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Government / Central Government / News / Asia Pacific / Innovation / E-Gov

Should civil servants be paid by performance?

In March this year, Exam Yuan, which regulates Taiwan’s civil service, moved to keep complacent civil servants on their toes by introducing a rule whereby those who get consistently poor grades in their appraisals will be asked to leave.

31/05/2010

John Kuan, President of Exam Yuan, told local reporters that the existing system does not weed out weak performers or distinguish between the good and the mediocre. This, he said, has created a civil service that lacks initiative and seeks only to avoid making mistakes. As a result, the Taiwan government was rated as far less efficient than private sector enterprises in the World Economic Forum’s global competitiveness report.

Meanwhile in Singapore, the government has just announced that civil servants are to receive one of the biggest mid-year bonuses of the last five years - but that future wage increases would be pegged to improvements in productivity.

Introducing more performance measures can only be a good thing for the public sector, says Kevin North, who leads IBM’s Asia Pacific Public Sector Business.

“Today, many public organisations are taking experiences gained from the private sector and are successfully implementing proven performance management solutions. The biggest challenge for many is cultural," he says. "But ultimately the public sector must develop a skilled and motivated workforce that is capable of facing up to 21st century challenges.”

With this in mind, FutureGov asked senior civil servants in China, India, Malaysia and Singapore for their views? Should civil servants be paid by performance?

Wang Jun, Deputy Secretary-General, Yichang Municipal Govermment, China
In theory, civil servants should be paid by performance. But in practice it is difficult to link salary directly to how good a civil servant is at his or her job. This is partly because of the performance appraisal system in China. Salary is determined by rank, not so much by performance. Performance in the civil service is ensured by examinations. They are a legal requirement and are strictly enforced. You must take an entrance exam before you enter the civil service, and then again on promotion to a higher rank (if you stay in one position for three years, then you usually have the chance to get promoted). Exams are a good way for the authorities to get an overview of the performance standards of government, and to ensure professional knowledge is held to a standard. However, China’s civil service exams could be improved, I feel. There are only three outcomes of the exam: either you pass, you fail or you get an “excellent” result. But there is no real difference between how those who get an excellent result and how those who get an ordinary result are treated in salary terms. Which means that as long as you don’t make too many mistakes in the Chinese civil service, your job is safe.

Dr Prajapati Trivedi, Secretary to Government, Performance Management Cabinet Secretariat, India
The Sixth Pay Commission, like its predecessors, recommended a Performance Related Incentive Scheme (PRIS). These commissions have highest level independent authority over India’s civil service pay structure. The Indian Government has accepted their recommendation. Yet this recommendation has remained unimplemented since the 4th Pay Commission submitted its report in 1987 primarily because there was no agreement on the meaning of the term ‘government performance’. With the introduction of Results-Framework Documents, a performance agreement between a minister and secretary of the department, we have overcome this definitional barrier. The performance of each government department in India is now measured on a scale of 1-100. This score measures the ability of departments to meet their commitments. Therefore, it is now just a matter of finding an acceptable formula to link the departmental performance index to incentive payments. The discussions on PRIS are at an advanced stage and I believe the decision is imminent. Fundamentally, no entity can improve performance without incentive. It is only human to be motivated by incentives.

Tan Sri Ismail Adam (pictured), Director General of Public Service, Malaysia
Several statutory boards in Malaysia have given out bonuses based on Key Performance Index for a few years now. Outstanding performers can receive one to three and a half months salary over and above the normal yearend bonus. Our government leaders are firm believers of varying pay by performance and we are moving aggressively in that direction. We target to have the whole of government implement this scheme by 2012. The biggest challenge is in evaluating performance and changing the mindset of staff that they should be evaluated. Getting all levels of government on board will also be a challenge. We might be able to implement it across the federal government, but circumstances might be different for state and local governments which require further fine-tuning. Every year, the top performing eight per cent of government employees gets a one-off payment. This is to recognise good performance and to incentivise them and others to do better. The civil service salary structure has three components – basic pay is based on the type of service and the individual’s qualification; fixed allowances such as housing and cost of living; and variable allowances which is based on the kind of service and the individual’s performance.

Han Neng Hsui, Director, Leadership Development, Public Service Division, Prime Minister's Office, Singapore
We support the principle that civil servants should be paid by performance. Such a system is meritocratic and motivates people to do their best. A positive work ethic contributes to overall organisational excellence. By ensuring that officers receive salaries that are commensurate with their contributions and capabilities, we are better able to attract and retain talent. The annual salary of civil servants contains variable components which are linked to individual performance and Singapore‘s economic growth. For instance, the performance bonus is directly related to an officer‘s work performance. In addition, salary components such as the Annual Variable Component and Growth Bonus are linked to Singapore‘s economic performance. Most of our schemes have moved from salary scales and fixed increments to a system of salary ranges and variable increments. The latter varies with an officer‘s performance, calibre and market wage movements. Apart from monetary rewards, civil servants are recognised for their performance by receiving awards from their organisations or nominations for national awards. Those who perform well and demonstrate the potential to assume larger responsibilities could also be promoted to a higher grade.

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