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2. Key remuneration concepts

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The key remuneration components reported in this section are Base Salary, Total Remuneration Package (Base Salary plus benefits), and Total Reward (Total Remuneration Package plus bonuses). To gain a complete understanding of APS remuneration, all elements of the key remuneration components need to be considered. The Total Reward provides the most complete overall remuneration information as it is made up of Base Salary and Total Remuneration Packages, as component parts.

2.1 Base Salary

The term Base Salary describes the full-time annualised salary paid to an employee. It includes salary sacrifice amounts (including pre-tax employee superannuation contributions made by salary sacrifice) and excludes bonuses and other benefits.

The median Base Salary movement for all APS classifications from 2011 to 2012 was 5.8%.

The non-SES classifications median Base Salary increased by 5.9% and the SES classifications median Base Salary increased by 4.7% from 2011 to 2012.

A longstanding feature of APS salary structures is incremental movement, or salary points within a pay scale (see Example 1). Most APS agencies have a number of increment points in the pay scale for each classification, typically between two and five. Employees advance annually to a higher increment point where they achieve at least satisfactory performance outcomes. As a general rule, when an employee reaches the top of the pay range for their classification, their Base Salary increases by only the general wage increase.

Example 1: Enterprise Agreement Pay Scale

In this example the general wage increase for employees is 3%, 3%, and 3%. Therefore, the increase for an employee at the top of the range is: 9.3% (compounding). For an employee on the bottom of the range just prior to the agreement coming into effect, the total increase in Base Salary over the life of the agreement is 18.6%.

The difference in the percentage increase between the two employees is due to the annual incremental movement at 1 July each year.

Compared with 2011, 2012 saw a marked reduction in employee mobility in and out of APS positions. The reduction in employee mobility means that APS employees are remaining in their current classification for longer and are moving up through the increment points within their current classification pay scale (rather than, for instance, being promoted to a higher classification). Newly promoted employees’ salaries usually start at, or near, the bottom of the pay scale. This has resulted in a general trend of a shift of median Base Salary values to higher up in the pay scale for the classification.

Example 2: Median movement between 2011 and 2012 for the APS 6 classification

2011

$78,995 (5 employees)

$75,761 (10 employees)

$72,763 (5 employees

Median Base Salary $75,761

2012

$81,365 (13 employees)

$78,034 (5 employees)

$74,946 (2 employees

Median Base Salary $81,365

Figure 2.1: Median Base Salary by classification

Source: Table 2.1

That is, the median movement from 2011 to 2012 is the result of both salary progression through incremental advancement and general wage increases, as provided for in enterprise agreements.

Table 2.1 provides 2011 and 2012 Base Salary movement. At the 95th percentile, the point where 95% of the values fall below, the movement from 2011 to 2012 varies from 2% at the APS 2,3,4,5 and 6 classifications to 6.5% at the SES 3 classification. The median movement trend is markedly different as it is sensitive to mobility in the APS. So when there is a higher vacancy rate compared with the previous year, the median value tends to move towards the value of the first quartile: as new employees generally commence with salaries at, or near, the bottom of a salary range. Conversely, when vacancy rates reduce compared with the previous year, the value of the median tends to move upwards toward the third quartile value, as employees remain longer in the same pay scale.

The greatest increase in median Base Salary was at the APS 1 classification with a 6.8% increase. The 2011 median Base Salary movement reported for the APS 1 classification was 0.0% due to a doubling of the APS 1 population in that reporting period and the new employees starting at, or near, the bottom of the salary range. For 2012, the employee rate of engagement has slowed, consistent with the generalised slowdown of position filling across the APS, resulting in the median movement higher up the APS 1 salary range.

The employment trends for the APS 1 and the resultant changes in Base Salary is a clear example of what has happened across most of the classifications.

The Graduate and SES 3 classifications report the lowest median movement from 2011 to 2012 of 3.2% and 3.5% respectively. Graduate employees are generally classified as Graduates for only a year and therefore have no incremental advancement built into their salary structure.

