2019 REVIEW OF STAFF COMPENSATION FOR THE WORLD BANK GROUP AND AWARDS ALLOCATIONS March 28, 2019 Blank Page 2 THE WORLD BANK GROUP GLOSSARY The World Bank Group (WBG) consists of the International Bank for Reconstruction and Development (IBRD or the Bank), International Finance Corporation (IFC), Multilateral Investment Guarantee Bank Group or WBG Agency (MIGA), International Development Association (IDA), and International Center for the Settlement of Investment Disputes (ICSID). Board of Directors The Executive Directors of IBRD, IDA, IFC and MIGA. For purposes of this paper, Country Office staff refers to locally- Country Office (CO) Staff appointed staff in locations outside of Washington (Country Offices and Satellite Offices). FCS Fragile and Conflict-Affected Situations. HQ Headquarters based in Washington, D.C. IDA-LIC IDA-Low Income Country. The single replacement to the Salary Progression Adjustment and Supplemental Merit Increase elements in the current Merit Element compensation system. Its main objective is to reward performance. The point in the World Bank Group’s salary ranges which aims to be Midpoint aligned with the 75th percentile of compensation at comparable levels in the respective local labor markets. The Bank Group’s individual performance rating system based on Performance staff contribution and performance (ranging from a rating of 1 for Management ‘unsatisfactory’ performance up to a rating of 5 for ‘significantly System exceeds expectations’). Salary erosion is defined as the percentage decline in average WBG salaries over the course of the year. It arises largely from turnover Salary Erosion and promotions (caused by inflows and outflows of staff, where more experienced staff leaving the organization or retiring staff are replaced by new recruits or newly promoted staff). The set of salary ranges established for various grade levels. At the World Bank Group, the salary structure or salary scale has 11 salary Salary Structure or ranges from GA to GK. Each grade has a minimum and a maximum Salary Scale (called a salary range) and a midpoint. In some country offices, the scale starts with G1 grade. THE WORLD BANK GROUP 3 The structure adjustment aligns the salary scales with the increases Structure Adjustment in labor market salary levels. This represents the increase resulting from aligning the midpoints to the new market values. 4 THE WORLD BANK GROUP TABLE OF CONTENTS EXECUTIVE SUMMARY ......................................................................................................................................... 7 INTRODUCTION .................................................................................................................................................... 8 A.I. HEADQUARTERS – STRUCTURE ADJUSTMENT ................................................................................................ 8 A.II. COUNTRY OFFICES – STRUCTURE ADJUSTMENT ............................................................................................ 8 A.III. FY20 TOTAL SALARY INCREASE .................................................................................................................... 8 A.IV. DISTRIBUTION OF SALARY INCREASES ......................................................................................................... 9 A.V. FINANCIAL IMPLICATIONS............................................................................................................................. 9 B.I. WBG AWARDS................................................................................................................................................ 9 B.II. AWARDS BUDGET ALLOCATIONS .................................................................................................................. 