The German University in Cairo MBA section

Salary limitations in Egypt

[Report results on the questionnaire of minimum and maximum salary limitations in Egypt ]

Students: Marwa Mourad Tamer Adel Medhat Abdel Wahab Abed Said Ahmed Mamdouh Lecturer: David Ethnasios English Language Instructor Academic Business Skills I Course M1100594 M1100725 M1100512

7/20/2011

Table of Contents
Table of Contents ............................................................................................................................ 2 Executive Summary ........................................................................................................................ 3 Introduction: .................................................................................................................................... 3 a. The Problem: ........................................................................................................................... 3 b. The Hypothesis: ...................................................................................................................... 3 c. The Scope: ............................................................................................................................... 3 Body: ............................................................................................................................................... 4 a. c. Methodology ........................................................................................................................ 4 Conclusion ........................................................................................................................... 5 b. Findings................................................................................................................................ 4 Appendix ..................................................................................................................................... 6

Executive Summary The problem of exaggerated salaries of Egyptian government officials versus understated salaries of small government employees has become a major public concern. These elevated salaries of government officials are negatively affecting the Egyptian economy and consequently its social structure. On the other hand junior government employees earn salaries that are not enough to cover their minimum life requirements resulting in corruption or hatred between the different social classes. Our Survey is based on the hypothesis that setting minimum and maximum salary limitations will play a significant role in solving the Egyptian economic and social problems. In conclusion the questionnaire results strongly confirm the hypothesis that if setting minimum and maximum salary limitations will play a significant role in solving the Egyptian economic and social problems. Introduction: In the wake of the revolution that drove President Hosni Mubarak from office, Egyptians expect a bright political and economic future .Demonstrations and strikes occurred following the revolution in many public and private sector companies due to what they perceive inequality in the distribution of salaries/wages. For as some labor and employees earn as low as LE 500 per month others could earn a 1000 multiple. a. The Problem: Exaggerated salaries of Egyptian government officials versus understated salaries of small government employees: First side of the problem: Exaggerated salaries of government officials are negatively affecting the Egyptian economy and consequently its social structure. Second side of the problem: Small government employees on the other hand earn salaries that are not enough to cover their minimum live requirements resulting in corruption or hatred between the different social classes. b. The Hypothesis: Setting minimum and maximum salary limitations will play a significant role in solving the Egyptian economic and social problems. c. The Scope: The questionnaire was given to a sample of 49 subjects who are mainly the colleagues or friends of the group members. The sample revealed that 85% are employed while 13% were unemployed. The employed sample was mostly (89%) private sector.

Body: a. Methodology The questionnaire was distributed amongst a sample of 49 subjects who are mainly the colleagues or friends of the group members. The vast majority of the responders were males working in the private sector. The questionnaire consisted of 14 questions that vary between yes/no, scale, multiple choice, checklist and ranking types. The questions were designed in a way to survey the responders opinion regarding most of the aspects regarding salaries that are currently discussed amongst the Egyptians when it comes to salary limitations. It did not only include questions that should indicated whether responders accept the concept of salary limitations but it also included general question regarding how salaries should be evaluated and whether revealing salaries in corporation is a favorable idea. The questions went further to examine whether the responders would like to set the same limitations in all sectors or whether they would like to set different figures for salary minimums and maximums in accordance to the different sectors. It was also important to get the responders opinion regarding whether reducing exaggerated salaries of government officials to a reasonable ceiling could allow the government to raise the level of minimum wages instantly, which might be an easy applicable solution for the problem of the government not having enough budget to raise the minimum wages of government employees. The last questions regarding setting a salary for the new president was a teaser question that had the purpose of triggering the responders to think about the fact that since he/she is setting limitation for salaries, should the president be included or excluded from such limitations.

b. Findings The sample revealed that 85% are employed while 13% were unemployed. The employed sample was mostly (89%) private sector. Despite the fact that the majority of subjects were privately employed 59% voted for implementing minimum and maximum wages on both private and public where as 31% voted for public only. When requested to determine the level of acceptance or rejection of the statement that huge salary gaps could negatively affect the social solidarity of the Egyptian community resulting in hatred between the social classes. The following results arise.

Neutral Disagree 4% 2%

Strongly disagree 0%

Agree 45%

Strongly Agree 49%

The above results strongly illuminate the fact that 94% agree on the above statement. Again the results show that a vast majority (76%) is between strongly and agreeing on the statement that states that one of the significant causes for the Egyptian economic setback is not setting a defined ceiling for salaries amongst government officials. The majority of the sample perceives that reducing the exaggerated salaries of government officials to a reasonable ceiling could allow the government to raise the level of minimum wages instantly.

