Local salary survey
methodology workshop
Compensation and Classification Section
Human Resources Policy Service
Office of Human Resources Management
United Nations Secretariat
Local Salary Survey Workshop
Day 1
9:30 – 12.30
1. Compensation at the UN:
- The Flemming Principle
- Key actors in Local Salary
Administration
2. Overview of local salary
survey methodology
- Defining the Market
- Categories of duty stations
- Four phases of the
comprehensive salary survey
13.30 – 16.30
3. Phase I: Preparation
- Selection of employers
- Job inventory
- Gathering local information
Local Salary Survey Workshop
Day 2
9:00 – 12.30
4. Phase II: Data Collection
- Interview preparation
- Questionnaire and
Interview DOs and DON’Ts
- Job matching
13.30 – 16.00
- Data on salaries, allowances,
and benefits
- Data quantification
- Determination of net income
Local Salary Survey Workshop
Day 3
9:00 – 12.30
5. Phase III: Data Analysis
- Individual employers
- All employers
- Selection of best
employers/jobs
6. Phase IV: Salary Scale
Construction
- Labour market profile
- Local UN Community
values
- Balanced salary scale
13.30 – 16.00
7. Computation of UN
allowances
- Dependency and other
allowances
8. Interim adjustments
9. Employer Report
10. Special measures
Introductions
Our learning objectives
• Key principles of the methodology
• Roles of survey participants
• 4 Survey phases
– Preparation
– Data collection
– Data analysis
– Construction of salary scale
• Interim survey process
Compensation is…
• For management:
…a powerful tool to influence employees’
behavior.
• For employees:
…a source of economic and sometimes
psychological income.
Task of the Administration
“…To develop policies and procedures that will
attain maximum return on investment, in
terms of attracting, satisfying, retaining and
perhaps motivating employees…”
Factors impacting compensation policies
•
•
•
•
•
Government laws
Labour agreements
Labour market trends
Cost (ability vs. inability to pay)
Etc..
Forms of compensation
• Direct
• wages and salaries (“pay”)
• benefits
•
•
•
•
•
Indirect
pension
insurance
paid time-off, etc.
benefits (in kind)
Issues faced by management
• What pay-based system to use?
a) Job-based
b) Seniority
c) Merit
d) Mixed
• What pay policy to use?
a) equal to market ?
b) above or below the market ?
Compensation - example
• How would you compensate for these services?
Compensation in the United Nations
Noblemaire vs Flemming
• International staff
• Local staff
- worldwide recruitment
- serve in different countries
- system of remuneration able to
recruit from all member
states, including highest paid
- Noblemaire principle is based
on highest civil service
- maintaining purchasing power
parity (post adjustment
system)
- base pay set in US$
- local recruitment
- serve at the same duty station
throughout the career
- system of remuneration able to
recruit from the local market
- Flemming principle is based on
the best prevailing local
conditions found in the
locality
- salary surveys conducted to
establish salaries based on the
best employers
- pay set (mostly) in local
currency.
Compensation in the United Nations
THE
THE
FLEMMING
FLEMMING
PRINCIPLE
PRINCIPLE
Original definition
•
Compensation for locally recruited staff should reflect the
best prevailing conditions found in the labour market for
similar work.”
Subsequent ICSC refinement
•
“The conditions of service, including both paid remuneration
and other basic elements of compensation, are to be among
the best in the locality, without being the absolute best.”
Compensation in the UN system
Achieving the goal of best prevailing
conditions by means of
Conducting salary survey with employers in the same
labor market who recruit staff of equally high caliber
and qualifications for work which is similar in nature
and equal in value.
Survey of :
- salaries
- allowances
- fringe benefits
- other conditions of employment
UN Salary Survey Methodology
• Methodology endorsed by the General Assembly
• The methodology:
- Defines the labour market relevant to the category of
staff;
- Provides technical guidelines for:
• Evaluating local market conditions;
• Identifying leading employers;
• Comparing UN salaries vs employers salaries
To ensure that UN salaries reflect best prevailing
conditions of employment.
Key Actors in Local Salary Survey
•
•
•
•
•
•
The International Civil Service Commission (ICSC);
The Responsible agencies (UN, WHO);
The Coordinating agencies (UNDP, UNICEF, WHO, etc);
The Compensation Officer (survey officer/specialist);
The Local Salary Survey Committees (LSSC);
The UNHQ Steering Committee.