9 C. SUMMARY OF RECOMMENDATIONS ...............................................................................................................10 Annex A: FY20 WBG HQ Compensation Measurement of the U.S. Market ..........................................................11 Annex B: July 1, 2019 HQ Salary Scale .................................................................................................................13 Annex C: 2019 (FY20) Structure Adjustments – Outside of HQ/Washington ........................................................14 Annex D: WBG Awards ........................................................................................................................................18 Annex E: IFC Awards Methodology......................................................................................................................20 THE WORLD BANK GROUP 5 Blank Page 6 THE WORLD BANK GROUP Executive Summary A. This paper presents for Board approval (i) the compensation proposals based on the 2019 (FY20) Review of Staff Compensation for the World Bank Group for Headquarters and Country Offices, and (ii) the FY20 budget allocation for the IBRD, IFC and MIGA Awards. B. The FY20 compensation review followed the rules set forth in the revised methodologies. For FY20, comprehensive market survey reviews of respective country labor markets for each of the WBG offices were conducted. In order to transition to the full scope of the revised country office methodology, Management intends to implement a transitional or intervening measure for FY20. C. WBG awards programs recognize and reward teams and individuals who, in delivering results in alignment with the WBG’s mission and objectives, have exhibited characteristics of exceptional performance, effort, innovation, collaboration, and leadership. IBRD, IFC and MIGA manage their own programs which are complemented by the joint WBG awards program. The scope and the budgetary envelopes of the awards and recognition programs in IBRD, IFC and MIGA are described in this paper. D. For the 2019 (FY20) Review of Staff Compensation for the WBG, it is recommended that the Boards of Directors approve: (i) The 2019 (FY20) structure adjustment of 2.2% to the salary ranges and midpoints for HQ-appointed staff; (ii) The 2019 (FY20) structure adjustments to the salary ranges and midpoints for Country Office-appointed staff as specified in Annex C. E. For the Awards, it is recommended that the Boards of Directors approve the FY20 budget allocations of: (i) US$3.8 million for the IBRD awards which include the IBRD portion of the WBG Awards; (ii) US$31.0 million for the IFC awards program which include the IFC portion of the WBG Awards; (iii) US$300,000 for the MIGA awards program. THE WORLD BANK GROUP 7 INTRODUCTION 1. This paper presents (i) the compensation proposals for the 2019 (FY20) Review of Staff Compensation for the World Bank Group for Headquarters and Country Offices, and (ii) the FY20 budget allocation for the IBRD, IFC and MIGA Awards. 2. The FY20 review represents the first year of the three-year (FY20-22) compensation cycle, where a comprehensive market survey approach was used to review all WBG salary scales around the world and calculate structure adjustments. For HQ, the FY20 outcome is based on the full application of the revised HQ compensation methodology approved by the Board in June 2018. For country offices, the FY20 outcomes of the compensation reviews are based on the proposed revised compensation methodology for country office-appointed staff. 3. The awards and recognition programs play a significant role in providing incentives and motivation, and a strong signaling effect to focus the institutions on critical strategic priorities. While some of these awards programs do not provide substantial financial amounts to staff, and in some cases, they provide non-monetary awards only in the form of trophies or certificates, they help improve and reinforce desired behaviors, and increase staff engagement. 4. This paper is organized into three parts. The first part details the proposed annual structure adjustments. The second part presents the proposals for FY20 awards budget allocations. The recommendations submitted for Board approval are presented in the third part. A.I. HEADQUARTERS – STRUCTURE ADJUSTMENT 5. The FY20 structure adjustment for Headquarters salary structure at grades GA-GI is proposed at 2.2%. Annex A provides more information on the FY20 WBG HQ measurement of the U.S. market. 6. The salary ranges and midpoints for grades GJ and GK are adjusted based on IMF’s projected U.S. CPI movement of 2.2% for FY20. 