ISME calls for benchmarking overhaul (old thread resurrected from LOS)

[Note this is an old thread dating from mid 2005 ...aj]

Hallo earth calling gov !!!

I for one found benchmarking lacking in transparency


The report rejects some of the arguments it says were used to justify benchmarking, such as difficulty in recruiting public sector workers and pay rates which lagged those in the private sector. It says the average wage in the public sector at the end of last year was more than 40% higher than the average industrial wage, while total employment in the public sector rose by 25,600 between March 2001 and the end of 2004.


He also says the process must take into account the advantages public sector workers have in terms of job security, holidays and pension arrangements.

http://www.rte.ie/business/2005/0630/benchmarking.html

Re: ISME calls for benchmarking overhaul

Who wouldn't have a problem filling 25'000 jobs in less than three years (around 800 a week)? It's nonsense to justify huge pay raises on this basis. As long as there is a booming private sector to subsidise this carry on it will continue as is.

Re: ISME calls for benchmarking overhaul

Another case of someone believing that reason and valid arguments have some sort of impact on the government. Benchmarking was never about equality between public and private jobs. It was about buying industrial stability with public sector workers so they wouldn't kick up to much of a fuss.

You don't get to be Taoiseach for 3 terms without buying the silence of a big chunk of the country.

Of course anyone who feels really agrieved by Benchmarking is free to join the Public Service. In a sensible country we'd aim for actual equality between the two, so people got fairness by default, not by having to chop and change to join the currently in favour class of citizen.

-Rd

Re: ISME calls for benchmarking overhaul

I worked in the service for years. All my old contacts say nothing has changed in the slightest except pay packets. Word is things have got worse if anything due to extreme apathy over decentralisation plans and not knowing where theyre going to be 6 months from now.

Conduct your own benchmarking. Ring 10 departments at random at 4:30pm on a friday afternoon and see how many calls are answered.

Re: ISME calls for benchmarking overhaul

car said:

Conduct your own benchmarking. Ring 10 departments at random at 4:30pm on a friday afternoon and see how many calls are answered.

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I had to ring one of the Departments a while back. I'm pretty sure it was Foreign Affairs. The particular section I rang had a recording with the opening hours.
It was open for something like an hour and a half per day.

I must dig out the number again, it's been a while.

-Rd

Re: ISME calls for benchmarking overhaul

A friend of mine worked for Dell for a few years and had dealings with the public sector. He said that he onlt called between 10.30 and 12.00 in case he cause a problem for anyone who should have been at their desk but wasn't.

Re: ISME calls for benchmarking overhaul

This is a small but important point:

The Public Service was the subject of the Benchmarking Review and not the Public Sector. The difference the latter category does not include the commercial semi state companies.

Re: ISME calls for benchmarking overhaul

I thought that most, if not all, of the commercial semi state companies got Benchmarking payments, though I am open to correction.
What is the difference between the commercial and the non-commercial semi state sector (other than the losses made by the commercial sector are actually quantified)?

Re: ISME calls for benchmarking overhaul

Hi Purple,

You are not alone this is a very common (and understanable) misconception.

Report of the Public Service Benchmarking Body

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It covers all the major groups in the public service (apart from top posts which are dealt with by the Review Body on Higher Remuneration in the Public Sector), including administrative/clerical grades, the Gardai, teachers, nurses, other health professionals and the Defence forces. The pay of approximately 230,000 public servants will be affected by the Report.

The public service is a sub-set of the total public sector. It does not include the commercial semi-state bodies such as the ESB, who act like other commercial companies and whose Payroll is not funded by the Government.

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To go back to the substantive debate, the following extract from the Report of the Public Service Benchmarking Body is useful.

There are significant differences between the culture and employment characteristics of the public service and private sector. These include pay determination systems, non-pay benefits, career structures and pay progression. In comparing the public service and private sector, a number of other differences are apparent e.g.

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• Public Service as Employer: The public service is the largest employer in the country employing around 235,000 people, approximately 20% of the working population.

• Levels of Educational Attainment: A substantially higher proportion of public service employees hold a third level qualification as compared with private sector employees.

• Occupational Profile: A higher proportion of public servants are employed in professional, associated professional or technical occupations than is the case in the private sector.

• Age Structure: Two-thirds of public servants are aged over 35 compared with less than half of those employed in the private sector.

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ajapale

Re: ISME calls for benchmarking overhaul

Thanks for the clarification ajapale but would it be safe to say that the pay increases in the commercial semi state sector have been (at least) in line with the public service?
The extract from the Report of the Public Service Benchmarking Body showed the mind set of those involved when things like productivity, holidays, average working week, security of employment, career breaks, sick pay, massive pension subsidies, the utter lack of accountability and virtual impossibility of being sacked for gross incompetence, the massive redundancy that will be offered in the very unlikely event that jobs are (voluntarily) cut and general terms and conditions of employment are not listed as pertinent factors when comparing the public and private sector.

