CHAPTER 3

PAY TREND SURVEY SYSTEM

3.1The pay trend survey system produces annual indicators of the average pay movements of full-time employees of private sector companies in the survey field. Based on information of changes in salaries due to general pay increases, bonuses, merit payments and inscale increments collected by the Pay Survey and Research Unit (PSRU) from these companies, gross pay trend indicators (PTIs) are produced for three different salary bands for verification and agreement by the Pay Trend Survey Committee, prior to release for public information.

3.2 In accordance with the recommendations of a Committee of Inquiry in 1988, the Administration deducts the value of civil service increments at their payroll cost (expressed as a percentage of the total payroll cost for each salary band) from the gross PTIs to produce the net PTIs. In adjusting civil service pay, the Administration takes account of the net PTIs plus other factors such as budgetary considerations and the prevailing social and economic conditions.

Pay Trend Survey Committee

3.3The Pay Trend Survey Committee (PTSC) is an independent body established by the Government on our advice in 1983. Its main function is to commission the annual pay trend survey and agree to its results. Insofar as the conduct of the annual pay trend survey is concerned, the PTSC is the only and final authority. Membership is given at Appendix J.

3.4The PTSC held four meetings during the year: the first in January to commission the 1996/97 pay trend survey; the second in May to examine and validate the findings of the survey; the third in September to review the survey methodology in preparation for the next survey; and the last one in December to commission the 1997/98 pay trend survey. The PSRU, under the guidance of the Secretary General, continued to provide support to the PTSC.

1996/97 Pay Trend Survey

3.5The 1996/97 pay trend survey took place between February and May 1997. The PSRU collected information on pay adjustments in 70 participating companies over the twelve-month period from 2nd April 1996 to 1st April 1997 and analysed the data in accordance with agreed criteria. After detailed consideration, the PTSC validated the results and published the gross PTIs on 15th May 1997. A summary of the results of the survey is at Appendix K. The revised pay scales for the civil service backdated to take effect from 1st April 1997 are given at Appendix L.

Review of Survey Methodology

3.6Under 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 PSRU, having regard to the advice of the PTSC.

3.7During 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.

3.8At its meeting on 1st September 1997, the PTSC agreed that the survey questionnaire should be simplified and made more user-friendly through the deletion of information sought for reference purposes. The PTSC considered that such deletion would not compromise the results of the survey nor jeopardise the integrity of the pay trend survey system.

3.9One item included for deletion concerns "pay adjustment due to promotion and transfer". As a result of the deletion, it is necessary to make consequential amendments to Criteria 8 and 9(6) of the survey methodology where "pay adjustment due to promotion and transfer" are specified respectively. The opportunity was also taken by the PTSC to propose deletion of Criterion 9(1)(c) of the survey methodology, which was no longer applicable.

3.10To a large extent, the success of the pay trend survey system depends on the willing cooperation of 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. On the understanding that the proposed changes would not compromise the results of the survey nor jeopardise the integrity of the pay trend survey system, we agreed with the PTSC that the survey methodology should be refined as proposed. Details of our advice and the PTSC's justifications for the proposed deletions are set out in our letter to the Chief Executive dated 15th December 1997 which is reproduced at Appendix M.

3.11We will continue to keep the methodology of the pay trend survey under review to ensure that the results of the survey will be as accurate as possible.