SC Salary Template
SC Salary Template
SC Salary Template
Bureau of Management
Table of Contents
A. INTRODUCTION................................................................................................................. 3
HQ SUPPORT AND MONITORING MECHANISMS..........................................................................3
NO LINK WITH UN NATIONAL SALARY SCALES AND CONDITIONS OF SERVICE............................4
APPROACHING THE MARKET...................................................................................................4
PUBLIC SECTOR FOCUS.........................................................................................................4
B. THE DESIRED MARKET POSITION...................................................................................5
C. BENCHMARK TERMS OF REFERENCE...........................................................................6
D. DATA COLLECTION AND ANALYSIS...............................................................................6
DATA COLLECTION METHODS.................................................................................................6
QUANTIFICATION OF SALARIES AND BENEFITS.........................................................................7
MATCHING TERMS OF REFERENCE..........................................................................................7
E. DESIGNING THE REMUNERATION SYSTEM...................................................................8
BROADBAND OPTIONS............................................................................................................8
SETTING THE REMUNERATION SCALE......................................................................................9
F. PROMULGATION AND MAINTENANCE..........................................................................10
SETTING THE EFFECTIVE DATE.............................................................................................10
AGEING SALARY DATA......................................................................................................... 10
INTEGRATION INTO PAYROLL.................................................................................................10
MANAGING PAY FOR PERFORMANCE.....................................................................................11
REPORTING BACK TO ORGANIZATIONS..................................................................................12
UPDATING SURVEY DATA.....................................................................................................12
SPECIAL MEASURES............................................................................................................. 13
G. TRANSITIONAL MEASURES...........................................................................................13
WHERE THE NEW SC REMUNERATION SCALE IS LOWER THAN CURRENT SC REMUNERATION....14
TYPICAL INTEGRATION FROM CURRENT TO NEW SERVICE CONTRACT REMUNERATION..............14
WHERE THE NEW SC REMUNERATION SCALE IS SIGNIFICANTLY HIGHER THAN THE EXISTING SC
REMUNERATION....................................................................................................................... 14
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A. Introduction
The Service Contract (SC) modality, as specified in the HR User Guide, is intended to
support the engagement of personnel to service development projects and to provide non-core
services where outsourcing is not a viable and/or feasible option. Individuals engaged under
the SC modality are considered as local contractors. The basis for the establishment of
conditions of service for SC holders is therefore found in the local labour market and must be
consistent with prevailing levels of pay for similar services and comparable work in the local
labour market.
SC holders are subject to all the provisions of local labour and tax law as applied to nationals
generally. UNDP is not responsible for payment of tax on earnings or other taxes due on the
remuneration of the SC, nor is UNDP responsible for reimbursement of taxes paid by SC
holders in respect of earnings received under SC with UNDP. The payment of taxes is the sole
responsibility of the individual under SC. In this regard, the remuneration package under the SC
is set at the gross level and may include an additional lump sum for participation in national
social insurance programmes that are mandatory in accordance with the UNDP User Guide .1
UNDP country offices should be cognizant of the fact that engagement under the SC modality,
while not necessarily short term, is not intended to support extended employment. Individuals
hired under Service Contracts are expected to return to the national market at the conclusion of
the project or when the non-core function is no longer required by the office. Therefore, while
Service Contract conditions should be broadly competitive, in no instance should conditions
lead the market or impede the movement of individuals into and out of this contracting modality.
Finally, and most importantly, the process for establishing Service Contract remuneration must
be simple and transparent. The guidelines presented in this handbook have been designed to
meet this objective. This handbook, is intended to provide structural guidance that will make the
process straight forward and consistent across duty stations while preserving the flexibility
needed to be effective at the local level. Furthermore, since SC holders will be integrated into
the global payroll system, it is necessary to adopt a more consistent and structured
approach in setting and maintaining SC remuneration.
The OHR Headquarters unit responsible for compensation matters will provide technical
advice and guidance to Country Offices in the setting of remuneration for SCs. The Regional
Bureau will be responsible for ensuring the proper implementation of the guidelines for
1
See UNDP Service Contract User Guide for guidelines regarding social insurance payments.
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establishing SC remuneration. Mechanisms for reporting on the setting of SC remuneration will
be established by HQ on a periodic basis to ensure conformity with this Handbook.