Figure 2.2: Base Salary range by classification: Graduate to EL 1

Source: Table 2.1

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Figure 2.3: Base Salary range by classification: EL and SES

Source: Table 2.1

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Table 2.1: Base Salary by classification
Classification Employees P5 Q1 Median Q3 P95 Average
2011 n 2012 n 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change % 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change %
Source: 2011 and 2012 APS Remuneration Reports
Graduate 1655 1649 50471 52327 52419 55606 55162 56944 3.2 57929 61036 60802 63443 55527 57860 4.2
APS 1 1952 1197 34663 35812 39602 39722 41151 43944 6.8 43779 46807 45746 48241 41221 43197 4.8
APS 2 4272 3731 44896 47077 48431 50758 50471 52998 5.0 51248 53752 53706 54780 49886 52142 4.5
APS 3 19674 18743 51139 53623 53396 56683 56215 59677 6.2 58050 60671 59535 60755 55867 58475 4.7
APS 4 31040 30279 58105 60811 61176 64285 63243 66923 5.8 63982 67222 66753 68088 62683 65736 4.9
APS 5 21426 21268 64304 67592 67021 70511 68092 72487 6.5 70068 73017 72713 74167 68500 71688 4.7
APS 6 32584 32527 71832 75543 75903 80220 79555 84478 6.2 81988 85669 85077 86779 79337 83098 4.7
EL 1 28508 28355 90856 95865 95849 101366 99378 104825 5.5 102448 105607 108788 112933 99739 104090 4.4
EL 2 13257 13146 109381 115390 120147 125608 124140 130460 5.1 129611 133647 139183 146676 125512 130967 4.3
SES 1 2006 2022 144200 149703 157260 165555 164586 172000 4.5 174728 185032 198947 205897 167093 175057 4.8
SES 2 557 579 184612 193846 201753 214596 209318 221266 5.7 222171 235746 251796 260116 214121 225174 5.2
SES 3 133 126 240000 251534 260658 276298 273383 282931 3.5 295000 314356 387417 412492 283161 301703 6.5
Total 157064 153622

2.2 Total Remuneration Package

Total Remuneration Package (TRP) includes Base Salary plus:

  • agency superannuation contribution;
  • motor vehicle cost /Executive Vehicle Scheme or cash in lieu of motor vehicle;
  • motor vehicle parking; and
  • any other benefits and supplementary payments.

In essence, TRP covers Base Salary plus benefits. It excludes bonuses, as defined in Total Reward (see Definitions p.75 and 76), shift and overtime payments.

The average movement in median TRP across all classifications from 2011 to 2012 was 6.2%.

The non-SES classifications median TRP increased by 6.2%, and SES classifications median TRP increased by 5.2%.

The APS 1 classification saw the greatest increase in median TRP with a 7.5% increase from 2011. The key contributor is the increase in median Base Salary of 6.8%. The second greatest increase was 6.8% and was recorded at the APS 4 classification.

As demonstrated in Table 3.1, Base Salary makes up at least 85% of the Total Reward at the non-SES classifications and the key benefit received by non-SES employees is the employer superannuation contribution, the key contributor toTRP movement is the Base Salary movement: see explanation at Section 2.1: Base Salary.

The lowest median TRP increase was recorded from the Graduate classification; increasing 3.0% from 2011 to 2012, consistent with the Base Salary movement.