Roles of key survey actors
ICSC
–
–
–
–
Establishes methodology
Reviews methodology after each survey round (5-7 yrs)
Monitors the implementation of the methodology
Participates in reviews/approvals of surveys in HQ
Salary Steering Committee
Roles of key survey actors
ResponsibleAgencies (UN, WHO)
-
Overall responsibility for approving local salary scales
Appoints survey specialist
Overviews application of methodology
Guides LSSC on survey matters
Supervises data collection
Performs analysis of survey data
Approves outcome of surveys
Provides written reports (preparatory, survey,
employers)
Roles of key survey actors
Coordinating Agency
- Usually the agency with the largest number of
staff members
- Establishes the Local Salary Survey Committee
(LSSC)
- May provide comments for review by the
responsible agency
Roles of key survey actors
Compensation Officer/Survey Specialist
- Guides the LSSC in the conduct of salary surveys,
especially at data collection, data analysis, and
scale construction phase
- Has delegated authority to make on-the-spot
decisions about survey technical matters
- Participates in data collection as team leader
- Reviews preparations by LSSC
- Presents survey results to the UNHQ Steering
Committee
Roles of key survey actors
Local Salary Survey Committee (LSSC)
-
Chairperson must be internationally recruited
Collects and provides staff statistics
Proposes employers
Reviews social, labour and tax laws
Selects survey team members
Contacts employers & sets interviews
Should have a balanced representation of
management and staff
- Provides comments on survey findings for UNHQ
Steering Committee
Roles of key survey actors
UNHQ Steering Committee
(UN, UNDP, UNICEF, ICSC)
- Reviews issues & findings of the survey
Overview of the methodology
The UN salary survey methodology
•
UN methodologies reviewed in 1993, 1997, 2003
and in 2011 to:
- Harmonize the HQ and non-HQ methodologies
- Harmonize treatment of UN staff across duty
stations
- Strengthen the credibility and competitiveness
of national staff salaries
The non-HQ salary survey methodology
Major changes:
Differentiation of labour markets
•
•
•
•
Prior to 1992: Five Best employers
1992: Seven Best employers
1997: 3 categories (5, 7, and 12)
2004: 4 categories (5, 7, 10, and 15, depending on
degree of dynamism and level of sophistication of the
labour market)
• 2011: same as 2003 though have introduced the “non
survey” as a 5th category for those duty stations with
less than 30 General Service staff
The non-HQ salary survey methodology
Major changes (cont.):
- Para-statal organizations must have their conditions of
employment established by the Government, otherwise
considered “private” sector
- National Civil Service (NCS) defined as Ministry of
Foreign Affairs . NCS must be retained as comparators
for certain duty stations.
- Periodicity of comprehensive survey is now every 5
years
- Minor in-kind benefits are no longer quantified as they
cannot be considered “basic” elements of compensation,
eg. beverages
The non-HQ salary survey methodology
Major changes (cont.):
- Meal benefit should be quantified on the basis of cost to
the employer
- Revised benchmark job descriptions, including IT jobs
and benchmarks for National Officer category
- The management representative in the interview team
must be internationally recruited, otherwise this role is
not occupied
- Re-enforced requirements for public/private sector,
sector representation, number of employers to be
surveyed
The non-HQ salary survey methodology
Major changes (cont.):
- NO-D grade level no longer surveyed . NO-D salary
levels extrapolated.
