Salary System

Staff in the Professional and higher categories are recruited internationally and are paid on the basis of salary scales applied worldwide and established by the General Assembly of the United Nations on the recommendation of ICSC. A common job classification system developed by ICSC provides the structure for this salary scale. The job classification standards consist of three tiers.

The Master Standard (Tier I), which employs a point-factor system, is the most general of the three tiers. Six factors are taken into account when grading a job: professional knowledge, difficulty of work, independence of work, work relationships, supervisory responsibilities and impact of work. Tier I also provides a framework for job design and human resources planning.

The second group (Tier II) consists of separate descriptive standards for major occupations. These narrative standards, giving examples of typical duties at each level, assist in indicating how the Master Standard should be applied in making meaningful distinctions between levels of work within an organization and in assigning proper grade levels to similar functions across organizations. Tier II standards have been established for the following occupational groups: Translators and Revisers; Personnel Management Specialists; Economists; Technical Cooperation Administrators; Computer Information Specialists; Purchasing and Contracting Specialists; Auditors; Civil Engineers; Public Information Specialists; Financial Management Specialists; Jurists; Editors, and Statisticians.

The third group of standards (Tier III) is intended to cover jobs at a given grade level within one field of work in a single organization. The salary of staff in the Professional and higher categories is made up of two main elements: a base or floor (minimum) salary and post adjustment, both expressed in United States dollars. Post adjustment is a cost-of-living adjustment designed to preserve equivalent purchasing power for all duty stations. The term "salary" or "net remuneration" as used in this guidlelines means base/floor salary plus the post adjustment applicable for a given location.

Level of salaries

The level of salaries for Professional staff is determined on the basis of the Noblemaire principle, named after the Chairman of a committee of the League of Nations. This principle states that the international civil service should be able to recruit staff from all its Member States, including the highest-paid. In application of the Noblemaire principle, the salaries of Professional staff are set by reference to the highest-paying national civil service. The Commission makes a periodic check to identify the national civil service of the Member State which has the highest pay levels and which by its size and structure lends itself to a significant comparison.

The federal civil service of the United States of America has to date been taken as the highest paid national civil service. Periodic equivalency studies are made between the grades of jobs in the United Nations system and those in the comparator civil service. These studies establish equivalencies between each of the grades (P-1 to D-2) of the United Nations with each of the respective grades and categories of the comparator civil service. These grade equivalencies form the basis for comparison of remuneration paid in the two services at their respective bases (New York and Washington, D.C.).

Net remuneration on the United Nations side (base salary plus applicable post adjustment) at New York for each grade P-1 to D-2 is compared to the salaries (net of income tax) of equivalently graded jobs in the comparator civil service in Washington, D. C. This comparison is expressed as an average ratio over a 12-month period and is known as the margin. A margin in favour of United Nations salaries is considered necessary to compensate for specific elements relating to expatriate service. An adjustment to account for the difference in cost of living between New York and Washington, D. C. is included in the calculation of the margin. The margin should remain within a range of 110 to 120, with a desirable mid-point of 115. Procedures are applied by the Commission to ensure that the margin is maintained within this range.

Post adjustment

The post adjustment system is designed to ensure that Professional salaries have the same purchasing power at all duty stations. As the cost-of-living varies significantly between duty stations, Professional salaries are set at different levels at each duty station so as to compensate for these observed differences in living costs. Differences in living costs are measured through periodic place-to-place surveys conducted at all duty stations. The surveys measure the cost-of-living of a duty station relative to the cost-of-living at the base of the system (New York). The results are reflected in a post adjustment index for each duty station. Duty stations with higher costs of living than New York have higher post adjustment indices, and consequently, higher salaries, while those which are less expensive than New York have lower post adjustment indices and lower salaries than New York.

Post adjustment indices for duty stations, as determined by periodic place-to-place surveys conducted once every four or five years, are updated monthly to reflect changes due to inflation (local CPI) and exchange rate fluctuations (local currency vis-a-vis the U.S. dollar). These updated post adjustment indices provide the basis for establishing the post adjustment classifications which directly determine salary levels (base plus post adjustment). Post adjustment classifications specify the number of multiplier points of post adjustment which may be paid in addition to net base salary at any duty station. One multiplier point is equal to 1 per cent of base salary. Consequently, a multiplier of 10 results in a post adjustment payment equal to 10 per cent of base salary. This is paid in addition to the net base/floor salary. Arrangements for updating post adjustment classifications differ as between hard and soft currency duty stations. For hard-currency duty stations, a change in post adjustment to account for inflation is made after either a full 5 per cent movement of the post adjustment index or a 12-month period since the last change, whichever comes first. Exchange rate changes at these duty stations are reflected monthly in post adjustment classifications. For other (soft-currency) duty stations, the post adjustment classification is reviewed every four months for inflation and exchange rate changes. ICSC now reviews annually the level of the base/floor salary scale which represents the minimum salary payable to staff at all duty stations.

These reviews usually result in the General Assembly increasing the base/floor salary scale and consolidating a number of multiplier points of post adjustment into the base/floor salary scale. This process ensures that minimum United Nations salaries are updated to take account of changes in the pay level of the comparator civil service. However, a side effect of these increases in base/floor salary scales is that all post adjustment classifications and multipliers must be recalculated as the purpose of changes in the base/floor scale is not to give a general salary increase applicable at all duty stations but rather to give an increase only at duty stations with little or no post adjustment. In this connection it should be noted that there is an important distinction to be drawn between the base/floor salary scale and the actual salary paid at the base of the system (New York).

New York, as the base of the system, serves as a point of reference for measuring cost-of-living differentials between duty stations but the salary levels payable in New York normally consist of two elements: base/floor salary and a post adjustment element. The level of New York salaries, like other duty stations, is normally adjusted in the light of movements in the cost-of-living at the duty station, while the level of base/floor salaries is adjusted in the light of movements of comparator salaries. The management of the post adjustment system is the responsibility of ICSC. Consequently, changes in the post adjustment classification of duty stations and in related multiplier points are approved and promulgated monthly by the Chairman of ICSC. The post adjustment system is more fully described in a booklet issued by ICSC entitled The post adjustment system, what it is, how it works. Examples of the calculation of net remuneration (base salary plus post adjustment).

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