Remuneration disparities in Oceania: Papua New Guinea and Solomon Islands

Abstract

This paper explores the impact of remuneration differences on workers in the Solomon Islands and Papua New Guinea. In these countries remunerative differences are linked to government policy (in Papua New Guinea) and job contracts (in the Solomon Islands), and have impacted on industrial relations in both settings (strike action). A total of N = 350 professionals (n = 60 expatriates) from 54 organizations in aid, government, higher education and industry (mean response rate = 36%) responded to an organizational survey form. Remuneration ratios between international and local respondents based on the World Bank's index of purchasing power parity approached 9:1. In both sites staff compared pay and benefits (remuneration) packages: Internationally remunerated staff rated their ability higher than their local counterparts did; locally remunerated groups reported more injustice in remuneration, were more demotivated by the gaps, and were more likely to be thinking about leaving the organization. In-country workshops of N = 40 largely local stakeholders from aid and community organizations plus government ministries considered the survey's findings and recommended: in Solomon Islands, (a) introducing a policy of localization, (b) establishing a remuneration commission (already existent in Papua New Guinea), and (c) reducing the remunerative gap; in Papua New Guinea, (d) reversing the post-Independence "dual pay system" (currently official policy), (e) instituting pay-for-performance, and (f) ensuring the existent localization policy is applied to recruitment, selection, and staff career planning and management.