- Relaxed criteria for retention of employers in the NO
category when also surveyed for GS category
- Salary data from employers to be weighted on the basis
of size of the employer
- Possibility to purchase external data to complete a
survey when insufficient employer participation
(applicable to cat 10 & 15 employers retention only)
The non-HQ salary survey methodology
Major changes (cont.):
-
Cars should only be quantified when the car is available
substantially for personal use . The benefit should be
treated as taxable and non-pensionable
- Six duty stations previously under the non-HQ
methodology will now be surveyed under the HQ
methodology though approved by the Responsible
agency (Bonn, Brussels, Copenhagen, the Hague, Tokyo,
Washington DC)
External data
• Data purchased from 2 external vendors
• Type of data
• Market salary movement data as a residual to
complete a survey
Purchasing external data
-conditions
• To be used as a residual source when cannot secure the
participation of the required number of employers
• Only applies to category I and II duty stations
• All employers surveyed must be retained (i.e no
selection of the “best”)
• The employers surveyed must still comply with
requirements concerning public/private sector and
economic sub-sector (25% limitation)
• Survey result is weighted average of the result of
internal comparison using usual basis and the external
movement data
Criteria for the Differentiation of Labour Markets
•
•
•
•
•
Overall labour market size
Presence of suitable employers
Conduciveness to start and operate business
Overall socio-economic climate
Size of UN population at the duty station
(greater or less than 30 General Service staff)
Categories of Duty Stations
• Category I: 15 employers retained
• e.g. China(*), Malaysia(*), South Africa(*), Thailand,
Indonesia
•
Category II: 10 employers retained
• e.g. Bulgaria(*), Jordan, Senegal, Vietnam(*)
•
Category III: 7 employers retained
• e.g. Angola(*), Benin, Ethiopia(*), Peru(**), Sudan (*),
Yemen(*)
•
Category IV: 5 employers retained
• e.g. Afghanistan, Chad, Haiti, Mongolia, Zimbabwe (**)
•
Category V: No survey
• e.g. Mauritius, Malta, Australia, Oman
•
(*) and (**) revised from 2003
Life cycle of salary surveys
• Comprehensive surveys are now at 5 year
intervals.
• 5-6 months prior to the comprehensive survey:
authorization package sent, time to establish the
LSSC, identify comparators, collect requested
data
• 1-2 months prior the established date of the
survey: time to make appointments with
potential comparators
Life cycle of salary surveys (cont.)
• Ideally, data collection is completed prior to the
specialist departing from the duty station. Data
analysis will take place at UNHQ.
• The Steering Committee reviews and approves
the findings approx. 1-2 months after
completion of survey
• The 1st interim survey is initiated 11 months
after the comprehensive survey.
Comprehensive salary survey
• Preparation phase
• Data collection phase
• Data analysis phase
• Salary scale construction phase
Preparation Phase
Responsibilities of the LSSC
The preparation phase
• Selection of potential comparators
• Post inventory
• Current information on tax laws and regulations
– Tax rates
– Exemptions/Deductions
– Credits/Rebates/Allowances
– Taxability of benefits
• Sample tax calculation
• Information on Social security
• Country-wide common rates
• Submission to Responsible agency
The Local Salary Survey Committee (LSSC)
• Ideally equal number of staff and admin reps
• Chaired by a senior official of designated
agency, must be internationally recruited
• Maximum 12 members
• Time commitment: release from regular
duties
• Can have subcommittees
• Emphasizes confidentiality
Confidentiality
Written confidentiality pledge of members:
“… I pledge to respect and preserve the confidentiality of employerspecific survey-related data obtained as a result of my
participation in the survey…
“… I further understand that a breach of confidentiality, such as
by divulging any employer-specific survey-related data, including
judgmental statements pertaining to such data, to a party outside
the secretariat of ICSC, the Local Salary Survey Committee and
data collectors can lead to a major disruption of the current, as
well as future surveys and should be considered as sufficient
reason for my replacement in the survey process and,
additionally, may render me liable to face appropriate
disciplinary procedures by my organization… “
Documents to review by the LSSC
• The ICSC Salary Survey Methodology (ICSC/72/R.11)
• The Salary Survey Manual (on OHRM website):
http://www.un.org/depts/OHRM/salary_survey/resource_centre.htm
Sources for Identification of Potential Comparators
•
•
•
•
•
Local Chamber of Commerce
Trade and Industry Association
Leading Employers
Previously surveyed Comparators
Headquarters information on multinational
employers found to be highly competitive
• Personal networking
• Internet, professional recruiters
• etc..
Key Criteria for Comparator Selection
• Broad cross-section of competitive economic sectors
(including public service or parastatal institutions)
• Established in the locality for approx. 5 years.
• Employees engaged in office work:
– 15,10 or 7 comparator retention duty stations: at
least 50 employees
– 5 comparator retention duty stations: at least 20
employees
• Must be within commuting distance of duty station
Key Criteria for Comparator Selection
• Retention of majority of employers from the
previous survey
• Exclusion of employers setting salaries based on
UN salaries only.
Criteria for Distribution of Comparators by
Economic Sectors
• Public Sector: Min of 25% of comparators
retained when National Civil Service included;
33% when not included
• Private Sector: Maximum of 25% of employers
from the same sub-sector
Global Comparators
• International Organizations: embassies (e.g.
