Does your pay check out?

By JANINE OGIER

Everyone wants to feel they are being rewarded well for the job they do, so people are curious about comparable salaries. There's a legal minimum wage, but beyond that it's up to individuals to negotiate for themselves, or collectively in a union environment.

Some professions are lucky enough to be fully aware of the "going rate" for their work. For example, chartered accountants and engineers can access annual surveys to check where they are on the remuneration scale and if it's time to coax some more cash out of the boss.

People working under collective agreements or represented by national bodies, such as public service workers, teachers and nurses, also have a fair idea of the professional pay scale and what they need to do to move up the ladder.

For others, it is more tricky.

There are still many places these days where remuneration is decided on an ad hoc basis and the salary is set at the discretion of the manager. This is more likely in the private sector and in a small business environment. Time in a job comes into the equation, too.

"It's hard for people to establish their worth in the marketplace," says Rob Woodward, a senior consultant with executive recruitment company Momentum Consulting Group.

"Because we are seeing people day in and day out, we have a sense of the types of salaries that are out there, but for Joe Bloggs off the street it is very hard for them to benchmark themselves in any meaningful way."

One way to find out a competitive salary is going for another job and finding out what is offered. Woodward says in the tight labour market being experienced at the moment, prospective employers are offering larger salaries and current employers are matching the offer to keep the staff.

Talking to colleagues in other organisations is one way to compare salaries.

Public Service Association national secretary Richard Wagstaff says problems emerge where there is no collective agreement or no clear pay policy, and the greater the discretion allowed, the more difficult it is to know what other people are being paid.

This issue came before the Taskforce on Pay and Employment Equity looking at the public service and public health and education sectors. Generally, the higher the level of discretion the more inequity there is. Women's pay is still well behind their male counterparts in many industries.

Working out the right pay for your job is a question of relativity, and there are different approaches used by human resources staff and managers to sort this out.

Approaches to determining pay include "points factor surveys", which measure things such as education, experience, the content of the work, work conditions and the responsibilities of the work to give a job a particular weighting.

The evaluation looks at the job, rather than the person performing it. The surveys set up differentials based on job size or value and provide a rank-ordered listing of jobs showing the degree of difference and relative worth of each position.

So the assessment is based on such things as how much autonomy someone has, how many staff the position manages, and how much impact the performance of the job has on the company's bottom line.

One of the most widely used surveys is the Hay Guide Chart. It assesses the job requirements - the knowledge required, the kind of thinking needed to solve common problems, and accountability. These type of surveys are useful in large organisations, the public sector and the military.

Another type of job value comparison is done by the name of the job and uses scoping factors to evaluate the characteristics and activities of the role. For instance, if the job is a chef, the scoping factors could be what kind of chef, how big the kitchen is, how many seats in the dining area, how many staff in the kitchen.

Other ways to determine salary include a maturity survey, which looks at how much a certain role would be expected to earn over time.

So a new graduate would earn so much, then after two years would be expected to have increased to another amount, then rise again at five years and so on.

A spokeswoman for the financial sector union FinSec says it's hard for people working where a collective agreement is in place to get an idea of where they stand unless they are in the union.

Unions are trying to stop union wage gains being passed on to non-union employees, but this is difficult. Some employers are coy about this; others admit it.

The Employment Contracts Act did away with national agreements for union members, so now people in different sectors and companies are being paid differently as their packages depend on what the collective can negotiate with specific employers.

For instance, one major bank pays its staff 10 per cent below what workers in other banks earn. "It's just what you can fight for these days," the FinSec spokeswoman says.

Remuneration surveys are also a useful tool for people checking their package against others in similar roles.

They are done by consulting firms and industry groups and include the Institute of Chartered Accountants (ICA) annual survey in collaboration with Momentum, and a similar one by the Institute of Professional Engineers of New Zealand (IPENZ).

This year's ICA results showed accountants in the banking and finance sector earn more than their counterparts elsewhere. Also, the average remuneration gap between private and government sectors is widening.

The IPENZ survey is available to members.

"Many people use it to track where they sit with respect to their experience level, and use it in negotiations with their employers," IPENZ deputy chief executive John Gardiner says.

It is not just salary that has to be looked at when measuring remuneration, but the whole package. Some workers get a car, parking, gym membership, superannuation, health insurance. Others get bonuses depending on the organisation's performance.

Demand for engineers in Auckland is far greater than supply so employers are offering extras to attract staff, Gardiner says.

In recent years employers have been cashing up benefits due to compliance costs for the administration and also the fringe benefit tax implications.

Working out how much an insurance, car parking or gym membership is worth is a case of doing some research. For instance, the Automobile Association can provide information on the value of running vehicles.

The Employers and Manufacturers Association co-ordinates an annual salary survey. The 2004 survey encompassing information from around 800 employers will be released next month.

Its purpose is to give employers an idea of the market rate for 207 positions, ranging from managing director to office cleaner.

The Hospitality Association also does an annual survey of salaries and makes the data available to its members. The association's chief executive, Bruce Robertson, says the market generally finds and sets its own pay level, as word of mouth works effectively.


The rough guide to ... salaries

* Accountant in the banking industry: $140,000

* Engineer in general management: $124,000

* Accountant in public practice: $105,000

* Accountant in local government: $98,000

* Engineer in a consultancy: $70,000

* Experienced probation officer: $49,500

* New Zealand Herald reporter (J8 grade): $46,500 base rate

* Senior administrator at Ministry of Education: $46,000

* Experienced social worker: $45,000

* Head teller in a bank: $39,000

* Experienced corrections officer: $38,000 including penal rates

* Call centre team leader: $35,000