[SINGAPORE] In an effort to bridge the gap with private sector salaries, the government will implement the second phase of salary adjustments for top-level civil servants in January. This will see their annual salaries rising between 4 and 21 per cent.
The adjustment will apply to 351 administrative officers, political, judicial and statutory appointment holders. Their annual salaries include monthly pay, performance bonuses, allowances and annual variable components and the current wage bill for these officers is $200.6 million.
The second round of salary adjustments will raise salaries of senior permanent secretaries (MR4) by 21 per cent from $1.6 million to $1.94 million.
This increase will include a 14 per cent rise in monthly salary and will also up the performance bonus norm by two months. It will also take into account the value of government pensions, which is estimated to be 7 per cent of MR4 annual salaries. The latest revision will lift MR4 salaries to 77 per cent of its year of assessment 2007 benchmark from 59 per cent currently. The target is to close the gap to 88 per cent of the year of assessment 2008 benchmark by end-2008.
Meanwhile, entry-level superscale grade or directors in the superscale (SR9) level will receive a 4 per cent increase in monthly salary to close the gap with its target. This will raise their annual salaries from $384,000 to $398,000. Administrative officers on timescale grades will also see an average increase of4 per cent in their annual salaries.
Since the annual allowance package for Members of Parliament is pegged to SR9, their allowance will likewise be increased by 4 per cent to $225,000 per year.
The total cost of the salary revisions is estimated to be $27.6 million a year, of which $17.5 million will be for political, judicial and statutory appointment holders. But as all salary revisions are non-pensionable, there will be no increase in pension cost.
"This adjustment is a follow-through of the April decision," said Teo Chee Hean, Minister for Defence and Minister-in-charge of the civil service.
"In this tight labour market, private sector salaries have moved up significantly, as the benchmark figures show. The Service needs to follow promptly in order to attract and retain good people."
Despite the first adjustment in April, salaries of these officers have lagged further behind salary benchmarks as private sector salaries rose significantly. Both benchmarks for MR4 and SR9 have gone up by 23 per cent and 10 per cent in the year of assessment 2007 from a year ago.
The first phase of salary adjustment conducted in April rought the MR4 annual salary to $1.6 million or 73 per cent of the year of assessment 2006 benchmark of $2.2 million. But it has since fallen to 59 per cent of the year of assessment 2007 benchmark of $2.7 million.
The MR4 benchmark for senior permanent secretaries is pegged at two-thirds of the median salary among the top eight earners in six professions: bankers, lawyers, engineers, accountants, and executives in local manufacturing firms and MNCs.
For SR9 officers, there was no monthly salary adjustment in April as their actual salaries were close to the benchmark. Officers received a one-off performance-related payment in April. Their benchmark pay is pegged to the income of the 15th top earner aged 32 from the same group of six professions.
The government said that it would continue to monitor the benchmark movements and make further adjustments by end-2008.
Besides the grades whose salaries were reviewed in April, the PSD has also recently announced salary revisions for the Legal Service, Management Executive Scheme (Graduates) and the Management and Technical Support Officers (Diploma holders). It is currently reviewing other schemes including the Education Service, Accounting Profession Scheme and Home Uniformed Services.
To link rewards more closely to performance, the government has increased the proportion of annual salary that is variable. At the senior levels, as much as 50 per cent of the annual salary is now performance-based, Mr Teo said. Of this, 30 per cent depends on individual performance. Officers are evaluated annually and those who do not make the grade will be asked to leave the Service.
Prime Minister Lee Hsien Loong will not be affected by the changes, as he had said in April that he will donate all increases in his own salary from the level before the April revisions to good causes for the next five years. Based on the difference between his salary before and after the April revisions, Mr Lee will be donating $500,000 to charity in 2008.
"These pay revisions clearly are a reflection of the fact that the civil service increasingly finds itself competing for talent against the private sector and as such, needs to ensure that its pay packages are competitive and aligned with its objective of attracting top talent," said Wong Su-Yen, managing director for the Asean region at Mercer (Singapore), in response to the salary adjustments.
Watson Wyatt Worldwide regional marketing director of Asia Pacific, Glenys Taylor, noted that properly rewarded employees - whether in private enterprise or government organisations - "are likely to stay as long as they are truly engaged in the business of the enterprise, have line of sight as to the organisation's direction and goals and work in an environment that fosters functional two-way communication".