US, UK, Canada, The Netherlands), EU, World
Bank, EBRD
• Banking Sector: HSBC, Citibank
• IT Sector: IBM
• Oil Sector: ExxonMobil, Shell, BP
Contacting Comparators
• Send initial letter with information on UN survey
process (included in package sent by OHRM)
• Contact more than required number for employer
retention and establish a reserve list of employers
• Assess whether employer should be included in the list
of employers to be surveyed.
• Explain to employers the type of information that will
be required – job matching, copies of salary scales,
specific details on other conditions of employment –
allowances, bonuses, loans below market interest rates
Contacting Comparators
• LSSC should identify the specific contact
person within the comparator responsible for
providing detailed info
• Confirm date/time of interview in a follow-up
letter
Exercise 1.
Selection of employers
- Each group should identify 20 employers for
submission to HQ for approval
- Review the criteria for selection of employers
Public Sector
• Local Government
• Parastatal Enterprises (e.g. Central Bank,
electricity & water companies), which salaries
established by the government.
• Embassy Community (e.g. US, UK, Germany,
Canada, The Netherlands)
• NGOs (e.g. Save the Children, Red Cross)
• International/Regional Organizations (e.g. EU,
World Bank)
Private Sector
Banking
• ANZ Bank
• Bank of America
• Barclays Bank
• Chase Manhattan
• Citibank
• HSBC
• Standard Chartered
Manufacturing
Consumer Products
• 3M
• Colgate Palmolive
• Proctor & Gamble
• Unilever
Pharmaceuticals
• Glaxo Smith Kline
• Merck
• Pfizer
Food & Tobacco
• Coca Cola
• Pepsi Cola
• Nestle
• British American
• Tobacco
• Phillip Morris
Petroleum
• British Petroleum
• Exxon Mobile
• Shell
• Schlumberger
Transport, storage &
communications
Airlines
• British Airways
• KLM
• Lufthansa
• Swiss
Information Technology
• Ericsson
• IBM
• Motorola
• Nokia
• Siemens
Wholesale & retail trade
Miscellaneous
Selection of employers
• One approach:
• Identify best sectors (e.g. banking,
manufacturing, etc.)
• Then identify best employers within each of
the best sectors
Job Inventory
• First, each agency should count the number of
posts in each benchmark job. A notional weight
of 0.5 for each job with no incumbent is applied
• Then, each agency should count the number of
classified posts at each grade including all
benchmark and non benchmark jobs
Note: Survey data analysis based upon a
weighted average reflecting the distribution of
local posts against benchmark jobs
Exercise 2.
Job Inventory
Income Tax Data Submission
•
•
•
•
summary tax legislation
sample tax calculation
rates of income taxes
deductions/tax credits applicable, may need to
obtain data from taxation authorities
• income tax related to dependency allowances
• amount of allowances provided by the law
• any other relevant info related to income taxes
Income Tax Information
• Provide English translation of important tax
provisions
• Consult a tax expert, if necessary
• Understand tax treatment of benefits
• Work through sample tax calculation
Tax calculation (cont.)
We also take into account:
• Tax deductions
• Tax credit
• Elements of remuneration: taxable vs. non-taxable
Tax Calculation
Example of typical income tax brackets:
Taxable Income
add–on
0 to 270
271 to 375
0
376 to 600
11
601 to 900
42
901 to 1,500
96
greater than 1,500
228
Tax rate
0%
10 %
14%
18%
22%
26%
Exercise 3.
Tax calculation
Social Security and Other Information
• Determine taxability of employee contribution to
social security
• Check labour laws on conditions of service
(minimum wages, workweek hours, leave,
termination indemnity, etc.)
• Find out which benefits, if any, are mandated by
law (13 month salary, bonus, transport etc.)
Submission to HQ
• List of employers, main and reserve lists; upon
approval of the list by HQ, kindly confirm interview
dates/times
• Completed job inventory form
• Completed tax info + supporting documents + sample
calculations
• Social security information
• See annexes (from OHRM)
From OHRM
Materials and Guidance
•
•
•
•
•
•
•
OHRM cover letter initiating survey
Annex 1: job inventory
Annex 2: most frequently surveyed employers
Annex 3: sectoral representation
Annex 4: tax info (PDF)
Annex 5: sample letter for employers
Employer reference: info on how the UN conducts
surveys, on the duty station, sample questionnaire,
sample employer report page
Data Collection phase
Recap on yesterday
• In small groups make a list of the subjects covered
yesterday.