An employee in my company used to work in Aer Rinta in the 1980's. He got £250 cash plus £250 in vouchers for disturbance when his locker was moved from one room to the next. I don't think that sort of thing happens in the private sector.

Re: ISME calls for benchmarking overhaul

• Public Service as Employer: The public service is the largest employer in the country employing around 235,000 people, approximately 20% of the working population.

Who pays for the public service salary and how does this justify a wage 40% higher than the average industrial.


• Levels of Educational Attainment: A substantially higher proportion of public service employees hold a third level qualification as compared with private sector employees.

Ya and why don't they do a direct comparision between public and private sectors in jobs where Levels of Educational Attainment are equal ..... you see in the private sector Educational Attainment doesn't often mean higher pay.. If you have a PHD in flower studies that does mean you will get higher pay. A company will look for your skills and how they can benifit the company. A PHD just means that you have complete a study in a small area of study. You will get more pay for four years experience than you would do for completing a PHD.


• Occupational Profile: A higher proportion of public servants are employed in professional, associated professional or technical occupations than is the case in the private sector.

• Age Structure: Two-thirds of public servants are aged over 35 compared with less than half of those employed in the private sector.

Again why does age mean more pay ??? I just don't get it with the public sector.

Re: ISME calls for benchmarking overhaul

Ive retrieved this very informative discussion on Public Service Pay and Benchmarking from "The Depths".

aj

Does anyone have a link or info on how the public sector and private sector compare now for pay etc?
A comparison between the internationally exposed part of the private sector (multinationals, internationally traded goods and services) and the public sector would be particularly interesting.

Purple,

That information is very difficult to come up with in a useable form. The CSO provide a quartely (I think) report on the wages in the different wage rates in sectors in the economy. However as mentioned previousy in the thread, the benchmarking body is interested in the details of the differences between the public and private sectors when holding constant variables such as age, education etc.

As part of this process they have just commissioned a major consultancy to perform an econometric study of data collected by the CSO as part of the National Employment Earnings Study to see the differences in earning between different sectors of the economy. The analysis will separate differencesin earnings between sectors into the components that can be explained by differences in jobholders’ characteristics combined with differences in the composition of the workforces in different sectors including the factors such as age, education, sex etc. and any remaining component attributable to differences between sectors.

The only issue is that the last National Employment Earnings Study was carried out in 2003 and as such will not account for recent Benchmarking or Social Partnership agreements. To be fair though, this is the last data which is suitable for the purpose so there was little they could do on this.

It is interesting to note though that this task has been done before in Ireland e.g. Academics in Maynooth produced (the only published) econometric analysis of the difference between public and private sector wages in 2003 (using 2001 data but not from the NEES). The econometric results suggested that, once all relevant variables that could be readily measured were controlled for a premium of about 13% was estimated for public sector workers relative to private-sector employees. The analysis also found that the premium was significantly larger for those near the bottom of the earnings’ distribution than for those near the top. The premium was significantly bigger for women than men in the mid-1990s but not at the end of the 1990s, and did not vary significantly across different levels of educational attainment.

There is also much EU research on the subject of private/public pay differentials which finds the same trends in terms of a larger premium for women and for those at the bottom of the Public Sector vis-a-vis private sector equivalents.

Apologies for the length of this post, but like most subjects, there is more to this area than meets the eye and it will be interesting to see if the results of the 'new econometric study' which is scheduled to be finished around May/June time is published.

Hi Rubenio and thanks for such a detailed reply.
When all the emotion is taken out of the debate there are very few hard facts left, lots of heat and very little light.
I would be interested in seeing the metric that is used for the comparison. Will factors like job security, environmental working conditions, pensions, career breaks, sick leave, rates of expenses etc be taken into account? If so then how will they be weighted? (Not all of them are positive as they serve to restrict employee mobility). If the whole thing is transparent it will make for some very interesting reading when it is finished.

Hi Purple,

Are you referring to factors in the Econometric study or in the overall benchmarking exercise? Those factors (job security etc) form no part of the econometric exerrcise which purely examines the effect of sector of employment on earnings making full allowance for:

• different compositions of the workforces in the public service and the private sector;
• differences between the two workforces in age, education and length of service;
• differences in the response rate to the survey in the two sectors, including the response rates at higher management levels in the public service and the private sector;
• differences attributable to gender;
• inclusion or non-inclusion of annual bonus payments, profit sharing, share options and other benefits-in-kind in the CSO survey.

