Politicians' pay much lower than private sector
03.06.2005 / 16:02 / Rubriek: Binnenland / Organisatie: Hay group
Prime Ministers's pay in Europe much lower than private sector
Big differences between political and business leaders in pay in Europe, shows Hay Group research. European business leaders are now paid at least five times what a typical Prime Minister earns. Top political posts are paid anything between 10% and 25% of comparably sized jobs in their economies. Research from Hay Group shows that in a developing economy like Poland, the figure is as low as 5%, but only rises to 31% in egalitarian Norway.
Hay Group has released a pay survey for senior politicians and civil servants in eight countries: Belgium, France, Germany, Ireland, Netherlands, Norway, Poland, and the United Kingdom. While Hay Group found a broad consistency in the annual total cash incomes of Prime Ministers, jobs in bigger countries (such as the UK, Germany and France) tend to be paid higher than those in smaller countries (such as the Netherlands and Norway).
The survey compared publicly available information on the pay levels of senior politicians and civil servants to executive pay in the relevant national market. In making the comparison, Hay factored in differences in 'job size' due to a country's international importance and impact as well as differing internal political structures.
Senior politicians's pay consistently lower
A broadly similar pattern was found for Senior Ministers in each country with absolute levels of pay tending to be highest in the bigger countries. But there is a substantial range of competitiveness when Ministers are compared with their national pay markets. In most countries, ministers' pay varies between 10% and 30% of the national 'rate'; in Poland it falls to only 8% and in Norway it rises to 35%.
Civil servants more competitive
There is more variation between countries in respect of the pay of senior civil servants, for example substantially higher in the UK than in France and Germany. In most countries remuneration levels of civil servants are between 30% and 50% of private sector levels. In Germany however, they are substantially lower (around 20%). In all countries covered in the survey Civil Service salaries are more competitive with the private sector than are those of senior politicians.
Pay for performance?
Performance related pay has not been adopted in any country for senior politicians. But some countries, for example the UK have systems under which civil servants' salary progression is related to their performance and also small bonuses are available to outstanding performers. Compared to the private sector performance related pay is virtually non-existent.
Decision making process varies
In most countries Ministerial pay is subject to Parliamentary approval, or to a legal framework set down by Parliament. For civil servants, a variety of approaches exist. In some countries their pay levels are determined legally; in others by the government itself; and in some (e.g. the UK and Ireland) decisions are heavily influenced if not in practice determined by independent salary review bodies. The sector is characterised by considerable variations in decision making of pay.
A next study of Hay Group is planned to cover both total cash and fringe benefits.
About Hay Group
Hay Group is a global organisational and human resources consulting firm that helps its clients (Boards, CEOs, Executives, and HR Managers) on virtually all aspects of their people-related business issues. Founded in 1943, Hay Group has over 2,200 employees working from 77 offices in 42 countries.
Our areas of expertise include:
Design and analysis of organisations and jobs;
Talent management through assessment, selection, and development of executives, managers, and teams;
Compensation, benefits, and performance management;
Executive remuneration and corporate governance; and
Employee and customer attitude research.
Hay Group works with nearly three-quarters of FORTUNE's top-50 Most Admired Companies, as well as many mid-sized and non-profit corporations, public institutions, and governments.
Note
Additional graphs are available: 'Average Total Cash all positions' and 'Total Cash all positions relative to national pay market'.
For more information please contact:
drs Wendela Manting
Marketing Communications Manager
+31 651 258 468
Wendela(underscore)Manting@haygroup.com
Hay Group
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The Netherlands
www.haygroup.nl
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