7. The July 1, 2019 (FY20) salary structure for HQ-appointed staff is presented in Annex B. A.II. COUNTRY OFFICES – STRUCTURE ADJUSTMENT 8. The proposed FY20 structure adjustments for Country Offices are detailed in Annex C. A.III. FY20 TOTAL SALARY INCREASE 9. For HQ, the merit element is set at 1.5% and it complements the structure adjustment. 10. For country offices with resulting FY20 structure adjustment based on the respective country labor market movement, the structure adjustment is complemented with a merit element that is set at 1.5% for each office. 11. Where country offices reviews result in minimal or marginal total salary increases, a transitional measure is applied to ensure that staff performance is appropriately rewarded. The FY20 total salary increase for each office is specified in the Addendum. In the transitional measure, the priority is given to the country offices located in FCS and IDA-LIC. 12. This transitional measure for FY20 total salary increase is the sum of the 1.5% merit element, and a percentage of the respective country CPI movement as follows: a. For country offices in FCS and IDA-LIC: 75% of country CPI movement; and b. For all other WBG offices: 50% of country CPI movement. 8 THE WORLD BANK GROUP 13. The transitional measure is not to be applied to Angola, Egypt, Sierra Leone, South Sudan, Sudan and Yemen due to recent scale denomination changes or currency development. These country offices will receive the minimum 2.0% total salary increase per office. A.IV. DISTRIBUTION OF SALARY INCREASES 14. All salary increases for Headquarters and Country Offices-appointed staff remain performance-based. Staff with unsatisfactory or partially meets expectations performance ratings will receive no salary increase. 15. Salary increases will continue to be distributed to individual staff based on their position in the salary range and performance rating, with higher performance recognized and differentiated through higher salary increases. 16. Salary increases will be distributed no later than November 2019 after the end of the annual FY19 performance cycle. A.V. FINANCIAL IMPLICATIONS 17. The proposed structure adjustments and financing of the transitional measure for Country Offices will be included in the respective FY20 budgets of individual WBG institutions. B.I. WBG AWARDS 18. Each WBG institution manages its own programs in alignment with respective business priorities. Individual institution’s awards programs are complemented with the Bank Group- wide program to recognize staff and reward collaboration and priorities that have cross-cutting themes across the WBG. These programs are financed through joint funding provided by individual WBG institutions. As the individual WBG institution varies in its business nature, the type and design of awards programs, as well as level of incentives offered, would also vary in terms of how each institution creates and recognizes performance differentiation. The WBG’s and each institution’s awards and recognition programs are described in Annex D. B.II. AWARDS BUDGET ALLOCATIONS 19. The IBRD awards program remains unchanged for FY20. Thus, the requested budget allocation of US$3.8 million for this program, which includes IBRD’s portion of the WBG Awards, is the same as the FY19 allocation. 20. IFC’s requested budget allocation for FY20 is US$31.0 million, compared to US$29.1 million for FY19. This amount includes the IFC portion of the WBG Awards. Successful implementation of IFC 3.0 requires changes in adapting incentives to encourage collaboration and sustained commitment to long term, complex engagements. Implementing adequate incentives will not be a one-time effort but requires a multi-year and multi-pronged approach. IFC already started to steer its incentives towards IFC 3.0. Following the revamp of IFC’s Corporate Scorecard, IFC Awards programs shifted to support the alignment of organizational performance with organizational priorities. For instance, the FY18 Corporate Awards programs was refocused to recognize strategic achievements, including the introduction of the Top 30 individual’s Award category to acknowledge and monetarily reward staff across the WBG for exceptional work demonstrated in low-income IDA and FCS countries, and for contributions toward creating markets and implementing the Cascade. IFC awards programs recognize the value of WBG collaboration in implementing IFC’s