Figure 2.4: Median Total Remuneration Package by classification

Source: Table 2.2

Figure 2.5: Total Remuneration Package range by classification: Graduate to EL 1

Source: Table 2.2

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Figure 2.6: Total Remuneration Package range by classification: EL and SES

Source: Table 2.2

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Table 2.2: Total Remuneration Package by classification
Classification Employees P5 Q1 Median Q3 P95 Average
2011 n 2012 n 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change % 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change %
Source: 2011 and 2012 APS Remuneration Reports
Graduate 1655 1649 58589 60405 60492 64746 63742 65668 3.0 66695 70331 70166 73342 64079 66769 4.2
APS 1 1952 1197 39816 41184 45701 46291 47448 51024 7.5 50986 54352 54613 57827 47782 50273 5.2
APS 2 4272 3731 51810 54577 55964 58653 58475 62025 6.1 59760 63300 63355 66104 57903 61032 5.4
APS 3 19674 18743 59014 61650 62206 65558 65016 69329 6.6 68795 71254 70547 75066 65160 68601 5.3
APS 4 31040 30279 67053 70043 70597 74162 72671 77602 6.8 74047 79120 77866 81704 72501 76774 5.9
APS 5 21426 21268 73825 77743 77109 81633 79191 84226 6.4 81628 86196 85330 89417 79523 83991 5.6
APS 6 32584 32527 82436 86930 87868 93274 92522 98247 6.2 95750 101390 100945 105285 92027 97418 5.9
EL 1 28508 28355 104075 110755 110927 118616 115257 122181 6.0 120016 125507 126920 133098 115662 122156 5.6
EL 2 13257 13146 125495 134180 138459 146666 145266 152371 4.9 152076 158898 167111 177270 146464 154732 5.6
SES 1 2006 2022 186470 198694 204763 217353 216936 228312 5.2 227907 238681 245859 254868 216918 227984 5.1
SES 2 557 579 235185 247460 258959 274671 272316 285608 4.9 284620 298851 312042 323032 273070 286563 4.9
SES 3 133 126 300792 329894 326225 350291 343532 362950 5.7 368010 392127 464801 502819 354274 376521 6.3
Total 157064 153622

Total Remuneration Package movements by agency

Table 2.3 provides information on the median movement of the Total Remuneration Package (TRP) at each classification by agency. Agency TRP is used rather than Base Salary or Total Reward, as it covers the two most significant elements of APS remuneration: Base Salary and the employer superannuation contribution.

For a calculation to be made, an agency must have employees substantively at a classification level in both 2011 and 2012. As a result, the number of agencies for each classification will vary.

Table 2.3 shows the agency TRP median movement from 2011 to 2012 tended to be in the range of 4 and less than 6%.

In addition to the effect of the reduction in positions available for filling, one trend from enterprise bargaining that may affect the number of agencies at the higher end of the spectrum is the use of differential pay rises. Differential pay rises occur when differing pay increases are applied to different pay points within a classification, or to different classification levels. This could result in a top pay point being increased by a higher percentage than a lower pay point, with the lower increase being used as an offset for the higher pay point outcome.

Other outcomes from enterprise bargaining that could also influence higher outcomes is the introduction of a new top of the range pay point expanding the salary range. In agencies with a significant number of employees at the top of their salary range, both the addition of a new top of the range pay point or a differential pay outcome would contribute to shifting the median for that classification up to values greater than the standard across-the-board pay increases.

In the last enterprise bargaining round, a number of agencies altered pay scales in their enterprise agreements reducing the number of years it takes for an employee to move from the bottom of a pay range to the top. Combined with the slowing of employee mobility, this has resulted in a growing proportion of employees being paid at the top of the salary range, which will shift the median value near to, or at, the top of the range.

Table 2.3: Remuneration movements (per cent change) of median TRP from 2011 to 2012 by agency
Classification Less than 0 % n 0 and <2 % n 2 and <4 % n 4 and <6 % n 6 and <8 % n 8 and <10 % n 10 % and over n

Source: 2011 and 2012 APS Remuneration Reports

Note: ‘n’ is the number of agencies.

