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I HAVE PROVIDED BELOW A 2008 EXECUTIVE SUMMARY - PART ONLY, OF A REPORT ON THE SINGLE SPINE PROJECT FOR YOUR INFORMATION

 

PKN

 

1.0       Executive Summary

 

1.1              Introduction

 

The development of a comprehensive payroll structure for the Government of Ghana has included the development of service classifications for services and institutions in the public sector, undertaking a review of market salaries and reviewing the job content of selected positions in the public sector.  These activities were undertaken to provide a context and basis for the development of a public sector pay structure framework, to provide some guidance on the future of public sector pay and to determine the need for broad based job evaluation.

 

 

1.2              Principles of pay systems

 

Pay structures in the public sector in particular must consider the following.  The first four of which are also key pillar of compensation:

 

v  Internal Equity

How Government, as Employer, values jobs within the public sector in relation to each other while also considering the value of jobs within the same service classification in relation to each other

 

v  External Competitiveness

Where the salary structure of the public sector is in comparison with the private sector, also considering where the salary structure of each service classification is in relation with each other

 

v  Employee’s Contribution/Performance

The structure should have a means to compensate employees for their individual performance and their contribution as it relates to the performance of the public sector

 

v  Transparent Administration

The structure must be able to be administered in a straightforward and transparent manner with established guidelines.

 

 

v  Affordable

The structure must be affordable to the Employer and cannot exceed what they can afford to pay

 

 

v  Understandable

Those whose salaries will be established by the structure must be able to understand it

 

v  Flexible

The structure must be able to accommodate changes when needed

 

v  Decompressed

The structure should bed sufficiently decompressed to recognize and compensate for the difference in job content from the lowest to the highest levels of the structure

 

1.3       International Experience

 

Many governments around the world use a single pay scale (or ‘spine’); or a limited number of such scales or spines. It is only in this way that a government (as employer), can ensure that employees doing like jobs receive like pay. Usual practice is for each part of the public service to operate with either a single pay scale (or a limited number of such scales, based around different public employers, where the employers are not the government).

 

1.4        Single or Multiple Pay Spines for Ghana

 

1.4.1        Single Pay Spine

 

The single pay spine places all public servants on one vertical structure.  The GOG’s decision to use the single pay spine considers the history of public sector pay in Ghana, the ability to ensure that all institutions were placed on it and to effectively implement it along with the following advantages and disadvantages:

 

Advantages

One salary structure for entire public sector
Pay points can be as many as are necessary to accommodate everyone in public sector
Equally spaced increments along structure, this would make it fair to all
Limits negotiations on the salary structure to the percentage increase in the entire spine
Disadvantages

There will continue to be the need for market premiums to be determined and paid to respond to supply and demand issues for specific positions
The union and employee associations may be reluctant to accept the single spine as there will be no basis for separate salary negotiations
 

1.4.2        Multiple Pay Spines

 

There is technically only one basis for having more than one pay spine.  This basis is that the service classification must recruit from a completely different labor market than from where the majority of the public sector staff is recruited.  If this is considered along with the current industrial climate, the history of public sector pay in Ghana, the local labor market climate and initiatives already taken by some of the service classification groupings (health, security services and revenue services), there could be up to 7 pay spines.

 

 

1.4.3    Policy Decision

 

Government has decided to adopt a single pay spine across the entire public service.  It must be noted that multiple spines can be established at any point during the implementation, using the service classifications provided.

 

1.5       Development of the Single Pay Spine

 

Pay minima and maxima were about ¢5.3 million and ¢460 million, respectively. An initial pay spine, therefore, would need to start just below this minimum and continue to a level just above this maximum. The starting point of ¢5 million was selected as a suitable starting point.

An increment between pay points of 3% was chosen as this restricts the average cost of moving existing salaries to the next nearest pay point to half this i.e. about 1.5%, thus containing the cost of conversion to the spine.  In addition, the current structure used by the majority of the public service has 3% increments.

The spine is constructed by ‘fixing’ the starting salary of the bottom pay point of ¢5 million, and then using the increment and the factor to calculate all higher pay points. This resulted in a pay spine of 156 pay points.

The spine is reproduced in full at Annex B but the top and bottom are shown below for illustrative purposes:

Top of pay spine

Pay point

Salary at pay point

increment

1

536,450,879

3.1257%

2

520,191,100

3.1249%

3

504,428,229

3.1241%

4

489,146,957

3.1232%

5

474,332,450

3.1224%

6

459,970,334

3.1216%

 

Bottom of pay spine

152

5,627,806

3.0024%

153

5,463,762

3.0016%

154

5,304,541

3.0008%

155

5,150,000

3.0000%

156

5,000,000
...