Public sector pay and employment equity reviews: Overview report. Department of Labour June 2009

Transcription

1 Public sector pay and employment equity reviews: Overview report Department of Labour June

2 Contents Summary... 4 Findings and responses Public Service... 5 Findings and responses public health... 7 Findings and responses public education... 7 Findings and responses - Crown research institutes... 7 Findings and responses local government... 8 Findings and responses tertiary sector... 8 The Pay and Employment Equity Plan of Action Progress, process and resources The review process Resources for reviews Key findings, responses and progress the public service Introduction Rewards Participation Fairness and respect Key findings and responses public health Introduction Rewards Fairness and respect Conclusions Key findings and responses public education Introduction Rewards Fairness and respect Conclusions Key findings and responses Crown research institutes Introduction Rewards Participation Respect and fairness Key findings and responses - local government Rewards Participation Fairness and respect Key findings and responses tertiary education Rewards Participation Respect and fairness The Plan of Action and the gender pay gaps Conclusions References

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4 Summary Pay and employment equity reviews took place in the public sector in Organisations produced reports containing robust quantitative and qualitative evidence about gender equity. Response plans were agreed upon by joint union/employer committees and chief executives to address gender issues identified in reviews. This paper deals with issues and responses identified through the reviews and with what is known about implementation to date. There is more information about the Public Service reviews than the others, in part because there were more projects there, and they were carried out earlier. The review process is analysed in a separate paper 1. Reviews covered the core Public Service, public health, and public education (public schools and teachers in kindergartens), two local bodies, and three crown research institutes. By end June 2009, employees had been covered by 67 reviews, around 13.5% of employees in New Zealand 2. A substantial part of that coverage was achieved after June Fifteen polytechnics, one wananga, one university and one autonomous crown entity will complete their reviews during 2009, and the final total number of reviews will be 85, covering 14.2% of employees (almost one in seven). While issues and responses varied considerably across organisations and sectors, there were common issues. Organisations identified both positive aspects of employment, and opportunities for improvement. The issues about pay were how jobs are valued, classification and gradings structures, how rates are set (pay structures and starting rates), how employees are placed and progress in pay structures, and the bases on which remuneration other than base pay is provided (benefits, allowances, and bonus payments). Women were under-represented in senior management. Part-timers were disadvantaged and often under-utilised. Workplace cultures inhibited women s full contribution and participation. Insufficiently flexible work arrangements also limited participation and progression of women. Opportunities for progression and development were limited for some occupations, especially administrative and clerical work, because of insufficient career steps and pathways, training and development opportunities and support and mentoring. Many organisations identified opportunities for improving collection, analysis and monitoring of human resources data, and for improving, clarifying and promoting human resources policies and processes. In some cases, available data and analysis were not sufficient to reach firm conclusions about the level of gender equity in the organisations or sectors. Some organisations could not be confident that they were meeting all their responsibilities under equal pay, equal employment opportunity and antidiscrimination legislation. 4

5 Response plans were much stronger on taking action to prevent problems in the future than in immediate action remedying the identified problems. In many cases, there were very limited monitoring, accountability and reporting arrangements, including in relation to reporting on progress to employees within organisations. Government policy supports continuing implementation of pay and employment equity response plans, excluding pay investigations of female-dominated occupations and recognizes the obligations of public sector chief executives to ensure they continue to address and respond to any identified gender inequities as part of good management practice and being a good employer. Government will encourage voluntary participation of public and private sector organizations in pay and employment equity projects. The Department of Labour (now Ministry of Business, Innovation and Employment) will continue to provide to both public and private sector organizations the pay and employment equity tools and resources including the review tools and the Equitable Job Evaluation System. Findings and responses Public Service All Public Service reviews except one found gender pay gaps in median equivalent full-time earnings. These varied in size from 3% to 35%. Common findings included: Women and men received unequal starting salaries for the same job Female-dominated jobs were lower paid than male-dominated jobs Gender inequalities were found in pay progression and performance pay Women predominated in the lowest paid staff and were a minority of those in the best paid jobs, and Women had a smaller share of additional rewards, such as employerfunded superannuation, premiums and bonuses. There were also significant gender differences in opportunities to participate in all roles and at all levels. These included: Women were often under-represented at senior management levels Women were over-represented in lower job bands and levels High levels of occupational segregation by gender Female staff had less access to training and development opportunities Women were less likely to apply for more senior roles Female-dominated roles had fewer career steps Women were less likely to believe that they would be supported by their manager to apply for a more senior role. The majority of part-timers were women. Many reviews found that part-timers were disadvantaged in terms of training, development and career progression. Women were also more likely to be employed on temporary contracts. Reviews found that women were more likely than men to report fairness and respect issues and to lack confidence that the organisation would effectively address these. Fairness and respect issues took various forms: Bullying and (to a lesser extent) sexual harassment Rudeness and disrespectful behaviour to some groups of women staff. 5