To serve this purpose, the SC remuneration policy is distinct in the following areas:
1. target market position (prevailing instead of best prevailing – 50th vs. 75th percentile)
2. comparator sample (focusing on public instead of private sector employers)
3. gross remuneration subject to national taxation
4. enrolment in local social security schemes where available
5. integrated remuneration system from junior support services through professional
services organized in a broadband format
6. no annual increments, all remuneration movement for individuals based only on revision
of the remuneration scale.
7. no retroactive adjustments in remuneration.
These primary differences should be kept in mind by Country Offices while managing SC
remuneration. The essential non-career, non-core character of SC services justifies these
differences. SC holders must be made aware at the outset of engagement that such differences
exist and the rationale for these differences.
Service Contract remuneration is based upon prevailing conditions found in the local
labour market. It is therefore necessary to gather information on local conditions of
employment in a structured manner to support construction of SC remuneration scales. In
keeping with the objective of simplicity, SC remuneration scales must be designed to be
comprehensive, inclusive of the value of typical allowances and benefits that are found in the
local labour market. The objective here is not to manage separate allowances and benefits for
SC holders. Rather, the value of these should be included in the remuneration scales such that
these scales are broadly competitive with the total remuneration values for the 50th percentile of
the local labour market.
To ensure competitive remuneration packages for similar services in the local labour
market and to facilitate the collection and updating of remuneration information, the target
market for the SC has been defined as primarily drawn from the bilateral and NGO community.
These are the organizations that engage personnel with profiles most closely similar to services
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included in the SC. Further these organizations usually maintain clear remuneration policies
and structures that ensure a reasonably accurate alignment of data.
The survey model for collecting local market information anticipates a standard sample
of ten employers. In very limited labour markets, that sample may be reduced to as few as six
employers. In all instances no less than two thirds of the sample must be drawn from public/not
for profit employers. This means seven public-sector employers for a ten employer sample and
four public sector employers for a six employer sample. A list of suggested employers for
inclusion in the sample is provided in Annex 1.
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C. Benchmark Terms of Reference
A series of benchmark Terms of Reference (TOR) spanning the range of services from
physical operations to substantive innovation in six occupations has been selected as the
internal proxy for maintaining competitive SC remuneration. These TORs have been selected
because they represent the services under SCs most frequently engaged by the UN system and
because these TORs can be found and measured in most external labour markets. The
benchmark TORs are by definition a representative sample and cannot reflect every possible
service under SCs if a streamlined and cost-effective approach to setting SC remuneration is to
be maintained. The six occupations represented by the benchmark TORs are:
Please see Annex 2 for tables containing brief thumbnail descriptions of the SC benchmark
TORs and their equivalent SC level.
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do not actually submit the data prior to the interview, this gives them an opportunity to
prepare for the interview. A sample of this questionnaire is provided in Annex 3.
While the use of pre-interview survey questionnaires is recommended to collect data prior to
the interview, this questionnaire should not be used as a substitute to the interview. The
Country Office should normally conduct an interview, either by telephone or in person, to
confirm the data reported and to validate the TOR matches. In order to ensure consistency and
reliability of data, the TOR matches must always be established by the Country Office and not
by each participating employer.
In order to simplify data collection and analysis, the remuneration at the midpoint for
each TOR will serve as the single reference for ensuring appropriate SC remuneration. The
midpoint remuneration is the midpoint or average of the minimum remuneration and the
maximum remuneration. The minimum remuneration represents an organization’s minimum
hiring rate while the maximum remuneration is the highest normally attainable remuneration
within each organization’s TOR. For organizations that don’t have a structured remuneration
scale or defined minimum and maximum remuneration levels, the organization’s average actual
remuneration or market reference point for that TOR may be used. Quantification of benefits
and allowances should be consistent with general practices in the salary survey industry.
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1. Structure: Understanding the structure of the organization is critical to
establishing accurate TOR matches as each TOR must be examined in the
context of the other functions it interacts with. Examining the roles of all the
TORs in a functional team enables a more accurate evaluation of each
individual TOR. External TOR at levels above and below the benchmark
TORs should also be examined to determine context.
3. Progression: While the organization structure and TOR content provide most
of the information necessary to establish accurate TOR matches, experience
and training requirements at various levels should also be examined in order
to understand movement between the levels.
Broadband Options
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Contribution SC Levels Service Bands
Value
Substantive SC-11 SB-5
Innovation
Adaptive SC-10
Delivery
Analytical SC-9 SB-4
Basic SC-8
Conceptual
Comprehension
Integrated SC-7 SB-3
Service
Execution
Comprehensive SC-6
Process Support
Specialized SC-5
Process Support
Basic Process SC-4 SB-2
Support
Repetitive SC-3
Support
The midpoint raw TOR data may be used to set raw band market references. Following
the smoothing of the SC pay scale, the raw band data should be retained for future reference as
a measure of changes in the comparator organizations. The initial point of departure in
constructing the remuneration scale is to use the raw TOR data for the surveyed organizations
targeted to the fiftieth percentile of the market.
