What is the best way to reduce the PS wages?

Dannyboy83

I would like to move past some of the pointless bickering now please and concentrate on what is the best way to reduce the PS Wage bill.

There was an excellent post here by P.Breathnach:

Originally Posted by P. Breathnach
That's a social justice view, and has some merit.

But if we take a hard-nosed "what the job is worth" view, such as prevails in the private sector, then we should disregard the individual's personal circumstances and concentrate on striking the appropriate rate for the work, taking account of such factors as the skills, effort, and responsibility involved. One should also take account of the market, and how much you need to pay in order to attract suitably good candidates.

There are people working in the public sector earning -- and deserving -- over €100,000 pa; there are others who are paid €25,000 pa, and who are bad value for money.

I have no knowledge of how performance is rated in the public sector so I would be interested to hear how these cuts (or potential raises!) are going to be implemented.

Here was one suggestion by Chris

If a PS pay cut is to be implemented, how about this way? It wouldnt hit low earners hard but would savage the high earners.

If you earn €18,000 gross, you take a 1.8% pay cut.
If you earn €45,000 gross, you take a 4.5% pay cut.
If you earn €80,000 gross, you take an 8.0% pay cut.
If you earn €250,000 gross, you take a 25% pay cut.
etc etc.

Earn x%, pay cut of x/10000 %.

How would that sound to people?

The problem with the above is that its preserving the morally bankrupt methodology of the public sector, i.e. no form of meritocracy.

Riskymove

er...a number of us are posting on these ideas..its a bit much to just ignore that and start a new thread no?

Dannyboy83

Riskymove wrote: »

er...a number of us are posting on these ideas..its a bit much to just ignore that and start a new thread no?

Those threads are just a to and fro between private and public, with many public sector workers saying they won't accept cuts, an emotional tug of war.

I'd like to move past that and get some number crunching and actually tackle the idea of how we will implement the cuts (facts, numbers) and keep the bickering out of the thread.

helimachoptor

Dannyboy83 wrote: »

Those threads are just a to and fro between private and public, with many public sector workers saying they won't accept cuts, an emotional tug of war.

I'd like to move past that and get some number crunching and actually tackle the idea of how we will implement the cuts (facts, numbers)

That while a noble idea won't happen. This thread will just descent into the tug of war like the others.

Riskymove

helimachoptor wrote: »

That while a noble idea won't happen. This thread will just descent into the tug of war like the others.

Danny..fair enough but unfortunately I agree with this


anyway here is what i said about the proposal from chris

actually i dont really like the idea of "savaging" high earners, its too simplistic to just think that as they are highly paid that they deserved to be hit more than others

I'd also add that there seems to be plenty of evidence that pay differentials are actually much higher at lower incomes

a 10% cut on someone earning €250k returns €25,000, a hefty saving

in addition i think there would be an extremely small number of people on such wages anyway

I think the way inwhich the pension levy was phased was probably fair enough and I think the most obvious (and quickest ) way of implementing a further amount (if its chosen as an option) is to increase those rates

Dannyboy83

helimachoptor wrote: »

That while a noble idea won't happen. This thread will just descent into the tug of war like the others.

They can argue that in their other threads.
Lets get down to business here and crunch the numbers.

All ideas welcome, as I said, I don't know how performance appraisal operates in the public sector.

frman

How soon do we think the actual cuts will be made ?

Will they wait for the Budget in December to start cutting and culling, or will it be done now that Lisbon is out of the way ?

helimachoptor

Dannyboy83 wrote: »

They can argue that in their other threads.
Lets get down to business here and crunch the numbers.

All ideas welcome, as I said, I don't know how performance appraisal operates in the public sector.

Yes they will, but they will also argue it here my friend. I am sorry but you will not get a purely mechanical discussion on this. People have vested interests and don't want to take pay cuts/want the PS to take cuts.

Riskymove

Dannyboy83 wrote: »

as I said, I don't know how performance appraisal operates in the public sector.

very badly

Will they wait for the Budget in December to start cutting and culling, or will it be done now that Lisbon is out of the way ?

I imagine any cuts will come in from 2010

it gets difficult to bring in tax/pay changes so late in a fiscal year

ixoy

You would remove automatic increments for a start - everyone getting the same increase, regardless of aptitude, doesn't exactly promote the best work attitude: why bother if you can slack and still get the same?

