Friday, June 30, 2006

Private versus Public Employment

Is there a huge difference between working in government and working in the private sector?

Yes and no.

I've worked in both sectors and can attest that the idea that governmental employees are overpaid slugs is, in general, a myth. Some of the most professional and hardest-working people I've encountered are in government and some of the worst performers are in the private sector.

That said, let's consider the differences:

  • Budgets. Size makes a difference here. Small, private sector firms can be much more budget-conscious than larger private firms or governmental agencies because they are closer to the edge. They live with the immediate impact of cash flow. There is more of a sense of We rather than They.
  • Terminations. Private sector firms are less likely to carry deadwood because their adherence to the employment at will doctrine makes it easier to fire people. In contrast, public sector managers know that terminations of employees who have passed probation can be appealed to the civil service board and they will have to make the case or the employee will be restored to the job. That encourages public sector managers to get their evidence in line but it can also cause them to tolerate or transfer poor performers.
  • Publicity. Private sector managers know that unless they do something extreme, their chances of hitting the front page of the local newspaper are remote. Public sector managers live with the prospect of news coverage or a complaint to a political board. One citizen can complain to a city council and people scurry to investigate the allegations. One shareholder complains at an annual meeting and people yawn.
  • Service expectations. Customers who are upset with a company's performance can walk across the street to a competitor. That's not so with irate citizens who know they have fewer options. If you think that means that governmental employees have less fear when it comes to ticking off a customer, see the above paragraph.

The differences are there, but the similarities are greater. All in all, the name of the employer is less important than its character and competence.

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