• Questions?
Data Collection Team
• Things to keep in mind:
• Four points: appreciation, reason for selection,
confidentiality, provision of summary results of the
survey
• The salary specialist leads the interview, members
can ask relevant follow up questions
• All members take notes during the interview
• Management representative must be international
recruited, otherwise this role is not represented
Data Collection Team
• Things to keep in mind (cont.):
• Any disagreements should be settled after the
interview
• Do not try to expect the employer to understand the
United Nations terminology
• Do not criticise employers
Data Collection
• The Employer Interview
• General employer information
• Comparing UN benchmark jobs
• Data on salaries, allowances and benefits
• Other conditions of service and taxation
General Employer Information
• Size of company in terms of number of staff
in jobs similar to the GS and NO in the duty
station
• Years established in the locality
• Structure of salary system
• Mechanism for establishing/updating
salaries
• Economic sector
Data collection
• The questionnaire
United Nations Benchmark Jobs
•
•
•
•
•
•
•
•
•
•
•
Job 1
Job 2
Job 3
Job 4
Job 5
Job 6
Job 7
Job 8
Job 9
Job 10
Job 11
GS-1
GS-2
GS-3
GS-3
GS-4
GS-4
GS-4
GS-5
GS-5
GS-5
GS-5
Messenger/Mail Clerk
Driver
Sr. Driver
Clerk/Office Assistant
Team Assistant
Admin. Assistant
Finance Assistant
IT Support Assistant
Staff Assistant
Admin Assistant
Finance Assistant
United Nations Benchmark Jobs
•
•
•
•
•
•
•
•
•
•
•
Job 12
Job 13
Job 14
Job 15
Job 16
Job 17
Job 18
Job 19
Job 20
Job 21
GS-6
GS-6
GS-6
GS-6
GS-7
GS-7
GS-7
NO A
NO B
NO C
NO D
IT Support Assistant
Office Assistant
Admin. Assistant
Finance Assistant
Sr. IT Support Assistant
Sr. Admin. Assistant
Sr. Finance Assistant
Programme/Admin
Programme/Admin
Programme
excluded
United Nations Benchmark Jobs
Note that the admin jobs can cover human
resources, procurement and inventory, project
support, logistics, travel, visa and immigration
support, or conference support
Four Step Approach to Job Matching
• Structure: Details on organisation structure
• Content: Grade-determining content for each
level and the relationship of jobs
• Progression: Career progression within the
company for jobs within an occupation
• Qualification: Minimum educational and
experience requirements
Job Matching
• Refer to job summaries for the General Service
within the classification standard and National
Officer categories
• Refer to sample job profiles in the methodology
• Review jobs and indicate grade levels
Organizational setting
Secretary A
• Drafts/types
correspondence; reviews
for completeness &
grammatical accuracy
prior to supervisor’s
signature;
• Maintains supervisor’s
calendar & schedules
appointments;
• Organizes & maintains
files;
• Screens callers &
incoming mails;
• Responds to queries
about the office activities.
Secretary B
• Drafts/types
correspondence; reviews
for completeness &
grammatical accuracy
prior to supervisor’s
signature;
• Maintains supervisor’s
calendar & schedules
appointments;
• Organizes & maintains
files;
• Screens callers &
incoming mails;
• Responds to queries
about the office activities.
Organizational setting
Head of Department
Secretary A
Division Director
Chief of Branch
Division Director
Division Director
Chief of Branch
Unit Head
Secretary B
Unit Head
Organizational setting
Head of Department
Personal Assistant
Secretary A
Division Director
Chief of Branch
Division Director
Division Director
Chief of Branch
Unit Head
Secretary B
Unit Head
Sample Job Profiles
Clerk/Office Assistant (G-3)
1. Structural counterpart: junior clerical level
2. Primary content feature: basic document production
and filing, general office support
3. Progression: entry level clerical post
4. Qualifications: secondary school, proficiency in office
systems
Sample Job Profiles
Team Assistant (G-4)
1.
Structural counterpart: admin support to nonmanagerial or junior supervisory professionals
2.
Primary content feature: manages information flow for
an individual professional or small unit
3.
Progression: 1st level of team support/secretarial
occupation
4.
Qualifications: some administrative or secretarial
experience, proficiency in automated systems
Sample Job Profiles
Staff Assistant/Secretary (G-5)
1.
2.
3.
4.