6 Many reviews found organisations lacked effective policies and procedures to deal with fairness and respect issues. Reviews produced a range of responses to address gender pay gaps. Examples included: Improved clarity and transparency about pay scales Guidelines for managers on setting equitable starting salaries Reductions in manager discretion in salary setting Checklists for appointment panels Clearer, competence-based pay progression systems Ensuring job evaluation systems are free of gender bias Equitable job evaluation for some or all occupational groups, and Recommendation of pay investigations. Proposals to address gender differences in levels of positions in organisations included: Addressing potential bias in recruitment procedures Mentoring Training and development Career progression systems. Responses included making part-time work available at more senior levels and including part-timers in development opportunities. Other response plans aimed to make flexible working arrangements more easily available. Responses to fairness and respect issues included: Promoting information about policies to all staff Updating, reviewing and clarifying the policies on bullying and/or harassment Information for managers on addressing and resolving complaints Training for managers, staff and new inductees New systems for reporting incidents that staff are comfortable using A zero tolerance policy towards disrespectful behaviour and discrimination, with disciplinary consequences for breaches. The gender pay gap in the Public Service fell from 17% in 2004 to 15.4% in 2008 and the proportion of management positions filled by women rose from 35.6% to 38.3% 3. Two pay investigations were initiated, one for education support workers and one for social workers. The social workers investigation was discontinued. The results of the education support workers pay investigation are being considered in bargaining. Some pay anomalies affecting individuals and groups of employees have been remedied and job evaluations were carried out for the first time for some jobs. Good results have been reported by some organisations in addressing fairness and respect issues. Several Public Service organisations have also improved their human resources and management policies, practices and systems and communicated them to staff. Actions reported include improving support for women s access to career paths and progression, improving training and development opportunities, and improving flexibility of working arrangements. 6

7 Findings and responses public health Gender pay gaps were reported as % in average total remuneration, which did not allow separation of the effects of the high concentration of part-timers among women. One District Health Board reported that women earned on average 69% of men s full-time equivalent earnings. Women were overrepresented in lower-paid occupations and under-represented in higher paid jobs. There were gender pay gaps within some occupations, including in starting rates in some cases. While some work was envisaged on investigating how jobs are evaluated and paid, pay investigations have now been discontinued. On average, women worked fewer hours per week than men, which affected their earnings women worked an average of 82% of full-time hours, while men worked an average of 92% of full-time hours. One fifth of part time employees would like to work more hours. Women were 82% of casual staff. Women were proportionally represented in senior management in some DHBs and not in others, and the majority of Senior Medical Officers are men. There were gender issues and responses related to job security, staff development, training and career progression especially for administrative support staff and part-timers. Opportunities for improving workplace culture were identified. Responses also related to working on more flexible hours and rostering systems. Findings and responses public education The reviews did not identify concerns about the pay rates for teachers in schools and kindergartens. There were concerns about some aspects of pay and progression for school support staff and about the basis on which the work of cleaners and teachers aides is evaluated. Pay investigations will not proceed. Women were under-represented for their workforce share in senior management roles, and in principals positions, in some cases. Measures for improving awareness of and commitment to pay and employment equity were agreed, involving the Ministry of Education, the School Trustees Association and the unions. It was agreed work would be done on better systems to ensure increments were paid on time, and on annualisation of pay for those employed for less than the school year. Work would also be done on improving support for training and development, and pay progression, and improving opportunities for part-timers. Further work was agreed regarding workplace culture and domestic and sick leave. Measures were agreed to improve clarity about work expectations, and the basis of pay, grades and scales. Findings and responses - Crown research institutes The gender pay gap was 18%-24% in median full-time equivalent earnings, reflecting: Women were found to be earning less than men in the same occupations There was a lack of clarity about grading systems 7

