A STUDY TO ASSIST THE DEPARTMENT OF STATE IN AN EVALUATION OF THE COMPENSATION SYSTEM OF THE UNITED STATES FOREIGN SERVICE VOLUME II

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00530R000902250001-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 137
• Document Creation Date: December 23, 2016
• Document Release Date: March 14, 2013
• Sequence Number: 1
• Publication Date: May 1, 1979
• Content Type: REPORT

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A STUDY TO ASSIST THE DEPARTMENT OF STATE
IN AN EVALUATION OF THE COMPENSATION SYSTEM
OF THE
UNITED STATES FOREIGN SERVICE
VOLUME II
APPENDIX
Prepared for the
Department of State
Pursuant to
Contract No. 1025-925135
Hay Associates
1100 Seventeenth Street, N.W.
Suite 507
Washington, D.C., 20036
(202)?'331043`0
HAY ASSOCIATES
WASHINGTON, D. C.
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TABLE OF CONTENTS/VOLUME II
APPENDIX
A. Hay Capabilities
B. Sampling Analyses
C. Hay Guide Chart Method of Job Evaluation
D. State Department Guide Charts
E. Profiling: "Why Down is Beautiful" (Hay M&M, No. 235)
F. Foreign Service Evaluations
G. State Department Paper Addressing the "Overseas Dimension"
H. 1978 Hay Nonexempt Survey Participant List
1. 1978 Hay Cash Compensation/Noncash Compensation Participant List
J. Hay Cash Equivalent Benefit Values Method
K. Summary of Foreign Service, General Schedule, American Business
and Selected Multinationals' Benefits
L. Summary Description of Foreign Service and Private Sector Overseas
Benefits and Allowances
M. Estimated Foreign Service Family Size Calculations
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Insurance
BAKER
Health Care
ROARK
? Seminars/Training
? VP Personnel
?EFP
-EEO
*Communications
West
BULL
A
South
STIX
AA
Washington D. C.
WIMER
A
North
BELLAK
?
Canada
MOFFETT
North Europe
YOUNGER
A
South Europe
BELLI
A
Australasia
KERR
Japan
McCLOSKY
Latin America
MORFIN
?
Brazil
OBERTANCE
Chicago-Porat
Atlanta-Mueller
Laking
Boston-Baird
Central-Matthews
Brussels-Weekes
Madrid-Illueca
Melbourne--Clark
Bogota-Orlol
Rio de lanerlo-
Bates
Philadelphia-Qulnson
New York-Betlak
Toronto
Frank(urt-Tuckman
Barcelona-Comas
Sydney-Drakeford
Caracas-Valle
Sao Paulo-
Keane
Simpson
Dyer
Eastern-Guilbeault
Helsinki-Esukari
Milan-Pelllaaonl
Wellington -Roberts
Mexico City-Tercero
Dallas-Erickson
Nadel
Montreal
London-Anderson
Paris-Belli
Auckland
Martinet
Britt
Ryterband
Western-Horn
Crolton
Monterrey-Potes
Decherd
Pittsburgh-lacobs
Calgary
Rawlinson
Kansas City--Grant
Rosenfeld
Vancouver
Dublin-Kingham
Los Angelus-Nash
Edinburgh-McBride
Minneapolis--Duff
Manchester-Murry
San Francisco-Lipp
-
-
Utrecht-Budde
Seattle,-Quay
REWARD
MANAGEMENT
POLICY
BOARD
Reward
Management
SYM-SMITH
AA
Surveys
RIORDAN
? IICC
? NCC
as ECC
is Quality Assurance
U.S.A. Operations
STIX
?A
Hay-Huggins Data
Services Inc.
PORTER
Planning
Finance
FIERO
IIUGGINS
Actuarial/Pension
BURRALL
AA TURBERG
at HEARST
? MUDRY
flay-Iluggins
Research
HEWITT
Managing Partner
ROCK
Business Strategy
FIERO
International
Operations
?ADINSMORE
Research for
Management
GORDON
1978
HAY
Academia
INGSTER
MSL
ROFF
LONG
International
Operations
? SMOLINSKY
ABS
POLICY
BOARD
? Business Planning at Climate as Selection
? Organization Design is Market ? Recruitment
? Management Development ? Social ? Organization
? Managcmcot Continuity Implementation
Banking
WALEK
? = Hay Policy Committee -
e = Compensation Committee
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MANAGING IN THE 80's
Successful management in the 80's will require
knowledge, processes and technology barely con-
ceptualized two decades earlier. Sweeping socio-
economic change throughout the world will create
problems as well as opportunities of a magnitude
never before experienced. Each company or institu-
tion-whether it be a far-flung transnational in-
dustrial complex or a local health clinic-is a
microcosm of this world of change, and will be
challenged to optimize the opportunities that such
change presents.
Hay Associates stands ready to assist in this process
of change through its unique range of professional
services developed over 33 years and offered from
.its present network of 34 offices in 17 countries.
But while the concept may sound relatively simple,
the extent of knowledge and the forms that Hay
technology takes, which give the concept sub-
stance, are not. For example, survey knowledge of
reward management transfers- into a technology
which, as transmitted to Hay's compensation center
staff, enables it to supply clients with information
not available elsewhere. Its knowledge of actuarial
science and mathematics, to take another example,
translates into a technology of benefits, pensions
and actuarial studies which is transmitted to clients
through a staff of highly skilled professional actu-
aries. The list goes on, including measurement
(social, market, opinion, climate, human resource
assessment), business planning and strategy, be-
havioral science and communications.
Hay's entire effort has been directed toward pro-
viding support, analysis, and implementation ser-
vices to client management through application of
its wide ranging specialized products. A unique
C'capital," upon which its consultants and clients
draw, is its basic data hank comprised of two care-
fully balanced and interwoven elements: knowl-
edge and technology.
The concept is straightforward: Hay knowledge
translates into Hay technology and, from there,
into learned processes. These processes, communi-
cated and refined through experience and applica-
tion, are transmitted to Hay consultants worldwide,
and thus ultimately constitute our range of con-
sulting services.
Hay Associates, with its vast storehouse of knowl-
edge and technology and its creative and results-
oriented professional and support staff, looks
forward in the 80's to extending the "edge" in
human resources consulting that it has earned over
the years. This brochure was designed to provide
an overview of the kinds of services that we offer;
the range of organizations we continue to serve;
and, more importantly, the kind of consulting
philosophy that has guided Hay in the past and
which will allow its staff to maintain its position of
consulting leadership with future generations of
management.
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? Managing in the 80's
? Reward Management
? Human Resources and Measurement Technology
? Business Planning
? Specialized Services
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REWARD MANAGEMENT
Hay's position of leadership and acknowledged
accomplishment in total compensation planning is
unique throughout the developed countries of
the world. During its more than 33 years of inten-
sive experience and advancement of innovative
and results-oriented concepts, Hay's participation
in the development of total reward management
systems has earned unequalled recognition.
Some of its principal services in reward manage-
ment include:
? job analysis and evaluation
? Cash compensation surveys
? Management incentives
? Employee benefit and actuarial services
? Sales incentives
? Salary planning and administration
? Communications
JOB ANALYSIS AND EVALUATION
Through its extensive experience and pioneer work
in job measurement, which formed the foundation
of Hay's original consulting efforts, a specialized
measurement and process knowledge and tech-
nology was developed. Its copyrighted Guide
Chart-Profile Method of Job Evaluation evolved as
the standard against which other job measurement
systems would be compared. Providing a systema-
tized approach to measuring job worth for any and
all positions in an organization, pay comparisons
between companies on the basis of common stand-
ards of job content could finally be accomplished.
Hay measurement technology showed that some
elements of job content are present in varying
levels in all jobs, from maintenance staff to chief
executive and operating officers. As expressed in
Hay language, these elements are Know-How,
Problem Solving and Accountability. Each of these
components is measured in points, with the total
being an expression of the position's weight rela-
tive to all other jobs within the particular organi-
zation.
The Hay job analysis and evaluation technique is
unmatched in experier,~ce, with well over hundreds
of thousands of individual jobs having been ana-
lyzed and evaluated all over the world. While job
evaluation has been employed primarily in com-
pensation work, other uses include applications to
assure EEO compliance, assess organization effec-
tiveness, assist in manpower planning, and the
customization of developmental programs.
CASH COMPENSATION SURVEYS
Once the backbone of Hay consulting, cash com-
pensation work is firmly anchored in the concept
that pay must be externally competitive and inter-
nally equitable. Achievement of these objectives is
increasingly difficult to attain by the changing
values and objectives within companies as well as
ever-increasing pressure from their various publics.
Defining an appropriate strategy for an organiza-
tion and subsequently ensuring that it is suppor-
tive of its other long-term organization and busi-
ness plans can no longer be left to chance.
To assist clients assess their relative levels of pay
practice against both general and specific industry
norms, Hay annually provides comprehensive com-
pensation surveys. These Compensation Compari-
sons, now nearing the quarter-century mark, form
the foundation for compensation planning for
nearly 1500 participating companies in over two
dozen countries.
Additionally, the Hay Executive Compensation
Comparison provides a detailed analysis of cash
and noncash compensation standards for key man-
agement positions representing both operating and
staff functions. This survey is complemented by
annually conducted special industry, job-family,
clerical, higher education, and regional surveys.
MANAGEMENT INCENTIVES
In addition to the basic commitment represented
by salary and noncash plans, variable compensa-
tion schemes form an integral part of the industrial
executive's total reward management program.
Designed to stimulate overall excellence and to
provide significant economic opportunity to key
management and professional executives, such
plans can offer a variety of cash or cash-equivalent
payment methods to achieve an optimum balance
among the needs of the executive and those of the
enterprise and stockholders.
EMPLOYEE BENEFIT AND ACTUARIAL SERVICES
With the creation of Hay-Huggins, resulting from
the affiliation with Huggins & Company, Inc., Hay
provides consulting and actuarial assistance in
benefit plan design backed by a research arm that
keeps abreast of employee benefit trends, innova-
tions and statutory requirements. A Hay-Huggins
Noncash Compensation Survey which covers the
benefits, personnel policy, perquisite and commu-
nications practices of over 450 industrial, financial
and service firms is produced annually.
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Benefit value comparisons, total remuneration ("R"
Charts), communications programs, and employee
preference studies are all part of the Hay-Huggins
service armamentarium.
SALES INCENTIVES
Over the years, Hay's leadership in sales incentive
design has become apparent. It is firmly committed
to the concept that sales motivational systems
should accurately reflect and recognize the sales-
man's individual contribution to the achievement
of company or corporate sales goals. Design and
application of systems that truly motivate are Hay
hallmarks of competence in such diverse and com-
.plex marketing environments as health care, trans-
portation and banking.
SALARY PLANNING AND ADMINISTRATION
Recent developments have stepped up the demands
upon salary administrators to resolve persistent
problems of inequity in employee pay practices.
Greater sophistication in the manner in which
salary programs are conceived, planned and im-
plemented is now demanded. Too often, man-
agement is caught short between a stated salary
policy and an apparent inability to implement it.
From its vantage point, Hay assists clients in their
salary planning, program implementation and ad-
ministration needs by developing policies, pro-
cedures and administrative guidelines, and offers
technical assistance in designing and implement-
ing formal salary planning and budgeting processes.
COMMUNICATIONS
Companies make major investments in their com-
munications and benefits programs: Often these
programs are not well understood and, frequently,
even misunderstood both' by employees and the,
managers accountable for their administration. An
effectively structured and professionally prepared
communications program, using a variety of media,
can enhance the value of existing programs and
simultaneously create the climate for capitalizing
on new ones.
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HUMAN RESOURCES AND MEASUREMENT TECHNOLOGY
Using its data bank as a base, Hay has developed
an extensive range of professional services which
are essentially highly-sophisticated measuring
and appraisal processes. These processes are de-
signed to detect weaknesses, as well as strengths,
of individuals with respect to selection, training
and development, work performance, and for
determination and assessment of the performance
of the enterprise as a whole and of individual units
and functions within it. Hay classifies these ser-
vices as follows:
HUMAN RESOURCES SELECTION,
TRAINING AND DEVELOPMENT
? Personnel assessment and selection
? Test appraisal and validation
? Test construction and development
? Manpower assessment
? Manpower training and development
EMPLOYEE RELATIONS SERVICES
? Hay employment systems analysis
? Labor relations and strategy
COMPUTER TECHNOLOGY
? Human resources management systems
? Information systems
? Pensurdata
RESEARCH FOR MANAGEMENT
? Public opinion and marketing research
? Management and organizational
climate studies
? Employee attitude surveys
? Management practices surveys
HUMAN RESOURCES SELECTION,
TRAINING AND DEVELOPMENT:
? Personnel Assessment and Selection
Selecting, transferring, promoting and other-
wise changing the status of personnel on
qualifications only, without regard to race,
religion, sex, age or national origin, are diffi-
cult at best. The search for tools and methods
that provide a legal basis for judging the worth
of an applicant or employee has, for many
firms, been a challenge of the highest order.
Today, as the result of practical experience
balanced by ongoing research and study, Hay
provides a full range of services, each of
which is designed to increase the impact and
effectiveness of personnel practices and docu-
menting them with hard facts about each job.
? Test Appraisal and Validation
This is an analytical service for evaluating and
improving personnel testing procedures to
aid in selecting candidates for employment or
promotion. Companies are under continuing
obligation to demonstrate and document the
validity of tests and procedures used. Hay can
assist clients in ascertaining that their testing
procedures and devices meet both the spirit
and the intent of legal requirements designed
to provide equal employment opportunities.
Hay evaluates and reports the technical
quality of the personnel system currently
used. The reliability, validity and utility of the
system are examirwed from the dual standpoint
of whether it makes good bu3ii?+ess sense and
complies with governmental regulations.
? Test Construction and Development
Hay's Test Development Service is a custom-
tailored process for designing and construct-
ing tests and other performance measures for
assessing current or prospective employees.
Additionally, if deficiencies detected in cur-
rent testing procedures are too substantial for
modification, Hay will recommend or develop
new tests and procedures as well as train client
staff to continuously monitor the resulting
selection procedures. Hay, offers cost effec-
tive programs which measure and aid in the
selection of best qualified candidates for on-
going or anticipated jobs, while simultane-
ously meeting governmental directives and
guidelines.
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? Manpower Assessment
Hay's manpower assessment planning and _
development programs represent systems by
which both jobs and their incumbents are
evaluated using common yardsticks of mea-
surement. By assessing managers, not in
isolation but within the context of real organi-
zational units and against specific position
requirements, and utilizing information from
the employee's past and current performance
along with other predictive techniques, Hay
counseling can help clients learn to forecast
future manpower requirements and capa-
bilities.
? Manpower Training and Development
This service provides for the development-
preceded by appropriate assessment-of in-
dividuals in executive positions. It seeks to
instill in the individual an understanding of
broad managerial content and purpose, while
advancing an understanding of himself and his
capabilities. In achieving personal develop-
ment, a career path is formulated for the
executive through counseling which maxi-
mizes his strengths in line with his aspirations
and the needs of the enterprise.
EMPLOYEE RELATIONS SERVICES:
? Hay Employment Systems Analysis
A key facet of Hay's human resources con-
sulting organization is its Employee Relations
Services Center. This unit has developed the
Hay Employment Systems Analysis ("HESA"),
an exhaustive audit process expanding on the
concept of "adverse impact" which includes
discrimination, government regulations, and
Hay technology. Although HESA is designed
to cover the entire human resources system of
the organization, it is equally responsive to
auditing one or more portions of that system
-e.g., employment-and the HESA audit is
thorough in its ability to meet the most string-
ent external compliance requirements.
? Labor Relations and Strategy
Hay provides a unique management service
for employers already engaged in collective
bargaining who wish to improve the quality
of the decision-making process used by man-
agement in their relationships with unions.
The services are particularly useful in govern-
mental, educational, and health-care organi-
zations because of the rapid transfer of con-
sulting expertise to the personnel or labor
relations professionals within these organiza-
tions. Client administrative strength is ex-
tended in activities 'such as preparing for
negotiations, contract administration, griev-
ance management, and preparing for arbitra-
tion.
COMPUTER TECHNOLOGY:
? Human Resources Management Systems
Hay's Human Resources Management Systems
Center was formed in response to the need
expressed by clients for implementation of
compensation studies and related programs.
The professional staff of the HRMS Center
engages in systems planning, design and de-
velopment related not only to compensation
projects but also to every functional area of
the personnel department. Two distinct prod-
ucts have been developed by the HRMS
Center: The Hay Compensation Monitor
(HCM) and the Hay Automated Personnel
Systems (HAPS).
The Hay Compensation Monitor is a system-
atic method for collecting, maintaining, and
reporting information required to plan and
control the administration of salaries and eval-
uation of jobs. It is an in-depth computer-
based application ranging from status and
exception reporting to salary planning, and
even provides basic formats for input to Hay
compensation comparisons. The Hay Com-
pensation Monitor is a modular system in that
any of five major processing modules can
be delivered and installed independently of
the others.
