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January 2008 Archives

Benchmarking II

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The recent reports on benchmarking and higher remuneration in the public sector have raised basic issues about equity and fairness.

First, the Benchmarking Body used a 12% provision while the Higher Remuneration Body used 15% when assessing the value of pensions. These averages have greatly distorted assessments. For example, the percentage applicable to a lowly paid clerical officer would be very different to that for a Garda who can retire at 50 on full pension, or to the Director General of a government department.

Second, Benchmarking II produced evidence that public sector employees were paid a salary premium (averaging 8-10%) on a comparable basis to private sector employees while working fewer hours back in 2003. This was prior to Benchmarking I payments. If account is taken of the resultant benchmark payments (averaging 9%), the additional value of pensions (12%+) and shorter hours worked and longer holidays (say, 10% difference), then the current pay premium for public sector employees could be as high as 40%. The benchmarking report was silent on this and only said that "public sector salaries compare well with the private sector". It would have been useful to have indicated 'how well'.

Third, the cost of Benchmarking I is often quoted in terms of a cost per year. It should be borne in mind that this cost recurs and increases each year and that the cost of Benchmarking I could exceed �6 billion to date. As indicated above, it is doubtful whether Benchmarking I should have been paid in the first instance and there is little to suggest it resulted in any worthwhile improvements in services.

Fourth, it was erroneous for the Higher Remuneration and Benchmarking bodies to confine themselves to comparisons between the domestic private and public sectors. Account should also have been taken of public sector pay patterns in other similar countries where it would be easy to make directly relevant comparisons. This might have helped ensure that, in the interests of international competitiveness, our Taoiseach, TDs and top managers and professionals in the public sector are paid salaries appropriate to a country with a population of four million people.

Subject to the foregoing, Benchmarking II comes across as a far more transparent assessment than it predecessor. It would be a pity if its approach to establishing relativities and comparisons was rejected simply because it did not deliver for the public sector on this occasion.

Lead letter published in the Sunday Business Post on 27th January 2008.

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This page is an archive of entries from January 2008 listed from newest to oldest.

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