8 There was a relatively high degree of occupational segregation, and women were concentrated in lower-paid occupations such as administrative support Job sizing systems did not adequately cover staff in support roles Women were under represented in the senior roles such as senior scientist There was a lack of clarity about performance-related pay increase One CRI found part-timers were disadvantaged in hourly rates of pay because they had to work a 40 hour week to earn an equivalent salary compared to full-timers who work a 37.5 hour week. Responses included: Develop guidelines for fair and transparent starting rates Inform staff more about the bases of pay and progression Review how jobs are evaluated Clarify and renew the performance pay process Take steps to improve recruitment of women into senior jobs, including through better recruitment, mentoring, and development opportunities Improve access and opportunities for training and development, and for progression Improve flexible work options, and work/life balance support Raise the profile of policies and processes for dealing with unacceptable workplace behaviour and strengthen options for addressing it. The CRIs committed to a range of monitoring including regular reports to senior management, and to further pay and employment equity reviews. Findings and responses local government The two local body reviews did find gender pay gaps, which varied across the organisations and between wages and salaried staff. Women were concentrated in lower paid jobs and under-represented in senior management. Women and men were concentrated in different occupations. Opportunities identified for improvement included: Reviewing starting rates, recruitment, and progression criteria Review how jobs are sized Develop guidelines on allowances Improve opportunities for training and development for women including through a professional women s focus group Further work on flexible working arrangements options and support for work/life balance Develop career pathways for administrative staff Improve staff and management awareness of acceptable and unacceptable workplace behaviour and policies and practices for dealing with unacceptable behaviour. Findings and responses tertiary sector Rewards Differences in starting salaries Gender pay gap in allied/general roles Specific pay and employment practices that impact on how women s work is valued and rewarded. 8

9 Participation Women over-represented in administrative and clerical roles Part-time positions attract less favourable terms, conditions and opportunities. Respect and fairness Lack of confidence that harassment, bullying and other inappropriate behaviours will be dealt with by the organisation Women can be disadvantaged by the way human resources policies are implemented. Pay and employment equity policy and organisational capability Problems associated with gender analysis of human resources and payroll data. ITP sub-sector action plan A robust and transparent pay system which: makes clear the criteria for accessing the salary at any point on a scale is regularly monitored and moderated. Implementation of a gender-neutral job evaluation system (that meets the Gender-inclusive Job Evaluation Standard) to ensure that work is valued and rewarded appropriately. The implementation and outcomes of pay and employment policies and practices are routinely examined for unintended gender disparities. Examine pay and employment policies and practices in relation to part-time and fixed-term staff for unintended gender disparities and redress any such disparities. Ensure that policies and procedures are in place for dealing appropriately with any complaints of sexual harassment bullying, discrimination and other inappropriate behaviours, that training is provided for managers and contact people, and that information about the resolution of complaints is made public in the annual report. Minimise the opportunities for gender bias in implementing human resources policies, specifically by: Increasing staff knowledge and awareness of human resources processes Creating transparent criteria for accessing increased pay or particular terms and conditions Documenting all human resources policies Training managers responsible for implementing human resources policy. In the light of the pay and employment equity review experience, ITPs review any gender data gaps and plan to fill them in order to develop a sound pay and employment equity picture over time. ITPs will develop or enhance their capability to undertake gender analysis. 9

10 The Pay and Employment Equity Plan of Action The Pay and Employment Equity Taskforce recommended to Government in 2004 a five-year action plan to address pay and employment equity in the public sector. The programme of work included documenting the nature and extent of gender pay and employment disparities, identifying the factors contributing to them and developing a long-term plan of action to address them. The Taskforce saw the public sector programme as providing a model for the private sector. The gender pay gap is higher in the public sector than in the workforce generally, in part because of the higher concentration of women in the public sector, and their greater concentration in female-dominated lower-paid occupations. The Plan of Action operated within relevant existing New Zealand legislation, and commitments under international conventions. The legislation includes: the Equal Pay Act 1972, the Employment Relations Act 2000 (especially the good faith bargaining provisions and the anti-discrimination provisions), the Human Rights Act 1993, and the good employer requirements in the State Sector Act 1988 and the Crown Entities Act 2004, including equal employment opportunities requirements. New Zealand is a signatory to various relevant international conventions including the Equal Remuneration Convention No. 100, the Discrimination in Employment and Occupation Convention No. 111 and the Convention on Elimination of all forms of Discrimination against Women. The Plan of Action operated within existing fiscal and public sector management arrangements, requirements and accountabilities, rather than new ones. It relied on a series of Cabinet decisions. Where necessary, specific amendments were to be made to existing instruments, policies and practices, to reflect and accommodate pay and employment equity (including the Government s public sector Bargaining Parameters, inclusion of pay and employment equity objectives in agencies Statements of Intent, the Minister s letters of expectation to District Health Boards, and the Operating Policy Framework for District Health Boards and so on) 4. In New Zealand s devolved public sector management framework, chief executives have substantial autonomy in relation to employment relations. The mechanisms established to implement the Plan of Action were: - a seven person Pay and Employment Equity Unit (PEEU) in the Department of Labour (the overall leader of the Plan) to develop tools and provide advice and support for the programme - a one million dollar annual Contestable Fund to resource pay and employment equity projects (in the event, primarily used to resource organisations conducting pay and employment equity reviews) - a tripartite Steering Group comprising employers and unions for the Public Service, public health and public education, the EEO Commissioner, the Director of the PEEU and an independent Chair, to lead and monitor the programme. The Plan also drew on sector leaders (the State Services Commission, the Ministry of Health and the Ministry of Education) to plan, support, monitor and report on activities in their sectors, including holding chief executives accountable for the quality of what was done. 10