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HAPS is a generalized human resources system
covering all areas of the personnel function
with emphasis on any particular area as de-
termined and directed by the user. It may be
interfaced with existing computer systems,
most notably the payroll, and automatically
generates a chronology or work history based
on input of significant transactions.
Information Systems
Through its computer-based capabilities and
technology, Hay builds information systems,
including design and programming elements,
education and training, software package
sales, and facilities management. Hay's pro-
fessional staff has extensive experience in the
development, implementation, operation and
administration of computer-based informa-
tion systems.
Pensurdata
An affiliated company of Hay, Pensurdata is a
computer services organization specializing in
insurance and employee benefit plan applica-
tions. In particular, its services and systems-
design capabilities for pension, health and
welfare plans can assist employee benefit ad-
ministrators meet the important reporting and
disclosure requirements of the Employee Re-
tirement Income Security Act (ERISA) of 1974.
Because of the vast recordkeeping require-
ments of ERISA, the major portion of Pen-
surdata services are provided through an
automated system, operated on its third-
generation computer.
RESEARCH FOR MANAGEMENT
A division of Hay Associates which provides ser-
vices in problem analysis and solutions based on a
wide variety of measurement technologies. Its areas
of emphasis include:
? Public Opinion and Marketing Research
A key element in establishing appropriate
corporate strategies is an understanding of
customers, prospects, the general public,
stockholders, the financial community, legis-
lators, regulators and the media. Relationships
with these publics are becoming more com-
plex. The demands of consumerists and
environmental action groups-often contra-
dictory-must be weighed and balanced
against the primary task of top executives-
i.e., building assets under management.
Thus, Hay approaches public opinion and
marketing research from management's point
of view: how to.build a total corporate pos-
ture appropriate to its varied constituencies,
consistent with the need to use resources
productively. The emphasis is on strategic
issues and the most effectiv utilization of re-
sources, whether for a major corporation or a
local school system. Projects, therefore, range
from studies of corporate image to evaluations
of educational objectives.
? Management and Organizational Climate Studies
Top management sets the direction for an
enterprise, and it is critical that its intentions
be mobilized into appropriate action. Hay's
management climate studies place top man-
agement in a unique position' to determine
whether these intentions are being accurately
translated and implemented throughout the
organization.
Designed to measure manager perceptions of
key management processes, Hay's climate
measurement program is a highly sensitive
diagnostic process which:
-Determines whether the climate existing
within various parts of the organization is
that intended by top management.
-Tests the feasibility of and readiness for
installing changes in strategy, policy and
programs.
-Determines progress toward change goals.
Annually since 1974, Hay has conducted a
multicompanySurvey ofManagement Climate,
enabling participants to examine their organi-
zational climate internally as well as in com-
parison to other organizations. Regular parti-
cipation not only provides measures of the
critical factors related to business success, but
also permits participants to track how these
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factors change with shifts in specific func-
tional or operational units.
? Employee Attitude Surveys
The most productive first step in addressing
such problems as absenteeism, breaches of
discipline, sabotage, low productivity or high
turnover is often through an attitude survey
of nonexempt workers.
Attitude surveys are used to gauge employees'
feelings about many issues which affect them
and their jobs. Some issues regularly studied
are general satisfaction with work, relation-
ships with management and supervision, com-
munications, cooperation, clarity of . work
assignments, opportunities for promotion,
compensation and physical facilities. This in-
formation often leads directly to the solution
of the specific problem(s) facing the organiza-
tion. Hay has conducted numerous such
studies and maintains a data bank useful for
viewing the company in the context of work
environments generally found in U.S. industry.
? Management Practices Surveys
Hay applies -survey technology to studies of
management practices and policies in both
functional and topical areas. An example' is
the Hay Survey of Human Resource Practices.
With initial participation numbering more
than 850 firms, this comprehensive informa-
tion base of personnel practices and policies
serves as a valuable aid in the planning and
management of human resources programs.
The Survey unfolds insights, supported by
facts, into such important issues as the impact
of EEO and OSHA legislation on firms' human
resources planning, trends in personnel pro-
grams for employees at different organiza-
tional levels, and programs being undertaken
in the critical area of assuring management
continuity. It is believed that the wealth and
validity of human resources information re-
sulting from this Survey are not duplicated by
or available from any'other source.
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BUSINESS PLANNING
Hay's Center for Business Planning combines its
knowledge and technology of both the manage-
ment sciences and the behavioral sciences. In the
complex technology of planning management, Hay
helps its clients assess market opportunities, evalu-
ate strategy options, and implement agreed-upon
business plans and programs.
Services of this Center are both process- and
content-oriented: process services are developed
for client organizations to apply in making strategic
decisions, upon which the lifeblood of the organi-
zation may depend; content services develop spe-
cific strategy recommendations, with further Hay
guidance for implementation as required. Major
counseling areas are these:
? Strategic planning
? Marketing analysis
? Financial strategy
? Organization design
? Performance assurance
? Performance measurement
STRATEGIC PLANNING
Effective strategic planning results in decisions:
what to do and how to do it. The critical function is
first, to identify mission and goals and subsequently
to devise appropriate policies and business strate-
gies to achieve them. Strategic planning is an
integral part of an enterprise's management pro-
cess; it is a management tool designed to help
make today's critical decisions with tomorrow in
mind-a process by which tomorrow's decisions
will be beneficial and flow logically from those
made today.
Hay helps design strategic planning processes
which reflect the style and characteristics peculiar
to the client's business; each process is tested for its
efficacy in facing the specific issues which require
decisions. Hay's professional, experienced strategy
specialists are notably well-versed in helping or-
ganizations assess their basic mission, examining
market opportunities, evaluating business mix and
diversification options, formulating positioning
goals, reviewing allocation of resources, develop-
ing appropriate programs and policies and evaluat-
ing economic development programs.
MARKETING ANALYSIS
Hay's capabilities in conducting marketing analysis
range from determining requirements for com-
mercialization of new products to comprehensive
evaluation and redefinition of marketing strategy
for the business as a whole. Illustrative studies and
issues include:
-Evaluation/formulation of pricing policies;
-Identification/evaluation of competitors' strate-
gies. and strengths;
-Measurement of product and market potentials;
share of market and marketing penetration ob-
jectives;
-Evaluation of sales practice (e.g., territory assign-
ments, sales quotas);
-Appraisal of product life-cycle positions;
-Analysis/redesign of distribution methods and
practices.
FINANCIAL STRATEGY
Every business plan must be backed by a financial
strategy in support ofts achievability. Such strategy
must not only make provision for the necessary
funding of the business but, equally important, be
responsive to corporate goals with respect to its
various financial publics. Hay has skilled personnel
to help formulate such strategies and goals.
? Organization Design
Appropriate organization structure is also
essential to the success of business plans. The
criteria of effective structure are derived from
the objectives of the enterprise or organiza-
tion, and how well those objectives are being
achieved. How responsively and flexibly the
organization meets externally-created oppor-
tunities and threats constitutes an appraisal
of the structure-and indicates whether it is
sound or whether it needs change.
Hay has long experience in assisting clients
increase their organizational effectiveness. Its
capabilities in design of organization struc-
tures and processes for accomplishing organi-
zational change are unusually strong. Major
~1
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projects are staffed by teams of specialists in
business strategy, organization structure and
organization development.
.~I
PERFORMANCE ASSURANCE
Executive performance agreements have been used
by companies for years. Hay's skills run to identify-
ing where they are appropriate, assuring-that they
are in support of corporate objectives and business
strategies, and designing rewards commensurate
with the achievement desired.
PERFORMANCE MEASUREMENT
The critical problem here is to arrive at acceptable
yardsticks by which to measure performance and
on what to base incentives. Not all objectives are
measurable in financial terms: many require sub-
jective evaluation.
Hay has many years' experience in working with
companies in the design of measurement standards
and management processes for the utilization of
such standards in practical business environments.
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SPECIALIZED SERVICES
Hay has organized a number of professional ser-
vices in response to the highly specialized nature
of major projects assigned to it by clients in
selected industries and service categories and by
the demands of today's sophisticated computer
technology. These services are grouped in the
following categories:
? Industry centers
? Computer-based comparisons
? Hay publications
? Hay seminars
INDUSTRY CENTERS
The rapid pace of specialization within industries
and other sectors of our economy in recent years
has led to the establishment of a number of
industry "centers," which offer counseling services
expressly designed for organizations within their
selected business areas. Industry specialist staffs
with major project management capabilities, aug-
mented by trained support units and Hay's. con-
sulting staff, are organized into key industrial,
financial, service and nonprofit knowledge centers.
Included among these are:
? Retailing
? Banking
? Insurance
? Utilities
? Higher education
Government (Federal ?-id local)
? Health care
COMPUTER-BASED COMPARISONS
? PERF/COMP
Utilizing advanced technology and exhaustive
data on industrial firms' executive compensa-
tion policies, Hay has designed a technique
for determining how much companies pay for
high-level job performance. "Perf/Comp," as
it is termed, correlates performance and size
of companies with compensation levels found
within companies in the sample.
BANCOMP Survey
A computerized extension of Hay's Compen-
sation Comparison and its Executive Compen-
sation Comparison is found in the BANCOMP
survey. This is a comprehensive survey system
supplying specific base and total compensa-
tion data for 81 functional areas found in
banking. Participating banks are guaranteed
quick access to functionally-specialized com-
pensation information at any time during the
year, permitting the user to compare his
bank's compensation and evaluation practices
with others in the BANCOMP survey.
HAY PUBLICATIONS
In keeping clients and the business public at large
informed of important new concepts, develop-
ments and Hay services, Hay's communications
department publishes a monthly business discus-
sion, "Management Memo," which brings such
information to readers in an easy-to-read two-page
format. Now in its 27th year of unbroken publica-
tion, "Management Memo" is received by thou-
sands of executives.
Additionally, Hay publishes a biennial report,
focusing on Hay's worldwide network of offices
and professional personnel, with brief descriptions
of its available services. Service brochures, describ-
ing in detail one or more of Hay's specialized con-
sulting services, are also distributed.
Further, a complete reprint service is maintained in
Philadelphia with reprints and aFticles of value and
interest available upon request. A listing of these
items is published periodically, and distribution is
made without charge upon simple request to any
of Hay's domestic offices.
HAY SEMINARS
Hay seminars are an ongoing year-round service,
which communicate knowledge and technology of
Hay processes and principles in a wide ranging
spectrum of specialized business areas to hundreds
of participants each year.
Seminars offered on an ongoing basis include the
following:
? Job analysis and evaluation (basic, inter-
mediate and advanced)
? Salary administration
? Executive compensation planning
? Communicating compensation and bene-
fit programs
? Estate and personal tax planning
? Design of employee benefit programs
? Human resources management
? Performance analysis
A complete list of seminars, presented in major
cities around the country with dates, locations, and
descriptions of the content, is available upon
request.
0
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APPENDIX B
SAMPLING ANALYSES
The consultants conducted initial analyses to determine the represen-
tativeness of sampling within the Cones/Occupational Groups for each Class.
Table I illustrates the representation of the Foreign Service in terms of
the distribution of jobs by Class in this category.
TABLE I
DISTRIBUTION OF JOBS BY CLASS FOR CONES/OCCUPATIONAL GROUPS
Selected Cones
Class
Total
Pop.
Total
Sampled
Political
Econ.
Admin. Consular
Staff Support
FSO
3632
3300
91%
1182
882
619 617
---
FSRU
857
681
79%
57
11
591 22
---
FSR.
1153
940
82%
98
69
681 92
---
FSS
1946
1918
99%
10
8
729 85
1086
The four Cones and the Staff Support Group currently represent 90%
of the Foreign Service in the four classes; and this sample is therefore
considered representative for the purposes of this study.
After determining that a representative sample could be drawn from the
Occupational Group category, as Table I indicates, a second analysis was
conducted to determine if a representative sample could be drawn from selec-
ted Grades within the Cones and Classes. This analysis, as Table II por-
trays, concluded that a representative sample could be drawn on the proposed
Grade/Cone basis.
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TABLE II
DISTRIBUTION OF JOBS BY GRADES WITHIN ALL CLASSES AND CONES/OCCUPATIONAL GROUPS
Political Economic Admin. Consular Support Staff
Pop. Sample Grades Pop. Sample Grades Pop. Sample Grades Pop. Sample Grades Pop. Sample Grades
FSO 1182 1156 1-6 882 798 1-6 619 425 1-4, 6 617 575 3-7 -- -- --
FSRU 57 -- -- 11, -- -- 591 591 1-8 22 -- -- -- -- --
FSR 98 -- 69 -- -- 681 681 1-8 92 -- -- -- -- --
FSS 10 -- -- 8 -- -- 729 390 3-8 85 23 4 1086 1041 3-10
Total 1347 1156 970 798 2620 2087 816 598 10.86 1.041
% Rep. 86% 82% 80% 73% 96%
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APPENDIX C
The Hay Guide Chart-Profile Method of Job Evaluation
The following discussion describes the components and process
of the Hay Method.
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THE KNOW-HOW GUIDE CHART
INCREASING
ADMINISTRATIVE
COMPLEXITY
HUMAN; RELATIONS !SKILLS
INCREASING
350
SPECIALIZED
400
AND
TECHNICAL
460
KNOWLEDGE
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 Declassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
The Know-How factor of specialized and technical knowledge is represented
in the facing illustration by a continuous vertical line increasing in value
in the direction of the arrow. The line represents a continuum of specialized
knowledge content among a group of positions. The range is from a very
limited need for formal knowledge to the most advanced levels of understanding
of a subject matter. The line can usually be divided into levels such as:
A
B
Similarly, the factor of administrative leadership is represented by a
continuous horizontal line indicating increasing complexity in managerial
demand in the direction of the arrow. Once again, the line can usefully be
divided into levels such as:
I II III IV V VI
Finally, the factor of human relations is represented as crossing the
matrix of the other two factors. In each case, human relations skills are
seen as being at one of three levels: (1) ordinary courtesy; (2) important;
or (3) critical for effective job performance.
Each of these factors has a qualitative, operational definition appro-
priate for the client institution in which the charts are being used. It is
possible to quantify the semantic (or qualitative) analysis by designing
a scale of numbers that is imposed upon the zones of intersection of the
factors.
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THE PROBLEM-SOLVING GUIDE CHART
INCREASING CHALLENGE TO
FIND INNOVATIVE AND
CREATIVE SOLUTIONS
50%
DECREASING
CONSTRAINTS
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In the facing illustration, the numbering pattern is represented by the
three values of 350, 400, and 460. Each is approximately 15% different from
the next. (Lower numbers would, of course, appear closer to the points of
intersection of the two lines.)
Thus, the content of a position, analyzed for Know-How, might be sym-
bolized as:
F II 3 460 (Points)
The "F" represents a defined level of specialized and technical knowl-
edge, the "II" represents a defined level of administrative leadership and 113"
.represents critically important human relations skills, and the "460" an
appropriate quantitative representation of these judgments.
A like process is used with the Problem-Solving Guide Chart, except that
two different factors are involved as shown in the facing illustration.
The thinking challenge is shown on the horizontal line. The line repre-
sents a factor in job content that is a continuum from positions involving
repetitive problem challenges to positions in which the problem challenges
consistently require pathfinding solutions because the situations are novel.
The line can usefully be divided into levels (shown on the illustrative
charts) such as:
1 2 3 4 5
Similarly, the thinking environment factor is shown as a vertical line in
which there is a decrease in the guidance for problem-solving in the direction
of the arrow. The line represents a continuum from highly circumscribed
problem-solving because of the need to follow detailed instructions to a level
where thinking is guided only by the ultimate goals of the organization. Once
again, the line can usefully be divided into levels such as:
A
B
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THE ACCOUNTABILITY GUIDE CHART
QUANTITATIVE INDICATORS
OF SIZE OF. IMPACT
IMPAC`rS OF DECISION-r1 1AKING
200
230
INCREASING
264
FREEDOM TO
COMMIT
RESOURCES
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 Declassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
In the zone of intersection of these two factors in a matrix, quantifi-
cation of the semantic judgments is once again possible. In this process,
Problem-Solving is considered to be functionally related to Know-How,- and this
functional relationship is symbolized quantitatively by using a percentage to
be applied to the Know-How points previously determined. The percentage
values are also in a scale with each number being approximately 15% different
from the next.
In the facing illustration, the percentage values are represented at 5070
and 57%. (Lower values would appear closer to the points of intersection of
the two lines.)
Thus, the content of a position, analyzed for Problem-Solving, might be
symbolized as:
F 4 (50%) 230 (Points)
The "F" represents a defined level of the thinking environment, the "4"
represents a defined level of the thinking challenge, the 50% is the appro-
priate quantification of these judgments, and the 230 points result from
taking 50% of the previously determined 460 points of Know-How.
A like process is used once again with the Accountability Guide Chart,
except that here three different factors are involved as shown in the facing
illustration.
