Governments need to consider several factors when making salary policies. Here are some useful considerations:

• Efficient delivery of public services: Government compensation and employment policies are important for the efficient delivery of public services, which are crucial for the functioning of economies and the general prosperity of societies. On average, spending on the wage bill absorbs around one-fifth of total spending.

• Accurate expenditure projections: Given the funding constraints governments are facing, accurate expenditure projections are more important than ever. Since salaries make up the greatest portion of the expenditure budget, it is essential to forecast procedures that would result in more accurate expenditure projections, especially as they relate to personnel.

• Compensation approaches: Governments need to analyze budgeted position compensation, considering factors such as step and grade systems, salary range or grade structure, and pay for performance systems.

• Benefits: To analyze total compensation, benefits need to be considered.

• Influence on private sector wages: In many countries, the government is the principal employer and thus can have an impact on private sector wages and employment. Government compensation policies can influence private sector wages by increasing reservation wages and crowding out private sector employment.

• Policies that work: Policymakers can help to grow wages by raising the minimum wage; updating overtime rules; strengthening rights to collective bargaining; regularizing undocumented workers; ending forced arbitration; securing workers’ access to sick leave and paid family leave; closing race and gender inequities; awarding government contracts only to firms that adhere to wage, health, and safety laws.

• Monitoring: Governments need to monitor the salary and wages budget through the year, not just when the budget is being put together. Should actual results deviate from the budget in a significant fashion, then adjustments need to be made.

• Capacity constraints: Capacity constraints in developing and transitional countries suggest that unified classification and pay systems are more desirable than differentiated classifications for different entities. Individual negotiations between staff and ministries result in distortions and inequities and compromise prospects for sustainable improvement.

• Federal employee compensation package: The Federal Government offers competitive base pay, with most positions using the General Schedule (GS) pay system. Some highly-competitive jobs, such as entry-level IT specialists, provide higher special pay rates. In addition to salary, the hiring agency may offer monetary recruitment, relocation, or retention incentives and performance awards.

Overall, governments need to consider the efficient delivery of public services, accurate expenditure projections, compensation approaches, benefits, influence on private sector wages, policies that work, monitoring, capacity constraints, and federal employee co...