11 A Chief Executives Committee was established to oversee and support the programme. An annual tripartite forum (of relevant Ministers, chief executives, other employers and unions) was established to provide advice if need be for the budget process on prioritising bids for remedial pay settlements arising from pay investigations in female-dominated occupations 5. The Plan of Action adopted two main strategies: pay and employment equity reviews in organisations and sectors to diagnose gender pay and employment equity issues and agree on responses to them; and pay investigations using gender-neutral job evaluation to address possible gender-related undervaluation in female-dominated occupations. Expenditure on the program over the five years was $3.5m in the Contestable Fund and $4.9m in the Pay and Employment Equity Unit budget, a total of $8.4m. The main body of work carried out to date has been on pay and employment equity reviews. This report summarises the findings, responses, implementation and results from the Public Service and other public sector pay and employment equity reviews. Other significant projects completed over the five years included: the development of tools for gender neutral job evaluation (the Equitable Job Evaluation System, the Standards New Zealand Gender-inclusive Job Evaluation Standard (P8007/2006), Gender Bias in Job Evaluation: A Resource Collection, A Guide to the Gender-inclusive Job Evaluation Standard, and Dorfox Meets the Standard: Gender-inclusive Job Evaluation) the Spotlight: A Skills Recognition Tool a range of information resources education and training courses and materials, and policy development including in relation to remedial pay settlements and pay investigations, pay and employment equity and Government procurement, and the accountabilities for and ongoing development of the Plan of Action. Progress, process and resources By end June 2009, employees were covered by 67 completed reviews, around 13.5% of employees (almost one in seven) in New Zealand 6. A substantial part of that coverage was achieved after June 2008 (only 2.3% of the workforce was covered by end June 2008 with the remaining 11.2% achieved after June 2008). A small number of organisations (covering.44% of employed people) had completed their reviews by June 2007, which would have enabled them to incorporate their significant projects in their business plans for 2007/08 and to have begun to make progress on implementation 7. When the reviews underway are completed, there will be 85 New Zealand workplace studies of gender pay and employment equity with agreed response plans for addressing the issues identified, covering 14.2% of employees. 11

12 Pay and employment equity reviews were carried out in the 38 core Public Service organisations. Sector reviews were conducted in education, which included public schools, and teaching staff in kindergartens. Reviews will be completed in 2009 in 15 polytechnics, one university and one wananga. Health sector reviews included 21 District Health Board reviews and the New Zealand Blood Service. Three Crown Research Institutes and two local bodies have voluntarily undertaken reviews and one autonomous crown entity is completing a review in The approach was also based on sector leaders in the Public Service, public health and public education the State Services Commission (SSC), the Ministry of Health and the Ministry of Education - monitoring the conduct and quality of reviews and implementation of action arising from them. Sector leaders play a lead role in employment relations for their sector through delegated legislative authority, policy mandates and influence exercised in a range of ways. The SSC in consultation with agencies set the timetable for undertaking Public Service reviews. The Ministry of Education convened tripartite review groups to carry out sector reviews. Sector leaders and the Department of Labour and the Ministry of Women s Affairs were in the earliest group of agencies and commenced their reviews in the second half of Early participation was seen as providing useful experience for guidance to organisations in their sectors. The earliest participants applied for and were allocated significant funding from the Contestable Fund, which had the effect of providing a fairly fully-articulated model for later projects and setting expectations about the cost and time reviews required and about the remuneration level required to attract suitable project managers. The remaining agencies undertook their reviews over the following two years, with Public Service reviews being largely complete by the end of 2007/08. In the health sector, an in-depth review was undertaken in five District Health Boards (DHBs) (hospitals) in 2007 followed by a verification process in the remaining DHBs. Through a project manager, the coordinating body District Health Boards of New Zealand (DHBNZ) facilitated and managed funding from the Contestable Fund and coordinated the review projects in consultation with the DHBs and unions. The project manager assisted in training and support of project managers for the reviews and in brokering connections among them. A sector response plan was developed involving both DHB level actions and sector level responses to be implemented and monitored by sector level bodies and processes. The health sector review report and response plan were provided to the Minister of Health in the second half of The Schools Education Group undertook a sector review comprising reviews in a sample of schools, a principals focus group, a staff survey and a principals survey, and analysis of centrally managed payroll and other data. The schools review report and response plan were provided to the Minister of Education in the second half of

