Welcome to the July 2015 edition of The Director’s Dilemma.
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This month our case study investigates issues associated with a government company awarding employment to employees that do not meet the advertised criteria or seeking a waiver of the salary guidelines for the position.
Undurra chairs the remuneration committee of a government sector board. The Committee workload is usually light; the key task is an annual review of the CEO’s KPIs for the coming year and performance for the prior year. The CEO recommends KPIs and targets for his direct reports and the government has salary scales which effectively bracket the pay available at each level of the organisation.
The CFO was a chartered professional accountant and the board were confident and happy with his performance. He has recently resigned as he felt the money was not enough recompense for his skills. The CEO undertook a search process advertising the salary scale allowed by the Public Sector Awards Board guidelines. Only two people responding to that campaign passed muster: One is a qualified accountant and is asking to be paid more than the top of the salary bracket, the other has been doing a similar role for many years in a comparable NFP organisation and has great references but is not formally qualified.
Now the CEO is in a quandary because if he can increase the ‘salary cap’ he feels he could get the former CFO back but if he can’t get a special dispensation to pay more he may have to take an unqualified applicant. Undurra has canvassed the issue with her committee and they are divided on what strategy to follow. Half argue that qualifications don’t matter as much as ability but the other half argue that they can’t accept an applicant who doesn’t meet the advertised criteria. The CEO is fearful of doing the wrong thing, and the accounts department is already struggling following the loss of the CFO. To make matters worse the junior accountants already in the department have somehow got news of the problem and are claiming that they won’t work for a boss who is less qualified than they are.
What can Undurra do?