strategy, which resulted in a doubling in FY18 of the number of awards allocated to IBRD and MIGA. THE WORLD BANK GROUP 9 21. IFC shares the WBG single and unified salary structure. However, as IFC is a private sector- oriented institution, a higher private sector weight would better reflect staff composition and skills needed. To retain its competitiveness and motivate staff to deliver on the IFC’s strategic agenda, the IFC awards budget allocation may increase to support IFC’s strategic agenda in subsequent years as IFC progresses with the implementation of IFC 3.0. Based on the Board- approved methodology, the maximum awards budget allocation is defined as the difference between the existing WBG pay-line and potential IFC-only pay-line. This IFC-only pay-line is based on a more appropriate (i) private sector weight (75% private sector), as well as (ii) staff weight based on Job Family, to mirror IFC’s staff profile. Based on a calculation using FY19 data, the difference between the WBG pay-line and the IFC-only pay-line would be approximately US$51 million. Subject to budget trajectory/discipline, efficiencies, institutional performance parameters and Board approval, IFC can request an annual awards budget allocation up to the calculated difference in the pay-lines. 22. The requested MIGA budget allocation is US$300,000, which remains unchanged for FY20. The MIGA awards program primarily aims at incentivizing behaviors that align with the Agency’s strategy to focus on IDA, FCS and climate finance. C. SUMMARY OF RECOMMENDATIONS 23. For the 2019 Review of Staff Compensation for the WBG, it is recommended that the Boards of Directors approve: (i) the 2019 (FY20) structure adjustment of an overall weighted average of 2.2% to the salary ranges and midpoints for HQ-appointed staff; (ii) the 2019 (FY20) structure adjustments to the salary ranges and midpoints for Country and Satellite Office-appointed staff as specified in Annex C. 24. For the Awards, it is recommended that the Boards of Directors approve the FY20 budget allocations of: (i) US$3.8 million for the IBRD awards which includes the IBRD portion of the WBG Awards; (ii) US$31.0 million for the IFC awards program which includes the IFC portion of the WBG Awards; (iii) US$300,000 for the MIGA awards program. 10 THE WORLD BANK GROUP Annex A: FY20 WBG HQ Compensation Measurement of the U.S. Market 1. The FY20 WBG HQ compensation review follows the revised compensation methodology as approved by the Board in June 2018. U.S. Market Data Sources 2. Multiple high-quality data sources are used to ensure adequate coverage for Bank Group jobs. The comparator organizations used in each data source are based on broad market data sets using various positions/jobs across various job families and functional areas in the market that the WBG compares with and competes with for its HQ-appointed staff (See Table 1). a. U.S. Public Sector. The data used to define this comparator public sector data uses both U.S. Civil Service compensation data from various U.S. Civil Service Departments and Agencies that pay employees according to the U.S. Office of Personnel Management (US OPM) General Schedule, as well as data from Aon Hewitt and Willis Towers Watson on academia, NGOs and not-for-profit organizations. b. U.S. Private Sector. For the industrial sector, data from Aon Hewitt, Willis Towers Watson and HRA NCA were used. For the financial services sector, data sources were McLagan and Willis Towers Watson. Table 1: Summary of Market Data Sources by Job Family for Compensation Data Aggregation Administrative Core Business & Technical Market Data External General Human Info Mgt Office Tech Accounting Legal Economist Finance Investment Operations Sources Affairs Services Resources Tech Support Specialists OPM x x x x x x x x x x McLagan x x x x x x x x x x x Willis Towers x x x x x x x x x x x x Watson Aon Hewitt x x x x x x x x x x x x HRA NCA x x x x x x x x x x x 3. The combination of the data source compensation levels, sector weights, job family aggregation, and the actual staff weighting by grade results in the composite gross market values for grades GA to GI. The 2019 WBG review staff weights by job family across the grades are summarized below (Table 2). THE WORLD BANK GROUP 11 Table 2: 2019 Staff