APPENDIX M

APPENDIX M

Letter of 15^th December 1997 to the Chief Executive
tendering advice on the methodology of
pay trend surveys

15^th December 1997

The Honourable TUNG Chee Hwa
The Chief Executive of the
Hong Kong Special Administrative Region
of the People's Republic of China
Chief Executive's Office
Hong Kong

Dear Sir,

Review of Pay Trend Survey Methodology

Under Clause 1(d) of our Terms of Reference, we are required to make recommendations on the methodology for surveys of pay trends in the private sector conducted by the Pay Survey and Research Unit (PSRU), having regard to the advice of the Pay Trend Survey Committee (PTSC).

BACKGROUND

2.During the survey in 1996/97, a number of private sector companies invited to take part in the survey expressed doubts about the relevance of some of the information sought via the survey questionnaire. The minute nature of such information also imposed considerable constraint on their staff in locating and retrieving the information. One company subsequently withdrew from the survey claiming that the amount of staff time expended was disproportionate to the benefit of participation in the survey.

REVIEW OF QUESTIONNAIRE

3.In the light of such comments, the PSRU undertook a critical review of the questionnaire and considered that it should be simplified and made more user-friendly through the deletion of information sought for reference purposes. At its meeting on 1st September 1997, the PTSC supported, in principle, simplification of the questionnaire and agreed, having regard to Members' concern for an incremental approach, that with effect from the 1997/98 survey, the following information should be deleted -

	(a)	*Minimum and maximum pay of individual staff categories* When introduced, information on minimum and maximum pay helped to establish the pay range of private sector jobs. This information was useful at the time when civil service pay review was conducted on the basis of a system of job-for-job comparison with the private sector. With the abandonment of this system (due to the difficulty of finding sufficient job analogues for comparison) and the subsequent introduction in 1979 of the qualification group benchmark system, information on pay range ceased to have any impact on the pay trend survey system, except to serve as a rough indication of the employee profile in individual companies.
	(b)	*Average pay of individual staff categories* Experience indicated that most companies do not maintain such data. Where such data were kept, staff in the companies concerned had to go through laborious counting and calculation before they could work out the required information. As the pay trend survey is concerned primarily with pay movement of private sector employees in different salary bands, with no regard to the categories of jobs held by these employees, the relevance of such information to the pay trend survey is in doubt.
	(c)	*Basis of salary structure of individual staff categories* Information on how individual staff is paid, for example, whether by individual rate, daily rate, or a range of rates, may be of interest to the PTSC in understanding the salary administration practice in the surveyed companies. The information, however, does not have any direct bearing on the pay trend survey system.
	(d)	*Pay adjustment due to promotion and transfer* This information has been collected to enable the PTSC to cross-check, where it deemed necessary, whether any company has sought to beat the pay trend survey system by categorising normal pay increases under the disguises of "promotion and transfer" which are excluded from the calculation of the pay trend survey results. However, as no signs of malpractice have been detected throughout the years, the pertinence of the PTSC's concern is queried. In addition, as most companies claim that such information is not readily available, to comply with the survey questionnaire, staff in these companies have to go through records of individual promotees and transferees. This is a time-consuming exercise, particularly for companies with a large employee size.

The PTSC was of the view that deletion of the above information, sought for reference purposes, would not compromise the results of the survey nor jeopardise the integrity of the pay trend survey system.

AMENDMENTS TO THE SURVEY METHODOLOGY

4.Only the proposed deletion set out in item (d) above would entail amendments to Criteria 8 and 9(6) of the survey methodology where "pay adjustment due to promotion and transfer" are specified. Deletion of the other three items will not require consequential amendment of the survey methodology.

5.The opportunity is also taken by the PTSC to propose deletion of Criterion 9(1)(c), which is no longer applicable. Criterion 9(1)(c) stipulates that companies participating in the survey should only be included in the calculation of the survey results provided that "they have not changed the basis of their salary structure to a pay scale or pay scales for some or all categories of their employees during the survey period". This criterion was in fact made redundant when the calculation methodology was changed in 1989 to the effect that irrespective of whether there had been any changes to the basis of the salary structure of employees in the surveyed companies, they would invariably be included in the calculations.

6.A copy of the revised survey methodology, with the proposed deletions highlighted, is at the Annex.

THE COMMISSION'S RECOMMENDATION

7.We have given careful consideration to the PTSC's proposals. To a large extent, the success of the pay trend survey system depends on the willing cooperation of selected companies in the private sector. Any attempt by the PTSC to address their concern and to retain their continued participation in the survey is, therefore, welcome. We note the justifications for the proposed deletions and we are satisfied that the proposed changes would not, in any way, compromise the results of the survey nor jeopardise the integrity of the pay trend survey system. We agree with the PTSC that the methodology should be refined as proposed.

8.We, therefore, recommend for your approval that, with effect from the 1997/98 survey, the methodology be amended by the deletion of -

	(a)	all references to "promotion and transfer" in Criteria 8 and 9(6); and
	(b)	Criterion 9(1)(c).

Yours faithfully,

(Sidney Gordon)
Chairman
for and on behalf of
Members of the Standing Commission
on Civil Service Salaries & Conditions of Service

Back

Content

Next