Performance‑based wage increments in the Civil Service

Oral Reply to Parliamentary Question on performance-based wage increments in the Civil Service

Parliamentary Sitting Date: 22 January 2007:

Ms Ellen Lee Geck Hoon: To ask the Prime Minister and Minister for Finance if the Civil Service is following the private sector by giving wage increments based on performance as there is a perception that many civil service officers are still on a seniority-based wage system enjoying yearly salary increments till they reach the maximum salary within their grade, regardless of positive or negative economic growth.

Oral Reply (for the Prime Minister) by Mr Teo Chee Hean, Minister in charge of the Civil Service and Minister for Defence:

The Civil Service has introduced merit increments for the majority of its graduate schemes of service since 2002. Officers receive annual increments based on their performance and potential. Better performers will therefore receive higher increments. 

Besides monthly salaries, all civil servants have performance-linked pay components in the form of an individual performance bonus. This is paid out in March each year. Those who perform well can expect to receive a larger performance bonus, while those who only meet the basic expectations of their job do not receive any performance bonus. 

In addition, the Civil Service pay package is adjusted in tandem with economic conditions through the Annual Variable Component (AVC). The AVC quantum is reduced during periods of low economic growth. Conversely, the AVC quantum is increased during good economic times to ensure civil service salaries remain competitive with the market.