Weights by Job Family at Grades GA – GI Administrative ACS Core Business Technical GRADE Accounting External General Human Information Legal Office Economist Finance Investment Operations Technical Affairs Services Resources Technology Support Specialists GA 100% GB 100% GC 100% GD 4% 1% 6% 7% 11% 3% 58% 1% 5% 1% 2% 0% GE 15% 5% 2% 7% 16% 4% 9% 8% 7% 20% 7% GF 7% 6% 2% 3% 14% 3% 15% 10% 6% 15% 19% GG 4% 3% 1% 3% 8% 4% 16% 10% 7% 16% 30% GH 3% 2% 1% 2% 3% 5% 14% 13% 15% 20% 21% GI 4% 3% 2% 3% 2% 2% 15% 11% 11% 31% 14% GE-GI 6% 4% 1% 3% 9% 4% 15% 10% 8% 17% 22% Converting Gross Market Values to Net Values 4. The U.S. labor market compensation data is collected and provided through various market data sources in gross terms, and the resulting gross market value per grade is then netted down to restate in terms comparable to the net-of-tax salaries of Bank Group staff. 12 THE WORLD BANK GROUP Annex B: July 1, 2019 HQ Salary Scale 1. The proposed annual net salary scale for HQ-appointed staff as of July 1, 2019 is shown in Table 3 below. Table 3: July 1, 2019 HQ Salary Scale WBG Grade Minimum (US$) Midpoint (US$) Maximum (US$) GA 28,000 40,000 52,000 GB 33,700 48,100 62,500 GC 41,500 59,300 77,100 GD 49,300 70,500 91,700 GE 67,600 96,600 125,600 GF 89,500 127,800 166,100 GG 115,700 165,300 214,900 GH 158,200 226,000 293,800 GI 243,200 304,000 364,800 GJ 288,100 339,000 389,900 GK 320,300 376,800 433,300 THE WORLD BANK GROUP 13 Annex C: 2019 (FY20) Structure Adjustments – Outside of HQ/Washington 1. The FY20 individual country office structure adjustments are presented by WBG Office location in alphabetical order. Table 4 also includes information for Satellite Offices (such as those in Western Europe, Japan and United States - New York City). 2. Locations noted as exceptions to the transitional measure as defined in para. 13 are identified with an asterisk (*) below. Table 4: FY20 Structure Adjustments by WBG Country or Satellite Office # Country Region FY20 Structure Adjustment 1 Afghanistan SAR 4.0% 2 Albania ECA 0.0% 3 Algeria MNA 6.7% 4 Angola* AFR 0.0% 5 Argentina LCR 31.7% 6 Armenia ECA 0.0% 7 Australia EAP 0.0% 8 Austria HQ 0.0% 9 Azerbaijan ECA 1.2% 10 Bangladesh SAR 0.0% 11 Belarus ECA 1.8% 12 Belgium HQ 0.0% 13 Benin AFR 0.0% 14 Bhutan SAR 4.8% 15 Bolivia LCR 4.2% 16 Bosnia and Herzegovina ECA 0.0% 17 Botswana AFR 3.9% 18 Brazil LCR 0.0% 19 Bulgaria ECA 2.1% 20 Burkina Faso AFR 0.0% 21 Burundi AFR 0.0% 22 Cambodia EAP 3.3% 23 Cameroon AFR 0.0% 24 Central African Republic AFR 0.0% 25 Chad AFR 2.5% 26 Chile LCR 3.0% 27 China EAP 0.0% 28 Colombia LCR 0.0% 29 Comoros AFR 2.0% 14 THE WORLD BANK GROUP # Country Region FY20 Structure Adjustment 30 Congo AFR 0.0% 31 Congo, Democratic Republic of AFR 8.5% 32 Costa Rica LCR 2.6% 33 Cote d'Ivoire AFR 0.0% 34 Croatia ECA 0.0% 35 Djibouti MNA 0.0% 36 Dominican Republic LCR 0.0% 37 Ecuador LCR 0.5% 38 Egypt, Arab Republic of* MNA 0.0% 39 El Salvador LCR 0.0% 40 Equatorial Guinea AFR 1.4% 41 Ethiopia AFR 0.0% 42 Fiji EAP 3.2% 43 France - Marseille HQ 0.0% 44 France - Paris HQ 0.0% 45 Gabon AFR 0.0% 46 Gambia, The AFR 0.0% 47 Georgia ECA 1.6% 48 Germany HQ 0.0% 49 Ghana AFR 8.0% 50 Guatemala LCR 3.9% 51 Guinea AFR 8.0% 52 Guinea-Bissau AFR 0.0% 53 Guyana LCR 2.9% 54 Haiti LCR 0.0% 55 Honduras LCR 1.9% 56 Hong Kong SAR, China EAP 0.0% 57 India SAR 0.0% 58 India - Chennai SAR 4.9% 59 Indonesia EAP 0.0% 60 Iraq MNA 2.0% 61 Italy HQ 0.0% 62 Jamaica LCR 3.8% 63 Japan HQ 0.0% 64 Jordan MNA 0.0% 65 Kazakhstan ECA 0.0% 66 Kenya AFR 0.0% 67 Korea, Republic of EAP 0.0% THE WORLD BANK GROUP 15 # Country Region FY20 Structure Adjustment 68 Kosovo ECA 1.2% 69 Kuwait MNA 1.0% 70 Kyrgyz Republic ECA 0.0% 71 Lao People’s Democratic Republic EAP 0.0% 72 Lebanon MNA 0.0% 73 Lesotho AFR 5.3% 74 Liberia AFR 0.0% 75 Madagascar AFR 0.0% 76 Malawi AFR 8.4% 77 Malaysia EAP 0.0% 78 Maldives SAR 2.7% 79 Mali AFR 0.0% 80 Mauritania AFR 0.0% 81 Mauritius AFR 4.5% 82 Mexico LCR 0.0% 83 Moldova ECA 4.9% 84 Mongolia EAP 0.0% 85 Montenegro ECA 0.0% 86 Morocco MNA 0.0% 87 Mozambique AFR 0.0% 88 Myanmar EAP 0.0% 89 Nepal SAR 2.4% 90 Nicaragua LCR 0.0% 91 Niger AFR 2.0% 92 Nigeria AFR 5.6% 93 North Macedonia, Republic of ECA 0.0% 94 Pakistan SAR 6.6% 95 Panama LCR 2.4% 96 Papua New Guinea EAP 0.0% 97 Paraguay LCR 4.1% 98 