Principles and Standards of INGO Fair Reward
Purpose: There is increasing focus within the international aid and development sector on the importance of fair reward, and demand for a common set of reward-related principles and standards for organisations working in the sector. Reward is particularly challenging for international aid and development organisations due to the legacy of how the work has historically been structured, the breadth of locations in which the work is located (often conflict or crisis), and the changing nature of those engaging in the work now being drawn from global, rather than higher-income, contexts. This evolution requires a reconsideration of how INGO reward is structured.
The focus on fair reward aligns with the United Nations’ Sustainable Development Goals, specifically SDG8 – decent work and economic growth, which calls for “equal pay for work of equal value”, SDG10 – reduced inequality, which calls for “equal opportunity and reduced inequalities of outcome”, and SDG17 – partnerships for the goals, which calls for enhanced cooperation between stakeholders to help meet the goals. It also aligns with the Core Humanitarian Standard on Quality and Accountability, in particularly Standard 8 – “staff are supported to do their job effectively, and are treated fairly and equitably” and Standard 3 – “humanitarian response strengthens local capacities and avoids negative effects”.
These Principles and Standards of INGO Fair Reward are designed in order to help organisations develop a shared understanding of what fair reward means for the sector. This document outlines a series of standards as minimum requirements which are underpinned by 5 core principles. The standards and principles have been collaboratively developed by a working group of 25 INGOs. It is intended that agreeing to these principles and standards demonstrates an organisational commitment to fair reward. They are aspirational in nature and do not reflect the assessment of whether existing reward structures are fair. Organisations that agree to commit to the principles and standards will include a public commitment on their website and will participate in an annual peer evaluation process.
Throughout the document we define reward as the total reward package an employee receives, including base pay, allowances and benefits, as well as access to non-financial rewards such as career development and leadership opportunities. We recognize the core goal of reward is to attract, retain and motivate the right talent at the right point in time, and to do so in ways that enable the organisation to achieve its core aims in a financially sustainable way.
Stakeholders to this document include (and are not limited to) beneficiaries, donors, funders, employees, partners, suppliers, and unions.
Principle 1: Ethical Reward – Reward policy is fully aligned with the organisation’s mission and values
Standard 1a: reward policies are free from bias and discrimination, and decisions made irrespective of personal characteristics;
Standard 1b: reward policies and practices should not undermine or distort the local market;
Standard 1c: the INGO sector should be leading the way in good reward practice, and as such encourages and promotes the use of the Principles and Standards of Fair INGO Reward amongst all stakeholders.
Principle 2: Transparency – reward is offered in a way that is transparent, evidence-based and easy to understand
Standard 2a: reward policy is present;
Standard 2b: reward policies and practices are available for all staff to access;
Standard 2c: process behind, and components of, reward policies and practices are clearly explained with a commitment to being applied consistently.
Principle 3: Equity – reward given to different employees is fair, consistent and justifiable
Standard 3a: all jobs are appropriately graded to reflect required technical knowledge, skills and experience;
Standard 3b: reward policies are designed to enable necessary variation depending on local contextual factors, such as in hardship locations, fragile states or absence of necessary skills;
Standard 3c: there is a commitment to policies being applied systematically.
Principle 4: Sustainability – a) cost of reward reflects stewardship of donor funds, and as such is justifiable to donors while ensuring long-term organisational financial viability; b) reward levels ensure sufficient wages for all employees in all countries
Standard 4a: reliable salary benchmarking data are used when setting reward;
Standard 4b: reward policies and external factors are reviewed periodically to ensure fairness is maintained.
Principle 5: Compliance and Risk – all reward policies and practices meet local and international legal and regulatory requirements, while also respecting broader organisational social responsibility
Standard 5a: compliance with legal context in all countries of operation and responsiveness to any changes to that context;
Standard 5b: commitment to understanding tax obligations and providing mechanisms for workforce compliance.
I am very impressed with the work you have done Ishbel in putting this together. It is definitely ambitious and aspirational but overall I fully agree with the overarching principles and the spirit.
Principle 1 – should this include alignment with organisational strategy as well as mission and values? I fully agree with this principle and have seen more and more that alignment between reward and values is crucial.
1b – is this possible in all contexts? I am conscious that in many African countries INGO workers are very well paid so in a sense the market is already distorted.
1c – why moral obligations rather than duty of care?
1d- this seems to link closely with 1b. This may need to be made clearer. Perhaps include that leadership give attention to and act on disparities and unintended consequences in reward practices.