13 A review was undertaken of the teaching workforce in kindergartens. Other staff were not covered as they were not employees of the Ministry of Education. The review mainly dealt with employment conditions teachers thought could be improved and did have a specific effect for women, although there could not be comparative analysis since almost 99% of the teachers are women. Its report was provided to the Minister of Education in September Three Crown Research Institutes collaboratively undertook a review and in 2009 a report was produced by each as well as an overview report for referral to other CRIs. One autonomous Crown entity undertook a review for completion in Two local government bodies have completed reviews and response plans in 2008/09. Reviews commenced in 2008 in 15 polytechnics and institutes of technology, and in one wänanga 8 for completion in 2009 and one university is undertaking its review in Each polytechnic has undertaken its own review and there has been contact among the organisations especially through the tertiary sector facilitator engaged by the Ministry of Education. The sector report provides an overview across the polytechnic reviews. The review process Organisations explored gender-related issues under three main headings, rewards, participation and fairness and respect, on the basis that when gender does not affect rewards, participation in all areas and levels of organisations, and how men and women are treated at work, there is gender equity in employment. The review tool was structured around these three indicators of gender equity in employment, and each indicator had four key questions and a further range of prompt questions to guide investigations. Reviews explored whether identified gender differences were explainable and justifiable, using guides provided to possible and common justifiable and unjustifiable reasons for the gender differences. Unjustifiable gender issues were prioritised for response. Each reviewing organisation produced a review report and a response strategy for progress toward gender equity. The pay and employment equity review was a self-review process carried out in organisations and sectors by joint union, employer and employee committees, using tools, education and training courses, information resources and advice and support provided by the Department of Labour, while the conduct of the review and its implementation remained the responsibility of those conducting it. The tool involved a structured six-step process of progressively collecting qualitative and quantitative information and data, and refining analysis and prioritisation including through validation of provisional findings with employees generally, and concluding with a response plan. The main information used in the 13

14 reviews has been payroll and other human resources information and staff surveys and other consultations with staff. A strong focus on the evidence base for the responses recommended has contributed to the reviews resulting in agreed recommendations by review committees, which have been signed off by chief executives in all reviews. The tool was focused on outcomes the current employment situation and experiences of women rather than on policies or processes. The review included identification of what the organisation was currently doing well and most reviews reported on that. An important feature of the approach was that organisations would carry out their own reviews and develop their own response plans, as part of implementing sustainable change. Mainstream human resources and management processes were to be made more gender-inclusive, including recruitment and selection, job evaluation, training and development, remuneration planning and management, and performance management and reward. While organisations were required to and did provide their review reports and response plans to the PEEU, the Unit had no direct supervision or authority in relation to the conduct of reviews or implementation of response plans. The PEEU evaluated each completed review report and followed up with organisations on progress in implementing their response plan. The Unit found that far more responses and comprehensive information was obtained through interviews than written reports from organisations. Organisations often valued the advice, resources and contacts with other organisations provided in these interviews. In the light of experience of the Public Service reviews, further models have been developed. A specific model was developed for the schools review, since many schools are small; for the health sector; and for the tertiary sector. As the reviews concluded in the Public Service, public health and public education, an overall review and revision of the tools was undertaken. The new four-step review process replaced the original six-step process, resulting in a more streamlined and less expensive and time-consuming review process based on analysis of the review elements that had proven to be of most value. The main elements of the revised package included an automated spreadsheet-based data analysis tool (the Pay and Employment Equity Analysis tool); an automated staff survey; a template for the review report and response plan; and an education course and information resources to support participants. The re-designed review process can be conducted over three months, for $20 000, and involving a part-time project manager and four half-day meetings of the review committee. The pay and employment equity review tools were also adapted for the private sector through a project commissioned by the National Advisory Committee on the Employment of Women. Those tools have been delivered through the Human Resources Institute of New Zealand website ( and have attracted significant interest several hundred hits in some months. 14