Consistent with the results a salary of less than EGP 1000 is seen to be non sufficient to cover an Egyptian familys minimum requirements of average size. In fact 63 percent voted for more than EGP1300 with an average of EGP 2300. 39% , i.e. the majority, of the responders chose that the maximum salary should be between 10 to 20 times as large as the minimum salary, while 22% chose it to be between 21 to 30 time and 17% chose that the maximum salry chould be lower that 10 times as large as the mimum salary. Eventually 57% of the responders set a defined salary for the new president with an average of EGP 280,000, while 43% exclaimed that they dont know.

c.

Conclusion

The questionnaire results strongly confirms the hypothesis that if setting minimum and maximum salary limitations will play a significant role in solving the Egyptian economic and social problems not only that the majority of the sample believes that the level of corruption will be dramatically reduced when considering a minimum salary that accommodates the basic needs of the Egyptian family. The responders are pro the fact that lowering the exaggerated salaries will help in raising the minimum wages in the public sector instantly. The majority of the responders went as far as setting a maximum salary for the president himself, which show how convinced they are of such system even in the highest level of government officials.

Appendix Detailed findings illustrated by graphs and pie charts: 85% of the people surveyed were employed Q: State your current employment status

Unemployeed, 6, 13%

Q1 - A

Between jobs, 1, 2%

Employed Between jobs Unemployeed

Employed, 41, 85%

The majority, i.e. 85%, of the people surveyed are employed 13% were unemployed and 2% were between jobs.

89% of the employed people were employed in the private sector Q: If employed: Are you an employee at the Egyptian private or public sector?

The majority, i.e. 89%, of the people surveyed are employed in the private sector while 5% in the public.

59% of the surveyed people think that implementing a minimum and a maximum wage concept is necessary in both the Egyptian private and public sectors Q: a. Implementing a minimum and a maximum wage concept is necessary in the Egyptian private sector b. Implementing a minimum and a maximum wage concept is necessary in the Egyptian public sector c. Implementing a minimum and a maximum wage concept is necessary in both the Egyptian private and public sectors d. Implementing a minimum and a maximum wage concept is not necessary

The majority, i.e. 59%, of the people surveyed think that implementing a minimum and a maximum wage concept is necessary in both the Egyptian private and public sectors, while 31% thought that it should only be implemented in the public sector, 8% thought that its necessary only in the private and 2% didnt find any necessity in implementing it.

94% of the people surveyed agreed that huge salary gaps could negatively affect the social solidarity of the Egyptian community resulting in hatred between the social classes. Q: Determine your level of acceptance or rejecting to the following statement: Huge salary gaps could negatively affect the social solidarity of the Egyptian community resulting in hatred between the social classes.

49% of the people surveyed strongly agreed that huge salary gaps could negatively affect the social solidarity of the Egyptian community resulting in hatred between the social classes, while 45% agreed, 4% were natural and 2% disagreed.

76% of the people surveyed agreed that one of the significant causes for the Egyptian economic setback is not setting a defined ceiling for salaries amongst government officials. Q: Determine your level of acceptance or rejecting to the following statement: One of the significant causes for the Egyptian economic setback is not setting a defined ceiling for salaries amongst government officials.

29% of the people surveyed strongly agreed that one of the significant causes for the Egyptian economic setback is not setting a defined ceiling for salaries amongst government officials, while 47% agreed, 12% were natural and 12% disagreed.

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88% of the people surveyed agreed that reducing exaggerated salaries of government officials to a reasonable ceiling could allow the government to raise the level of minimum wages instantly. Q: Determine your level of acceptance or rejecting to the below statement: Reducing exaggerated salaries of government officials to a reasonable ceiling could allow the government to raise the level of minimum wages instantly.

23% of the people surveyed strongly agreed that reducing exaggerated salaries of government officials to a reasonable ceiling could allow the government to raise the level of minimum wages instantly, while 41% agreed, 8% were natural and 4% disagreed.

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82% of the people surveyed think that the minimums and maximums of salary limitations should vary according to the relevant sector. Q: Do you think that the minimums and maximums of salary limitations should vary according to the relevant sector, for instance a maximum in the medical sector is not the same as in the industrial? Yes no

82% of the people surveyed agreed that the minimums and maximums of salary limitations should vary according to the relevant sector while 18% percent disagreed.