Structural counterpart: secretary to senior manager
Primary content feature: manages information flow,
including provision of instructions to subordinate levels
Progression: promotion from subordinate secretarial
level
Qualifications: prior experience in company
procedures, full proficiency in automated systems
Sample Job Profiles
Office Assistant/ Secretary (G-6)
1. Structural counterpart: provides support to an
Executive who has responsibility for a broad spectrum
of functions within the company or organization
2. Primary content feature: manages information flow,
including confidential issues, supervises other staff
assistants
3. Progression: highest level of secretarial position
4. Qualifications: prior experience in company procedures,
full proficiency in automated systems
Exercise 4.
Grade level determination
Review the standard benchmark job descriptions (see
methodology ICSC/R72/R11 (p.48-70)
Identify differences in functions within job series.
Job Matching
Global Comparator Programme
• Establishes standard matching points between UN jobs
and those of employers most frequently surveyed and
retained
– US Embassy, British Embassy, Canadian Embassy,
EU, Dutch Embassy, World Bank
– Exxon Mobile, Citibank, Shell, IBM
• Objectives
– To increase accuracy and consistency of job matching
– To reduce interview time and increase efficiency of
survey process
– Apply matches per grades confirmed with HQ of
these organizations
Data on Salaries
• Minimum salaries: Minimum or actual
hiring rates for the majority of employees
• Maximum salaries: Actual salary
achievable by the majority of employees in
the job
Data on Allowances and Benefits
Types:
• Bonuses & profit sharing (moving average over
3 years)
• Transportation (cash / in-kind): allowances,
company transport, company-provided vehicles
• Housing: allowances, company-provided
residences
• Meals (actual cost to the employer)
• Company products (actual cost to the employer,
not retail value)
• Credit: low interest/subsidised loans
Data on Allowances and Benefits
Eligibility for quantification:
• Be offered across-the-board to all employees or
to an identifiable group of jobs (e.g. Finance
Assistants)
• Be provided by the employer on a regular and
recurring basis
• Benefits must be taken advantage of by, or
given to 75% of the employees in the company
• Not provided explicitly for work related
purposes
Data on Allowances and Benefits
Keep in mind
• Taxable elements vs non-taxable elements
• Salary and benefits expressed as % of salary –
workweek adjusted
• Flat rate allowances – no workweek adjustment
Quantification of Allowances & Benefits
• Benefits quantified at cost to the employer
• Benefits, offered on daily basis, quantified on
basis of 222 days per year
Most Common Allowances and Benefits
• General cash allowances (bonuses, profit sharing plans
etc)
• Transportation (cash or in-kind services)
• Allowances/benefits related to meals
• Allowances/benefits related to housing
• Provision of credit through low interest or subsidized
loans
EXCLUDED Allowances & Benefits
X
• Individual performance bonus of an exceptional nature
• Illegal benefits or payments
• Training courses provided to staff for work related
reasons
• Airline tickets provided by airlines companies
• Termination indemnities; severance payments
• Supplementary payments based on seniority or
longevity
• Leave days, pensions, health insurances etc.; social
security benefits and after-service payments
Company Provided Car
• Normally for executive positions
• Quantified on basis of personal use
– Formula: Purchase price less Eventual resale value
– Difference divided by: years of usage
– Must be extensively available for private use, and
provided predominantly for work related
requirements
– Is now taxable and considered non-pensionable
Beverages (tea, coffee etc), corporate events and meals
• Beverages and refreshments are no longer
quantified as they are not considered basic
elements of compensation (New!)
• Meals are only quantified on the basis of the
cost to the employer, not by reference to the
difference in cost difference between
commercial meal and subsidized meal
Low Interest Loans
• Housing loan quantification
–
–
–
–
Average loan: Maximum allowance amount/2
Multiplied by: years of repayment/30 years*
Multiplied by: savings in interest
Multiplied by: utilization rate
* assumed as the average UN career
Low Interest – Other Loans
• Loan for car purchase, equipment, personal loan
quantification
• Average loan: Max allowable amount /2
• Multiplied by: savings in interest (market vs
employer rate)
• Multiplied by: utilization rate
• Total value benefit for all “other loans” is subject
to a max (cap) of 3% of Taxable Gross Income of
the surveyed job
Other benefits
•
Vacation bonus (in % or fixed amount)
•
Discount sales programme
- quantified at cost to employer x utilization rate
- benefit quantified separately for family members (if
applicable)
•
Travel fare (air ticket)
- not applicable to employers in travel business (travel
agencies, airlines etc..)