Peru LCR 0.0% 99 Philippines EAP 0.0% 100 Poland ECA 0.0% 101 Romania ECA 0.8% 102 Russian Federation ECA 0.0% 103 Rwanda AFR 5.5% 104 Samoa EAP 0.0% 105 Saudi Arabia MNA 0.0% 16 THE WORLD BANK GROUP # Country Region FY20 Structure Adjustment 106 Senegal AFR 0.0% 107 Serbia ECA 2.3% 108 Sierra Leone* AFR 0.0% 109 Singapore EAP 1.4% 110 Solomon Islands EAP 1.6% 111 South Africa AFR 0.0% 112 South Sudan* AFR 0.0% 113 Sri Lanka SAR 0.0% 114 Sudan* AFR 0.0% 115 Switzerland HQ 0.0% 116 Tajikistan ECA 0.0% 117 Tanzania AFR 4.7% 118 Thailand EAP 0.0% 119 Timor-Leste EAP 0.0% 120 Togo AFR 0.0% 121 Tonga EAP 4.6% 122 Tunisia MNA 2.8% 123 Turkey - Ankara ECA 5.2% 124 Turkey - Istanbul ECA 7.6% 125 Turkmenistan ECA 3.6% 126 Uganda AFR 1.3% 127 Ukraine ECA 0.0% 128 United Arab Emirates MNA 0.0% 129 United Kingdom HQ 0.0% 130 United States - New York HQ 2.2% 131 Uruguay LCR 6.7% 132 Uzbekistan ECA 0.9% 133 Vanuatu EAP 3.4% 134 Vietnam EAP 0.0% 135 West Bank and Gaza MNA 0.0% 136 Yemen, Republic of* MNA 0.0% 137 Zambia AFR 2.3% 138 Zimbabwe AFR 0.0% THE WORLD BANK GROUP 17 Annex D: WBG Awards WBG AWARDS PROGRAM 1. President’s Awards for Innovation recognize teams that have accelerated development results through the creation and/or adoption of innovations across WBG operations, as well as client countries. These innovations may be brand new solutions, such as a new technology, product, policy, process, partnership, or other approach; or may be an adaptation of established approaches to different sectors or context. For 2019, in addition to other important criteria, the nominations called for innovation related to solutions using disruptive technology via private sector partnerships. These awards are non-monetary. 2. President’s Awards for Excellence recognize individuals and teams who, in delivering results toward the WBG’s mission and objectives, have modeled the Maximizing Finance for Development or Cascade, exceeded the expectations of the job (“gone above and beyond the call of duty”), demonstrated WBG collaboration, and/or exhibited characteristics of exceptional leadership. These awards are non-monetary. 3. Spot Awards recognize extraordinary efforts made by individual staff and teams to realize the goals of the WBG. Monetary awards under the spot awards program may be up to US$400 (or equivalent in the salary currency). The Bravo Awards Program for a few selected units (e.g. WB BPS, GCS, ITS, SPA) 1 forms a sub-category of the spot awards and VPU team awards, where funds are re-purposed under this program. The Bravo Awards is a points-system type of program (where points are redeemable for small monetary awards) to recognize worthy efforts and behaviors of staff, peers and colleagues, thus promoting a culture of appreciation and recognition. 4. Integrated VPUs Performance Awards reward and recognize team achievements and individual performance in support of VPU goals. This program incentivizes collaborative behaviors and results that will help deepen the synergies across IBRD and IFC, specifically in the areas of Human Resources (HR). Monetary awards range between 2% and 10% of the midpoint salary of the recipient’s grade. 5. The Service Recognition Program honors staff on their 10, 20 and 30-year anniversaries with the WBG, as well as in commemorating their retirement. The Retirement Appreciation Award for all WBG staff who retire after reaching 20 years of continuous service is US$1,200. IBRD AWARDS PROGRAM 6. VPU Team Awards recognize and reward teams that, in delivering an activity during the prior calendar year, focused on impact, integrity, respect, innovation, teamwork, supporting the FCV agenda, supporting the Bank Group’s Cascade/Maximizing Finance for Development agenda, and the achievement of VPU-specific objectives. Monetary awards range between US$400 and US$2,000 (or equivalent in the WBG office salary currency). 7. Finance Partners Performance Awards align collective and collaborative performance with the Finance group-wide business objectives. The program links the Finance Partners group objectives to rewards, to encourage staff to collectively deliver on Finance VPU results and support one another within and across the Finance VPUs. This program is a foundation for measuring and rewarding annual achievements and recognizing outstanding staff and team performance towards collective delivery and results. Monetary awards range between 2% and 10% of the midpoint salary of recipient’s grade. 