The most important accountability factor is -the freedom to act, the
freedom to frame and to execute management decisions. The direction of the
arrow shows increasing freedom to act, and the job content point values
increase in this direction. This line may also be divided into levels of:
A
B
The second most important accountability factor is the nature of the
impact of the position on specified end results. Every position may be viewed
as having either an indirect impact on organizational results--symbolized by
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THE PROFILE OF A POSITION
SLOTTING
POINTS
SUMMARY EVALUATION:
KH F113
460
PS - F4(50%)
230
ACC - F3C
230
TOTAL POINTS
920
THE PROFILE
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either "R" (Remote impact) or "C" (Contributory impact)--or a direct impact--
symbolized by either "S" (Shared impact) or "P" (Primary impact).
The least significant accountability factor is the magnitude (in annual
dollars) of the area(s) most clearly or primarily affected by the position.
The magnitude line is shown horizontally and can be divided for levels of:
(1) (2) (3) (4) (5)
The impact factor is represented as crossing the matrix of the other two
factors, and the person evaluating a position must make a "best" judgment as
to the most appropriate way in which to characterize a particular position.
As with the Know-How and Problem Solving Charts, at the zones of inter-
section of the three factors, the same 15% internal scale of numbers used
previously may be imposed upon the chart.
Using the facing illustration, the content of a position, analyzed for
accountability, might be symbolized as:
F 3 C 230 (Points)
The "F" represents a defined level of freedom to act, the "3" represents
the magnitude of the area affected by the position, and the "C" indicates a
judgment that the position is best described as having an indirect, contribu-
tory impact upon end reuslts, and the "230" is an appropriate quantification
of these judgments.
The summary evaluation of the "illustrative" position we evaluated
previously is shown at the top of the facing illustration.
Under the title of slotting, we find the symbols for each of the loca-
tions on the semantic (or qualitative) scale where we decided the content of
the position could be properly assigned.
Under the title of points, we find the quantitative representations for
the semantic judgments of the evaluator.
The profile of a position is simply the characterization of the job
factors as percentages of the entire job content. For example, the entire job
content of our illustrative position was value at 920 points.
Of these 920 points, it turns out that 50% (460 points) are assigned to
Know-How content, while 25% (230 points) are assigned to Problem-Solving and
25% (230 points) to Accountability. In this position, the content of the job
pertaining to problem-solving is valued equally with the content pertaining to
accountability.
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 nble below shows standard steps
correspond opproximosely to 75%
rnces and which double in volue
5 steps.
STEPS
6400
5600
0864
4224
3683
- 3200 -
2800
2432
2112
1040
- 1600 -
1400
1216
1056
920
- 800 -
700
608
528
460
- 400 -
350
334
264
230
- 200 -
175
152
132
11s
- 100 -
17
76
66
57
- 50 -
43
38
33
29
- 25 -
22
19
16
14
- 12 -
to
9
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TO FIND PROBLEM SOLVING POI
NTS:
IN COLUMN BELOW THAT CORRESPONDS TO KH POINTS
, READ PS POINTS OPPOSITE
% PS/KH
PS!KH
Kt{
Pis
.
} 50
-
51
-
66
-
76
-
87
-
100
115
132
152
115
200
230
264
304
350
4oo
46o
528
(u8
100
800
920
1056
1216
1400
87 a
4)
50
51
66
76
87
100
115
132
152
115
200
230
264
)04
350
400
460
526
669
700
8u0
920
1056
1216
76-7.
38
4)
50
51
66
16
81
100
115
132
152
115
200
2)0
264
304
350
400
460
528
608
100
800
920
1056
66%
33
)9
43
50
57
66
76
81
100
115
132
152
175
200
230
264
)04
350
400
460
528
608
100
800
920
5717.
29
33
38
43
50
51
66
16
81
too
115
132
152
115
200
230
264
304
350
460
460
528
6u8
700
800
507.
25
29
33
38
43
50
57
66
16
87
100
115
132
152
175
200
230
264
304
350
400
460
528
608
700
43:.
22
25
29
33
38
43
50
57
66
76
81
100
115
132
152
115
200
230
264
304
350
400
460
528
608
33:.
19
22
25
29
33
38
43
50
57
66
16
87
100
115
132
152
175
200
230
264
304
350
400
460
Sze
33.
16
19
22
25
29
33
38
43
50
51
66
16
81
100
115
132
152
115
200
230
264
304
350
400
4to
29%
14
16
19
22
25
29
33
38
43
50
57
66
76
81
100
115,
132
152
175
200
230
264
304
350
400
25%
12
14
16
19
22
25
29
33
38
43
50
57
66
16
81
100
115
132
152
175
200
2)0
264
304
350
22%
10
12
14
16
19
22
25
29
33
38
43
50
57
66
16
81
100
115
132
152
175.
200
230
264
304
19%
9
10
12
14
16
19
22
25
29
33
38
43
50
51
66
76
81
100
115
132
152
175
200?
230
264
16 e
8
9
10
12
14
16
19
22
25
29
33
38
43
50
51
66
16
81
100
115
132
152
175
200
230
14
7
8
9
10
12
14
16
19
22
25
29
33
38
43
50
57
66
16
81
100
115
132
152
115
200
12%
6
7
8
9
10
12
14
16
19
22
25
29
33
38
43
50
51
66
16
81
100
115
132
152
115
10;.
5
6
1
8
9
10
12
14
16
19
22
25
29
33
38
43
50
57
66
16
87
100
115
132
152
CHARACTERISTIC HAY PROFILES (Percentage of KH-PS-AC)
%
TOFINDPROFILE: IN
COLUMN
BELOW THAT
CORRESP0NOSTO
STEP
DIFFERENCE
BETWEENAC
BPS POINTS, READ PROFILE OPPOSITE .
PS/KIt
PS'KH
ACCOUNTABILITY HIGHER
THAN
PROBL
EM SOLVING
AC -.
PS
ACC
OUNT
ABILITY LOWER
THAN
PROBLEM
SOL
VING
4
UP
3
UP
2
UP
1
up
LEVEL
1
DOWN
2
DOWN
3
Down
4
DO 004
-871.
29
26
45
32
21
41
33
29
38
35
30
35
36
32
32
38
33
29
40
34
26
41
36
23
42
37
21
764;
32
25
43
34
26
40
36
28
36
38
29
33
40
30
)0
42
31
27
43
32
25
44
34
22
45
35
20
66%
36
23
41
38
24
38
40
26
34
42
27
31
44
28
28
45
29
26
46
31
23
47
32
21
49
32
19
57%
39
22
39
41
23
36
43
25
32
45
26
29
46
21
27
48
28
24
49
29
22
51
30
19
53
30
17
50 a
42
21
31
44
22
j4
46
23
31
48
24
28
50
25
25
52
26
22
5)
27
20
55
27
18
56
28
16
43 a
45
20
35
41
21
32
49
22
29
52
22
26
54
23
23
55
24
21
56
25
19
58
25
11
59
26
15
387.
49
19
32
51
19
30
53
20
21
55
21
24
56
22
22
59
22
19
60
23
11
62
23
15
62
24
14
33 :
53
17
30
55
18
27
56
19
25
59
19
22
60
20
20
62
20
18
6j
21
16
65
21
14
66
22
12
29 0
56
16
28
58
11
25
60
17
23
62
18
20
64
18
18
65
19
16
66
19
15
68
19
13
69
20
11
257..
59
15
26
62
X15
23
63
16
21
65
16
19
66
11
17
68
11
15
70
17
13
70
18
12
12
18
10
227
62
14
24
65
14
21
66
15
19
68
15
11
70
15
15
12
15
13
12
16
12
74
16
10
75
16
9
19=
66
12
22
68
13
19
70
13
11
72
13
15
12
14
14
74
14
12
15
14
11
76
15
9
77
15
8
161
69
11
20
70
12
18
72
12
16
74
12
14
16
12
12
16
13
11
11
1)
10
79
13
8
80
13
1
14:
72
10
18
14
10
16
76
10
14
16
11
13
78
11
11
19
11
10 '
80
11
9
81
12
7
,82
12
6
12%
75
9
16
16
9
15
71
10
13
19
10
11
80
10
10
81
10'
9
82
10
8
83
11
6
84
11
5
10!'.
17
8
15
19
8
13
80
9
11
81
9
10
82
9
9
83
9
9
8'1
9
7
85
10
5
86
9
5
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It is probably clear to the reader by implication that a job within the
same organization might be "twice the size" in content but have the same
profile. That is, an 1840 point position might consist of 920 Know-How points
(50%), 460 Problem-Solving points (25%) and 460 Accountability points (25%).
The same profiles for different "size" positions indicate that the
position have similar functional characteristics within the organization. For
example, when problem solving equals accountability, the position tends to be
sunnortive or in a staff role for primary or line management.
As indicated earlier, however, the actual design and language used for
such charts must be established for each client institution separately; and
the fully effective and appropriate application of these charts derives from
their use under the guidance of an experienced evaluator.
The charts may be used for evaluating positions not included in a first
study, for evaluating new positions designed after the close of a study, and
for evaluating the changed content of positions that currently exist within an
organization.
This process requires that the evaluation of one position within an
organization be consistent with and related to other evaluations of positions
within that institution. Once a group of positions within a particular
organization have been evaluated with the Guide Charts, the language of the
charts acquires a special meaning that is applied in the same manner each time
a position is evaluated.
PROFILES AND STEP DIFFERENCES
Profiles and the Step Scale
There are really only two key rules for the evaluator to remember when
job profiles are being prepared.:
o The profile percentages must always add up to 100 percent; and
o The Problem-Solving percentage cannot equal or exceed the Know-How
percentage.
Rather than have evaluators burdened with the detailed calculations, the
"Characteristic Hay Profiles" chart facing this page includes practically all
of the usual numerical factors handled during evaluation.
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In order to use the chart effectively, however, some additional comment
is required about the numbering system.
At the left of the Profiles Chart is a series of numbers ranging from
"4" to "6400." The column is titled "Steps," and in this process each number
is called a "Step." Starting at the bottom of the scale, if you move from "4"
to "5" you have moved one step. If you move from "4" to "6" you have moved
two steps. If you move from "4" to "10" you have moved six steps.
You may also move down the scale as well as up the scale, so that moving
from "100" to "50" means you have moved five steps down.
On the lower half of the Profile Chart, all of the variations of profiles
are shown.
In the center column, AC = PS (Accountability = Problem-Solving) means
that the point totals for each of these factors are equal. Using the illus-
trative evaluation discussed on pages 5 through 8 of this report, PS points =
AC points (230 = 20), as shown below.
Total
KH PS AC Points
F II 3 460 F 4 (50%) 230 F 3 C. 230 920
The Problem-Solving percentage is 50%. Reading the facing chart, where
50% appears at the outermost column on the left, and moving to the column
headed AC = PS, the profile for the illustrative job is: 50-25-25, the same
percentages presented in the discussion of Illustration 4, page B-5.
If an evaluation were as follows:
Total
KH PS AC Points
G III 3 700 G 4 (57) 400 G 5 C 528 1628
Then, the Accountability points (528) are two steps higher than the
Problem-Solving points--note that the step scale on the left side of the chart
progresses. as follows: 400 460 528. The profile can be found by locating
57% in the column with the heading "% PS/}ai"--the 57' being the percentage in
the evaluation itself--and moving rightward to the column labeled "2 UP."
Thus the profile for this position is: 43-25-32.
The technique is probably at this point evident to the reader.
One other useful application of the Profile Chart is found in the table
of step values at the upper part of the chart. The evaluator can find the
point totals for Problem-Solving directly from this chart.
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In the illustration above, the position has been evaluated for Know-How
at G III 3 700 (Points). The 700 points can be located on the uppermost
horizontal line. In the vertical column, labeled "% PS/KH," the percentage
value of 57%--the value chosen in the evaluation itself--can be found. The
number 400 appears at the intercept of 57% and 700 (Points). Thus, the point
total for Problem-Solving is 400.
The profiles of positions help to serve as a "check" on the judgment of
the evaluator. In the report, it was stated that "level" profiles are char-
acteristic of support or staff positions. Major executive positions, with
very heavy "line" responsibilities and an overwhelming level of primary
accountability for the performance of the organization, tend to have "3 up" or
"4 up" profiles--that is, Accountability point totals are much higher than
Problem-Solving totals.
On the other hand, intensively research-oriented positions will tend to
have "2 down" or "3 down" profiles--that is, Accountability point totals are
much lower than Problem-Solving totals.
Stet, Differences
Another set of important evaluation rules involves judgments that result
in step differences. In comparing the Know-How or Problem-Solving or Account-
o You cannot see any difference, there is none and both jobs are at the
same step.
o You detect a just noticeable difference in the factors being compared,
it is a one-step difference.
o The difference is quite evident, it is about two steps.
o If, even without consideration, there clearly is a difference, then it
is a matter of three or more steps. (Add some intermediate jobs for
ability aspects of two positions, if after thorough consideration:
smoother progression.)
The key task of the evaluator is to locate a position properly along the
semantic or qualitative dimensions of the Guide Charts. Then, the choice of
a step number can be used to "finely adjust" the judgment. That is, if you
choose the lower or "top if the bnx number" step, your sense of the appro-
priateness of the judgment is not overly strong. If your choose the higher
or "bottom of the box number" step, your sense of the appropriateness of the
judgment is that you may really be considering placement into the next highest
level. Of course, the Problem-Solving Chart gives you only two choices, but
the "sensing" patern indicated above is the same.
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AYMEN & MANAGEMENT
a thoughtful discussion of the serious concerns facing administrators today
EDWARD N. HAY & ASSOCIATES MANAGEMENT CONSULTANTS
Number 235 of a Series
People and Performance:
Why Down Is Beautiful
F or years we've been thinking about jobs in terms
of Down and Up, and referring to the people in
those jobs as Down People and Up People. Perhaps it's
time to say exactly what we mean.
Jobs contain three major elements: know-how,
problem solving and accountability. Down and Up refers
to the. relationship between problem solving and ac-
countability. In a Down job, the emphasis is on problem
solving. In an Up job, accountability-which calls for
action and end results-receives the major emphasis.
While we may seem to discuss Up and Down jobs and
Up and Down people in a somewhat black and white
fashion, we are not overlooking the fact that every Job,
and every person, possesses some of both types of char-
acteristics. Remember that we are looking at the rela-
tionship between problem solving and accot.mtability,
not problem solving rersus accountability. Every job has
some thinking elements and some action elements. The
question is how these two complement each other.
Down jobs require a lot of thought. This thinking
may be creative or adaptive in its challenge, or it may
require careful evaluation and analysis of data. The
important thin, is that in a Down job an individual is
paid for producing plans, analysis, a new product,
recommendations. Implementation is left to someone
else.
Down Is In
Many managers think Down is bad and Up is good.
When they evaluate jobs, they try to include a little
uppityness in every job-"Our people are doers." Wrong!
Sonic of your people should be thinkers. Gird yourself.
Think down.
In a bank trust department, for example, security
analysis is a Down job, while portfolio management is an
Up job. If the bank decides to make its investment re-
search people accountable also for portfolio manage-
ment, their jobs would be changed from Down to
Up-and the research department weakened. By its very
nature Down contributes to the end results achieved by.
others, but should not be expected to compete for a
piece of the action.
Machiavelli Was Down
Which bripgs us to our most important point. Some
people do an excellent Down job once the positive
aspects of a "thinker's " job are emphasized. Such
people are usually not motivated by power and money.
They prefer a job which permits thoughtful reflection, a
search for better ways to do things. Machiavelli is an
historical example of Down. He tried to regain the good
graces of the powerful Medici through intellectual skills,
and was one of the first to recommend "management by
objectives." The means lie used did not concern him!
A typical Down person may not always seem prag-
matic. He is usually articulate about arguing a point. but
he tends to be blunt, outspoken, a little idealistic. He
values ideas. Up people probably played on the high
school football team. They're aggressive, competitive.
Down people may have carried the tuba in the marching
band. Or they have exotic hobbies like existential philo-
sophy or building harpsichords. Volume and profit they
appreciate, but after two martinis you hear them wonder
wistfully if growth is really good.
The Prince Was Up
Up people need Down people. The field force in an
insurance company must have someone to worry about
new product development and market research. A chief
executive needs at least one officer on whom he can rely
for complete objectivity. If everyone competes hard in
an Up way, priorities and objectives can become dis-
torted. The major difference in Up excellence and Down
excellence is that Up is usually measured in two ways-
profitability and growth-while Down is more likely
measured in terms of contribution to a body of know-
ledge, publications, etc. Its impact is less immediately
convertible into profit or growth.
Up people enjoy triumphing over obstacles, using
their influence and skill to control the actions of others.
