./.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/W/48/Add.1
12 October 2000
(00-4213)
Committee on Budget, Finance and Administration
PERFORMANCE AWARD PROGRAMME
Payroll simulations
Addendum
1. The present paper has been prepared in response to questions asked at the meeting of the
Budget Committee held on 3 July 2000.  A number of concerns were expressed at that meeting,
regarding in particular the cost of the prog ramme proposed in document WT/BFA/W/48.  The
Secretariat was asked to provide simulations based on the present staffing table, to show whether the
proposed programme could be operated within the agreed budget of 2 per cent of net salaries.  These
simulations are provided below and reflect the pr oposals contained in document WT/BFA/W/48.  One
change to those proposals has been introduced in response to comments made at the meeting of the
Budget Committee.  The initial proposal provided for a fixed bonus of + 2.5 per cent of net salary forexcellent performance.  In the present simulations, the fixed bonus is replaced by a variable
percentage depending on the number of cases qualifying for bonuses and on the balance of funds
remaining in the budget after payment of the standard increase for satisfactory performance.
2. The calculations are based on a total net salary budget of CHF 55 million.  It is assumed that
70 per cent of the staff are below the grade ceiling and that 100 per cent of the staff are performing
satisfactorily.  It is also assumed that 25 per cent of the staff have recorded an excellent performance
during the year and are thus eligible to receive a share in the residual amount available for bonuses.
3. The simulation covers a six-year period and illustrates how the proposed programme would
be gradually introduced in order to remain within  the 2 per cent limit.  In the first year only the
pensionable increase for satisfactory performance by staff below the grade ceiling and the non-
pensionable bonus for excellent performance would be paid.  The pensionable increases in the first
year would correspond to the value of the current periodic increments.  The non-pensionable awardfor satisfactory performance by staff at the grade ceiling would be phased in over a four-year period
commencing in year 2.
4. The simulation demonstrates that the annual cost increase generated by the proposed
programme does not exceed the limit of 2 per cent of the net salary budget over the six-year period.
The simulation also shows that the funds potentia lly available for bonuses for excellent performance
payable to 25 per cent of the staff increase over time, from 1.3 per cent of the total net salary budget
for this subset of staff in year 1 to 4.5 per cent of the net salary budget for this group in year 6, the
reason being that the non-pensionable awards and bonuses have only a one-time impact on the growth
of the net salary budget. In other words, although they represent an additional cost in the year of their
introduction, that cost does not increase over time.WT/BFA/W/48/Add.1
Page 2
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Number of staff (in %) receiving the standard increase :
- pensionable 70 70 70 70 70 70
- non-pensionable 30 30 30 30 30 30
Bonus (as % of net salary) payable to 25% of staff 1.3 1.5 1.8 2.3 3.0 4.5
Increase in net salary budget (in 1000 CHF)
Standard increase :- pensionable
912 993 993 993 993 993
- non-pensionable 0 101 101 101 101 0
Bonus for excellent performance 188 28 50 73 97 221
Total increase in CHF 1,100 1,122 1,144 1,167 1,191 1,214
Total bonus payments, including previous year's payments 188 216 266 340 436 658
Increase in net salary budget (as % of previous total)
Standard increase :- pensionable
1.66 1.77 1.74 1.70 1.67 1.64
- non-pensionable 0.00 0.18 0.18 0.17 0.17 0.00
Bonus for excellent performance 0.34 0.05 0.09 0.13 0.16 0.36
Total increase in % 2.00 2.00 2.00 2.00 2.00 2.00
Net salary budget 56,100 57,222 58,366 59,534 60,724 61,939Proposed performance award programmeYear