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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. 9:30 – 12.30 1. Compensation at the UN: - The Flemming Principle

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local salary survey methodology workshop
Local salary survey methodology workshop

Compensation and Classification SectionHuman Resources Policy ServiceOffice of Human Resources ManagementUnited Nations Secretariat

local salary survey workshop
Local Salary Survey Workshop

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

Day 1

local salary survey workshop1
Local Salary Survey Workshop

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

Day 2

local salary survey workshop2
Local Salary Survey Workshop

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

7. Computation of UN allowances

- Dependency and other allowances

8. Interim adjustments

9. Employer Report

10. Special measures

Day 3

13.30 – 16.00

our learning objectives
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
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
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
Factors impacting compensation policies

Government laws

Labour agreements

Labour market trends

Cost (ability vs. inability to pay)

Etc..

forms of compensation
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 ?

Issues faced by management
compensation example
Compensation - example

How would you compensate for these services?

noblemaire vs flemming
Noblemaire vs Flemming

International 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 staff

- 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 nations1
Compensation in the United Nations

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
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
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
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.

slide19
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

ICSC

slide20
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

ResponsibleAgencies (UN, WHO)

slide21
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

Coordinating Agency

slide22
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

Compensation Officer/Survey Specialist

slide23
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

Local Salary Survey Committee (LSSC)

slide24
Reviews issues & findings of the survey

Roles of key survey actors

UNHQ Steering Committee

(UN, UNDP, UNICEF, ICSC)

the un salary survey 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
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 methodology1
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 methodology2
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 methodology3
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 methodology4
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
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
Purchasing external data -conditions

To be used as aresidual source when cannotsecure 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
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
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
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
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
Comprehensive salary survey

Preparation phase

Data collection phase

Data analysis phase

Salary scale construction phase

preparation phase
Preparation Phase

Responsibilities of the LSSC

the preparation phase
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
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
Confidentiality

Written confidentiality pledge of members:

“… I pledge to respect and preserve the confidentiality of employer-specific 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
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
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
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 selection1
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
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
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
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 comparators1
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
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
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)

selection of employers
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
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

income tax data submission
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
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
Tax calculation (cont.)

We also take into account:

Tax deductions

Tax credit

Elements of remuneration: taxable vs. non-taxable

tax calculation
Tax Calculation

Example of typical income tax brackets:

Taxable Incomeadd–onTax rate

0 to 270 - 0%

271 to 375 0 10 %

376 to 600 11 14%

601 to 900 42 18%

901 to 1,500 96 22%

greater than 1,500 228 26%

social security and other information
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
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
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

recap on yesterday
Recap on yesterday

In small groups make a list of the subjects covered yesterday.

Questions?

data collection team
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 team1
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
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
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 collection1
Data collection

The questionnaire

united nations benchmark jobs
United Nations Benchmark Jobs

Job 1 GS-1 Messenger/Mail Clerk

Job 2 GS-2 Driver

Job 3 GS-3 Sr. Driver

Job 4 GS-3 Clerk/Office Assistant

Job 5 GS-4 Team Assistant

Job 6 GS-4 Admin. Assistant

Job 7 GS-4 Finance Assistant

Job 8 GS-5 IT Support Assistant

Job 9 GS-5 Staff Assistant

Job 10 GS-5 Admin Assistant

Job 11 GS-5 Finance Assistant

united nations benchmark jobs1
United Nations Benchmark Jobs

Job 12 GS-6 IT Support Assistant

Job 13 GS-6 Office Assistant

Job 14 GS-6 Admin. Assistant

Job 15 GS-6 Finance Assistant

Job 16 GS-7 Sr. IT Support Assistant

Job 17 GS-7 Sr. Admin. Assistant

Job 18 GS-7 Sr. Finance Assistant

Job 19 NO A Programme/Admin

Job 20 NO B Programme/Admin

Job 21 NO C Programme

NO D excluded

united nations benchmark jobs2
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
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
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
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.

sample job profiles
Sample Job Profiles

Clerk/Office Assistant (G-3)

Structural counterpart: junior clerical level

Primary content feature: basic document production and filing, general office support

Progression: entry level clerical post

Qualifications: secondary school, proficiency in office systems

sample job profiles1
Sample Job Profiles

Team Assistant (G-4)

Structural counterpart: admin support to non-managerial or junior supervisory professionals

Primary content feature: manages information flow for an individual professional or small unit

Progression: 1st level of team support/secretarial occupation

Qualifications: some administrative or secretarial experience, proficiency in automated systems

sample job profiles2
Sample Job Profiles

Staff Assistant/Secretary (G-5)

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 profiles3
Sample Job Profiles

Office Assistant/ Secretary (G-6)

Structural counterpart: provides support to an Executive who has responsibility for a broad spectrum of functions within the company or organization

Primary content feature: manages information flow, including confidential issues, supervises other staff assistants

Progression: highest level of secretarial position

Qualifications: prior experience in company procedures, full proficiency in automated systems

exercise 4 grade level determination
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
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
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
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 benefits1
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 benefits2
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
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
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
EXCLUDED Allowances & Benefits

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

X

company provided car
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 (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
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
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
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 benefits1
Other benefits

Uniform

Secretary’s day gift (applicable to secretaries only)

Laundry

Club membership

Etc.

data analysis1
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
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
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 quantification1
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 analysis2
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
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 r etention of jobs
Data AnalysisRetention of jobs

Eliminate jobs with insufficient matches

Criteria:

data analysis3
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 analysis4
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 construction1
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 construction2
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 construction3

SPAN (INTER-STEP 3-5%)

3%

3%

3%

3%

INTER-GRADE

DIFFERENTIAL (10-35%)

5%

5%

5%

5%

INTER-GRADE

DIFFERENTIAL (10-35%)

SPAN (INTER-STEP 3-5%)

Salary Scale Construction
non pensionable component
Non-Pensionable Component

Gross pensionable remuneration is derived from the net pensionable salary

It is not appropriate for a significant number of non-taxable, 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
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 aspensionable

Non-taxableallowances and benefits provided(usually in-kind benefits) should be treated as non-pensionable

Refer to Annex X for detailed listing

allowances and charges1
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

objective of interim survey
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
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, labour-wage index, or movement of a particular employer)

interim adjustment
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

Intendedto reflect movement of minimum salaries and allowances of retained employers

Intendedto ensure UN salaries are adjusted with the same frequency as that of the majority of retained employers

mini surveys
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 surveys1
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
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 surveys1
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
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
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
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
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

employer reports
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
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

the end
The end

Questions?

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