Caesar Borgia, the notorious Florentine prince, aggres-
sively pursued end results--total power for himself-with
cunning, total dedication and an utter disregard for side
effects. He was Up because he was continuously involved
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in actions that had weighty impact on his surroundings, capability and estimate his potential against the meal-.
like assassinating people. Implicit in an Up move, even ured requirements of his job. They consider his experi-
when end results are legitimate and means are construe- ence, his talents, and his job preferences, and often
Up and Down People
include psychological appraisal of personality and apti-
tude factors that influence job performance. Through
proper selection techniques a company can place people
in Down jobs and encourage them to produce Down
A few people can discharge the accountabilities of results.
both a Down job and an Up job in an exceptionally Compensation: The right mix of compensation alter-
competent manner. These people are comparatively rare, natives must also be geared to the Up and Down nature
and generally outstanding, like Benjamin Franklin and of jobs. Incentives, which reward the degree in which
Winston Churchill. On the Down side, Franklin invented accountabilities are met or surpassed, make sense for
bifocals and the Franklin stove, explored electricity, many Up jobs, where the premium is on action, but
excelled in chess, and became a prolific writer and might apply misguided pressures for Down people,
thinker of unquestioned originality. On the U.p side, he who need time for contemplation and research away
turned ideas into action when he helped organize the from the push to perform. The design of any incen-
U.S. Post Office, secured French help for the Colonies live program that exists for both Up and Down jobs
and published Poor Richard's Almanac, handbook of the must be related to the inherent characteristics of
pragmatic, profit-oriented man. each specific job.
Winston Churchill's accomplishments are legion. On ;Management Methods: Companies that stress man-
the Down side, he was a witty and feared orator who agement by objectives must vary the application
wrote voluminously, including a six-volume history of according to the Up and Down nature of jobs to
World War II, won the Nobel Prize for Literature, and emphasize the kind of results they expect. Up jobs
became all accomplished water colorist. On the Up side, need definite targets. like cutting costs 10%, while
he was Prime Minister of England during World War 11, Down results are harder to pinpoint. For Down jobs,
and was renowned for his courage. energy and frankness. management must create a general area of focus-such
He was a mag'flificent, stylistic leader. as developing methods to help Up people cut costs-
People who can he equally effective in Down and Up and follow through by giving Down people the flexi-
areas are rare arid valuable. On the Down side, they bility and freedom from Up pressures they need to
possess intelligence, imagination. intellectual leadership, produce effective Down analysis or plans.
vision, and a willingness to challenge existing values. On
the Up side, they are courageous, aggressive, pragmatic
and energetic, and call exert authority and accept con-
sequences. They provide leadership of a practical kind
because they are able to act.
Think Down
Once a company recognizes the need for including
Down along with Up, there are at least four areas where
this recognition can lead to positive action:
Job Design: A good job evaluation program empha-
sizes the Up and Down profiles of jobs. and enables the
company to create and maintain jobs that clearly identi-
fy and encourage Up and Down results. A chief execu-
tive officer is clearly Up: his corporate planner is Down
and should be encouraged to operate in a Down way.
Management must believe in the need for Down jobs and
communicate this belief clearly.
Selection: A company that understands the Up and
Down nature of its jobs can find. through man-job eval-
g
uations, the right Up and Down people to handle these
jobs. Man-joh evaluations assess a person's current
Tomorrow's Leaders
In any talent search, the biggest bonus comes
every time a company identifies those individuals
who can perform well in both an Up and a Down
way. Here are the people who combine the intelli-
gence and creativity of Down with the courage and
drive of Up. Here are the people capable of balancing
business demands for profit and growth with society's
demands for relevance, constructive use of power,
and intellectual leadership. The company that identi-
fies these people early in the game-and helps them
develop their potential through actual experience in
exercising both kinds of accountabilities --will be
taking a giant step toward providing tomorrow's
leaders today.
rl reprint front Business llori=ons, "Patterns of Alan-
agement by Results" t' Daniel Al. Glas::er, Plt.D. is
available to readers upon request. 3unply write to: A lc&,!
L?'ditor, at any of the Iluy addresses listed below.
EDWARD N. HAY & ASSOCIATES ? MANAGEMENT CONSULTANTS
ORGANIZATION - COMPENSATION - MANAGEMENT DEVELOPMENT AND APPRAISAL - MARKETING
tic:.d,funrtcrs: 1845 Walnut Street, Philadelphia, Pennsylvania 19103 Tel. [phone]
: ? face I East Wacker Drive Suite :23
11-ton, Mass. Chicago, Illinois 76:5 Eve Street. N.W.
HAY
?2t@8 00601 Washington. D. C. 20006
Tel 01' 742-6800 Tel. [phone] Tel. [phone]
2758 No 1 Main Place 1 Maritime Plaza
Dallas, Texas San Francisco, Calif.
75250 04111
Tel. [phone] Tel. [phone]
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JOB #
13
FS TYPE/GRADE
CONE
TOTAL POINTS
CLIENT/HAY
MIDPOINT
FSO
3
Political
1354
484
FSRU
2
Admin.
1312
469
47
.392
FSO
3
Admin.
1312
469
38
,107
FSO
2
Political
1216
434
47
,392
FSO
3
Political
1176
420
38
,107
FSO
3
Consular
1176
420
38
,107
FSO
3
Political
1176
420
38
,107
FSO
4
Admin.
1142
408
30
,198,
FSO
3
Econ./Comm.
1056
377
38
,107
FSO
3
Econ. Comm.
1056
377
38
,107
FSRU
2
Admin.
1022
365
47
,392
FSO
4
Consular
1022
365
30
,198
FSO
3
Econ./Comm.
988
353
38
,107
FSO
4
Econ./Comm.
958
342
30
,198
FSO
4
Political
958
342
30
,198
FSR
3
Admin.
924
330
38
,107
FSO
4
Consular
890
318
30
,198
FSO
4
Admin.
890
318
30,198
FSO
4
Consular
890
318
30
,198
FSO
4
Econ./Comm.
890
318
30,198
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JOB #
FS TYPE/GRADE
-CONE
TOTAL POINTS
CLIENT/HAY
MIDPOINT
28
FSO 4
Political
860
88
FSO 5
Econ./Comm.
860 307
32
FSRU 3
Admin.
805 288
38,107
98
FSO 4
Econ./Comm.
782 279
30,198
68
FSRU 3
Admin.
775 277
38,107
77
FSO 6
Econ./Comm.
750 268
19,997
31
FSO 5
Econ./Comm.
750 268
24,351
110
FSO 5
Political
727 260
24,351
111
FSO 5
Political
727 260
24,351
60
FSS 4
Consular
702 251
20,907
89
FSRU 5
Admin.
702 251
24,351
7
FSO 5
Econ./Comm.
654 234
24,351
44
FSR 4
Admin.
634 226
30,198
95
FSO 4
Admin.
614 219
30,198
12
FSRU 4
Admin.
611 218
30,198
91
FSRU 5
Admin.
594 212
24,351
69
FSRU 4
Admin.
588 210
30,198
96
FSRU 6
Spec. Proj.
588 210
19,997
21
FSS 3
Admin.
571 204
25,458
76
FSO 6
Admin.
571 204
19,997
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JOB #
FS TYPE/GRADE ?CO
FSU jl 5 Admir
Spec. Proj
Spec. Proj
TOTAL POINTS I MIDPOINT
CL I Elf/HAY
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JOB #
FS TYPE/GRADE
CONE
TOTAL POINTS
CLIENT/HAY
MIDPOINT
18
FSR 6
Admin.
353 119
19,997
62
FSS 3
Sec.
333 119
.. 25,458
86
FSS 4
Sec.
333 119
20,906
113
FSS 3
Sec.
333 119
25,458
83
FSS 4
Admin.
319 114
20,906
29
FSR 8
Admin.
301 108
14,316
85
FSS 5
Sec.
291 104
18,704
114
FSS 5
Sec.
291 104
18,704
115
FSS 5
Sec.
291 104
18,704
116
FSS 7
Sec.
282 101
14,998
45
FSS 6
Admin.
275 98
16,743
100
FSS 7
Admin.
273 98
14,998
55
FSRU 6
Admin.
275 98
19,997
101
FSS 7
Admin.
275 98
14,998
17
FSRU 7
Admin.
275 -98
16,743
102
FSRU 7
Admin.
275 98
16,743
103
FSRU 7
Admin.
275 98
16,743
104
FSRU 7
Admin.
275 98
16,743
54
FSR 8
Admin.
271 97
14,316
117
FSS 7
Sec.
268 96
14,998
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JOB
FS TYPE/GRADE
-CONE
TOTAL POINTS
CLIENT/HAY
MIDPOINT
82
FSS 7
Sec.
268 96
14,998
99
FSS 8
Admin.
247 88
13,440
16
FSRU 8
Admin.
247 88
14,316
57
FSS 6
Admin.
247 88
16,743
79
FSS 5
Admin.
245 88
18,704
52
FSRU 7
Admin
242 86
16,743
80
FSS 9
Sec.
233 83
12,043
81
FSS 8
Sec.
233 83
13,440
40
FSS 7
Sec.
233 83
14,998
37
FSS 7
Sec.
233 83
14,998
118
FSS 8
Sec.
203 73
13,440
119
FSS 8
Sec.
203 73
13,400
38
FSS 8
Sec.
203 73
13,440
43
FSS 7
Sec.
203 73
14,998
42
FSS 8
Sec.
194 69
13,440
39
FSS 8
Sec.
194 69
13,440
78
FSS 10
Sec.
194 69
10,799
84
FSS 9
Sec.
194 69
12,043
41
FSS, 8
Sec.
169 60
13,440
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May 12, 1978
A N N E X
to
Overseas Elements of Foreign Service Positions
Amplification, with Illustrations
This paper is intended to provide illustrations of
the extra dimension of Foreign Service positions overseas
arising from frequent moves of Foreign Service employees,
foreign languages, cultural standards, political environment,
self-reliance/initiative, and representational duties.
Each of these elements is discussed in relation to the nine
other elements of the proposed factor evaluation system
for classifying Foreign.Serv.ice positions.
1. Frequent moves add an extra element of difficulty
to the performance of all Foreign Service American positions
overseas. Here are a few examples:
Consular employees learn to detect patterns of
deception followed by non-bona fide visa applicants and by
practitioners of visa fraud. These patterns vary from post
to post, and when a consular employee is transferred it
becomes necessary for him/her to recognize new patterns.
The basic principles of work have not changed, but new
knowledge is required if the principles, guidelines, etc.
are to be applied, most effectively.
Political and economic/commercial analysts and
reporters must know in some detail how the host government
organizes its decision making. Each government is different,
both in terms of its formal organization and in terms of
the individuals in power. The analyst and reporter who
has learned what he needs to know at one post must rapidly
acquire like expertise at his next post.
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Frequent moves necessitate adaptations in supervisory
controls. Newly-arrived employees frequently require
close supervision while they are beginning a new assignment;
providing it is an added responsibility of the supervisor.
Newly-arrived supervising employees may find it expedient
to supervise those working under their supervision closely
fora time, while they are learning the capabilities of
their staffs. Frequent moves of Foreign Service employees
also leads to re-examination and restructuring of
supervisory controls at Foreign Service posts, so that
assigned personnel may be employed most effectively.
One result of frequent moves is an overall increase in
the total effort devoted to supervision and supervisory
control.
Because the Foreign Service is staffed by mobile
employees operating in diverse situations, its guidelines
tend to be broadly stated and non-specific. Employees must
use.judgment and ingenuity in interpreting and applying
them--and in devising local guidelines for dealing with
problems particular to the post.
Secretaries, for instance, have manuals for their
guidance in preparing correspondence. These are useful at
all posts, but the secretaries adapt and supplement them
to meet local post conditions and requirements. Frequent
moves make it necessary for secretaries to learn new
supplementary material.
Similar adaptations are made by other employees.
Political officers, for instance, know U.S. policy on
human rights. How this policy is best advanced, however,
varies from country to country. When he/she moves to a
new post the Ambassador and his deputy may give him/her
supplementary guidelines to enable him to apply the policy
effectively in the new situation.
To perform work at a given level of complexity.in a
number of different environments raises the overall
complexity of an employee's total assignment. The number
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of largely undefined, issues and elements in a series
of different jobs through which an employee moves is
inevitably greater than it would be if he/she were
continuously in the United States. It is intended indeed,
through frequent transfer to ensure that employees do
in fact understand the. complexity of the foreign relations
process and avoid the pitfall of trying to solve complex
problems as if they were merely U.S. problems, problems
of the host country, or purely bilateral ones.
The economic/commercial officer dealing with the
problems arising from a U.S. trade restriction, for
instance, must see that the solution should, if possible,
be acceptable to the U.S., to the host country, and to
third countries. Furthermore, it should be acceptable not
only in the first instance but also as a matter of
precedent.
Frequent moves do not directly affect the scope and
effect of the work done by Foreign Service employees.
One of the principal effects of frequent moves is
the disruption of existing personal contacts and the
requirement to establish new ones. The effect is general;
it applies to all Foreign Service employees.
Security officers, for instance have circles of
,local officials whom they know and can trust. When they
move, they may find that they have inherited their pre-
decessors' circle. But personal contacts are indeed
personal. Some of the relationships of mutual trust will
fade away; new ones will be established. If the new
circle is inadequate, the security of the post and its
employees will be prejudiced.
The significance. of personal contacts goes clear to the
top. Ambassadors may be replaced precisely because of a
decision to break a given circle of contacts and establish
another.
The general purposes of personal contacts may alter
as an employee moves from post to post (e.g., they are
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not the same in Eastern Europe as they are in Western
Europe). However, frequency of moves does not of itself
affect the purposes of contacts.
Medical opinion indicates that moving is a factor
of stress, adversely affecting individuals. Frequent
re-location entails some physical effort, but its larger
effects arise from other stress factors. These stresses
are met by all Foreign Service employees, since-all are
subject. to frequent transfer. In general, the impact of
frequent transfers is greatest on employees with dependents.
Families frequently have difficulties in making regular
adjustments to alien environments. Despite any domestic
strains that may develop, however, the employee is
expected to meet the work requirements of his/her new
assignment.
Frequent transfers do not affect but are a part of
the work environment of Foreign Service American employees.
They are an aspect of the work assigned.
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2. Foreign Language
The degree to which skill.in reading and/or speaking
a foreign language is necessary to gain and/or apply
the facts and other information necessary to do acceptable
work varies from post to post and between positions at the
same post. It most evidently is necessary in countries
(e.g., the Peoples Republic of China) where few people are
able and willing to speak English and where for political,
cultural or other reasons information of significance
to the U.S. is closely held. At such posts much essential
information is gathered by the careful comparison of
foreign language texts and by appraising the nuances of
information obtained in foreign language conversations.
Similarly, a part of the work of such posts is to
disseminate facts and information to readers and auditors
who do not understand English.
Even in positions where knowledge of a foreign
language is not so evidently crucial in obtaining and using
information, skill in the use of the local language(s)
considerably augments the ability of Foreign Service
employees to receive or to convey information effectively.
Asecretary who cannot indicate to a caller who does not
speak English when he/she might be received by one of the
post'.s officers is obviously less able to meet the require-
ments of his/her position than one who can--just as is an
economic/commercial officer who can not explain to a non-
English speaker how he/she might best do business with
U.S. firms.
He/she may know the information he wishes to convey,
but if-he can not bring it to bear directly at the critical
moment, the information may be useless. Consular officers
who can not interview applicants in their own language
simply can not obtain all the critical information they
need to determine visa eligibility or the validity of
claims to U.S. citizenship; significant numbers of
applicants are unwilling to give the necessary information
through interpreters.
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Knowledge of a foreign language is an important
factor in establishing supervisory controls. For example,
a Middle Eastern Embassy's General Services Section
is staffed by 5 General Service Officers and 71 local
employees, many of whom speak only the language of the
host country. Those GSOs who do not speak the local.
language must supervise indirectly through English-
speaking local employees. The latter may or may not be
the best immediate supervisors among the local employees,
but they are the only usable ones. To the extent that
officers who supervise large numbers of local employees
can use the local language they are able to organize
their work more effectively and to exercise more
effective supervision.
The foreign language element does not affect signi-
ficantly the guidelines under which most Foreign Service
employees work.
The need to use a foreign language adds one element
of complexity--namely translation and interpretation--to
the work of Foreign Service employees. Consular officers,
for example, are required as occasion arises to certify
that legal documents have been translated'into English
by translators of known competence. Security officers
must be sure that local authorities understand their
roles in the protection of post property and personnel.
Embassy officers must ensure that what is said in inter-
views with host governmental officials is thoroughly
understood by all parties, and this task is more complex
when those present are not all bilingual. Written
statements may have to be prepared, for example, where
none would be required under other circumstances.
While the nature of the results: achieved by a Foreign
Service employee may be affected by the foreign language
element in his/her position, that element does not
materially affect the breadth and depth of the assignment
and the general scope of the work accomplished.
Every employee who must deal officially with those who
do not speak English finds that his/her efficiency is
impaired if he can not communicate in a foreign language.
The oftener such occasions occur, the greater the need
for the language.
