Remuneration disparities in Oceania: Papua New Guinea and Solomon Islands

Abstract

This paper explores the impact of remuneration differences on workers in the Solomon Islands and Papua New Guinea. In these countries remunerative differences are linked to government policy (in Papua New Guinea) and job contracts (in the Solomon Islands), and have impacted on industrial relations in both settings (strike action). A total of N = 350 professionals (n = 60 expatriates) from 54 organizations in aid, government, higher education and industry (mean response rate = 36%) responded to an organizational survey form. Remuneration ratios between international and local respondents based on the World Bank's index of purchasing power parity approached 9:1. In both sites staff compared pay and benefits (remuneration) packages: Internationally remunerated staff rated their ability higher than their local counterparts did; locally remunerated groups reported more injustice in remuneration, were more demotivated by the gaps, and were more likely to be thinking about leaving the organization. In-country workshops of N = 40 largely local stakeholders from aid and community organizations plus government ministries considered the survey's findings and recommended: in Solomon Islands, (a) introducing a policy of localization, (b) establishing a remuneration commission (already existent in Papua New Guinea), and (c) reducing the remunerative gap; in Papua New Guinea, (d) reversing the post-Independence "dual pay system" (currently official policy), (e) instituting pay-for-performance, and (f) ensuring the existent localization policy is applied to recruitment, selection, and staff career planning and management.

Anti-Poverty Psychology

“…A prime example is labor unions, whose goals include fighting for decent work conditions globally (http://www.icftu.org/default.asp?Language=EN). Labor unions have been very active, for instance, in fighting for the harmonization of pay structures between national versus international aid workers, in countries like Papua New Guinea and Bougainville (Marai et al 2010). Another example is the worker's cooperative, such as the classical Mondragon organization in Spain (http://www.mcc.es/ENG.aspx).…”

“…Such risks of disengagement may accrue because of P4P's potential to create job insecurity, if the component that is variable pay is not counterbalanced by a minimum wage that is livable, a safety net for those who are working with minimal training and previous experience (Marai et al 2010). Without these, P4P in a public sector conceivably produces perverse incentives with respect to workplace performance .…”

“…Wages are organizational incentives, and these are often nested, in many low-income settings, in an inter-organizational institution known as "dual salaries" (above; and Marai et al 2010). The name as we have seen in Chap.…”

“…It sampled 202 workplace organizations and 1,290 professional employees ). These were operating in six low-income countries with landlocked (Munthali et al 2010), island (Marai et al 2010) and transition economies (Zhou et al 2010. The mixed methodology included for instance a multi-level organizational sample survey .…”

“…Brain drain is the only solution, and even that is often unrealistic. The workshops consistently called for the gap to be reduced; for recruitment and selection processes to be open and accountable rather than tied; for performance over-and-above the bare minimum to be rewarded; and for career goals and pathways to them to be provided (Marai et al 2010;Munthali et al 2010;Zhou et al 2010). Incorporating accountability and transparency in pay systems can improve pay satisfaction (Jawahar and Stone 2010), although naturally the system must be defensible at the outset.…”