•
Hotel accommodation
- not applicable to employers in hotel business
Other benefits
•
•
•
•
•
Uniform
Secretary’s day gift (applicable to secretaries only)
Laundry
Club membership
Etc.
Exercise 5.
Data quantification
Data Analysis
• But first the crossword
Data Analysis
• Individual employer data analysis
• Determining total net incomes for jobs
matched
• All employer data analysis
• Retaining the best employers (5, 7, 10 and 15
best employers)
Determining total net income
Establish Annual Base (at Min & Max)
Multiplied by:
Workweek ratio
Equals:
Adjusted base
Plus:
Taxable allowances /benefits
Equals:
TOTAL GROSS INCOME
Minus:
(Tax deductions)
Equals:
TAXABLE GROSS INCOME
Minus:
(Income taxes)
Equals:
NET INCOME
Plus:
Non-Taxable benefits
Equals:
TOTAL NET INCOME
Data Analysis / Quantification
General rules
• Daily allowance (x 222 days)
• Bonus/Profit sharing (3 years average)
• Non cash value benefits (quantified at cost to
employer)
• Benefits should be utilized by at least 75% of
employees
• If equivalent benefits exist at UN, benefits should not
normally be quantified, for example overtime
Data Analysis / Quantification
General rules
• Social benefits (pension, health, life insurance etc.. )
should not be quantified
• Taxable or non-taxable benefits
• Application of local taxes at single person rate
• Tax levels used should be applicable at reference
month
Data Analysis
• Consolidate individual employer total net salary data
• Enter employer, job and grade weights from job
inventory
• Enter current UN minima and maxima
Data Analysis
Retention of comparators
• Eliminate employers with insufficient matches
Criteria:
• For GS category: employers should have at least
1/3 job matches across 1/2 grades
• For NO category: at least 2 job matches out of the
3 surveyed jobs (*)
Note (*) an employer can be retained in the NO category with just one match, if also
retained in the GS category and that match is within the same job family as jobs
matched in the GS category
Data Analysis
Retention of jobs
• Eliminate jobs with insufficient matches
Criteria:
Retention
15
Min # of comparators with data
for each job retained
5
10
5
7
3
5
3
Data Analysis
OWAI calculation
Analysis of Minima
• 1. Calculate job averages at the minimum
weighted by employer size
• 2. Calculate averages per grade weighted by
incumbents per benchmark job
• 3. Calculate job averages at the maximum and
determine the span per job
• 4. Calculate the weighted average span by grade
• 5. Compare survey minimum salaries by grade
with UN minimum salaries
Data Analysis
Analysis of Maxima
• 6. Compute survey maxima salaries using
overall average weighted span
• 7. Compare survey maxima salaries by grade to
UN maximum salaries
• 8. Compute average increase by grade
• 9. Calculate overall weighted average increase
(OWAI)
• 10. Iterate above steps to identify best
combination of comparators
Salary Scale Construction
Salary Scale Construction
• The importance of a balanced salary scale
• Local Labour Market Trends
• Recruitment and retention considerations
• Perceived equity
• Competitiveness for various jobs
• Local UN community values
Salary Scale Construction
• Characteristics of a balanced salary scale
• Uniform grade spans
• A smooth pattern of inter-grade differentials
• An overall weighted average increase which varies no
more than + 1% from the final raw data survey result
of the best group of retained employers
• The G-4 pivot point
Salary Scale Construction
SPAN (INTER-STEP 3-5%)
INTER-GRADE
3%
3%
3%
3%
DIFFERENTIAL (1035%)
5%
5%
5%
5%
INTER-GRADE
DIFFERENTIAL (1035%)
SPAN (INTER-STEP 3-5%)
Non-Pensionable Component
• Gross pensionable remuneration is derived from the net
pensionable salary
• It is not appropriate for a significant number of nontaxable, i.e. non-pensionable employer benefits (e.g.
company products, reduced interest rate loans) to be used
in the determination of UN pensionable remuneration
Non-Pensionable Component (cont.)