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General Services employees who are expected to obtain
supplies and services locally, to read specifications,
to accept bids, to assist with the rental and maintenance
of quarters and offices find repeated use for foreign
languages, as do receptionists, consular employees,
security officers, stenographers and others. Economic
and political officers, too, find that they may be handicapped
in obtaining information, persuading and negotiating if
they must deal only with counterparts who speak only
English. Subtle nuances (which foreigners may be unable
to convey or to understand in English) are of great
importance when communicating with other governments on
matters of consequence.
An employee who can not communicate in a foreign
language must of necessity confine his effective work
contacts to the circle, however, restricted it may be, of
those who communicate in English.
The purposes of.the working contacts of Foreign
Service employees are not materially affected by the
language element in their work, nor are physical demands
on the employees. The physical risks and discomforts of
working are only marginally affected. It is worthy of
note, however, that there is a continuous psychological
drain on individuals who can not fully meet position
requirements because they can not always communicate
effectively. Secretaries, for example, who never know
whether they will be able to transmit and receive
messages via telephone without calling for assistance are
obviously under a strain almost never experienced by
secretaries in the United States.
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3. Cultural Standards
Knowledge of cultural standards is not customarily
conveyed by formal training. Foreign Service employees,
like all other Americans, absorb the cultural standards
of American society at home, at school and in everyday
work and recreation. He/she who has not learned well is
reproached, in myriad subtle or not so subtle ways, by
his associates. Life teaches him/her how to improve
his/her personal effectiveness by taking due account of the
cultural norms of American society, and the learning
process is virtually instinctive.
Foreign Service employees working abroad do not have
a lifetime's conditioning to the local culture. Early
in their tours of duty, they must learn what actions,
appearances, etc. are acceptable and must augment their
effectiveness in dealing with local nationals by learning
what behavior is not acceptable or "counter-productive."
This must be done if employees are to fulfill work
requirements in terms of maintaining contact and influence
with the local government and society. This additional
element of knowledge is essential to most Foreign Service
positions overseas. In certain countries for instance,
social kissing on hand or cheek (acceptable or even
customary in many Western cultures) may lead to the
irreversible disruption of social and professional
contacts between families and individuals. In other
countries, touching the head is taboo. The list could be
extended. In fact, the Foreign Service Institute of the
Department and many posts abroad seek to make Foreign
Service employees aware--through briefings, the issuance
of written guidance, etc.--of many of the important "do's
and dont's" for U.S. employees posted abroad.
While cultural differences do not affect the controls
used by the supervisors of Foreign Service employees, they
do affect the controls those employees find useful in
supervising local employees. In countries where literacy
rates are low, for example, General Services officers
may find that tasks which can not be set in simple oral
terms must be broken into components and assigned piece-
meal. In certain countries daily intervals of religious
observance must be allowed, and prescriptions regarding
dress must be considered. Supervisors take into account
local customs regarding hours of work, the provision of
maternity leave, etc. In many cultures, employees at
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certain levels are so unaccustomed to solving problems
on their own that supervisors can rarely specify
assignments solely or even in major degree in terms of
results to. be achieved. Sometimes a certain degree
of pilfering is generally considered to be acceptable;
supervisors have the task of establishing standards which
vary from the local norm and of ensuring that they are
observed. Supervisors also must learn how to motivate
employees in terms of incentives and disincentives to
which they are culturally conditioned to give appropriate
weight.
The guidelines Foreign Service employees follow are
not affected by local cultural standards. However,
Foreign Service employees must use judgment and ingenuity
in interpreting the intent of the guidelines and in
taking cultural differences into account in developing
applications to specific areas of work. For example,
broad policy statements are interpreted to the public in
terms of symbols effective in the local cultural environ-
ment.
The additional element of complexity involved in working.
in an alien culture has been touched on under other
headings. Further examples could be given. For example,
-economic/commercial officers find that certain methods
of advertising which are effective in the United States
are not similarly effective in other countries. Part of
their work is to ascertain the reasons why this is so and
to make the information they acquire available to U.S.
businessmen. Information officers, too, are continually
involved in interpreting cultural aspects of American
life to foreigners of a different cultural background.
The greater the.cultural differences, the more complex the
work. It requires the analysis both of aspects, of
American life that Americans take for granted and of elements
of alien culture that affect perceptions of the United
States. For instance, citizens of countries to which the
concepts of Western democracy are alien have difficulty
in understanding and appreciating the political processes
of the U.S. Analyzing the reasons for this difficulty and
divising means to reduce or overcome it are exceedingly
complex processes. They require continuing efforts to
establish concepts, theories and programs to resolve
unyielding problems arising from inherent cross-cultural
differences.
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Cultural differences, like language differences, have
a bearing on the nature of the results Foreign Service
employees can achieve, but they do not materially alter
the scope of the work done or the number and kinds of
people affected by it.
Cultural differences do not materially affect the
range and level of working contacts most Foreign Service
employees are expected to make, nor do they materially
alter the purposes of these contacts. However, cultural
differences do have to be taken into. account if contacts
are to be fully effective. In many countries the role
and influence of office-holders do not correspond as
closely to their ostensible positions as do those of U.S.
officials. Often influence is very much a personal or
family matter. Whom to approach and how best to do so
requires more than superficial examination of an official
organizational chart, and it depends--much more than in
the U.S.--on the etablishment of interpersonal trust and
rapport.
Cultural differences do not materially affect the
physical demands on Foreign Service employees. They do,
however, impose a psychological drain on them. Foreign
Service employees abroad are never free to follow purely
American norms of conduct and are always aware that to do
so may have unwanted consequences. They are also aware
that to accept alien norms fully- or to allow their
children to do so may have unfortunate consequences.
Families who serve in countries where inter-racial
prejudice is particularly prevalent, for example, must
be on their guard against the contagion.
Cultural differences have little to do with the risks
and discomforts of physical surroundings or the nature of
the work assigned. There are some exceptions, however.
In some countries, for instance, the killing of animals
even if it is accidental--may arouse onlookers to violent
assault on the person involved. In such countries it is
advisable for foreigners not to drive automobiles but to
employ a local chauffeur. Indeed the official advice to
Foreign Service employees in a number of countries is
never to stop at the scene of an accident--even if humans
have been killed or injured--but to drive immediately to
the nearest police station.
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4. Political Environment
The peoples and governments of many foreign nations
actively distrust foreigners and impose mild to severe
restrictions on their freedom of movement and activity.
Many foreign regimes which are unsure of their political
power distrust all outsiders--whether local or foreign
regime nationals. They restrict foreigners' activities
and keep them under positive, continuous or intermittent
surveillance. In countries where the people or their
government are unfriendly toward Americans or are
actively hostile toward the U.S., the restrictions
imposed on official U.S. personnel are even more rigorous
and unpleasant. The positive surveillance of official
Americans ranges. from unobtrusive, static observation
of their places of work and residence to police "tails"
who follow employees or members of their families 24
hours a day. It may. include eavesdropping by secret
police or police agents in public places (restaruants,
cinemas, sports arenas) and the recruitment of
household servants or embassy local employees as
police informers.
Politically inspired restrictions on the Foreign
Service employee's freedom of movement and activity
(besides being increasingly unpleasant and psychically
debilitating as they wear on) directly and significantly
impede the employee's successful performance of his/her
job. Surveillance of American residences to identify
foreign national guests, "plants" among Mission or
household staffs, and "tails" who follow official U.S.
personnel to and sometimes into the offices of foreign
national businessmen, teachers, and government officials
quickly discourage further contact by host country
nationals with U.S. Embassy or Mission personnel. To
overcome the chilling effect of host government restric-
tions, the Foreign Service employee must devise means
of making regular if minimal contact with key sources
of information and/or assistance and a conscious system.
of regulating the frequency of contact with each source
in order to minimize the risk to the person interacting
with the official American. The detention and determined
grilling of an innocent host nation contact immediately
after the departure of the U.S. Embassy employee is an
all too familiar story to Foreign Service personnel.
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Unfriendly regimes frequently attempt to obtain a
greater measure of knowledge about and/or control over
the activity of the U.S. Mission in their country by
recruiting informers among the Mission's local employees
or by introducing agents into the local staff group.
The threat which these informers pose to the integrity of
the mission and its operations is obvious. So too, are
the additional demands placed on every American-employee
to safeguard the security of the Mission. The additional
supervisory problems imposed by secret police "plants"
is less evident. Supervisors are frequently called upon
to produce standard results with unqualified and
inadequate employees who cannot be inspired by exhortation
or prospect of promotion or be disciplined by threat of
firing, and whose interest in the task at hand and in
performing in satisfactory fashion is subordinate to the
accomplishment of their "collateral" tasks.
Executives and supervisors called upon to manage
program activities in an unfriendly or unstable nation
must exercise tighter control over the professional
activities of their subordinates and impose a degree of
control over the off-duty lives of Mission employees and
their families than is either necessary or acceptable in
other work environments. The number of negative guidelines
increases significantly; to name only two, supervisors
must insure that host government officials are not
intentionally or inadvertently provoked or that employees
or their families do not run unnecessary or foolish risks
in moving around the community.
In politically unstable countries, U.S. Embassy
political officers must develop a sort of sixth sense
for opposition (even revolutionary) activity if they are
to function successfully as observers of the local scene.
This specialized job skill--(which cannot be learned on
a college campus or in an American city) enables the
political officer .to-spot--or to sense--the signs of
political or social tension, of political unrest, of.
active opposition and of the regime's preparations for
counter action (e.g., the deployment of military/security
personnel and equipment in unusual locations or of
additional personnel in critical areas). The U.S.
political officer must also develop the ability to determine
whether the rising political unrest is directed at the
United States or at Americans and U.S. installations or
whether Americans may be injured unintentionally and
their property damaged inadvertently.
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Thus to perform successfully in unfriendly or
unstable countries, Embassy personnel in every section
of the Mission must develop a new group of professional
skills: first, effective concern for the safety and well-
being of the members of the American community and for
the integrity and physical security of U.S. installations;
second, mastery of the.range of tasks associated with
Emergency and Evacuation planning, organization, and
operations. Every section of the U.S. Mission is involved:
political and economic officers seek "hard" information
on events and with the Ambassador and DCM, analyze the
threat and the options available; consular officers relay
timely information to the American community and document
potential emergency travelers; administrative support
personnel re-check security and supply dispositions,
establish emergency communications links, and prepare to
move large numbers of employees and dependents to exit
routes. None of these critically important skills can
be'learned in the U.S. or in comfortable cities in the
developed world.
Finally, each Foreign Service employee must learn how to
surmount the physical or psychic impact of any politically
inspired limitations imposed on him/her or on his/her
family; he/she must continue to perform up to standard
despite the restrictive, hostile, or unstable environment
outside.
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5. Self-Reliance/Initiative
To perform up to standard, American employees in many
Foreign Service posts must demonstrate a degree of self-
reliance and initiative not required of personnel performing
similar tasks in the U.S. or in large U.S. military or
civilian installations abroad. The degree of self-reliance
and intiative required for effective performance varies
with the size and location of the post, with the availability
of supplies and equipment, with the length of the supply
line, and with the presence of expert or technical
personnel (on the staff of the U.S. Mission, working for
American firms, or available on the local job market).
Foreign Service personnel in small and medium size
posts, particularly those located in the Developing World,
must perform and perform successfully without the level
of professional guidance and supervision and of informal
support from qualified professional colleagues that is
typically and routinely available in an organization in
the U.B. or in a large U.S. installation abroad. Similarly,
these employees must successfully carry out their assigned
tasks without the consumables, spare parts, and equipment
which are routinely available at home, and without the
support services of specialized and/or technical personnel
who are immediately available in.the U.S. as members of
the organization or as contract experts. As a result, the
Foreign Service employee in a small, isolated post must
set about acquiring the additional knowledge of his own and
of related fields which he needs to perform successfully,
and he must begin developing the self-confidence and
self-reliance he needs to function effectively.
Consciously and systematically, the employee must
accumulate and delve deep into the textbooks, guides, and
manuals he needs to understand his own job and to perform
it better; he must take advantage of the infrequent visits
of traveling specialists/technicians to increase his
knowledge of his job and of the equipment he uses. He must
devise ways to acquire and to stock the consumable supplies
and the parts needed to keep his operation going. Finally,
by a combination of research, questioning of visiting
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'technicians, and by trial and error experimentation,
the employee must learn how to diagnose and repair or
to utilize in alternative modes a piece of malfunctioning
equipment. Thus, research into handbooks replaces
questioning of supervisors or colleagues; "do-it-yourself"
maintenance replaces telephoning and waiting for the
repairman; study, extended question and answer correspon-
dence and experimentation replaces the quick walk down
the hall to the budget and fiscal specialist, the civil
engineer, or the air conditioning expert.
Working in a small US. Mission in a developing
country where there are no electrical engineers or even
trained electricians, the General Services Officer, for
example, must teach himself enough about electricity and
electrical installations to wire the additional rented
residence which is critically needed to house the new
employee and his family who are arriving next week; he
must systematically explore the local market for supplies
and services in order to know where to find substitute
supplies which can be made usable with alteration or where
he can get a key replacement part reproduced or repaired;
he must, meanwhile, devise and install warehouse control
and re-order procedures which will compensate for the
length of the supply line (even though they will not off-
set interruptions of transportation or customs clearance
caused by political unrest). The communicator must
isolate the equipment malfunction, strap on a safety belt
climb a 5U' antenna mast to replace a down coupler (with
a replacement part which he "squirreled away" a few weeks
earlier) and restore communication with Washington. The
communicator must do this personaly because there are no
technicians on the local job market, the next regular-
ly scheduled visit of the roving communications technician
is eight weeks away, and the Regional Communications
Officer cannot organize an emergency visit by a communica-
tions technician in less than 5 - 7 days.
Without the improvisation and pinch-hitting which
stems from the increased degree of self-reliance and
initiative, the Foreign Service employee would not and
could not perform his assigned job up to the standard
required, and the U.S. Mission would not be able to
carry out the tasks assigned to it.
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6. Representational Duties
Except when assigned to U.S. Missions located in
large, Westernized cities, Foreign Service personnel and
their families are on constant display as they perform
their official functions or move about their country of
assignment leading their personal lives. They are
representatives of.the United States as well a.~ employees
of the U.S. Government. Judgments are made about the
U.S. and its people on the basis of the conduct and
appearance of the members of the U.S. Official Family.
Moreover, like the minister's son or daughter in small
town, turn-of-the-century America who was expected to
behave "better" than the other children in the town,
Foreign Service employees and the members of their
families are expected by the nationals of the host country
and by the members of the resident diplomatic corps to
behave "better" than other residents whether local or
expatriate. The Foreign Service employees are expected
to be more conservative in dress and manner; they are
expected to conform to the norms.of behavior generally
accepted by the members of the local community.
Since one of the goals of the U.S. Mission in a
foreign nation is to foster understanding and to win
friends (and support) for the U.S., all Foreign Service
personnel and their families, whatever their rank or
function are expected to conduct themselves in a fashion
that will not give offense to or even arouse adverse
comment in the local community. Recognizing that all
their actions outside the privacy of their own quarters
can and probably will be observed, members of the "official
family: must eschew certain actions and activities which
would be entirely acceptable in and would indeed go
completely unremarked in an American setting. In
organizing their private social lives, Foreign Service
staffers must avoid too close or too obvious association
with particular host country nationals or with certain
official or private resident Americans in order to avoid
annoying (or even provoking) the host government or
raising questions about their own official duties or the
status and function of the other Americans. When the
"proscribed" individuals happen to be close friends of
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long-standing from previous posts, the burden which this
mission-related restriction imposes on an employee's
private socializing is especially onerous.
Similarly, Foreign Service employees and their
families are expected to participate in certain public
activities or attend certain social functions organized
by officials of the host government, local nationals,
or other diplomats however dull and unproductive (or down-
right unpleasant) these social occasions may be or however
tired or ill the Foreign Service employee and his/her
spouse may be. As representatives of the U.S., of the
American people, and of the U.S. Mission in country "x",
they are expected to welcome and respond affirmatively
to invitations of the representatives of a friendly
foreign government. -
Foreign Service personnel are also expected to
attend and work at representational social functions given
by the Mission as a whole or by the Ambassador, the DCM
or other senior members of the Mission. Functioning as
co-hosts/co-hostesses of the Ambassador and his wife (or.
other Mission officers and their spouses) the Foreign
Service employee has the task of insuring that the foreign
national guests he/she encounters are accorded a cordial
welcome, are put at ease and are both encouraged and
enabled to have an enjoyable and rewarding,social
experience. Such co-hosting can be difficult and exhausing
work, particularly in countries which are culturally and
politically very different from the U.S.
In addition, nearly every Mission employee must carry
out hi"s/her own personal representational program if he/she
is to accomplish the official tasks on his/her agenda.
Government officials, political figures, and businessmen
are not going to supply information about or comment on
current developments unless the American Embassy political
or economic officer has taken the time and made the effort
to build a relationship of friendship and mutual trust via
a combination of office meetings and social encounters.
