Two labour markets, one economy

Salary discrimination between government and private-sector employment in Bangladesh has intensified employee demotivation and disengagement, particularly in the context of the 2026 Government Pay Scale. Government employment offers strong job security, guaranteed career progression, structured salary increments, pension schemes and multiple allowances, making it significantly more attractive than private-sector employment. This imbalance has increased frustration and dissatisfaction among private-sector employees, who often discharge comparable-or even heavier-workloads without equivalent compensation or employment security.
Government employees receive relatively stable and predictable incomes. In addition to basic pay, government employees benefit from housing, medical, transport, and festival allowances, as well as pension benefits, substantially enhancing their overall income and long-term financial security.
In contrast, most private-sector employees-despite longer working hours, performance-based pressures, and limited job stability-often face lower or stagnant wages, limited benefits, and minimal long-term security. This disparity is particularly problematic because both government and private-sector employees purchase goods and services from the same market and face identical prices for essentials such as food, housing, transportation, healthcare, and education. Consequently, lower private-sector earnings translate into reduced purchasing power, increased financial stress and a decline in job satisfaction.
From the perspective of Equity Theory, private-sector employees compare their effort-reward ratio with that of government employees who may possess similar educational qualifications but enjoy higher income security and social prestige. When such comparisons are perceived as unfair, employees are more likely to reduce effort, disengage psychologically, and withdraw organisational commitment. Similarly, Job Demands-Resources (JD-R) theory suggests that inadequate pay and job insecurity represent a critical lack of job resources which, when combined with high work demands in the private sector, increases the risk of burnout, cynicism and disengagement.
At the organisational level, this demotivation manifests as lower productivity, weakened employee loyalty, increased absenteeism, and higher turnover intentions. At the national level, prolonged salary discrimination threatens private-sector competitiveness, discourages innovation, and creates labour market distortions, despite the private sector's central role in employment generation and economic growth in Bangladesh.
Drawing on Equity Theory and JD-R theory, persistent disparities in salary security and long-term benefits between government and private employment generate perceptions of inequity and resource deficits that undermine motivation and engagement in the private sector. This highlights the urgent need for policy interventions aimed at establishing wage fairness, social protection, and sustainable workforce development.

Dr. Dalowar Hossan
Research Faculty
SBS Swiss Business School, Switzerland
dalowarhossan.bd@gmail.com