Once the remuneration scale has been developed, the Country Office should examine
the utility of the scale from a resource and competitive market position perspective. If
necessary, the raw job data market extract should be adjusted to a higher or lower market
position to improve either the competitiveness or budgetary aspects of the scale.
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Finally, the SC remuneration scale should be established in local currency. Only when
it is the practice of all of the surveyed organizations to denominate remuneration and make
payments in a currency other than local currency should this be considered. However, to the
extent possible, payment of remuneration should remain in local currency. If the remuneration
scale is denominated in a currency other than the local currency and paid in local currency, the
UN prevailing operational rate of exchange must be applied. Payments of remuneration to SC
holders in currencies other than local currency should be based upon documented evidence of
similar practice by all of the surveyed employers and confirmation of legality by the appropriate
national authorities.
Through data ageing there is a mechanism for ensuring both that SC remuneration is
kept competitive and that the remuneration management process does not create difficulties for
payrolling and budgeting. Country offices also have the flexibility to promulgate updates in SC
remuneration without data ageing, bearing in mind that there is no retroactivity and all
remuneration scales must be issued with prospective effect.
Through the Atlas system, UNDP has progressively integrated all financial and human
resource functions. The introduction of these guidelines to support setting SC remuneration
supports the integration of SCs into the global payroll system. The SC remuneration scales
must therefore, be prepared in conformity with the structures presented in Annex 2. These
scales need to identify minima, maxima and midpoints by pay band and need to be
electronically exportable into the Atlas system. The Global payroll unit will provide instructions
for the electronic formats of Service Contract pay scales to support integration into the payroll
system.
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Managing Pay for Performance
The Performance Bonus for individual Service Contract holders is governed entirely
through service quality assessment. The decision to grant a Performance Bonus is not
automatic or granted as an entitlement.
During the Service Quality Evaluation process, the Supervisor of the SC holder: (i)
makes a recommendation for a Performance Bonus, (ii) confirms that the individual has met all
the contract objectives and (iii) confirms that the performance was more than satisfactory. In
assessing the performance, Country Offices consider the quality of the individual’s services in
comparison to the performance of other SC holders conducting similar services. The Resident
Representative has sole discretion to approve recommendations for Performance Bonuses
based on the Service Quality Evaluation and the availability of resources under the project.
The Performance Bonus is a one time payment granted to a SC Holder at the end of a
twelve month contract after the service quality assessment. The Performance Bonus is
calculated as a percentage of 1 to 3% of the gross remuneration rate that was in effect at the
time of the evaluation taking into consideration the level of quality of service performance.
Under the work plan, SC holder must design a MDG campaign in region X of the
country, with the participation of NGOs X,Y,Z. As part of the TOR the SC holder must achieve
an increased awareness in that region. The SC holder establishes an effective network in the
region that results in the donor funding for the campaign, which was not foreseen in the plan,
nor envisaged. This additional funding and donor presence increases visibility and contributes
to the success of the campaign.
The supervisor could conclude that this SC holder performed more than satisfactory and could
conclude to recommend 1 -3 % bonus.
UNDP has a project on building social facilities first level health services in a disaster
area, with OCHA funding in one country as part of its post-crisis interventions. The office hires
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a SC holder to supervise construction work. The Plan of work is to complete the supervisor on
5 social facilities in region X and ensure completion of buildings for temporary acceptance.
The SC holder, who is a construction engineer by profession, identifies a flaw in the floor
tile construction in three sites and reports this to the contractor. The architect agrees and
explains in detail how the designs were made and the SC holder concludes that in fact the
mistake in construction was not due to flawed designs but due to misinterpretation of those
designs. Under normal circumstances, this could be overlooked since there's a nuanced
difference in the way the designs should have been interpreted in construction and only a
trained eye could understand this. While the responsibility of the SC holder was strictly
supervision of the construction sites, in this example he/she went beyond his/her area of
responsibility and intervened which created a significant saving.
The supervisor could conclude that this SC holder performed beyond expectations and
could conclude to recommend 1 - 3 % bonus.
