lyons et al., (2006), private sector employees place more value on career advancement than their contemporaries in public sector but in the real sense, it is not an option to them than in the public. A good example is in the way nurses and teachers serving in public service work. They have an intrinsic call to serve their communities through their duties knowing they can advance in their careers at one point.
Out of this trend, special care is needed to expound on why employees in public sector place more emphasis on their commitment to the communities they serve than on their career path. According to Lyons et al., (2006), public sector managers tend to feel more secure than private ones, and that is why advancement in career seems to be secondary in their priorities to service. As a result, they will always work with some level of motivation since there is no pressure as to how and where their future may be because there is limited competition for spaces in their jurisdictions as long as they offer excellent services.
The other reasons as provided by the World Bank (nd), is the concept of job cadres and grades offered in public sector. In this classification, every job is assigned to a pyramid of skills called cadre and also another level of competencies and knowledge referred to as job group. In this form of arrangement, there is that room for an individual beginning employment at a junior level to progress through the ranks much smoothly, and that is why most people feel secure to work in public organizations. Private firms have limited career progression where some hit a plateau after reaching a certain level.
Private institutions bear the advantage of having limited interference from stockholders, but regarding benefits, the public workers enjoy more benefits. Public firms have a better compensation plan than privately held institutions because they offer healthier bonuses and right incentives to their employees. They are known to provide better longer term incentives than their counterparts in private institutions such as LTI programs, options, and restricted stock, among others. These programs provide the right motivations needed for individuals to dispense their duties within the public firms knowing that their future is secured entirely (Davis, 2015). Regardless, they allow them to focus on service delivery rather than worrying so much about their futures within the organizations which is also a plus.
They also enjoy more intangible benefits which the World Bank (nd), says, cannot be quantifiable. One of the right incentives is the essence of job security. The public employees gain more autonomy in performing their tasks than private ones because their employment is well tenable going into the future. The other incentive is a social privilege, an example being the ability to be preferred in accessing government services. The other enticement is hard currency savings from the trips made overseas (World Bank, nd).
Financial benefits associated civil servants are like basic pay and retirement benefits. At the point of retirement, employees are offered a sum-gratuity and then a pension upon at the end of service period. The pension is always calculated in terms of base pay, and it is always attached to the number of years worked which actually is not part of private institutions delivery scheme in most cases. As a result, this group of professionals tends to feel much more protected to offer their services, and even upon retirement they still enjoy the fruits of their labor through the pension schemes.
There is a general perception that private firms offer better remuneration than public companies most especially concerning pay-scale (Rashid & Rashid, 2012). Although the amount of money that a private institution’s CEO gets home with is higher than what a public servant will have at the end of the month, the conclusion on this matter can be quite contradictory. For instance, a study conducted by the office of national statistics in 2012 reveals that the median pay for public servants stands at £28,802 while that of private sector employees remained at £25,000 (Rogers, 2012). According to Ray (2017), many talented employees flock into most of the publicly held institutions because the said organizations have better compensation plans and have excellent opportunities for future gains than in privately held organizations. They offer good bonuses per pay, and that is always a pull factor for many employees working in private organizations.
While that might be true, a real motivation for employees seeking employment in the private industry according to Davis (2015), is a financial reward. The reason for this contradiction is that many private companies need to attract top talent and that is why they offer higher premiums than their counterparts in public sectors. More importantly, they need a name brand in the market, and that is why they splash higher salaries to meet this constant need. The result of this attribution is that the privately owned firms will run risks on their finances and this can lead to other challenges especially concerning sustenance of the salaries. In reality, it is the public institutions that remain at the top of this discourse about pay scale.
Other than benefits and pay, there is always the challenge of bad business culture in most private firms due to the constant exit of individuals. Some businesses place a lot of emphasis on developing individual trade and disciplinary classifications within their organizations especially regarding customer retention and financial success while at the same time forgetting on how to adjust the internal client. Although, the removal of a CEO can be an easy task, the effect of this action on the culture of an organization can be devastating. Also, when one key influential individual leaves the office for greener pastures some privately held organizations find it hard to replace them. The reason being is that employs feel that such people provided a better and supportive work environment than the new one coming in at that moment. On the other hand, new managers may find it hard to work in privately held firms because of the high expectations placed on them due to higher wages they are paid, and this tends to backfire. The result of this is that employees will grow disgruntled leading to a higher turnover rate. In financial terms many privately held firm lose money because of higher turnover rates as compared to publicly owned businesses and this confuses the culture of those companies (Davis, 2015).
Organizational culture varies between private enterprises and public ones especially in line with career development, benefits, pay scale and even turnover. These forms of idiosyncrasies embed on the social discipline developed in an organization which renders the firm in question either a success or a failure. Public companies tend to outpace the private ones concerning turnover because they have higher pay, better benefits and they also give room for an excellent career development. The job groups and cadres provided in public owned institutions provide the employees with a peace of mind, that, they will grow in their career and their skills will improve with time. Moreover, the longer they stay in these institutions, the better it is for them concerning benefits because they will earn a higher pension and the gratuity at the end of their service during retirement.
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