This could be achieved by reforming PMDS. If I recall, PMDS is rated on a per-individual basis and that your rating will be decided on whether you achieve certain self-defined goals (with maybe a cursory input from your supervisor). In most private sector areas, you also apply your rating against your peers and use a bell curve model - so only 10% could get top (5), 20% above (4) and so on. Then only give increments based on those who achieve 4 or 5 - reward those working harder. Those who get a 1 or 2, in two consecutive periods, should be removed - let's get rid of the waste. Chances are if you're scoring a 1 or 2 you're not really contributing much. This would start to streamline the process.
Anyone who works in the PS/CS would surely support this - it must annoy them to see slackers beside them get rewarded as well as they themselves do. I can certainly see it every day and it annoys me on their behalf. Fixing this would reduce the bill and motivate for better performance.

When comparing the wages with the private sector counterparts, I'd like to see that the weighting given to job security and the shorter hours worked when taking pay into account. It may need to be re-adjusted.

In an ideal world there would be a ground level review of just how much people are needed and what departments - the McCarthy report is a good step here, but it can't tackle people as well within each group.

Dannyboy83

First we need numbers.

Borrowing is at 24billion per year.
Current Irish defecit is 71billion and climbing by 1 billion per 2 weeks.

There are 339,000 public sector workers.


Do we have any breakdown of y workers paid x amount?
A are paid 35,000 per annum
B are paid 50,000 per annum
C are paid 100,000 per annum
D are paid 250,000 per annum

etc.

meditraitor

There is great merit in what chris says

chris wrote:

If a PS pay cut is to be implemented, how about this way? It wouldnt hit low earners hard but would savage the high earners.

If you earn €18,000 gross, you take a 1.8% pay cut.
If you earn €45,000 gross, you take a 4.5% pay cut.
If you earn €80,000 gross, you take an 8.0% pay cut.
If you earn €250,000 gross, you take a 25% pay cut.
etc etc.

Earn x%, pay cut of x/10000 %.

How would that sound to people?

I think for the sake of the country Job cuts in the PS need to be dismissed apart from the small minority of wasters.
Pay cuts in the PS is the only way to reduce our national outgoings without hitting the poor and by this I mean that cuts in social welfare will have a more profound effect on our national psychy than reducing the pay of say a teacher on €60000 a year to €55000.

Riskymove

ixoy wrote: »

You would remove automatic increments for a start - everyone getting the same increase, regardless of aptitude, doesn't exactly promote the best work attitude: why bother if you can slack and still get the same?

Ioxy

your post sets out exactly how PMDS operates except you need to get less than a 4 to get an increment

to be fair while public sector reform is a must thats a far more medium to long term plan

in this thread the idea is discuss the actions needed around the planned savings and how best they may be implemented

Do we have any breakdown of y workers paid x amount?
A are paid 35,000 per annum
B are paid 50,000 per annum
C are paid 100,000 per annum
D are paid 250,000 per annum

sopme stats I recall from discussions on these threads are:

the majority are up to €60k

only 3% over €150k

joolsveer

ixoy wrote: »

You would remove automatic increments for a start - everyone getting the same increase, regardless of aptitude, doesn't exactly promote the best work attitude: why bother if you can slack and still get the same?

This could be achieved by reforming PMDS. If I recall, PMDS is rated on a per-individual basis and that your rating will be decided on whether you achieve certain self-defined goals (with maybe a cursory input from your supervisor).

The rules state that increments are not granted automatically and that performance and other criteria are taken into account in deciding if an increment is merited. Are there public service bodies where the existing rules are ignored?

Riskymove

Dannyboy83 wrote: »

Current Irish defecit is 71billion and climbing by 1 billion per week.

no thats national debt I think

the deficit is difference between this year's revenue and expenditure

i.e. 20 odd billion

Riskymove

joolsveer wrote: »

The rules state that increments are not granted automatically and that performance and other criteria are taken into account in deciding if an increment is merited. Are there public service bodies where the existing rules are ignored.

we are already moving away from the topic at hand


this has been discussed already on threads - basically the implementation of perfromance has been generally so weak that such technicalites are indeed moot

many people i am aware of who do very little or very poor work get increments

Dannyboy83

Riskymove wrote: »

Ioxy

sopme stats I recall from discussions on these threads are:

the majority are up to €60k

only 3% over €150k

Okay so 3% of 339,000 is 10,170 workers earning above €150k
So that total wage bill is €1,525,500,000 at the minimum

Reducing this by 20% would yield: €305,100,000

97% of 339,000 is 328,830 workers earning between €20k and €60k
So if we take €30k as the blind average, the wage bill is: €9,864,900,000
That figure sounds too high, nonetheless, a 10% reduction on that figure would yield: €986,490,000

Can we whittle this down a bit so?

Lets simplify it and stick to yearly figures, then we can narrow it down.

