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Branch), the linkage between compensation adjustments and budgeting can be quite simple. For the initial start-up, the staff budget should be based on the midpoint of the pay range for each position, and adjusted as necessary after recruitment. On an ongoing basis after corporatisation, the budget should be derived from actual staff numbers and specific package amounts, and adjusted annually for inflation and performance-based increments. The ongoing implementation process should be quite smooth as the proposed remuneration arrangements generally conform to the Government subvention guidelines.
START-UP BUDGET
5.2 The initial staff budget for RTHKC will need to be estimated according to the midpoints of the pay range for each position; because starting salaries will be based on applicants' skills and experience, pinpointing the total is impossible at this time. Once staff are hired, the estimate can be refined. Initial staff costs will also have to be adjusted for inflation as described in Chapter 4. In any event, actual compensation levels are unlikely to deviate significantly from the midpoints. Any marked increase from the recommended amounts should require Board support and Government approval.
ONGOING BUDGETING PROCESS
5.3 To ensure flexibility, we recommend that RTHKC follow a simple three-step staff budgeting process. This process should be supervised by the Board, as RTHKC is unlikely to be able to request additional funds from the Government Treasury during the
year.
5.4.1 Adjust for number of staff. The budget should reflect the forecast staff numbers, taking into account planned reductions and vacancies that must be filled. RTHKC is expected to reduce its manpower levels gradually as it achieves greater efficiency after corporatisation. On the other hand, some vacancies may be filled in the coming year.
5.4.2 Adjust for inflation. Once the required number of staff is established, the next step is to increase all current compensation levels by the inflation adjustment discussed in Chapter 4.
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