A short guide to the benchmarling process.
What is benchmarking?
The process began in 2000 as a response to unrest in the public service over pay.
It was agreed by both the Government and the public service that the old system of relativity was was creating too many disparities in pay.
Public servants complained that their pay and conditions were falling behind those in the private sector, and that if it was not addressed many talented and sought-after civil servants would move to the private sector.
The first benchmarking exercise in 2002 led to an average increase of 8.9 per cent for 300,000 public sector staff including civil servants, gardaí, teachers, nurses and other health sector workers.
What is the methodology used?
The current benchmarking body based its comparative analysis on data taken from 263 private sector companies ranging from the smallest to companies with more than 250 employees.
It took into account public sector perks including job security and pension provision.
It also took into account private sector perks not usually available to the public service such as bonus payments, cars, medical insurance, profit sharing and share option schemes. In the previous agreement, these factors were not taken into consideration.
This time too the benchmarking body employed a different methodology to calculate pay awards using a weighted average rather than a median.
Previously a public servant's pay would have been benchmarked with the median of his or her equivalent in the private sector. So, for instance, if there are three salary scales in the private sector, the median would be the middle scale and public service pay would be benchmarked against that.
This time, the benchmarking process has taken account of the weighted average when setting public service pay.
In other words, if a quarter of the private sector workers are earning €35,000 and three-quarters are earning €55,000 a year, the average would be €50,000, but the salaries would be set at a higher rate to reflect the fact that more people earned more than the average salary.
Critics of the benchmarking process say this process is skewed towards the higher earner where there can be greater disparity in earnings.
Who are the members of the benchmarking body?
The members of the body are Dan O'Keeffe SC, chairman; Billy Attley, former general secretary of Siptu; Olive Braiden, Arts Council, and former chairwoman of justice sector performance verification group; John Malone, former secretary general of the Department of Agriculture and Food; Tom McKevitt, former deputy general secretary of the Public Service Executive Union; Willie Slattery, managing director, State Street International (Ireland) Ltd; and Prof Brendan Walsh, emeritus professor of economics, UCD.