15 The evidence-based and cooperative nature of the reviews produced extensive qualitative and quantitative information and analysis about gender equity and employment and developed workable solutions agreed by employers and unions and chief executives. Much of this information and analysis was not previously available. Participants often found the human resources data, and the knowledge of gender equity, required for the review challenging. Some could not meet the minimum data requirements for a pay equity analysis: gender, occupation (using a wellstructured classification with adequate descriptors for reliable job matching), proportion of full-time equivalent employment and pay. An extensive education programme was conducted to raise awareness of how gender can affect employment opportunities, rewards and experiences. The review process itself was a significant education and awareness raising exercise for employers, unions, human resources practitioners and others. Hundreds of people have been directly involved in review committees and many thousands involved in reviews in various ways 9. The PEEU has also held annual wellattended forums introducing new tools and resources and incorporating reports and discussion of projects undertaken by organisations and other participants in the Plan of Action. Reviews used project managers to carry out reviews in conjunction with the committees, in undertaking data analysis, writing reports, and carrying out consultations. The PEEU provided training courses and briefings for the project managers, and ongoing advice and support. As the programme developed, a review project managers network was facilitated by the PEEU, which provided a useful forum for problem-solving and building knowledge. Some project managers were external contractors and others internal human resources or other staff. Project managers brought varied skills for data analysis, gender analysis and project management, which was reflected in strengths and weaknesses of completed projects. There was considerable preparedness of project managers to share their experiences frankly and contribute to mutual problem-solving. Participation in the network was confined to (past and present) project managers to protect confidentiality. Chief executives agreed to the ongoing participation of project managers from their staff after the organisation s own review was completed, as a contribution to capacity-building in the sector. In some cases, PEEU negotiated with project managers to share their resources with specific other organisations and in others provided deidentified resources directly or through the PEEU website. The network contributed significantly to building capacity for undertaking the reviews. As time passed, some project managers (at least eight) undertook multiple reviews which has also had a capacity-building effect. 15

16 Resources for reviews The time taken to complete reviews using the 6-step process varied between three months and three years. Six months was the most common time taken. The process generally involved around six committee meetings of half a day, while some committees held more meetings. Some organisations that took longer periods to complete their reviews were well-satisfied with what they accomplished. Delays often occurred after the review report and response plan were completed, in the process of chief executive sign-off. The review process took varying amounts of staff time, especially for staff members who served on review committees. Committee sizes varied between 5 and 11, with most committees in the 6-10 range, and fairly equal proportions of committees having 6, 8 or 10 members. Most but not all reviews were assisted by money from the Contestable Fund. Some did not apply, while others applied but were unsuccessful. Those organisations that did not receive funding were nevertheless obliged to conduct reviews and undertook very comprehensive reviews. Consistent with the Steering Group s guidelines, allocations from the Fund were typically based on funding a project manager for six months at an annual rate of $ although there was variation over time and across organizations. The State Services Commission s consultations with agencies found that organisations reported that the contribution from the Contestable Fund was critical for their ability to undertake the review, and that reviews could not have been completed within the required timeframe within existing resources. Many organisations reported that their human resources management capacity was already stretched in meeting existing central agency requirements and their own organisational strategies and projects. 16

17 Key findings, responses and progress the public service 10 Introduction Under the Plan of Action, pay and employment equity reviews were required by Government policy to be conducted in the 38 organisations of the core Public Service. All Public Service organisations except one reported an overall gender pay gap. Almost all reported on the proportion of senior management who were female. A majority reported on fairness and respect issues such as bullying and harassment. Organisations had considerable leeway about the specific gender issues to concentrate on. This meant that there was variation in information gathered and reported. For example, only a small minority of Public Service organisations reported on job security. This lack of uniformity means that it is at times difficult to generalise about findings and responses while the wide range of issues reflects the diversity of the organisations and the issues that mattered to their review committees. Public Service response plans also varied enormously in scope and comprehensiveness. Rewards All reviewing organisations in the Public Service except one found gender pay gaps. These varied in size from 3% to 35% in median full-time equivalent remuneration. As the table below shows, 14 of the 38 Public Service reviews found overall gender pay gaps of 20% or more, whereas only 6 had gender pay gaps below 10%. The largest number of reviews (16) found pay gaps between 10% and 19.9% (see table 1 below). Table 1: Size of Public Service Gender Pay Gaps Overall Gender pay gap (median FTE) No significant gender pay gap Public sector organisation code number %-9.9% 1, 4, 18, 19, %-19.9% 2, 3, 8, 10, 11, 12, 15, 17, 20, 16 21, 26, 28, 33, 34, 35, 38 20%-29.9% 5, 6, 7, 9, 13, 29, 30, 31, % to 35% 14, 16, 22, 23, 37 5 Did not disclose size of overall GPG 26, 32 2 Number of organisations The overall gender pay gap was found to have a number of contributory factors. These included unequal starting salaries for the same job, lack of equal pay for the same or similar work, female-dominated occupations being lower paid than male-dominated occupations, gender inequalities in pay progression and performance pay, women predominating in the lowest paid jobs and being a 17