P. Breathnach

Dannyboy83 opened this discussion by quoting my view (well, one of my many views). Now I am going to be boring. If you agree with what I said, or hold a roughly similar opinion, the way to go is benchmarking -- fair-minded, honest, competent, and transparent benchmarking.

Dannyboy83

Alternatively, give me a link where I can get the figures and I will go away and do the number crunching myself and come back with the results.

God, I'd love a game of SimCity now

jimmmy

Dannyboy83 wrote: »

Okay so 3% of 339,000 is 10,170 workers earning above €150k
So that total wage bill is €1,525,500,000 at the minimum

Reducing this by 20% would yield: €305,100,000

I would argue those p.s. on more than 150,000 per year should get a pay cut higher than 20%. Its not as if there will be a huge exodus of them to the private sector, or to the public sector in other countries. Our deficit is huge and big savings need to be made. Another area where great savings can be made is p.s. pensions.....especially to those pensions greater than say 100,000 per year. What pensioner needs that obscene amount of money....most would have their mortgages paid off + kids reared etc ?

Dannyboy83

Well, I grossly underestimated the PS wage
Its €20billion:eek:, not €10billion, according to Page 14 here.
I'm going off to do some sums.
http://www.rte.ie/news/2009/0716/Volume%201.pdf

BTW, Just seen that we've hit €20billion in exchequer debt here:
http://www.rte.ie/business/2009/1002/exchequer.html

ardmacha

Inflation is negative. Simply "suspend" the last increases paid in 2008 in both pay and social welfare, right across the board. This will lead to immediate short term savings and is putting payments back where they were when prices were at this level previously. Perhaps this will have to end as inflation recovers,but as inflation recovers so will revenue to some extent.

Then launch a proper benchmarking.
- agree the criteria first
- then apply the criteria in detail to various sectors, having one benchmarking report cover everyone from manual workers and professionals doesn't cut it.

Sin1981

They keep going on about these recent reports on public v private not comparing "like with like". Can someone tell me where the 2002 benchmarking came up with figures to compare salaries?? did they compare public salaries with private? So why are these salaries not comparable?? mmm....

IMO, pay cuts depending on your level of salary,
seeing as the differential between public and private is greater at the lower entry level grades, there should be larger cuts there... but hey we're not that mean!! How about:

3% cut for anyone earning less than 35-40K
5% for anyone on 40-60K
10% for anyone on 60-80K
12% cut for anyone on 80-120K
and ~25% cut for anyone on over 120K.

And then.... get the benchmarking-to-western-European-averages show on the road, to make any further cuts over the next 2/3 years...

ardmacha

Can someone tell me where the 2002 benchmarking came up with figures to compare salaries?? did they compare public salaries with private? So why are these salaries not comparable?? mmm....

The 2002 benchmarking data is completely secret, they basically looked at what union you were in rather than any proper analysis.

Sin1981

ardmacha wrote: »

The 2002 benchmarking data is completely secret, they basically looked at what union you were in rather than any proper analysis.

Ahhh I see, all very fair and transparent.
Will Cowen have the balls to take on the unions proper? or will we see a cop-out token levy of some sort introduced like last year?

optocynic

P. Breathnach wrote: »

Dannyboy83 opened this discussion by quoting my view (well, one of my many views). Now I am going to be boring. If you agree with what I said, or hold a roughly similar opinion, the way to go is benchmarking -- fair-minded, honest, competent, and transparent benchmarking.

Oh if only wishing made it so.
Do you think such a fair, rational and realistic solution to the impending doom would get past the rabid union leaders?

I agree this is the best solution, but can we implement it... realistically?

P. Breathnach

optocynic wrote: »

Oh if only wishing made it so.
Do you think such a fair, rational and realistic solution to the impending doom would get past the rabid union leaders?

I agree this is the best solution, but can we implement it... realistically?

It's worth trying.

optocynic

P. Breathnach wrote: »

It's worth trying.

Without doubt... in fact... the least trying it would achieve is pointing out the pure hypocricy of the unions.

NewDubliner

ardmacha wrote: »

Inflation is negative.

Does that include the capital element in mortgage repayments?

optocynic

NewDubliner wrote: »

Does that include the capital element in mortgage repayments?

What is it you want?
Just spit it out... so we can all see how foolish it is!!!

ardmacha

Do you think such a fair, rational and realistic solution to the impending doom would get past the rabid union leaders?

Do you think it would get past the fact free contributors on this board?

Inflation is negative.
Does that include the capital element in mortgage repayments?

Inflation is an average, some people have mortgages, some do not. Are you suggesting a customised pay cut based on everyone's individual inflation rate? The only thing I would take out is any effect of government taxes on things like cigarettes.