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94% of the people surveyed think that salaries should be annually readjusted in accordance to the existent inflations rate? Q: Do you think that salaries should be annually readjusted according to the existent inflations rate? Yes no

94% of the people surveyed agreed that salaries should be annually readjusted in accordance to the existent inflations rate while 6% percent disagreed.

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63% of the people surveyed thought that a minimum wage should be over EGP 1300 with an average of EGP 2300 Q: According to your point of view, how large do you think a minimum wage should be to cover an Egyptian familys minimum requirements? (Mother, Father & 2 Children) (Circle one only) a. Lower than 800 (.) define the amount b. 800 900 c. 901 1000 d. 1001 1100 e. 1101 1200 f. 1201 1300 g. Higher than 1300 (..) define the amount

0% 0% 6%
12% 15% a(Lower than 800 ) 4% b(800 900) c (901-1000) 63%

d (1001-1100)
e (1101-1200) f (1201-1300) g (>1300)

63% of the people surveyed thought that a minimum wage should be over EGP 1300 with an average of EGP 2300, while 15% set the minimum between EGP 1201 and 1300, 12% set it between EGP 1001 and 1100, 6% between EGP 901 and 1000 and 4% between 1101 and 1200.

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39% (the majority) of the responders chose that the maximum salary would be from 10 to 20 times as large as the minimum salary. Q: How many times should a maximum salary be compared to a minimum salary x? (Circle one only) a. Lower than 10x (determine ..x) b. 10x to 20x c. 21x to 30x d. 31x to 40x e. 41x to 50x f. Higher than 50x (determine ..x)

f (> 50x)

39% (the majority) of the responders chose that the maximum salary would be from 10 to 20 times as large as the minimum salary, while 22% chose it to be between 21 to 30 time and 17% chose that the maximum salry chould be lower that 10 times as large as the mimum salary.

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43% ( the majority) of the responders think that a salary increase should relate to an employees improved level of professional performance Q:According to your point of view which of the following statements are true (Circle one or multiple) a. A salary increase should relate to a promotion from one level to another b. A salary increase should relate to an employees improved level of professional performance c. A salary increase should relate to an employees improved level of education (such as obtaining a masters degree) d. A salary increase should relate to an employees number of years spent at a corporation

43% ( the majority) of the responders think that a salary increase should relate to an employees improved level of professional performance, while 23% think that its linked to an improved in the level of education (such as obtaining a masters degree) and19% think that increase should take place when an employee is promoted from one level to another. 15% of the responders think that the number of years spent in a corporation should be an indicator of how large the salary should be.

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The responders split on whether revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency or not. Q: Do you think that revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency that would benefit the flow of work? Strongly agree Agree Neutral Disagree Strongly Disagree

18% strongly agreed while 31% agreed that revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency that would benefit the flow of work, while the other half of the people surveyed were either neutral or disagreed.

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The responders split on whether revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency or not. Q: Do you think that revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency that would benefit the flow of work? Strongly agree Agree Neutral Disagree Strongly Disagree

The responders split on whether revealing all employees salaries within a private or a public corporation is a good idea to implement the concept of transparency or not while 8% where neutral.

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A majority os 71% thought that raising the minimum wages in the Egyptian public sector would lower the level of corruption. Q: Do you think that raising the minimum wages in the Egyptian public sector would lower the level of corruption? Strongly agree Agree Neutral Disagree Strongly Disagree

A majority os 71% thought that raising the minimum wages in the Egyptian public sector would lower the level of corruption, while 17% disagreed and 12% were neutral.

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The majority of responder have scored intelegance the highest and responsibility the lowest as a criteria according to which the size of salries should be evaluated. Q: The size of salaries should be evaluated in accordance to: Rank by order from 1(least important) to 5(most important). responsibility productivity experience intelligence education

The majority of responder have scored intelegance the highest followed by productivity and responsibility the lowest as a criteria according to which the size of salries should be evaluated. Ranking result: Intelligence ranked 1st Productivity ranked 2nd Education ranked 3rd Experience ranked 4th Responsibility ranked 5th

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An avarage salary of EGP 280,000 for the presedint Q: How large do you think the new Egyptian presidents monthly salary should be? a. Define the exact amount (.) b. I dont know

57% of the responders defined a salary for the new president with an average of EGP280,000 while 43% said that they dont know.

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