PS exec pay tied more to own work
7,000 top staff get 1% increase, but balance tilted away from group goals
The Conservative government is giving the nearly 7,000 executives in Canada’s public service a one-per-cent raise and tying more of their pay to their individual performance on the job.
The one-per-cent raise also applies to defence scientists, who are considered executives.
Retroactive to April 1, the raise is smaller than the 1.75 -per-cent increase that unionized employees received this year. At the same time, the government is shifting how it rewards executives for meeting departments’ corporate goals, as well as the individual commitments they agree to in performance agreements with their bosses.
Treasury Board President Tony Clement has made reducing compensation costs and improving performance top priorities in his drive to modernize the public service and make it more like the private sector.
The Conservatives took an unprecedented step in 2011 of tying 40 per cent of executives’ “at-risk” or performance pay to the government’s “corporate” priority of reducing jobs and $5.2 billion in operational spending by 2015. The other 60 per cent was tied to executives’ individual performances.
With the spending cuts implemented and about 20,000 jobs off the payroll, the government has decided to reduce the portion tied to corporate goals from 40 to 33 per cent and will instead boost the share of performance pay for individual performance to 67 per cent for 2013-2014.
The government, however, has made it clear that restraint and finding ways to improve efficiency are still corporate priorities to ensure the government balances the budget by 2015 as promised. The performance agreements for all executives must include the following clause:
“To renew and transform business processes through the effective implementation of cost-reduction and efficiency improvement initiatives as identified in Deficit Reduction Action Plan (DRAP) and other governmentor departmental initiatives, in keeping with the government’s commitment to return to balanced budgets in 2015.”
The same five-level rating scale will still be used to evaluate executives — ranging from scores of “did not succeed” to “surpassing expectations.” The government took over the job of assessing executive performance during the spending reviews and downsizing but is now returning that task to the deputy ministers heading departments and agencies.
Last year, the government had 6,923 executives in five levels from EX-1 to EX-5 and spent about $76.4 million on bonuses and performance pay.
Base salaries range from $104,600 for a new executive to $198,000 for a senior assistant deputy minister at the EX-5 level. More than half of all executives are entry-level or EX-1s and only six per cent are at the senior EX-4 and EX5 levels.
Until now, the government has relied on the advice of an independent and external advisory committee when determining the pay and bonuses of executives. That committee was quietly shut down after its longtime chair, Carol Stephenson, the former dean of the University of Western Ontario’s Ivey School of Business, resigned more than a year ago.
The committee’s last report was in 2011, when it recommended the government tie only 25 per cent of pay to the corporate goal of spending reduction. The government boosted that to 40 per cent.
Officials in Treasury Board President Tony Clement’s office have said the committee isn’t shelved but the government is “re-evaluating” the mandate to put more focus on “containing costs” rather than wage increases to retain executives.
Clement has made reducing compensation costs and improving performance top priorities in his drive to modernize the public service and make it more like the private sector.
Clement made performance agreements mandatory for all public servants in the hopes of improving productivity and getting rid of poor performers. All employees must have agreements that lay out their goals and objectives by April 1, 2014.
The government has several studies under way to examine the comparability of federal compensation with those of other employers in the public and private sectors.
Generally, public servants in lower-end jobs are paid more than in the private sector and those at the top are drastically underpaid. The size of that gap has long been in dispute. Treasury Board also has plans in the works to study the work of executives, including how jobs are evaluated and classified. That review could affect the structure of the senior ranks and how executives are paid.
The Conservatives have long said the public service is top-heavy with too many executives. The number of executives grew nearly 70 per cent since the Liberals’ massive downsizing in the late 1990s.