Rationalizing Public Sector Compensation

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RATIONALIZING PUBLIC SECTOR COMPENSATION

JULY 2009 This publication was produced for review by the United States Agency for International Development.

RATIONALIZING PUBLIC SECTOR COMPENSATION

Management Systems International Corporate Offices
600 Water Street, SW Washington, DC 20024

Contracted under Agreement No. 6043-001-53-14 Philippines National Budget Monitoring Project

This publication is made possible by the generous support of the American people through the United States Agency for International Development (USAID) and Management Systems International (MSI). The contents are the responsibility of INCITEGov and do not necessarily reflect the views of MSI, USAID or the United States Government.

DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

CONTENTS
I. II. INTRODUCTION ............................................................................................................ 1 SALARY STANDARDIZATION POLICY ................................................................... 1 Simplification of the position classification structure......................................................... 1 Rationalization of Longevity and Merit Pay ....................................................................... 2 Consolidation of existing allowances ................................................................................. 2 Upgrading of compensation rates in the government ......................................................... 2 Presidential power to grant pay increase ............................................................................ 2 POST-SSL DEVELOPMENTS ....................................................................................... 2 ADDRESSING WEAKNESSES OF THE EXISTING SYSTEM ................................ 3 SALARY STANDARDIZATION LAW 3: The Updated Compensation Rationalization System ..................................................................................................... 8 Total Compensation Framework......................................................................................... 8 New Salary Structure .......................................................................................................... 9 New Transparency Provisions .......................................................................................... 11 Implementation Period ...................................................................................................... 11 CONCLUSION ............................................................................................................... 11

III. IV. V.

VI.

APPENDIX A – Joint Resolution #4 .......................................................................................... 12 APPENDIX B – Executive Order No. 811 ................................................................................. 33 TABLES Table 1: SALARY SCHEDULE EFFECTIVE JULY 1, 2008 PURSUANT TO EO #719 ............................................................................................................ 6 Table 2: MODIFIED SALARY SCHEDULE FOR CIVILIAN PERSONNEL, PURSUANT TO JOINT RESOLUTION NO. 4 .......................................................... 9 FIGURES Figure 1: COMPARISON OF THE EXISTING COMPENSATION IN THE PUBLIC SECTOR VERSUS PRIVATE SECTOR .................................................................... 4 Figure 2: COMPARISON OF MONTHLY SALARIES, SELECTED POSITIONS .................... 4 Figure 3: COMPARISON OF MONTHLY SALARIES (IN U.S. DOLLARS) FOR THE POSITION OF HEAD OF GOVERNMENT, PER COUNTRY ........................ 5 Figure 4: COMPARISON OF MONTHLY SALARIES (IN U.S. DOLLARS) FOR THE POSITION OF GOVERNMENT CLERK/ENTRY LEVEL (GOVERNMENT), ...................................................................................................... 6 Figure 5:...
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