1Budget, Performance Review and Strategic Planning, Global Corporate Solutions, Information and Technology Solutions, and Strategy, Performance and Administration Department. 18 THE WORLD BANK GROUP 8. Variable Pay Pilot. In line with the WBG medium to long-term plan to shift the WBG system and culture to a more pay-for-performance operating model, a potential first pilot program to be defined by its objectives/overall purpose, parameters, scope, and awards may be designed in FY20. Any design that may be potentially implemented within FY20 would be managed within the awards budget envelope for FY20. IFC AWARDS PROGRAMS 9. IFC Corporate Award Program a is an integral part of how the IFC Management team rewards and recognizes outstanding performance consistent with IFC’s core values and corporate priorities in the following categories: (1) Low-income IDA and FCS countries, (2) Creating Markets and the Cascade, or MFD, (3) IFC delivery to clients, and (4) Corporate initiatives. These monetary awards range between 2% and 10% of the midpoint salary of the recipient’s grade. 10. In addition, IFC introduced Top 30 for IFC 3.0 individual awards. These awards are designed to reward individual efforts, focusing specifically on IFC 3.0 and the Creating Markets agenda. These monetary awards are set at 15% of the midpoint salary of the recipient’s grade. 11. IFC Annual Performance Awards distinguish extraordinary efforts, achievements, and positive behaviors consistent with IFC's core values. The program rewards teams and individuals incorporating corporate, departmental and individual performance and, specifically, emphasizes individual and team performance that leads to improved client results and greater effectiveness for the corporation as a whole. The program promotes functional and performance differentiation for successful contributions in IFC’s high priority areas. Monetary awards range between 5% and 15% of the midpoint salary of the recipient’s grade. MIGA AWARDS PROGRAM 12. MIGA’s Management Awards reward teams and/or individuals who make significant contributions to MIGA’s institutional and/or operational results. The awards program is primarily aimed at incentivizing behaviors that align with the Agency’s strategy to focus on IDA, FCS and climate finance. Monetary awards may be up to US$7,000. THE WORLD BANK GROUP 19 Annex E: IFC Awards Methodology 1. Using the same methodology to define the WBG pay-line, IFC will calculate the difference between the WBG pay-line to which all salaries will be pegged, and what an IFC-only pay-line would be, based on (i) a more appropriate private sector basket (75% Private/25% Public) in relation to IFC hiring sources (which show a 92% Private/8% Public mix), and (ii) a more appropriate set of staff weights by Job Family to reflect IFC’s staff profile as shown in Table 1 based on 2019 staffing profiles. 2. The increased emphasis on the finance and investment job families (as per the IFC’s staff composition) would increase the midpoints of the salary range for grades GF-GI. This differential will be utilized to estimate the maximum award envelope IFC can request to allocate to its awards programs. Since the differential is based on the HQ compensation methodology, for country offices a projected difference will be estimated based on the wage bill split between HQ and Country Office staff. 3. Budget trajectory/discipline, efficiencies, and institutional performance parameters, will be key factors in determining the IFC’s awards envelope requested annually for its awards programs. Table 1: 2019 Staff Weights by Job Family at Grades GE-GI – WBG and IFC WBG Core Business and Technical Grade Economist Finance Investment Operations Technical Specialists GE 9% 8% 7% 20% 7% GF 15% 10% 6% 15% 19% GG 16% 10% 7% 16% 30% GH 14% 13% 15% 20% 21% GI 15% 11% 11% 31% 14% GE-GI 15% 10% 8% 17% 22% IFC Core Business and Technical Grade Economist Finance Investment Operations Technical Specialists GE 9% 13% 26% 13% 2% GF 4% 22% 29% 24% 1% GG 4% 10% 29% 25% 13% GH 2% 14% 48% 13% 11% GI 2% 21% 47% 13% 4% GE-GI 4% 14% 35% 19% 9% 20 THE WORLD BANK GROUP