The overall benchmarking exercise states that the Benchamrking Body (quote from Benchmarking Body Terms of Reference) "in reaching its recommendations should have regard to:

• The need to recruit, retain and motivate staff with the qualifications, skills and flexibility required to exercise their different responsibilities;
• The need to support ongoing modernisation of the public service;
• The need to ensure equity between the employees in both the public and private sectors and,
• The need to underpin the country’s competitiveness and continued economic prosperity.

In this work the Body should have regard to the differences between the public service and the private sector and between the various public service groups within its remit in working conditions, the organization of work, perquisites, and conditions of employment and other relevant benefits, including security of tenure and superannuation benefits.”

Of course, "should have regard to" is the key phrase here and could be from a 'passing glance' to a major issue for the body.

Couple of key points as I see them:

1) There has been no evidence, empirical or otherwise, produced that there was any need for a benchmarking exercise to begin with. Indeed, the only Irish study found a 13% premium (using 2001 data) for those working in the Public Service. Unless such evidence is produced it is easy to question the motives for the exercise;
2) Surely, for a spend of circa €1bn direct spend as well as the effect on private sector wages which are based on public sector wages (e.g. nursing home staff and nurses) we should do a study using 2006/2007 earnings data as opposed to 2003 CSO data to take account of what's happened in the intervening time.

For me the lack of evidence based policy making is a major failing our political system. I would be quite happy for benchmarking to take place if it could be shown there was a problem - to date no-one has and if there is evidence then it should be made publically available.

Anyone want to FOI the econometric study when its produced?

Another great post Rubenio.
I was referring to the factors in the overall benchmarking exercise.
I think the key phrases that show that Benchmarking was a politically motivates exercise that had little or no economic underpinning are
"The need to ensure equity between the employees in both the public and private sectors and,
The need to underpin the country’s competitiveness and continued economic prosperity."
I think that if these factors had really been taken into account Benchmarking would have had quite a different outcome.

I agree the "equity" statement is an interesting one. But it does take away the risk/reward dynamic to the private sector.

One other interesting thing for me in this whole debate are the number of pay awards given to the public service in any given year:

1) Annual increments as one rises up the scale - I haven't done the full analysis for every grade (I do have a life ) but the jump from the first point to the second point on the Clerical Officer Scale is about 4.5% and it is much the same between the first two points of the Assistant Principal scale.

This is an automatic annual jump unless you are rated 1 on the 1-5 scale of the Civil Service Performance Management and Development System (PMDS). As a matter of interest you need to score a two to be eligible for promotion. I haven't seen any statistics as to how many people were rated 1 so I can't comment as to how often this 1 rating is applied. Obviously, when you are promoted your salary goes to the salary pertaining to that grade.

2) National Wage Agreements - these have the effect of raising the wages at each point on the scale so at the end of the latest National Wage Agreement "Towards 2016" each point on the scale will have risen by 10% in 27 months.

3) Benchmarking - This varied according to the recommendations of the Benchmarking Body but averaged 9% over the course of the last Benchamrking Agreement.

So in a given year, a public service employee will receive their annual increment, their entire grade will go up by the terms of the national agreement as well as by whatever Benchmarking payment is due.

It is probably only fair to state that these increases are dependent upon verification of implementation of the public sector modernisation agenda. Again, I don't feel that its fair of me to comment on the stringency of the targets set to receive these payments.

Of course, each of these general increases are also reflected in the pensions provided to retired public sector workers and in the pensions to be received by those who are still to retire (as they are defined benefit pensions). To the best of my knowedge no-one has assessed the final liability of the Public Sector pension bill, but I did see in the Irish Times recently that Dublin City Council did calculate their pension liability and it alone came to the entire amount in the National Pensions Reserve Fund which was set up in 2000 to part-finance the cost of social welfare and public sector pensions from 2025 onwards. Obviously then there is nothing in the pot to pay for the pensions of every other Local Authority or Central Government Civil Servant, Garda, Nurse etc so this would have to come out of normal Govt. spending at the time they are due.

The whole area of financing the public sector wage and pension bill will be a huge issue in years to come, particularly in an economic downturn. Interesting times ahead I think

Rubenio said:

The whole area of financing the public sector wage and pension bill will be a huge issue in years to come, particularly in an economic downturn. Interesting times ahead I think

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And that is what it really comes down to, the market will effectively reduce private sector wages if/when there is an economic downturn. The same will not happen in the public sector. Even if it were glaringly obvious that it was in the national interest the public sector unions would stop it from happening. So as the economy contracts the public sector wage bill becomes a bigger and bigger proportion of the governments budget spend and pulls the economy down further. I don’t think this scenario is very far away either.
As this thread is in the work and careers section I think the advice has to be get into the public sector as fast as you can!!!