Less obvious perhaps, but equally significant in terms
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of Mission operations, the Administrative Officer,
General Services Officer or Budget and Fiscal Officer is
not going to obtain the cooperation and active support
of the traffic police commander,the chief customs
inspector, or the supervising teller at the local bank
unless and until he/she has established the same kind
of relationship of trust and confidence. In highly
personalized societies where tasks and problems are seen
in interpersonal not topical or functional terms, the
fact of being the responsible official in the U.S. Embassy
is not sufficient to obtain., for example, the prompt
clearance through customs of a particular shipment of
vitally needed supplies. But the "difficult" customs
inspector will go to great lengths to help "his friend
in the American Embassy".
Thus representational social activity at the level
both of the Mission and the individual employee is
of major importance to individual and Mission job
performance. The willingness and ability to carry
out an effective program of representational entertaining.
are rarely required for successful job.perforitiance by
government employees working in the United States.
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FACTOR 10 - FOREIGN SERVICE REQUIREMENTS FOR OVERSEAS POSITIONS
This factor deals with the additional requirements
placed upon foreign service employees over and above
those normally associated with government service employees.
There are six separate elements which constitute the
additional responsibilities inherent in overseas positions.
They are:
A. Frequent Moves
B. Foreign Language Requirements
C. Cultural Adjustment
D. Political Environment
E. Self=Reliance/Initiative
F. Representational Duties
Each of these elements, with the exception of element
A, contains separate identifiable levels of complexity and/or
difficulty based on the specifics of the location where
assigned.-
ELEMENT A - FREQUENT MOVES (1 LEVEL)
As part of a career service which requires employees to
frequently pick up households and move, sometimes with very
short notice, Foreign Service personnel must possess the
attitudes and abilities which enable them to do so without
undue disorientation and with a minimum adjustment period
before being fully functional on a new job.
.LEVEL A.1 50 POINTS
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2 -
positions. In almost all cases Foreign Service personnel are
required to move every two or three years.
ELEMENT B - FOREIGN LANGUAGE (4 LEVELS)
This element recognizes that there i.- no single skill
more important in carrying out'official duties and in the
psychological adjustment to a foreign environment than a
knowledge of the host country language.
LEVEL B.1 0 POINTS
English.is the principal language of the country to
which the employee is assigned, and there is no need to learn
a foreign language.
LEVEL B.2
. The position is located in a country where a foreign
language is spoken. However, English is the second language
of the country and the majority of educated foreign nationals
can communicate and conduct business in English.
LEVEL B.3 75 POINTS
The position is located in a country where a category A
language (see 3 FAM exhibit 873.1) is spoken. English is
not the second language of the. country.
LEVEL B.4 125 POINTS
The position is located in a country where a language
other than English or a Category A language is spoken. English
is not the second language of the country.
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ELEMENT C - CULTURAL ADJUSTMENT (3 LEVELS)
This element recognizes the cultural differences associated
with foreign duty assignments. An awareness and appreciation
of foreign cultures and customs is required, as is sensitivity
to the effect of religious and other cultural elements on
both professional and personal behavior.
LEVEL C.l 5 POINTS
The country to which the employee is assigned has a
culture substantially similar to that of the United States.
There are no sharp cultural, class, or religious differences
which effect daily life styles.
25 POINTS
At this level there are a number of cultural, class
and/or religious differences to which American personnel
must adjust.
LEVEL C.3'
75 POINTS
At this level there are many cultural, class, and/or .
religious differences to which American personnel must adjust
often with considerable inconvenience or difficulty. These
differences may manifest themselves in various restrictions
on the conduct of American personnel and may heavily influence
behavior patterns.
ELEMENT D - POLITICAL ENVIRONMENT (4 LEVELS)
This element recognizes that political differences between
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LEVEL D.1 5 POINTS
The political environment of the country to which
the employee is assigned'is similar to that of the United
States. The government is usually democratic with guaranteed
freedoms for its citizens.
LEVEL D.2 25 POINTS
The host country government is different from that of the
United States. Personnel freedoms are restricted, but restrictions
are normally of a limited nature. Normally, the government
is stable and not hostile to the United States.
LEVEL D.3 50 POINTS
The political environment of the host country is
extremely different from that of the United States. Severe
limitations may be placed on its citizens and US personnel.
There are restrictions on movement, speech, and other forms
of communication. Normally, there is little or no outward
hostility towards the US.
LEVEL D.4 100 POINTS
There are major political differences between the
host country and the US. Severe restrictions are placed
on the movements of US employees. The host country government
or a large element of the population is hostile towards the
US.
ELEMENT E - SELF-RELIANCE/INITIATIVE ;4 LEVELS)
This element recognizes varying degrees of self-reliance
and initiative rOrTni -, a of cer.~l i..s~,. .. mt._ _ ~ , _
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5 -
of the post is a factor as-is the availability of backup
equipment, supplies, and technical and clerical personnel
capable of providing assistance.
LEVEL E.1 5-POINTS
This level applies to large and medium sized posts
located in areas where adequate technical assistance is
available and sufficient equipment and supply sources exist.
It is expected that the large personnel complement will
enable the post to provide assistance and support in most
areas.
LEVEL E.2 20 POINTS
This level applies to small posts where it is necessary.
for the employees to provide assistance in areas unrelated
to their normal field of expertise. Adequate technical
assistance is available and sufficient equipment and supply
sources exist.
LEVEL E.3 40 POINTS
This level applies to large and medium size posts
located where technical and mechanical assistance is not
readily available and the local market does not have sufficient
equipment and supply sources. The number of personnel assigned
to the post is such that employees are seldom called upon to
provide assistance and support in areas outside their field
of expertise.
LEVEL E.4 75 POINTS
This level applies to small posts located in areas where
little reliance can be placed on outside sourer fnr f h*-;ral
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6 -
and mechanical' assistance and the local market is unable
to provide adequate sources of equipment and supplies. It
is necessary for employees to provide support and assistance
in areas unrelated to their normal field cf expertise.
ELEMENT F - REPRESENTATIONAL DUTIES (3 LEVELS)
This element recognizes that each American employee,
regardless of his or her specific organizational role,
is considered to be an official US representative by host
country officials and private citizens. Formal and informal
representational functions often require time outside official
office hours and a subordination of personal interests and
preferences to the needs of the organization. This element
also recognizes the additional responsibility of overseas
Foreign Service employees for the effective handling of US
officials, other Foreign Service employees and their families,
as well as visitors and evacuees
LEVEL F.1 25 POINTS
This level applies to all employees who do not have
specific official representational duties but are nonetheless
expected to represent the United States to host country
nationals in everyday activities.
LEVEL F.2 35 POINTS
This level applies to those employees who are expected
to represent the United States officially on an infrequent
basis (generally no more than once per quarter).
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k LEVEL F.3 45 POINTS
This level applies to those employees who are
expected to represent the United States officially on a
frequent basis (generally at least once a month).
Drafted:PER/PPM:BWest:smh
1/17/78
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H
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HAY/WASHINGTON, D.C. and SUBURBS SALARY SURVEY - NONEXEMPT POSITIONS
WASHINGTON, D.C. PARTICIPANTS
Army Times Publishing Company
Communications Satellite Corporation
Computer Network Corporation
Garfinckel's
McGraw-Hill, Incorporated
TRT Telecommunications Corporation
U.S. News & World Report
Woodward & Lothrop
Acacia Mutual Life
American Security Bank, NA
Federal National Mortgage Association
Government Employees Insurance Company
Industrial Bank of Washington
International Group Plans, Incorporated
Metropolis Federal Savings & Loan
Mortgage Corporation
National Permanent Federal
Savings & Loan Association
National Rural Utilities Cooperative
Financial Corporation
National Savings & Trust Company
Northwestern Federal Savings
Pennamco
Perpetual Federal Savings & Loan
Price Waterhouse & Company
Riggs National Bank
Security National Bank
Union First National of Washington
United Services Life Insurance Company
Washington Federal Savings & Loan
NONPROFIT & GOVERNMENT
Air Line Pilots Association
Aluminum Association
American Association for the
Advancement of Science
American Bankers Association
American Chemical Society
American Geophysical Union
American Institute for Research
American Petroleum Institute
American Psychological Association
American Public Transit Association
American Trucking Associations, Inc.
B'nai B'rith
Blue Cross and Blue Shield Associations
Brookings Institute
Chamber of Commerce of the United States
Gallaudet College
George Washington University
Group Health Association, Inc.
National Academy of Sciences
National Agricultural Chemicals Association
National Association of Home Builders
National Association of Securities
Dealers, Incorporated
National Council on the Aging
National Forest Products Association
National Geographic Society
National League of Cities
National Milk Producers
National Railway Labor Conference
National Retired Teachers Association
Natural Rural Electric Cooperative Association
Overseas Development Council
Republican National Committee
United States Brewers Association, Inc.
United States Catholic Conference
Urban Committee
Visiting Nurse Associations
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 Declassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
Aspen Systems Corporation
Automatic Data Processing of Washington, D.C., Inc.
Dart Drug Corporation
Giant Food, Incorporated
Informatics, Incorporated
Kiplinger Washington Editors, Incorporated
Marriott Corporation
NUS Corporation
Pfizer Medical Systems, Incorporated
Roper Eastern
Rouse Company
Tracor Jitco, Incorporated
American Bank of Maryland
American Finance Management Corporation
Annapolis Federal Savings & Loan
B.F. Saul Company
Chevy Chase Savings & Loan, Incorporated
Citizens Bank & Trust Company of Maryland
Citizens National Bank
Citizens Savings & Loan Association
Equitable Savings & Loan Association, Inc.
Equitable Trust Company
First National Bank of Maryland
Government Services Savings & Loan
Potomac Valley Bank
Sandy Spring National Bank
State National Bank
University National Bank
American Society of Hospital Pharmacists
American Speech & Hearing Association
Holy Cross Hospital
Montgomery County Government
Montgomery County Public Schools
National Geographic Society
University of Maryland at College Park
Washington Suburban Sanitary Commission
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HAY/WASHINGTON, D.C. and SUBURBS SALARY SURVEY - NONEXEMPT POSITIONS JUNE 1978
VIRGINIA PARTICIPANTS
Dynalectron Corporation Equitable Life Insurance Company
Gulf Oil Real Estate Development Company Fidelity American Bank NA Northern Virginia
Time-Life Books, Incorporated First American Bank of Virginia
First & Merchants Corporation
First Virginia Banks, Incorporated
National Bank of Fairfax
Navy Federal Credit Union
Northern Virginia Bank
United Virginia Bank/National
Virginia National Bank
American Automobile Association
American Gas Association
Center for Naval Analyses
Mitre Corporation
United Way of America
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 I,.DUCDeclassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
Addressograph-Nultigraph Company
Alabama Power Company
Alexander & Baldwin, Inc.
Allen-Bradley Company
Amerada Hess Corporation
American Broadcasting Companies
American Hospital Supply Corporation
American Society of Civil Engineers
American Standard, Inc.
American Telephone & Telegraph Company
AMF, Inc.
Anchor Hocking Corporation
Anderson-Clayton & Company
Arcata National Corporation
Armstrong Cork Company
Barber-Greene Company
Barry Wright Corporation
Bell Telephone Company of Pennsylvania
Braden Steel Corporation
Brooklyn Union Gas Company
Brown & t:illianson Tobacco Company
Buckeye International Corporation
H.E. Butt Grocery Company
Buttes Gas & Oil
California & Hawaiian Sugar Company
Carrier Corporation
Ceco Corporation
Celanese Corporation
Chemical Abstracts Services
Chesebrough-Pond?s, Inc.
Church & Dwight Company, Inc.
Ciba-Geigy Corporation
Clow Corporation
Cole National Corporation
Columbia Gas System, Inc.
Columbia Nitrogen Corporati.'n
Commercial Shearing Inc.
Conagra, Inc.
Consolidated Rail Corporation
Container Corporation of America
Continental-Emsco Company
Coulter Electronics
Crouse-Hinds Company
Cutler Hammer
Cyclops Corporation
Danly Machine Company
Dayton Power &. Light Company
Dayton Press Inc.
Dead River Company
Debron Corporation
Dentsply International
Detroit Edison Company
Dexter Corporation
A.B. Dick Company
Dixie Yarns, Inc.
Dow Badische Conpanv
Dow Chemical Company
Dow Corning Corporation
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 E. Declassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
Ecolaire, Inc.
Economics Laboratory
EL'rRA Corporation
ESB, Inc.
Ex-Cell-0 Corporation
Exxon Company, USA
Factory Mutual Engineering Corporation
Federal Express Company
Florida Power & Light Company
Florida Steel Corporation
Franklin Mint Corporation
Frantz Manufacturing Company
Freeport '.Minerals Company
Freightliner Corporation
Frito-Lay
General
Crude
General
Electric
General
Foods
Corporation-
General
Mills,
Inc.
General
Public
Utilities
General
Shale
Products Corporation
General
Signal
Corporation
GF Business Equipment
Gold Kist, Inc.
Graham Manufacturing Company
Graybar Electric Company
Green Giant Company
Hallmark Cards, Inc.
Hanes Corporation.
Hart, Schaffner and Marx
H.J. Heinz Company
Hooker Chemical Company
Houghton Mifflin Company
J.M. Huber Corporation
ICI United States, Inc.
Illinois Tool Works, Inc.
Inmont Corporation
International Multifoods Corporation
International Packing Corporation
S.C. Johnson & Son
Joy Manufacturing Company
Kawasaki Motors Corporation, USA
Kellogg Company
Kendall Company
Kennametal, Inc.
Kennecott Copper Corporation
Kent-Moore Corporation
Kerr-McGee Corporation
Kimberly-Clark:Corporation
Lamb-Weston, Inc.
Leeds & Northrup Company
Leggett & Platt, Inc.
Libbey-Owens-Ford Company
Lipe Rollway Corporation
Thomas J. Lipton Inc.
Loral Electronics Systems
Mack Trucks, Inc.
Magnetic Controls Company
McGraw-Edison Company
McQuay-Perfex, Inc.
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 Declassified and Approved For Release 2013/03/14: CIA-RDP90-0053OR000902250001-8
Mead Corporation
Memorex Corporation
Miles Laboratories, Inc.
Mitre Corporation
Mitsubishi International Corporation
Modine Manufacturing Company
Moog, Inc.
Moore Business Forms
Morrison's, Inc.
Nalco Chemical Company
Narco Scientific Industries
National Can Corporation
National Gypsum Company
NCR Corporation
Norfolk and Western Railway
North American Philips Corporation
Northern States Power Company
Northwest Industries, Inc.
Northwestern Bell Telephone Company
Norton Company
Oglethorpe Electric Membership Corporation
Olin Corporation
Omaha Public Power District
Optical Coating Labs, Inc.
Otis Engineering
Owens-Corning Fiberglass Corporation
Owens-Illinois, Inc.
Pako Corporation
Peavey Company
Pennsylvania Mines Corporation
Pennsylvania Power & Light Company
Pennwalt Corporation
Pepsico, Inc.
Perkin-Elmer Corporation
Pillsbury Company
Pitney Bowes, Inc.
Pizza Hut, Inc.
Portland General Electric
Potomac Electric Power Company
Power Authority - State of New York
Price Brothers Company
Pullman, Inc.
Puritan-Bennett Corporation
Recognition Equipment, Inc.
Resource Sciences Corporation
Rexnord, Inc.
Rogers Foods
Ryder System, Inc.
SCM Corporation
Scott Paper Company
Sears Roebuck & Company
Sonoco Products Company
South Carolina Public Service Authority
Southern Airways, Inc.
Southern Company Services, Inc.
Southern Railway System
SPS Technologies, Inc.
A.E. Staley Manufacturing Company
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Standard Register Company
Studebaker Worthington, Inc.
Sun Company
Talon
Tetley, Inc.
Texas Instruments, Inc.
Tonka Corporation
Trans Union Corporation
Uarco, Inc.
Union Carbide Corporation
Union Pacific
Uniroyal, Inc.
United Telecommunications
Upjohn Company
U.S. Gypsum Company
Valmont
Industries
Victor
Equipment
Company
Wagner
Electric
Wausau
Homes
Western
Company
of North America
Western
Electric
Company, Inc.
Western
Publishing Company
Win Schuler's, Inc.
Wool Bureau, Inc.
Zenith Radio Corporation
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Acacia Mutual Life Insurance (Wash., D.C.)
Allendale Mutual Insurance (Johnston, R.I.)
American Reserve (Chicago)
Bankers Life (Des Moines)
Bankers Life Nebraska (Lincoln)
Central Life Assurance (Des Moines)
Commercial Union Assurance (Boston)
Corroon & Black of Tennessee (Nashville)
Cotton States Insurance (Atlanta)
Farm Family Life (Albany)
Great Southern Life (Houston)
Hartford Steam Boiler Inspection & Insurance (Conn.)
Liberty National Life (Birmingham)
Lutheran Mutual Life (Waverly, Iowa)
Metropolitan Life (NYC)
Midland Mutual Life (Columbus)
Minnesota Mutual Life (St. Paul)
Mutual Life of New York (NYC)
Mutual Trust Life (Oak Brook, Ill.)