Reporting back to Organizations
1. summary of data collected from the specific organization showing TOR matches and the
valuation of their remuneration package;
2. a table showing the average of all organizations by benchmark TOR and the fiftieth
percentile remuneration;
3. a summary table of organization practices on remuneration;
4. the revised Service Contract remuneration scale.
At the time of data collection for the SC remuneration survey, the periodicity of
adjustment of surveyed organizations should be ascertained. SC remuneration scales should
generally be updated annually. Data should be collected from comparator organizations at a
time during the year following when a majority of these organizations revise remuneration
packages. As noted above, this data should be aged to the anticipated prospective effective
date.
Only in rare instances should SC remuneration scales be updated more frequently than
once per year. Such updating should take place only if all of the surveyed organizations have
implemented more frequent updating as well.
Again with each update of survey information, the Country Office should ensure that a
report of the survey be provided to the participating organizations.
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Special Measures
There are times where extreme economic or social events take place that disrupt the
normal pattern of employer activity in a market. At these moments it may be necessary to take
measures outside of the normal adjustment mechanisms in order to maintain an effective
functioning remuneration system. Special measures are intended to provide short term partial
relief during times of economic and social crisis. These measures are not intended to sustain
fully purchasing power or to provide full economic insulation during periods of crisis. The
measures are intended to be of short duration, typically no more than three months and in no
instance longer than six months.
In acute emergency and/or economic/social upheaval which has impacted the security of
a country profoundly, temporary special measures may be applied. Such measures may
warrant an adjustment to SC remuneration. SC holders are eligible to receive an allowance for
working under hazardous conditions only when the Chairman of the International Civil Service
Commission has approved the implementation of hazard pay for UN staff. Hazard Pay is
typically authorized:
For duty stations where very hazardous conditions such as war or active hostilities
prevail and where the evacuation of families and non-essential staff has taken place;
For duty stations where no evacuation has taken place, but in which staff are required to
work in hazardous conditions such as war or where active hostilities prevail, including
situations where staff are required to work on cross-border missions in hazardous areas;
Where the performance of functional medical requirements that directly expose staff to
life-threatening diseases, such as severe acute respiratory syndrome (SARS) and the
Ebola virus, in the course of the performance of their duties.
Hazard pay is authorized for a limited period, normally up to three months at a time, subject to
ongoing review, and is lifted when hazardous conditions are deemed to have abated. SC
holders are eligible to receive hazard pay only on days that they are required to work and
actually do so. The daily rate is obtained by dividing the annual amount (i.e. 25 percent of the
net mid-point of the SC Band) by 365 days. In some situations it may be appropriate to
incorporate such a component in the form of a bonus when setting the remuneration for SCs.
However, any revision to the individual SC remuneration is only made upon extension of a
contract or for new contracts. The SC must include a clause stipulating that this component is
short term and is reviewed on a continuous basis and may be withdrawn when the conditions
improve.
G. Transitional Measures
Implementation of these guidelines and the introduction of a more uniform approach in
establishing SC remuneration will in many duty stations require transitional measures. The
introduction of these guidelines is not intended to create significant disruptions in current SC
remuneration practices. Where application of these guidelines results in a SC remuneration
package that is significantly different from current rates of remuneration, transitional measures
should be considered.
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Where the new SC remuneration scale is lower than current SC remuneration
In such instances, the current remuneration rates should be frozen. Existing SC holders
will retain their individual remuneration for current contract duration. Upon conclusion of
contracts, new contracts should be issued with appropriate adjustments to remuneration.
Flexibility for placement of existing SC holders in the appropriate pay range should be practiced
to minimize the negative impact of the change in remuneration. (i.e. placement may be at the
third quartile in the range if necessary)
Where the gap between existing remuneration and the new SC remuneration scale is
more than 10%, some consideration should be given to providing diminishing lumpsum
differential payments for a period not to exceed 12 months into a new contract.
Where the new SC remuneration scale is significantly higher than the existing SC
remuneration
In cases where the new SC remuneration scale would result in increases in excess of
twenty five percent or double the normal annual rate of movement in a country, whichever is
lower, phasing in the new remuneration rates for existing staff should be considered. The new
remuneration rates should be phased in over a period of not exceeding twenty four months.
New SC holders should be placed for the most part in the lowest quartile of the appropriate
band.
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Annex 1: List of Sample Organizations that should be considered for SC
Remuneration Surveys
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Annex 2: Service Contract Survey Benchmark Thumbnail TORs
2
Please note that TORs below the SC5 level have been left blank intentionally as specialized functions in
Development Project Management are not found at these levels.