18 minority in the best paid jobs, and women having a smaller share of additional rewards, such as employer-funded superannuation, premiums and bonuses. Unequal pay for the same or similar work Twenty one of the 38 Public Service reviews found evidence of women being started at lower points than men on the pay scale for the same job 11. The size of gender differences in starting salaries ranged between 1% and 28%. Gender gaps in starting salaries were found to be wider amongst more senior staff in some reviews 12. Four review reports stated that no significant gender difference was found in starting salaries 13. However, some reviews that did not mention a gender gap in starting salaries had strategies in their response plans to prevent gender differences in starting salaries 14. The remaining reviews did not comment on starting salaries. It was noted in two review reports that external appointees were able to command higher starting rates than internal appointees, and that men were more likely to be appointed from outside the organisation 15. Some review reports also noted that men had higher expectations and women were less comfortable than men about negotiating starting rates and could be disadvantaged as a result 16. Records of reasons for placement of appointees at particular points in the position in range had often not been kept. Responses to gender differences in starting salaries Six Public Service organisations that found a gender gap in starting salaries did not propose any specific remedial action 17. One 18 noted that the payment of market rates to men contributed to gender differences in starting rates and saw that as a reason for not recommending any action. However, most organisations acknowledged the importance of equal pay for the same work and recommended responses. Most organisations focused on addressing the issue for the future and only a couple provided remedies for the current unequal remuneration. The most common response was the creation of guidelines or checklists for managers and/or appointment panels on avoiding gender bias in setting starting salaries 19 Eight Public Service organisations committed themselves to greater transparency in salary setting 20 Three reviews committed to monitoring and reporting data relating to appointments, including starting rates and the rationale for them 21 One proposed a moderation process, to ensure new employees are given appropriate and fair starting salaries, consistent with those of other employees 22 Two proposed to ensure that the starting salaries for all staff reflect the work they are required to do, their previous relevant experience and the relevant qualifications they bring to the job 23 Three proposed to introduce a six-month salary review process for new staff to ensure that staff had been appointed at the appropriate band 24 One committed to a review of progression versus vacancy driven appointments, to ensure equitable starting salaries

19 Gender differences in progression through pay scales Pay progression refers to moving through the pay scale in a current job. Normally in the Public Service people are appointed below the mid-point of the rate for the job and can progress as their competence increases until they reach the top of the pay scale. In many Public Service organisations pay progression was linked partly or wholly to performance. Most reviews did not report on performance-based pay rises 26. Eight Public Service reviews reported that there was no evidence of gender inequality in performance-based pay increases 27. One did not make it clear whether the premiums paid in some jobs were performance-related 28. Nine reviews reported that women received smaller performance-based pay increases than men or were less likely to receive performance pay 29. One review specifically noted that female-dominated occupations such as administrative support were not eligible for performance pay 30 and this may have been the case in other organisations. Another review noted that the performance pay moderation process lacked consistency, and proposed greater transparency 31. In two cases it was specifically noted that women received smaller pay increases than men who had the same performance grading 32 although in neither case was a specific response recommended. Women normally received smaller amounts of performance pay even when they had the same percentage increase, because performance pay was a percentage of salary, and men had higher average salaries. Staff often perceived the performance pay system to be arbitrary and felt that outcomes did not necessarily reward good performance. More women than men felt that there was no clear link between their performance and their reward. Responses included: Training for staff to ensure they understand the performance pay system Reduction of manager discretion 33 Create a new pay and performance system to remove manager discretion and set out clear competence-based pay progression 34 Further investigation of performance payments 35 Recommendations for performance pay to go forward to the panel with the name of the candidate removed 36 Monitor performance pay for gender bias and conduct further analysis 37 Include consideration of gender equity in the annual performance and/or market increase moderation process 38. The remaining reviews, including several where a gender discrepancy in performance pay was found, did not recommend a response. Widening pay gaps over time Most reviews did not compare men s and women s position in range for the job over time. Those that did so found that pay gaps widened over time, with increasing tenure 39. One Public Service review noted that 38% of males with 3-8 years experience received 100% or more of the rate for the job, compared with 8% of the females, and amongst staff with 10 or more years experience, 64% of 19