Principle 2 – I really like this principle. I just wonder if the word open will be universally understood in all contexts.
2a – this is definitely something for many INGOs to work towards.
2c – this may need to be made slightly clearer. Not everyone will understand what a ‘reward system’ is.
Principle 3 – this is so important. However the question is reward is considered fair by who? Is it staff? Does it include stakeholders e.g. partners?
3a – the word competence has negative associations in some contexts of a person undergoing a formal performance improvement plan. Perhaps an alternative wording could be used such as knowledge, skills and experience.
3b is important but some may raise questions on relationship with equity. Is there something about clear criteria being included in the policies?
3d – does the global minimum standards refer to expatriates or all staff? The word global could be perceived to mean expatriates. If for all perhaps change to all employees. But this is very important. It also links with the comment on the website about a minimum living wage.
Principle 4 – b) Again this links with the concept of a minimum living wage and is something that the sector can sign up to particularly for the lowest paid staff. What do you mean by partners? Does this include partners that are funded by the INGOs e.g national NGOs? This may be a challenge to ensure a minimum living wage for some partner organisations and could be a controversial subject. I noted the remit of the standards are for INGOs. So the introduction of partners here seems a little contradictory. It could be confusing having two sets of a and b in principle 4.
4a – should regularly be added in here?
4b – this may need to be clearer. Is it a reward framework or a policy? If this is to include cost of living/inflation perhaps this could be specified. I am also conscious this may also infer benefits provisions and the external factor influencing those.
Principle 5 – I am intrigued by the term organisational social responsibility and I assume this has evolved from CSR.
5a – perhaps this goes beyond awareness and responsiveness. I believe there is also the aspect of compliance.
5b – an interesting concept of ’no harm’ on tax. It may need to be explained however.
Were any aspects from project FAIR about total reward and the non financial aspects of reward that need to be included as a principle? I don’t have an exact principle in mind but I am just thinking along the lines of reward policies take into account non financial reward and that certain aspects such as training and career development are considered alongside reward. Again this is aspirational in nature in many cases.
I noted a few aspects were not included and I am sure this is deliberate but would like to ask anyway:
I was interested that you did not address the dual salary system. Is this something you have concluded that organisations should decide on their own approaches on a case by case basis? Is it an acceptance that dual salary systems will likely always exist for some INGOs?
I note that the role of leaders is not explicitly stated particularly on their corporate responsibility for fair reward.
I noted nothing was stated on reward differentials between the lowest and highest paid staff. I am conscious that again this is a controversial issue.
Can I ask out of interest how will the standards be implemented? I noted that INGOs will need to agree to them and also include a commitment on their website.
Congratulations on a fantastic piece of work Ishbel. It is great to see that you have taken a very interesting piece of research and translated it into very practical standards for INGOs.
First – I would just like to commend Ishbel’s work to encourage this focus on fair reward across our sector. These principles and standards can really help guide us in our work.
At WaterAid we operate a single salary system where all staff are paid on local packages and in local currency, regardless of where they come from. We do take some account of the international pay market research when setting salary ranges for CDs/RDs/Regional roles. We have a timebound relocation support policy for non-nationals. This is in line with our values and is working well for us to secure the right people in the right roles for WaterAid. Happy to share details of this approach and our experience with colleagues.
I’d like to highlight the tension between the principle to be ‘fair’ and the principle to be competitive -4a) ‘market benchmarking’ – which currently is a tightrope that we balance on.
I’m also currently particularly interested in the minimum standards section 3d) since I’ve been working on a Global Travel policy and finding options to provide this in a consistent way are limited.
I would pick out:
Practical point, that whilst fairness/ethics/morals is important, we still need to be able to recruit/retain and any standard/set of principles must still support us to do this for internationally mobile staff, where there is still a need for them.
Should we specify that we won’t compete with the UN?!
Should there be anything specific about minimum living wage here? I couldn’t spot. Perhaps covered under 1c and detail not required?
Standard 1d: what does it really mean? Unintented consequences to whom? I think this standard as currently defined creates an “obligation of results” whereas standards and principles should only focus on setting up a framework for an “obligation of means”.
Standard 5b: my view is that tax is an individual issue and tax considerations should not be taken into acocunt when setting up a reward policy. Staff will have to pay taxes according to the tax legislation applicable to them. When it comes to staff who are required to move across borders to perform their activities, then I would agree that a uniform (meaning across all staff moving across borders) “no-harm” approach could be defined as a standard but even here I think some organisations may want to move away from existing tax-equalization mechanisms for international staff