Chapter 4: Empirical Estimations on Malaysia
4.2 The conceptual framework
4.3.1 Data
Data for estimating equations (4.1) and (4.2) are derived from the average monthly salaries for the public and private higher education institutions (HEIs) in Malaysia (see Chapter 3 for the detailed analysis of the HIEs salary scales).
The wages for public HEIs were obtained from the Malaysian Public Services Department’s website (Jabatan Perkhidmatan Awam). The salary scales for academics are based on the four job classifications, namely Lecturer, Senior Lecturer, Associate Professor and Professor. For non-academics, the salary scales are divided into three main job classifications, namely Managerial and Professional (Grade 41 to 54), Supporting 1 (Grade 17 to 40) and Supporting 2 (Grade 1 to 16).
As mentioned in Chapter 3, in the Malaysian public service charter, the non-academics are divided into 19 job classifications (see Appendix 1), each with its own salary scale. For the purpose of this study, the salary data for non-academics in public HEIs is represented by the salary scales of Administration and Support group (under the ‘N’ job classification). This is because ‘N’ job classification is the core group for non-academics in the Malaysian public HEIs, as their job functions range from supervising academic management, to handling human resource management and other general administrative tasks at the central
department and faculty levels (Mohd. Akhir, 2000). Furthermore, the differences in the monthly salary scales between job classifications for non-academics are not great.
The average of monthly salary scales for academics and non-academics are calculated by using the average between the minimum and maximum of salary scales on each job classification including the promotional grade on that job classification. For instance, the minimum salary scale for Managerial and Professional group is the starting salary scale at Grade 41 and the maximum salary scale is the maximum salary scale at Grade 54. For the Professor level, the calculation is based on taking the average of the minimum of salary for a Professor (Premier Garde C) and the maximum salary for a Professor (Turus 1). This method is adopted from the method used by Abdullah (1980) in analysing the salary range in the Malaysian public sector. It is worth noting here that the average or midpoint salary is also used by the Association of Commonwealth Universities in their salary survey (Falk, 2011). Following the method used by the Malaysian Public Service Department (PSD) in their study comparing the salaries of public servants and private sector employees in 2010 (Jabatan Perkhidmatan Awam, 2010c), the calculation of average monthly salary scales takes into account the fixed monthly allowances but excludes others payments such as annual bonus or honorarium. The salary range and fixed monthly allowances of academics and non-academics in Malaysian public HEIs for 2011 are shown in Appendix 3A and Appendix 3B.
The average monthly salary scales for the private HEIs are gathered from their universities’ website. The justification is that the salary scales of the private HEIs are not available in any other form. One difficulty which the researcher encountered while collecting salary
scales of the private HEIs is the lack of consistencies in wages among the private HEIs, and also among the various job classifications in both the academic and non-academic levels. In addition, there are also no formal pay scales in the Malaysian private HEIs (Din and Shanmugam, 1999). Taking these limitations into account, the construction of the salary scales for the private HEIs are based on two conditions stipulated below:
(i) The private HEIs salary scales are represented by the salary scales taken from the established private HEIs in Malaysia based on the SETARA ranking published by MQA. Only private higher educational institutions which fall in the Tier 5 (excellent) category in the SETARA ranking list published by MQA in 2009 will be analysed. This means that the salary scales from other private HEIs which do not fall in the chosen category will be excluded.
(ii) For the non-academic staff members, in addition to the salary scales, the researcher has looked at their general job descriptions and academic qualifications for the respective positions which are made available through the relevant websites. This is to ensure that the salary scales analysed fall in the right category and match the job classifications in the public and private higher educational institutions. This helps to reduce the differences in nomenclature or terms used to reflect the job classification or job title between the private and public HEIs. The same method is also used by the Malaysian Employers’ Federation (MEF) in their annual salary survey. The minimum qualification for the managerial and professional group is a university degree, while Supporting 1 group members are required to have a diploma or higher certificate. Supporting 2 group members are required to have at least a high school certificate.
Just like the salaries in public HEIs, the average monthly salaries in private HEIs are analysed based on the average between the minimum and maximum salary scale of each job classification. The data on average of salary scales of private HEIs are gathered from January 2011 to June 2011 (see Appendix 4A and Appendix 4B).
This study however has not included the salary scales for the top management group in the Malaysian HEIs such as the Vice Chancellor or President, Deputy Vice Chancellor and others senior positions. Getting access to the salary scales for top management officers in private HEIs is impossible (due to confidentiality of employment contracts). It would not be possible to estimate the efficiency wage ratio and the elasticity of effort in the top management group without the salary scales of the private HEIs top management group. Nonetheless, it will not have any meaningful impact on this study due to a small number of employees in this salary group in the public and private HEIs. For instance, in USM only seven employees are in the top management group and other public HEIs also have about the same number. What is worth mentioning here is that the top management group had been excluded in the study by Embi (2006).