National Life & Accident (Nashville)
New England Mutual Life (Boston)
NN Corporation (Milwaukee)
North Central Companies (St. Paul)
Northwestern Mutual Life (Milwaukee)
Northwestern National Life (Minneapolis)
Preferred Risk Mutual (West Des Moines)
Sentry Insurance (Stevens Point, WI)
Southwestern Life (Dallas)
St. Paul Fire & Marine (Minnesota)
St. Paul Title (Troy, Mich.)
Title Insurance & Trust (Los Angeles)
United Insuran?:e of America (Chicago)
Western Life Insurance (St. Paul)
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Allegheny Intermediate Unit (Pittsburgh)
American Bankers Association (Wash., D.C.)
The American College (Bryn Mawr, Pa.)
American Heart. Association (Dallas)
Hartford Hospital (Connecttcut)
LIMR4 (Hartford, Conn.)
MacNeal Memorial Hospital (Berwyn, Ill.)
Samaritan Health Services (Phoenix)
Amherst H. Wilder Foundation (St. Paul)
BLUE CROSS/BLUE SHIELD
BC Association (Chicago)
BC of Greater Philadelphia (Pa.)
BC of Northeast.Ohio (Cleveland)
BC of Southern California (L.A.)
BC of Southwest Ohio (Cincinnati)
BC/BS
of
Florida (Jacksonville)
BC/BS
of
Iowa (Des Moines)
BC/BS
of
Kansas City (Mo.)
BC/BS
of
Michigan (Detroit)
BC/BS
of
N. Carolina (Burham)
BC/BS
of
Rhode Island (Providence)
BC/BS
of
Texas (Dallas)
BC/BS
of
Virginia (Richmond)
BC/BS
of
W. Virginia (Charleston)
BS of California
Colorado BC/BS (Denver)
Delaware BC/BS (Wilmington)
Maryland BC/BS (Towson)
Massachusetts BC/BS (Boston)
Ohio Medical Indemnity (Worthington)
Pennsylvania BS (Camp Hill)
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Arizone Bank (Phoenix)
Bank of the Southwest (Houston)
Chase Federal Savings & Loan (Miami Beach)'
Chase Manjattan Bank (NYC)
Citibank (NYC)
Colwell Company (Los Angeles)
Community Federal Savings & Loan (Riviera Beach, Fla.)
Crocker National Bank (San Francisco)
Federal National Mortgage Association (Wash., D.C..)
Federal Reserve Bank (San Francisco)
First Bank System (Minneapolis)
First Financial Group of New Hampshire (Manchester)
First National Bank (Dallas)
First National Bank of Maryland (Baltimore)
First Pennsylvania Bank (Philadelphia)
Mutual Federal Savings & Loan (Norfolk)
National Bank of Detroit (Mich.)
New England Merchants National Bank (Boston)
Northwest Bancorporation (Minneapolis)
Northwestern National Bank (Minneapolis)
Old Stone Bank (Providence)
Peoples Savings Bank (Bridgeport, Conn.)
Percy Wilson Mortgage & Finance (Chicago)
Pittsburgh National Bank (Pa.)
Rainier National Bank (Seattle)
Shawmut Bank of 'Boston (Mass.)
SINCO (Salt Lake City)
Society for Savings (Hartford, Conn.)
South Carolina National Bank (Columbia)
State Street Bank & Trust (Boston)
Valley National Bank (Phoenix)
American Express (NYC)
Dial Financial (Des Moines)
Farm Credit Banks of Springfield (Mass.)
Investors Diversified, Services (Minneapolis)
Postal Finance (Sioux City, Iowa)
St. Paul Companies (Minnesota)
Student Loan Marketing Association.(Wash., D.C.)
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HAY CASH-EQUIVALENT BENEFIT VALUES
I. BASIS FOR THE VALUATION
For benefits which are conditional on the occurence of an event such as
death, disability or continuous employment in the organization, the cash-
equivalent has been calculated on the basis of the probability of receiv-
ing the benefit, using a representative employee population and appropriate
actuarial assumptions. For benefits such as company cars and subsidized
meals, (which have an immediate value), the cash-equivalent has been cal-
culated on the basis of the most probable replacement cost in 1978.
It should be noted that the Total Remuneration Comparisons portray annual
rates of pay, not annual actual pay. Included in an employee's actual
pay are payments for time not worked such as sick leave, vacation and
holidays. The cash-equivalent of these plans has been included in the
charts since they are clearly add-ons to the annual salary or cash com-
pensation rate, and there is a difference in compensation between jobs
with identical cash compensation but which provide different vacation
and holiday policies, e.g., a position which pays $30,000 per year with
two weeks vacation clearly is worth less than a position at the same
compensation but which provides five weeks of vacation per year.
The following are the specific assumptions used for calculating the
cash-equivalent benefit values.
For optional plans or plans offering optional amounts of coverage,
it was assumed that the employees opted to participate and chose
the highest amount of coverage available except for Voluntary AD&D,
where the amount of coverage was limited to 300% of salary.
Where employees contribute to the cost of a plan, the value was
reduced by the percentage of the. cost or the portion of the cover-
age paid by the employee to obtain the employer paid cash-equivalent
benefit value. The Employer Paid cash-equivalent benefit values
under insurance. plans were. increased by 10% of the total cash-equiva-
lent value in. order to recognize an additional value for offering
such plans on a group purchase basis even if employee paid (to assure
equitable results, this credit was given independently of who pays
the cost).
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Representative values placed on various benefits are shown below:
PERQUISITES
a. Executive Dining Room
The cash-equivalent for an executive dining room was valued at $750
per year for employer paid meals. Lower values were used where meals
were not fully paid by the employer.
b. Company Cars for Executives
The cash-equivalent varied from $3,000 to $5,000 per year depending
on the Hay point level.
c. Physical Examinations
A cash-equivalent of $200 was applied for annual company paid exami-
.nations with lower values applied for biennial exams.
d. Executive Medical Expense Reimbursement
The cash-equivalent was determined at $1,100 per year.
e. Club Memberships
A cash-equivalent of $750 was applied for club memberships.
f. Personal Financial Counseling
The cash-equivalent ranged from $2,500 to $3,600 based on the salary
level.
g. Excess Personal Liability
A cash-equivalent of $100 was applied for company paid coverage.
h. Stock Options
Stock options were not included in the calculation of cash-equivalent
values.
-2-
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DEATH BENEFIT PLANS
a. Group Life Insurance
The cash-equivalent was based on the amount of coverage before and
after retirement and the disability provision. Yearly rates per
$1,000 of insurance varied from $5.04 to $7.87.
b. Dependents' Group Life Insurance
A cash-equivalent of between $3 and $30 was applied based on the amount
of coverage for the spouse and children.
The cash-equivalent was based on the amount of benefit provided for
the spouse and children, the duration of payments and the remarriage
provision. For example, a rate of 0.81% of salary was applied for a
benefit of 25% of salary to the spouse for life terminating on re-
marriage with no remarriage payment.
c. Group Survivor Income Benefit Insurance
d. Group Accident Insurance
A standard cost of between $0.07 and $0.66 per year per $1,000 of
insurance was used depending on the type of coverage.
e. Business Travel Accident Insurance
A rate of $0.27 per year per $1,000 of insurance was used.
DISABILITY INCOME PLANS
a. Sick Leave/Salary Continuance
Formal plans were valued under a schedule based on a weighted service
assumption with rates up to 3.64% for 52 weeks' sick leave. Informal
sick leave plans were calculated on the basis of the waiting period
for Long-Term Disability benefits, if an LTD plan was reported. Infor-
mal plans were assumed to provide 13 weeks' sick leave at full pay
followed by up to 13 weeks at partial pay but not to exceed the LTD
waiting period.
For plans which provide for an accumulation of days per month of ser-
vice, the benefit was converted to an equivalent benefit under a
scheduled basis.
b. Sickness & Accident (Weekly Indemnity) Insurance
Plans were valued on the basis of the elimination period for non-
hospitalized and hospitalized accidents and sicknesses, the benefit
formula, maximum weekly benefit and maternity benefits, if any.
For example, a 4-4-26 plan (with first day in event of hospitalization)
was valued at $10.94 per year per $10 weekly benefit. A six week
maternity benefit would add $1.20 per year per $10 weekly benefit.
-3-
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c. Long Term Disability Insurance
A schedule was used which relates to a standard rate per year per
dollar of monthly benefit, varying by elimination period and duration,
less an offset for plans integrated with Social Security. For example,
an individual earning more than the Social Security maximum would pro-
duce a rate of $13.50 per $100 of excess monthly benefit, payable to
age 65, with a six month elimination period.
HEALTH PLANS
a. Hospital/Medical Coverage
The cash-equivalent value for a Basic/Major medical or Comprehensive
plan varied from $200 to $1,200 depending on benefits covered, deduc-
tible and coinsurance.
b. Dental Coverage
The cash-equivalent value for dental coverage was based on the expenses
covered, amount of deductible and percent coinsurance with rates up to
$330.
c. Optical Coverage
The cash-equivalent value for optical care was calculated between $2
and $40 depending on expenses covered and percent of charges covered.
d. Retiree Hospital/Medical Coverage
Medicare premiums paid by the employer were given an annual value of
up to $55, depending whether the subsidy covers the dependent spouse
premium, and depending on the percent of the premium paid by the
employer.
Employer post-65 hospital/medical plans supplementing Medicare were
given an annual value of up to $137.
RETIREMENT BENEFIT PLANS
a. Pension Plan
The cash-equivalent values were related to the type of plan, the
latest update (for career average plans), the benefit formula, maxi-
mum years of credited service (if any), payment of the pension, normal
and early retirement provisions, spouse's pension, Social Security
integration, disability provision and cost-of-living adjustment.
For example, the rate for a 1% final five-year average benefit, not
integrated with Social Security, payable unreduced from age 62, fully
indexed per the CPI, with no maximum credited service and no company
paid spouse pension, is 8.64% of salary.
-4-
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b. Profit Sharing/Stock Bonus Plan
The cash-equivalent value was calculated based on the company contri-
bution (as a percent of pay) for the last five years (or years since
effective date if less).
c. Thrift/Savings Plan
Contributions to thrift or savings plans were listed at the rate
produced from the maximum matching, e.g., 6% of pay matched at 50%
produces a 3% cash-equivalent value.
PERSONNEL POLICIES
a. Holidays and Vacations
These values were calculated at the rate of .384% of salary per
holiday and 1.92% of salary per week of vacation. The cash-equivalent
value for vacations whose length depends on service was based on a
weighted service assumption.
b. Company Cafeterias
A rate.of $350 was applied for company paid meals, with lower values
if not fully subsidized.
STATUTORY BENEFITS
Three statutory benefit plans were included in the cash-equivalent values
for private sector organizations.
a. Social Security
The 1978 rate was used, namely, 6.05% of the first $17,700 or a
maximum of $1,070.85.
b. Worker's Compensation and Unemployment Insurance
A cash-equivalent value of $100 was used for these two programs.
-5-
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K
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SUMMARY OF EMPLOYEE BENEFITS
The Tables below indicates the prevalence of the major benefit practices among the 306 American Business
companies and the 13 selected multinational companies. In addition, the Federal Civil Service and the
Foreign Service practices are denoted by an *.
Prevalence of Practice
Perquisites
American
Business
Selected
Multinationals
Federal Civil
Service
Foreign
Service
Stock Options
.62%
58%
no
no
Stock Appreciation Rights
17%
18%
no
no
Stock Bonus Plan
6%
18%
no
no
Executive Stock Purchase Plan
4%
-
no
no
Deferred Compensation Plan
20%
33%
no
no
Non-Qualified Supplemental
Retirement Plan
20%
67%
no
no
Executive Dining Room
20%
17%
no
no
Employer - Provided Car
65%
33%
no
no
Parking
79%
75%
Physical Examinations
84%
72%
no
no
Special Executive Vacations
36%
25%
no
no
Country Club Memberships
49%
67%
no
no
Luncheon Club Memberships
54%
36%
no
no
Mortgages/Loans
13%
27%
no
no
Personal Legal Services
7%
8%
no
no
Personal Financial Counseling
7%
41%
no
no
Employer Paid Spouse. Travel on
Company Business
47%
64%
no
no
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American Selected Federal Civil Foreign
Business Multinationals Service Service
Life and Accident Insurance
Basic Group Life
Plan Provided
100%
100%
Cost: - Employer Paid
72%
62%
- Shared
26%
38%
- Employee Paid
2%
0%
Coverage: - Under 100% of
Earnings
2%
- 100% of Earnings 25% 50%
*
*
Over 100% of
Earnings
73%
Coverage at
Retirement : - Terminated
31%
*
*
- Continued in
Part
66%
92%
- Continued in .
Full
3%
0%
Supplemental Group
Life Insurance
Plan Provided
51%
69%
Cost: - Employer Paid
7%
0%
- Shared
34%
44%
- Employee Paid
59%
56%
Group Survivor Income
Insurance
Dependents Group Life
Accidental Death and
Voluntary AD&D Insurance
25%
46%
no
no
Business Travel Accident
Insurance
77%
92%
no
no
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American Selected Federal Civil Foreign
Business Multinationals Service Service
Sickness and Disability Income
Sick Leave/Salary
Continuance
Long Term Disability
Insurance
Type of Policy:
- Specified weeks per
illness or per year
- Accumulation of days
72%
per month or year
18%
15%
- Other
Accumulated Days
Per Year
10%
8%
- Under 13 Days
88%
- 13 Days
6%
- Over 13 Days
6%
Plan Provided
Earnings Related
91%
92%
no
no
Coverage: 50%
23%
60%
54%
50%
N/A
65-69%
13%
Other
10%
8%
Cost: - Employer Paid'
59%
33%
- Shared
24%
25%
N/A
N/A
- Employee Paid
17%
42%
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American Selected Federal Civil Foreign
Business Multinationals Service Service
Health Insurance
Hospital./Medical Covered Expenses
not subject to
Deductible:
Hospitalization
81%
100%
In-Hospital Medical
61%
77%
*
*
Surgical
79%
100%
*
*
X-Rays, Lab. Tests
61%
85%
*
*
t
' Offi
D
ors
ce
oc
Visits
10%
*
*
Extended Care
Facilities
25%
31%
*
*
Maternity
76.%
100%
*
*
Optical
5%
Cost of
Employee Coverage: - Employer Paid
64%
- Shared
36%
*
*
- Employee Paid
-
Depende
Cost of
nt Coverage:- Employer Paid
.40%
- Shared
57%
77%
*
*
- Employee Paid
3%
Plan Provided 44%
54%
no
no
Cost: - Employer Paid 68%
57%
- Shared 29%
43%
N/A
N/A
- Employee Paid
3%
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American Selected Federal Civil Foreign
Business Multinationals Service Service
Retirement Income
Type of Plan:
- Final Average Earnings
81%
85%
- Career Average Earnings
12%
15%
- Other
7%
Percent Benefit
Per Year of Service:
- Under 2.0% of Earnings
59%
68%
- 2.0% of Earnings
13%
-
- Over 2.0% of Earnings
2%
17%
- Varies with Service
20%
15% *
- Varies with Age
1%
-
- Other
5%
Years for Final
Average Earnings:
- 3 Years
3%
- * *
- 5 Years
90%
100%
- Other
7%
-
Cre
Maximum Years
dited Service:
- Under 35 Years
21%
7%
- 35 Years
11%
7%
- Over 35 Years
13%
17%
- No Maximum
55%
69%
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Cost-of-Living
Pension Increases
for Pensioners:
American . Selected Federal Civil Foreign
Business Multinationals Service Service
- Yes: Guaranteed 11% -
- Yes: Informal. 41% 85%
- No 48% 15%
Required Employee
Contributions:
- Under 7% of pay 12%
- 7% of pay 0%
- Over 7% of pay 0%
- No Required Contri-
butions 88%
Normal Retirement
Age:
- 62 2% -
- 65 98% 100%
50%
50%
Profit Sharing Plan Plan Provided 22% 14% no no
Employer Contribution
as % of Employee
Compensation:
- Under 5%
- 5-9%
- 10% Plus
Thrift/Savings Plan 36%
N/A N/A
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Business Multinationals Service Service
Holidays and Vacations
Holidays
Vacation
(Annual Leave)
Numbers of Days:
- Under 9
- Over 9
Service Required for
3 Weeks Vacation:
- Under 5 years
- 5 Years
11%
26%
63%
12%
43%
8%
8%
16%
61%
(Immediate
13 days)
(Immediate
13 days)
Service Required for
4 Weeks Vacation:
- Under 3 Years
1%
0%
- 3 Years
0%
8%
- Over 3 Years
99%
92%
Service Required for
5 Weeks Vacation:,
- Under 13 Years
2%
9%
- 13 Years
3%
0%
Maximum Weeks Vacation:
- 3 Weeks
7%
(24 days)
(24 days)
- 4 Weeks
34%
27%
- 5 Weeks
65%
- 6 Weeks
8%
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SUMMARY DESCRIPTION OF FOREIGN SERVICE AND
PRIVATE SECTOR OVERSEAS BENEFITS AND ALLOWANCES
FOREIGN SERVICE
PRIVATE SECTOR
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DEPARTMENT OF STATE - FOREIGN SERVICE
SUMMARY DESCRIPTION OF BENEFITS AND OVERSEAS ALLOWANCES
BENEFiis- ANNUAL LEAVE
MEDICAL BENEFITS
RETIREMENT BENEFITS
OTHER BENEFITS
OVERSEAS
ALLOWANCES LIVING QUARTERS ALLOWANCE
POST ALLOWANCE
HARDSHIP POST DIFFERENTIAL
REPRESENTATION ALLOWANCE
OFFICIAL RESIDENCE EXPENSES
EDUCATION ALLOWANCE
HOME LEAVE
REST AND RECUPERATION LEAVE
RELOCATION ALLOWANCES
OTHER SERVICES
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BENEFITS
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ANNUAL LEAVE
The same annual leave policy applies for employees overseas
(i.e. 26 days after 15 years, 20 days after 3 years and
13 days if less than 3 years) except that the maximum accum-
ulation from year to year is 45 days for overseas employ-
ees versus 30 days for domestic employees.