20 the men but only 26% of the women received 100% of the rate for the job. In response they proposed to enhance the system for determining the position in range to make it easier to understand 40. It was found that men progressed more rapidly through the pay bands. In response it was recommended that the reasons for this be explored further 41. It was also found that men receive larger salary increases within the same pay bands and with the same performance rating 42. Gender pay gaps within occupations and pay bands The Education Review Office case study noted that there was a $10,000 average annual pay gap between Reviewing Officers with an early childhood teaching background (the majority of them women) and other Reviewing Officers. ERO committed itself to a review of salaries for staff with a previous background in female-dominated employment. This issue had been addressed some years previously but the gap had re-emerged. Ten other reviews also noted gender pay gaps within occupations and job bands 43. Some included gender pay gaps amongst managers 44. One review noted that women earned less than their male co-workers in the same pay bands 45. The other reviews did not explore the issue of gender pay inequalities within occupational groups and bands. A small number of review reports stated that there may be situations where women and men were doing the same or substantially similar work on an ongoing basis, but with different job titles and levels of pay. They proposed to explore this further by clarifying job descriptions. In response it was proposed to monitor pay gaps within occupations 46, further investigate gender pay gaps within occupations 47 and redress where necessary 48, and to have management development workshops 49. Achievements in relation to equal pay for the same or similar work The Ministry of Agriculture and Forestry case study shows that the process used by managers when setting starting salaries was initially unclear. The considerations used in setting starting salaries, such as skills shortages or candidates expectations were not on record. Following the pay and employment equity review the process for setting starting salaries was reviewed to ensure it was transparent and auditable. Any deviations from policy must now be recorded and justifiable. Progress made by other organisations has included making salary ranges more transparent 50. An agency reports having eliminated gender gaps in starting salaries at management level 51, and another is confident that when starting salaries are next checked gender bias will have been reduced or eliminated 52. Lack of equal pay for work of equal value Internationally, pay equity is a term meaning equal pay for work of equal value. Pay equity is achieved when female-dominated occupations receive equal pay with male-dominated occupations in which the work is shown to be of equal 20

21 value. The Equal Pay Act provides that work is evaluated according to skills, responsibilities, and effort and working conditions. The Public Service reviews found that female-dominated occupations were less well paid than male-dominated occupations. Where there was a high level of occupational segregation by gender, the pay gap between male-dominated and female-dominated occupations was a major component of the overall gender pay gap. Responses to unequal pay for work of equal value Twenty five reviewing organisations stated specifically that future job evaluations for all or some of their positions would in future comply with the Gender-inclusive Job Evaluation Standard and/or use gender-neutral tools such as the Equitable Job Evaluation System (EJE) to inform job sizing for all or some of their jobs 53. Two response plans committed the organisations to pay investigations. Other responses included: One organisation specifically committed itself to a regular re-evaluation of all jobs on a rolling 3-year cycle and also stated that they would prioritise occupational groups in which low paid female staff predominate when resizing jobs 54 One organisation committed itself to creating more specific job descriptions as a precursor to determining whether male-dominated and female-dominated jobs were of equal size. Two Public Service organisations have provided Equitable Job Evaluation training for their human resources staff 55. One has taken action to re-size all the jobs in the organisation 56. It is not clear whether other organisations have made progress on re-evaluating jobs according to gender-neutral standards. One organisation that committed itself to providing training in using the Equitable Job Evaluation tool has not reversed this decision 57. Proportion of lowest paid staff that is female Women were over-represented for their workforce share in the bottom earnings quartile in all reviews except one 58. In nearly all organisations that addressed this question 75%-100% of the lowest paid staff were women. For example in one organisation 23 of the 29 staff members on the lowest pay were female, and some staff reported that they were at times in financial difficulties as a result of low pay 59. In many instances the part-time positions were concentrated in occupations where the full-time pay was at the lowest end of the spectrum. This meant that that the incomes of part-timers were extremely low. In one review, it was found that the majority of part-timers had rates of pay not far above the minimum wage 60. One organisation 61 reported that some female staff were being paid below the minimum rate for the job. This anomaly has been rectified as a result of the review. Most of the lowest paid positions were in administrative support and domestic positions. Typically in these lowest-paid positions there were no career steps, so it was not possible for these staff members to advance to better paid positions within the organisations. Some of the responses recommended education about career opportunities by informing administrative staff about opportunities for 21