Douglas responds to Nathaniel Williams

by Deniston Douglas 25.JAN.08

Mr Nathaniel Williams, Permanent Secretary (ag) in the Ministry of Rural Transformation, clearly demonstrates a lack of understanding of the Powell Report. His presentation is flawed for a number of reasons.

However, to be fair to him, the fault is not his because the report on page 35 stated “that implementation and maintenance of the new classification and salary structure falls under the purview of the Ministry of Finance and Planning”.{{more}} None of the senior officials from that Ministry attended the meetings of the steering committee.

No1. The Government officials continue to make the false assumption that only people at the top echelon of the public service were not on par with the private sector. On page 28 of the report the consultant stated that “high differences are found in the upper echelons of the salary structure, particularly at the Executive Management and Professional Technical levels. However, when one makes the comparison between the old scale and the consultant’s report, fewer than 20 posts were green circled in the top echelon of the Public Service. It must also be pointed out that in most of these posts there is only one incumbent. It defies logic that $14.2 million was needed to adjust the salaries of the people at the top.

No 2 .The second assumption made by the officials is that salary increases over the years have reduced the implementation cost of the reclassification. On page 50 of the report the consultant stated that to bring about internal pay equity or R1, it will cost an additional $14,240.503 for those positions that were green circled. The 2003 wage bill was $109,526,292.81. If the reclassification was implemented without any salary increases the wage bill would have been $123,766,796.67. This does not mean that all employees will have benefited from the exercise; only those posts that were green circled will have seen an adjustment in their pay package. That principle still holds true today as some employees will not benefit from reclassification as is the case of our Teacher 1 and 2.

The Government assumption that salary increases across the board reduce the implementation cost of the reclassification exercise is inaccurate. Salaries increases do not change pay inequity.

N0 3. The officials used the consultant figures, not the consultant formula to arrive at the new salary bands. The consultant used the midpoint of the salary range as his reference point. To find the midpoint we add the minimum and the maximum of the incumbent salary range and divide it by two. Using Teacher 3 as an example, in 2003 the teacher was in salary band Grade 5 with a salary range of ($1518-$2118). Using the formula we add the minimum and maximum and then divide by 2 to get the midpoint figure of $1818. The teacher 3 was green circled and placed in H, the new recommended salary band. The midpoint for that band was $2250. In order to bring about internal equity the Government needs to adjust Teacher 3 Salary by the difference between the two midpoints. In 2004, the difference was $2250-$1818=$432 or approximately 24%. To develop this point further, if I want to introduce R2, I will have to further adjust the midpoint R1 $2250 by $166 to get the new R2 midpoint figure of $2416.

In 2007, the Teacher 3 salary range was $1784-$2487. The new midpoint is $2136. Using Mr Powell’s formula we now adjust the $2136 by 24% or $513 to address the issue of inequity. The new midpoint is now $2649 and not the original $2250 as the Government Officials are claiming. We have now established internal equity in the organisation through the rationalization of R1.

On page 52 of the report the consultant provides new salary range and increments which was needed in 2004 to bring Public service salaries in line with market rate. Below is the example for Teacher 3 salary band.

For salary band H see table (2004).

Interestingly, the consultant on page 54 stated that the Government should move all “Green Circled’ positions that fall below the R2 external market line to at least the minimum of the range. This accounts for fact that the overall cost for R2 implementation is $6.4 million and establishes the fact that not all green circled positions will benefit with the introduction of R2.

Let us examine what the officials did. They used the 2004 figures, where the recommended midpoint for Teacher 3 was $2250 as previously stated. They applied 15% or $337 of $2250 to arrive at the new maximum of $2587. Then, unscientifically, that figure was adjusted by $2. However, when I minus $337 from $2250 I get $1913. Again, unscientifically, they adjusted the minimum of the band to $2025.Their new scale for Teacher 3 is $ $2025-$2589 and not in keeping with the recommended salary band H in the example above.

They fail to apply the consultant formula to address the question of internal equity, the issue at the heart of any reclassification exercise. Secondly, they used their own pay range instead of the one recommended.

No wonder that a senior member from the Ministry of Finance admitted to us that the methodology they used is unscientific.

The result of the Government’s erroneous methodology is clear.

(a) Reduction in salary bands.
(b) Reduction in the overall cost of implementation
(c) They can correctly claim that in most cases they introduce something better than the consultant’s recommendation because their calculations are based on the 2004 recommended figures.
(d) Incumbents arrived at their maximum faster than the 5-7 increments the consultant recommended.

The SVGTU accepted a report which was based on a scientific methodology; hence the tampering of the methodology by Government officials after the report was accepted is not our fault

Based on the mandate given to the consultant, the history of reclassification in the state and article 29-10 of the current collective agreement which reads” In accordance with the terms of the reclassification exercise teachers shall be first in line to benefit from the implementation of the reclassification exercise we are in the right. I rest my case.