• Taxable (usually cash) allowances such as additional
month salaries, profit sharing, housing-related
allowances, bonuses, cost-of-living allowances etc.,
should be treated as pensionable
• Non-taxable allowances and benefits provided (usually
in-kind benefits) should be treated as non-pensionable
• Refer to Annex X for detailed listing
Allowances and Charges
Allowances and Charges
• Child allowance: 2.5% of mid-point salary (G-1 step1 +
salary of G-7 longevity step) / 2], or local practice and tax
abatement
• Language allowance: 5% of G-5, step I level, for first
language, 2.5% for second
• Spouse allowance: based on local practice (most often tax
abatements + government subsidies + allowances by
employers)
• Funeral Allowance: based on local practice
• Charge for UN provided Transport determined by UN
Country Team
Interim Adjustments
Objective of interim survey
“… to ensure that United Nations salaries continue to
reflect the salary movements of the retained
employers and, consequently, of the best prevailing
conditions in the locality…”
ICSC/72/R.11 pp30
Interim adjustment measures
Types of interim measure, based on local conditions:
• Mini-survey: updates on average percentage
movement of minimum salaries and
allowances, applied across-the-board
• Indexation (e.g. consumer-price index, labourwage index, or movement of a particular
employer)
Interim adjustment
• Method is recommended at time of comp survey by
LSSC and specialist and considered for approval by
Responsible Agency
• Carried out between comp surveys
• Not intended to track rates of inflation and/or local
currency devaluation
• Not designed as mechanism for maintaining
purchasing power of salaries or their value in terms
of convertible currency
• Intended to reflect movement of minimum salaries
and allowances of retained employers
• Intended to ensure UN salaries are adjusted with
the same frequency as that of the majority of
retained employers
Mini surveys
•
Mini survey has fuller coverage and is more precise than
indexation
•
Data analysis should be conducted according to the same
procedures as in the comprehensive survey
•
Generally conducted on annual basis; effective date
should be the reference month of data collection
Mini surveys
•
LSSC responsible for requesting authorization
from Responsible agency to initiate and collect
data for mini-surveys
•
Must obtain and submit updated tax code and
fully documented movement in retained
employers’ minimum salaries and benefits, as
were captured during comp survey
During mini-surveys
It is not possible to:
• Introduce new comparator employers
• Change job matches
• Introduce new benefits (in cash or in kind)
• Change quantification formula for benefits
• Change values of in-kind benefits
• Change for reference points for minima salaries
• Modify established span or grade differentials
• Alter UN job or grade weights
During mini-surveys
Employer retention
• Where a previously retained employer does not
participate in the interim survey, their salary data
should still remain in the analysis (possibility that they
will participate again in the future)
• Where a previously retained employer no longer has a
presence or has significantly restructured its grading
levels, that employer’s data should be removed from the
analysis
Indexation
• Can be used as an interim adjustment measure where
valid, reliable and relevant indices are available, though
there must be a strong correlation between past salary
movements and the index
• If majority of employers retained for majority of past
comprehensive surveys adjust salaries by means of an
index, we can consider using this method as a basis for
adjustment
• Once selected, adjustment mechanism should remain
consistent until the next comp survey
Tax rates and social security
• Fundamental adjustments to tax rates and social security
conditions should be monitored and reported by the
LSSC to the Responsible Agency
• National wage legislation, high inflationary situations,
should also be monitored and reported in a timely
manner
Submission to Responsible Agency
• Data collected by the LSSC in view of an interim
salary adjustment exercise should be fully
documented (salary scales, all pertinent information
incl. tax) and validated/signed, and as such,
submitted to the Responsible Agency for data
analysis in a timely manner
• Employer templates or other material to
facilitate data collection is usually
provided at the time of granting an
authorization to initiate data collection
Interim survey results
• Usually applied as an across-the-board increase
• In case of negative results from comp survey,
necessary to have “gap closure” between local
UN salaries and the local labour market
Other survey issues
Employer Reports
•
•
•
•
•
•
How the UN conducts salary surveys
How we analyzed your information
Labour market profile
Summary of employer benefits
Revised UN salary scales
We do not provide employer reports after interim
surveys
• Can provide employer follow-up with outcome and
copy of revised UN scale
• CONFIDENTIAL
Special Measures
• Conditions where special measures can be
considered
– Extreme/Immediate Economic Volatility
– Extended periods of social unrest/economic
collapse
• Parallel and supplemental process to standard
survey methodology
• Objective is to promote partial stability
• UN staff are not immune from local conditions
• Refer to comparator employers in the first
instance
Exercise 6.
Situational questions
The end
• Questions?
• THANK YOU!