17
2. Information Technology3
3
Please note that TORs below the SC5 level have been left blank intentionally as specialized functions in
Information Technology are not found at these levels.
18
3. General Administration
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4. Human Resources4
4
Please note that while service contracts serving in the area of Human Resources in UNDP projects do
not typically exceed the SC-9 level, TORs at the SC-10 and SC-11 levels are included to allow for
matching to those levels of responsibility in the external labour market if they exist. This allows for
additional external data points to inform the establishment and maintenance of the SB-5 pay ranges.
TORs below the SC5 level have been left blank intentionally as specialized functions in Human
Resources are not found at these levels.
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5. Finance and Accounting5
5
Please note that TORs below the SC4 level have been left blank intentionally as specialized functions in
Finance and Accounting are not found at these levels.
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6. Team Assistants/Secretaries6
Basic SC-8
Conceptual
Comprehension
Integrated SC-7
Service
Execution
Comprehensive SC-6 Executive Provide confidential secretarial and administrative
Process Assistant assistance at the representational and/or highest
Support executive level. Communicate executive decisions
and directions
Specialized SC-5 Sr. Secretary Provide secretarial and communication support to a
Process large business unit, facilitating integration of
Support communication and business activity with other units of
the organization
Basic Process SC-4 Secretary Provide basic secretarial support to a small business
Support service including text processing and information
management
Repetitive SC-3 Clerk-Typist Manage information in both hard copy and electronic
Support format. Facilitate distribution and retrieval of business
information
Mechanical SC-2
Operations
Physical SC-1
Operations
6
Please note that TORs above the SC6 level and below the SC3 level have been left blank intentionally
as specialized functions for Team Assistants/Secretaries are not found at these levels.
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Annex 3: Sample Survey Questionnaire
Background Documentation:
A copy of the following documentation would be helpful if available:
a. Salary Scale b. Organization Chart (macro level)
c. Summary description of job responsibilities and competencies by grade level.
d. Heirarchical list of job titles and grades by department or business unit.
Survey Completed By:
Name: Email: Fax:
Job Title: Telephone:
General Information:
1 Company or Organization name:
2 Country of location for which data is being provided:
3 Office established in Country Since (Year):
4 Total number of employees (regular, full-time employees only please):
5 Are taxes withheld from payroll? (If no, please state if legally tax exempt or employee responsibility):
Salary Scale:
6 Effective date of salary scale:
7 Standard working hours per week:
8 Confirm salary scale based on multisector salary survey:
9 Next anticipated salary scale review (date):
10 General Benefits:
12 Loan Benefits:
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18 Do you have a medical insurance plan or on-site medical clinic? (If no, skip to 17)
i Insurance provided by (a.Private Company, b.Self-insured, or c. on-site clinic):
ii Does medical insurance cover the employee's immediate family?
iii Does medical insurance cover the employee's extended family?
iv Percentage contribution employer:
v Percentage contribution employee:
vi Above contributions are a percentage of (a.base salary b.the insurance premium):
a. If % of insurance premium, indicate average total premium amount for single employee:
b. If % of insurance premium, indicate average total premium amount for married
employee with 2 dependent children.
vii Percentage reimbursement for Hospital care:
viii Percentage reimbursement for Surgery care:
ix Percentage reimbursement for General/Outpatient care:
x Percentage reimbursement for Prescription Medicines:
xi Percentage reimbursement for Eye care:
xii Percentage reimbursement for Dental care:
xiii Percentage reimbursement for Maternity care:
xiv Ceiling on medical benefit (if any)
xv Is the ceiling (a.per person, b.per family):
xvi Is the ceiling (a.per year, b.per lifetime):
19 Annual amount of allowance for dependent child: (if any)
i Maximum number of children eligible for allowance:
20 Annual amount of education assistance for dependent children (if any):
i Maximum number of children eligible for assistance:
21 Annual amount of dependent spouse allowance (if any):
22 Annual Leave
Please indicate working days of annual leave below where employer policy is more generous than the
minimums prescribed by the Country's labour laws. (Where amounts are left blank, it will be assumed that
the employer is following the minimum prescribed by law.)
i Annual leave (vacation):
ii Sick Leave (with full pay):
iii Sick Leave (with partial pay):
iv Maternity Leave:
v Paternity Leave:
vi Family-related leave:
vii Bereavement Leave (to attend funerals):
viii Other Leave:
23 Other Notes/Comments:
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Annex 4: Terms of Reference Summary Sheet
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Annex 5: Sample Service Contract Remuneration Structure
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