Public sector refers to the body of management charged with the responsibility of providing services to the public in a universal manner. This body is usually the State or the government of a State and it utilizes taxpayer’s money in the provision of the services to the public. However, some State agencies operate partly as dependent on the State and partly as autonomous. Private sector refers to a body of management which engages itself in the provision of services in a customized manner with an aim of meeting specified objectives as well as making profits.
This body mostly constitutes the business wing which comprises private businesses enterprises and the civil society wing, which comprises non-governmental and civil society organizations, which are sometimes involved in public policy formation through lobbying and advocating for the rights of minority groups (Government Finance Officers Association).
Both the public and private sectors are involved in the provision of services to the citizens of a country. They also utilize the inputs of the people in the provision of the services, that is, they require the citizens or target populations to contribute either directly or indirectly towards the provision of the services.
In the public sector, the citizens contribute through paying taxes while in the private sector, the target population contributes through being customers to private business enterprises or through the provision of some resources like land for the construction of offices as well as the provision of human resources to manage and coordinate the programs established by civil society organizations (Johnson 243-425).
Both public and private sectors are also involved in policy formulation, which involves the development of policies to inform their actions. They are also characterized by organizations which are organized and coordinated in a bureaucratic manner, in which decisions are made based on the chain of command in the organizational structure (Johnson 243-425).
The two however differ significantly in terms of their objectives, how they operate, the scope of their operations and the quality of services provided as well as on the nature of employee engagement and remuneration. In terms of service provision, the public sector provides a wide range of universal services to all the citizens of a country irrespective of their social economic status, age, gender, race or religion. The services in other words are accessed without any eligibility criteria. Due to the large number of target population who access the services, the services are usually of low quality.
The business wing of the private sector is established to make profits through providing goods and services to the citizens of a country. The sector belongs to private investors, who aim at ensuring that particular services and goods are availed to the consumers, who purchase them at a cost. The success of the business wing of the private sector depends on marketing, quality of goods and services, availability of markets, demand and supply as well as on competition.
The civil society wing of the private sector provides limited number of services to a specified group of people, meaning that there is an eligibility criteria, for example, an NGO like Child Fund, may be involved in providing education to the needy and vulnerable children. Due to the eligibility criteria, the services provided by the private sector are usually of a high quality.
The other difference is in the terms of employee engagement and remuneration. In the public sector, employees are usually engaged in a permanent basis, which is pensionable. The employees therefore somehow have a sense of job security in the public sector. Employees are also remunerated based on their qualifications and job groups. In terms of promotion, it is mostly based on the number of years an employee has served in the public service as well as on education.
In the public sector also, there are usually no bonuses or incentives to motivate employees and success is not measured based on individual performance but rather on universal government policy success. However, in many developed countries like Canada, UK and Australia, the public service has been embracing the concept of contractual employee engagement as a way of harmonizing governments’ expenses on employees and employee productivity.
Most of the contracts are however given to public servants who are already serving in a different department within the public sector. This can be seen as a strategy of motivating employees by giving them an opportunity to earn extra remunerations on top of their usual remunerations.
In the private sector, employees are usually engaged on contract basis, meaning that no terminal benefits and job security. Their promotion and payment are based on their performance, through what is referred to as variable pay, in which employees are paid depending on how they perform. The private sector is usually characterized by the maximization of their human resources, through training of employees on various tasks, so that a single employee may undertake various tasks, thus saving the organizations on the employee remuneration. Layoffs are also very prominent in the private sector based on the general performance of the organizations and the general business environment.
One of the challenges faced by managers in the public sector is the high number of client who needs the services. Since the services are provided in large scale, it becomes challenging for a manager to coordinate all the activities and services due to the presence of many players and stakeholders in service provision. Usually, there is inefficiency due to the bureaucratic red tape prevalent in the public sector, thus posing as a challenge to the managers.
There is also the challenge of poor communication or miscommunication between various stakeholders, who may have vested interests in the provision of public services. Most notably is the problem of rent seeking behaviors by some political agents, who seek to influence policy formulation, implementation and evaluation. This acts as a barrier to managers in the public sector because they are faced with the challenge of choosing to serve either the interests of some political masters or the interests of the public, at the expense of their job security.
Government Finance Officers Association. Government Finance Review, Volumes 6-7. Toronto, ON M5A 2N4: Government Finance Officers Association, 1990.
Johnson, David. Thinking Government: Ideas, Policies, Institutions, And Public Sector Management In Canada, 2nd Edition. Toronto, ON M5S 2G5: University of Toronto Press, 2006. 243-425. Print.