Graduate 5 3 13 5 5 3 1
APS 1 5 1 9 8 8 1 5
APS 2 5 3 20 10 15 7 6
APS 3 9 6 25 19 14 8 9
APS 4 6 7 31 28 17 7 5
APS 5 3 8 29 39 17 3 4
APS 6 9 9 25 28 20 6 9
EL 1 3 2 24 36 24 9 8
EL 2 2 3 17 42 21 8 13
SES 1 14 6 15 25 14 8 11
SES 2 4 4 15 12 5 8 8
SES 3 2 4 9 6 2 2 7

2.3 Total Reward

Total Reward is the sum of the Total Remuneration Package plus bonuses. Bonuses include individual performance, retention and productivity bonuses as well as whole-of-agency or group bonuses. Median performance bonuses in 2012 ranged from $725 at the APS 3 classification to $19,997 at the SES 3 classification.

The overall movement in median Total Reward across all classifications from 2011 to 2012 was 6.5%.

From 2011 to 2012, the non-SES median Total Reward increased by 6.5%, and the SES median Total Reward increased by 4.9%.

Consistent with TRP, the APS 1 classification saw the greatest increase in median Total Reward with an increase of 7.7% from 2011. This is a reflection of the increase in median Base Salary (see explanation at Section 2.1: Base Salary) and a significant increase in the number of APS 1 employees who received a productivity, sign-on or whole-of agency bonus in 2012 compared with 2011.

The APS 4 classification recorded the second highest increase in median change in Total Reward with an increase of 7.4%. An increase in the number of productivity, sign-on or whole-of agency bonus payments at this classification influenced the increase from 2011.

The Graduate classification received the lowest increase in Total Reward of 3.1%. This is consistent with the median movement of Base Salary and TRP of 3.2% and 3.0% respectively.

Figure 2.7: Median Total Reward by classification

Source: Table 2.4

Figure 2.8: Total Reward range by classification: Graduate to EL 1

Source: Table 2.4

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Figure 2.9: Total Reward range by classification: EL and SES

Source: Table 2.4

Note: Refer to Section 7 (remuneration findings by classification) for the minimum and maximum values for each classification.

Note: Refer to Appendix 2 for notes on interpreting box plots.

Table 2.4: Total Reward by classification
Classification Employees P5 Q1 Median Q3 P95 Average
2011 n 2012 n 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change % 2011 $ 2012 $ 2011 $ 2012 $ 2011 $ 2012 $ change %
Source: 2011 and 2012 APS Remuneration Reports
Graduate 1655 1649 58645 60405 61021 64942 63742 65713 3.1 66741 70691 70708 74110 64182 66838 4.1
APS 1 1952 1197 39825 41345 45701 46721 47682 51352 7.7 51111 54586 54791 58687 47853 50677 5.9
APS 2 4272 3731 51810 54634 55964 59054 58519 62514 6.8 60084 64272 63436 66837 58084 61581 6.0
APS 3 19674 18743 59014 61818 62318 65747 65555 69829 6.5 68795 71754 70582 76104 65247 69047 5.8
APS 4 31040 30279 67221 70227 70597 74434 72697 78041 7.4 74180 79620 77942 82415 72579 77242 6.4
APS 5 21426 21268 73904 77801 77134 81772 79794 84867 6.4 81721 86803 85610 90269 79702 84503 6.0
APS 6 32584 32527 82519 87293 88042 93538 92972 98906 6.4 95901 102153 101403 106323 92279 98051 6.3
EL 1 28508 28355 104294 111095 111164 119014 115630 123333 6.7 120016 126774 127816 134445 116087 123029 6.0
EL 2 13257 13146 126027 134381 139259 147591 146277 153829 5.2 154220 161017 170524 180576 148055 156800 5.9
SES 1 2006 2022 188947 199881 207260 218974 219464 230406 5.0 232299 243497 250545 263298 220142 231160 5.0
SES 2 557 579 237681 250224 262125 277363 275656 288715 4.7 291580 303543 314942 331872 278071 292200 5.1
SES 3 133 126 300792 329957 329989 353300 348652 366401 5.1 373871 394956 479068 502819 358552 384552 7.3
Total 157064 153622