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MEDICAL BENEFITS
In addition to the many optional plans available to the U.S.
government employees, Foreign Service employees may join the
Foreign Service Benefit Plan which is sponsored by the Amer-
ican Foreign Service Protective Asssociation. The Government
contributes the same amount to this plan as for all plans
available to the U.S. government employees.
For overseas employees, hospital and medical services are
provided under the Department of State Medical Program at
no cost to employees other than a $35 deductible for depen-
dents. The program covers the same general expenses as
those covered under the private plans (Blue Cross, Aetna,
etc.). Employees are encouraged to maintain their private
plan coverage while overseas.
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RETIREhtENT BENEFITS
Retirement and disability benefits are provided under
the Foreign Service Retirement and Disability System.
These benefits are basically identical to those pro-
vided under the Civil Service Retirement System ex-
cept for the benefit accrual rate which is 2% of
highest 3 year average basic salary for each year of
service up to a maximum of 70% instead of 1/% for the
first 5 years of service, 1 3/4% for the next 5 years
and 2% for subsequent years up to a maxim of 80%. Also,
the compulsory retirement age for career ambassadors or,
'ministers is 65 and 60 for other foreign service em-
ployees while there is no longer a mandatory retire-
ment age for civil service employees. Optional retire-
ment is available as early as age 50 with 20 years of
service compared to age 55 with 30 years of service (or
age 60 with 20 years of service or age 62 with 5 years
of service) under the civil service plan.
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OTHER BENEFITS
All other benefits for foreign service personnel are the
same as those applicable to civil service employees.
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OVERSEAS ALLOWANCES
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LIVING QUARTERS ALLOWANCE
The State Department provides all overseas employees either
with living quarters or an allowance based on the average
cost of housing at each location.
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POST ALLOWANCE
A post allowance is made where the foreign cost-of-living
(excluding housing and education) is higher than in
Washington, D.C.
This allowance takes into account the availability of special
services which may be available only to Federal employees
(such as commissary, PX or duty-free purchases).
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HARDSHIP POST DIFFERENTIAL
This is a premium for service in locations having extra-
ordinary difficult or unhealthful living conditions. This
allowance varies from 10% to 25% of the employ@,e's salary.
This type of allowance is paid in a limited number of
locations.
Whereas all other allowances are non-taxable, the employ-
ee must pay income tax on this allowance.
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REPRESENTATION ALLOWANCE
These allowances help to defray costs of official
entertainment and incidentals. Specific funds are
allocated to each post each year from which eligible
employees incurring representation expenses can be
reimbursed.
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OFFICIAL RESIDENCE EXPENSES ALLOWANCE
This allowance covers the unusual expenses incident
to the operation and maintenance of official residences
suitable for the chief representatives of the United
States at such posts.
At most posts, only the chief of mission is eligible for
such allowance. At the larger posts, his senior assis-
tants may also obtain such expense allowance.
The amount of allowance is based upon the difference
between normal housekeeping expenses (assumed to be 5%
of salary) and the costs the principal representatives
are required to bear.
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These are allowances to cover the cost of adequate
schooling, which is in excess of the cost that would
be incurred for a dependent in a U.S. public school.
If no adequate school is available at the post of the
employee, the allowance also covers room and board
and periodic transportation between the nearest ade-
quate.school and the post.
For dependent children attending college in the U.S.,
this allowance covers only the cost of one trip per
year from college to the post where the family is
located.
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HOME LEAVE
Home leave is provided annually after an employee has been
in tour at least 18 months. Home leave is accumulated.at
the rate of 15 days per year additional to the annual leave.
Home leave is generally taken in-between post assignments.
On average, home leaves are taken every 2 years for a dur-
ation of 20 days.
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REST AND RECUPERATION LEAVE
Provided at a limited number of hardship posts, the leave
is taken at a location abroad having different environmental
conditions than those at the post. Such leave may not be
taken more than once during any continuous two-year tour
unbroken by home leave' and twice during any continuous three-
year tour unbroken by home leave. Only the round-trip air-
fare is paid for. No additional leave time is provided, i.e.
it must be taken as part of annual leave.
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RELOCATION ALLOWANCES
The Foreign Service Act provides allowances for the
payment of expenses incurred while relocating. Among
these are:
Temporary Lodging Allowance
Foreign Transfer Allowance
Home Service Transfer Allowance
Evacuation Payments
All of these allowances are designed to defray the costs
associated with relocation, including temporary lodging.
Some expense reimbursements are subject to a maximum
amount (such as wardrobe and miscellaneous transfer
expenses).
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OTHER SERVICES
Depending on the location, foreign service employees may
be able to take advantage of certain services such as duty-
free purchases, military PX and Commissaries. However,
these are not available at all locations. In addition, the
availability of these services is taken into account in the
establishment of the Post Allowance.
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B,
GENERAL PRIVATE SECTOR PRACTICES FOR EXPATRIATE AL OWANCES
AND PRACTICES OF THE ]3 SELECTED MULTI NATIONAL ORGAN I zAT I ON5
INTRODUCTION
BENEFITS ? ANNUAL LEAVE
? MEDICAL BENEFITS
RETIREMENT BENEFITS
OTHER BENEFITS
OVERSEAS
ALLOWANCES
? OVERSEAS PREMIUM
? H?USING ALLOWANCE
? COST-OF-LIVING ALLOWANCE
? HARDSHIP POST PREMIUM
DOMESTIC EXPENSES ALLOWANCE
EDUCATION ALLOWANCE
? HOME LEAVE
? RELOCATION ALLOWANCE
INCOME TAX EQUALIZATION ALLOWANCE
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INTRODUCTION
I*ollowing is a summary of the general overseas allowance practices
followed by private sector organizations, together with the specific
practices of the 13 U.S. multinational organizations selected for
comparisons purposes.
The description of general sector practices is based-on Hay Associates'
past experience in this area, supported by the State Department
Allowances Staff's own understanding of private sector practices. In
addition, two surveys of expatriate compensation practices by The
Conference Board1 and by Dr. Cecil G. Howard2 support Hay Associates'
knowledge and understanding of private sector practices.
1"Compensating Key Personnel Overseas", Conference Board Report No. 574,
The Conference Board, Inc.
2"Overseas Compensation Policies of U.S. Multinationals", The Personnel
Administrator, November, 1975.
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EMPLOYEE BENEFITS
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General Practice: The domestic annual leave policy is generally
applied to expatriates.
13 Multinationals: All 13 companies apply the U.S. annual leave
policy for expatriates.
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General Practice: The private sector practices vary regarding
medical benefits. Most organizations maintain
their domestic medical insurance plan which then ..
reimburses on the basis of cost in U.S. for
equivalent medical service. Some organizations
will supplement the insurance by reimbursing
employees for part or all expenses not reim-
bursed under the medical plan. In remote or
undeveloped areas, some companies have their
own medical facilities and provide free care to
employees and their families.
13 Multinationals: Specific information on the practices of the
selected multinational organizations in each
location was not available. All 13 companies,
however, reported maintaining their domestic
medical plan benefits.
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RETIREMENT BENEFITS
General Practice: The majority of organizations continue the domestic
plan for expatriates. Few organizations provide
a foreign service supplement and those that do
provide such supplement only for certain hardship
areas.
13 Multinationals: All 13 companies reported continuing their domestic
plan for expatriates.
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Beneral Practice: All other benefits for expatriate employees
are generally the same as those applicable to
domestic employees.
13 Multinationals: All 13 companies reported having the other
benefits to be the same for expatriate employees.
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EXPATRIATE ALLOWANCES
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OVERSEAS PREMIUM
General Practice: The majority of U.S. multinationals pay a premium
to induce employees to work overseas. The amount
usually determined as a percent of base salary,
generally between 10% and 20%. Some organizations
limit the amount of the premium to a maximum sum.
13 Multinationals: Of the 13 companies, 8 reported an overseas
premium of 15% of base salary, 1 reported a
premium of 15% on the first $24,000 of salary
and 10% on the excess, 1 reported a premium of
10% of base salary, while 3 reported that no
overseas premium was paid.
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HOUSING ALLOWANCE
General Practice: The majority of U.S. multinationals have a housing
subsidy policy for their expatriates. Except for
special situations where companies own or rent housing
for their employees, the subsidy generally consists of
an amount added to the regular compensation. The amount
generally covers the portion of the housing costs in
excess of usual costs in the U.S. The amount the employee
is expected to pay is generally that which the company
perceives as a "normal" amount paid by employees for rent
in the U.S.
The housing cost is generally based on one of the
surveys published either by the State Department or
private organizations (ORC, AIRINC, etc.)
13 Multinationals: Of the 13 companies, 7 reported basing the allowance on
the ORC1 Tables, 5 reported using data published by
other private organizations (AIRINC, INCOM, etc.) while
1 reported not using any published surveys.
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COST-OF-LIVING
General Practice: This allowance covers the difference between the cost-
of-living overseas and in the U.S. It is generally based
on one of the surveys published by the State Department
or private organizations (ORC, etc.). The amounts are
generally higher than those provided government employees
overseas because of the special servi'ces (duty-free
purchases, 'military PX, etc.) which are often available
for government employees but not for private sector
employees.
13 Multinationals: Of the 13 multinationals, 8 reported basing their
allowances on the ORC Tables, 1 on the State Department's
data and the other 4 on data.published by other private
organizations.
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HARDSHIP POST PREMIUM
General Practice: This is a premium for service in locations having
extraordinary difficult or unhealthful living conditions.
It is usually calculated as a percent of base salary.
Organizations often utilize the State Department
practice in determining the locations eligible for this
allowance and the level of such.
13 Multinationals: Since ORC uses the State Department policy for determin-
ing the hardship post premium for their clients, the 7
companies which use ORC data therefore utilize the same
practice as the State Department. Two companies indi-
cated they do not pay a hardship allowance. The remaining
4 companies did not specify their basis.
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DOMESTIC EXPENSES ALLOWANCE
General Practice: There is no generalized practice in this area. It
often varies with the local practice and the size of
each company's operations. When provided, such allowance
(or expense reimbursement) is generally limited to a
few top positions.
13 Multinationals: Of the 7 companies which had provided information on
this subject, 4 indicated they do not generally pay
for the cost of domestic help, while 3 indicated they
pay for the cost of some help (generally maid and/or
chauffeur).
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EDUCATION ALLOWANCE
General Practice: Most U.S. multinationals provide an education allowance
for children which covers the tuition and room and
board costs at the nearest school providing adequate
education. In addition, there is generally a minimum
of one paid trip per year to and from the school.
There is generally no allowance for college education.
However, an annual trip from college to the overseas
location is often paid for.
13 Multinationals: All 13 companies indicated that they provide an educa-
tion allowance which covers tuition, room and board, and
transportation.
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HOME LEAVE
General Practice: The majority of U.S. multinationals provide expatriate
employees a home leave. No additional time off is
generally provided (the annual leave policy applies),
although companies often provide a minimum paid home
leave of 4 weeks irrespective of years of service.
The expense covered include travel to and from home
base only.
The frequency of home leave varies between every year
to every three years with every two years as the most
.prevalent practice.
13 Multinationals: Of the 13 companies, 10 provide a home leave every year,
1 provide one every 2 years while the other 2 did not
specify. Specific information on the duration of paid
home leave was not available for.all but four partici-
pants: two indicated a minimum paid home leave of 3
weeks and the other two indicated a minimum of 4 weeks.
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RELOCATION ALLOWANCE
General Practice: U.S. multinationals generally cover all relocation
expenses including temporary housing costs, when
necessary. Few have dollar limits on amounts reimbursed
(other than "reasonable and necessary"). Some
organizations have special allowances for "draperies,
etc."
Shipping of cars is not usually reimbursed. However,
a number of organizations either provide cars to
their overseas managers or provide assistance in the
purchase-of a new car overseas.
13 Multinationals: All 13 companies indicated covering all relocation
expenses. Specific information on their policies
was not reported.
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INCOME TAX ALLOWANCE
General Practice: The vast majority of U.S. multinationals provide expa-
triates an Income Tax Allowance to cover the excess
of any foreign tax above that which they would have had
to pay if they had been working within the United States
However, the method used for calculating the Income
Tax Allowance can vary. The prevalent practice is to
equalize the compensation to that which the employee
would have received on a net basis in the U.S. and
cover all taxes on the overseas allowances such that
they are effectively received on a tax-free basis.
13 Multinationals: All 13 companies reported providing an Income Tax
Allowance which equalizes the total compensation
(base salary plus bonus, if any) such that employees
pay the same tax on their total compensation as-if
they lived in the United States. In addition, the
allowance reported cover taxes on all overseas allow-
ances such that employees receive these allowances
in full.
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N
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ESTIMATED SIZE OF THE AVERAGE DISTINCT
FOREIGN SERVICE FAMILY UNIT
The estimation of the size of the average distinct Foreign Service family
unit was based on computer-produced data provided by the Department of State.
The figure is an estimate because the raw data was incomplete in two minor
respectsl' but was statistically adjusted to compensate where feasible. The
resulting estimate is very precise, and was derived by computing the average
number of Foreign Service-approved personnel per distinct Foreign-Service
family unit. The total number of approved personnel consists of all single and
married members of the Foreign Service, plus all approved dependent children,
plus all approved dependent adults. Spouses who are also members of the Foreign
Service were counted once. The estimated number of distinct family units
includes all single and married members of the Foreign Service but adjusts for
cases in which both husband and wife are in the Foreign Service. From these
calculations, the size of the average distinct Foreign Service family unit is
estimated to be 2,8722, and is rounded to 3 (husband, wife, and one child).
1. The missing data consisted of: (1) members of the Foreign Service who did
not report marital status. An estimate of the number of cases in which
both a husband and wife were both members of the Foreign Service was used
to adjust the data; and (2) the number of individuals reporting as Foreign
Service members and as married to a Foreign Service officer was an uneven
number, an impossibility since the total must be even. To address this
circumstance, a conservative estimate was made: one individual in the unknown
marital status category was assumed to be a Foreign Service officer married
to another Foreign Service officer.
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REFERENCES
Compensation Comparison
U.S.A.:-
Industrial Management. Hay Associates,
Hay
Philadelphia, Pa. 1978.
Hay Compensation Comparison
U.S.A.:
Financial Management.
Hay Associates,
Philadelphia, Pa. 1978.
Hay Compensation Comparison
U.S.A.:
Service Management.
Hay Associates,
Philadelphia, Pa. 1978.
Hay Noncash Compensation Comparison. Hay Associates, Philadelphia, Pa. 1978.
Heisler, E.A., and Kerr, R.D. Officer Job Evaluation Study in the Australian
Permanent Defense Forces. Australian: Hay Associates, March 1974.
Pappas, L.D., Fisher, Jr., A.H., and Martin, Jr., F.B. An Analysis of Selected
Linkages Between Military and Civil Service Occupations. The 1975 Quad-
rennial Review of Military Compensation of the Office of the. Deputy Assistant
Secretary of Defense.(MPP), The Pentagon, Washington, D.C., April 1976.
Pappas, L.D., Fisher, Jr., A.H., and Doren, M.J. A Comparison of the Civil
Service Classification System and the Hay Method of Job Evaluation. United
States Civil Service Commission, Washington, D.C., August 1976.
Siegel, S. Nonparametric Statistics for the Behavioral Sciences. New York:
McGraw-Hill, 1956.
Standing Reference on the Pay of the Armed Forces Peport No. 142, National
Board for Prices-and Incomes, H.M. Stationary O fice, February 1970.
Washington, D.C. Metropolitan Area Non-Exempt Salary Survey, Hay Associates,
Washington, D.C., 1978.
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