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The compensation in the public sector differs from the compensation in the private sector. Therefore, organizations operating in the public sector should elaborate clear and effective criteria for compensation in the public sector. In this regard, it is possible to distinguish three major criteria, including the job performance, the time of work, and the age of employees.
The job performance provides organizations with detailed information on the contribution of employees in the organizational performance. The higher is the contribution the higher should be the compensation. However, the job performance can vary because of different reasons, such as illness of an employee or the deterioration of the economic situation, and others. Therefore, the job performance assessment cannot always be objective.
The time of work is another criterion. The longer the employee works the higher should be the compensation. On the other hand, the time of work does not mirror the effectiveness of work. For instance, employees can do nothing for years and get higher compensation compared to employees who worked a couple of years and made a significant contribution to the organizational performance.
Finally, the age of employees may be a criterion for the compensation in the public sector. For instance, retiring employees need compensations because they cannot work anymore. However, elderly employees could have spent little time in the organization operating in the public sector or employed there only in last year or months of their career.
Thus, it proves beyond a doubt that there are no ideal criteria for compensations in the public sector but the combination of criteria can contribute to the adequate compensation and elaboration of the fair approach to employees working in the public sector.

 
References
Peters, T. J. (2007). In search of excellence: Lessons from America’s best-run companies. New York: Harper & Row.
Schein, E. H. (1999). Organizational culture and leadership. San Francisco: Jossey-Bass.