Debated in Parliament on 8 Apr 2013.
Mr Baey Yam Keng asked the Prime Minister whether the Public Service Division has completed its review of the salaries of Administrative Service officers, the judiciary and statutory appointment holders and, if so, whether highlights of the changes can be shared.
Mdm Speaker, the Public Service Division (PSD) has completed a comprehensive and thorough review of the salary framework of the Administrative Service officers, the judicial appointment holders and selected statutory appointment holders, that is the Attorney-General, Chairman of the Public Service Commission and the Auditor-General.
For the review, I had asked PSD to take into account the need to continue to have market competitive salaries in order to recruit and retain persons of high ability, integrity and commitment to be capable public service leaders. This is consistent with the view of the independent Committee chaired by Mr Gerard Ee which reviewed political salaries and which was debated in this House last year.
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Mr Ee's Committee felt that civil servants, judicial appointment holders and statutory appointment holders are "pursuing professional careers, albeit in the public sector. Competition for talent in these groups is very keen, not just in Singapore but overseas as well". They concluded that "civil servants, other statutory appointment holders and judicial appointment holders should be paid salaries that are competitive with the market".
In carrying out the review, the PSD also maintained the policy that Civil Service salaries should lag, and not lead the market even though they take reference from the market. PSD looked at multiple sources of data and also engaged Mercer, an international expert on remuneration issues. Using this data, the conclusion of the review is that current salaries are at about the right level, and will be maintained, that is, there is no need to raise them or to cut them. There will be some adjustments to certain salary ranges and start points to smoothen out salary progression.
There will, however, be two structural changes made to the salary framework. First, pensions will be removed. A Long-Term Retention Package will be introduced for the Administrative Service to retain officers for leadership and policy continuity within the Public Service. For the judicial and statutory appointment holders, a gratuity plan will be introduced. Both the gratuity plan and the Long-Term Retention Package are essentially of the same value as pension and are taken into account in the overall salary levels when carrying out salary comparisons. The removal of pension for the statutory appointment holders and the Judiciary will require constitutional amendments. These amendments will be tabled in Parliament in due course.
Second, the Gross Domestic Product Bonus (GDP)Bonus currently received by the officers and appointment holders will be replaced with the National Bonus similar to that for political appointment holders. Unlike the GDP Bonus which is tied only to GDP growth, the National Bonus is linked to a broader set of indicators, such as the socio-economic progress of the middle and lower income Singaporeans.
Mdm Speaker, the Government will continue to regularly review the salaries for the Administrative Service and the judicial and statutory appointment holders to ensure that they remain competitive. When doing so, PSD will not follow any specific formula, but will examine and take reference from a number of different sources, including market surveys by compensation specialists of salaries of professionals and executives in comparable jobs, and salary data from IRAS. This is no different from how it reviews the salaries of all other civil servants regularly to ensure that we are able to recruit and retain
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sufficient numbers of persons at all levels with the commitment and ability to serve the public and, in so doing, uphold the quality of the Public Service.
Madam, I am glad to note from the Deputy Prime Minister that the Government is using among various sources independent experts to reassess the appropriateness of salary scales for its top services in the Government. I would like to ask: going forward, is the Government continuing to use that as a way to ensure that the scale is relevant and competitive, instead of a straight peg to the private sector salaries, or as the Deputy Prime Minister said, a lag behind certain benchmarks in the private sector? With these changes, in terms of removal of pension and the bonus calculation, how is the Government in a better position to attract and retain top talent in these elite services of the Government service? My final question is: besides compensation, in the Public Service, integrity and public ethos are equally important, how is the Government ensuring that high standards are maintained in the service?
I will take the last question that Mr Baey has raised first. Commitment and integrity are very important for the Public Service, and these are key things which we assess our public officers on and demand very high standards of. So, when an officer is found to have not lived up to the standards of integrity and honesty that we require for public servants, we do not hesitate to take action against him. We can see examples of that already.
In order to make sure that we can recruit and retain officers of high quality throughout the Public Service, not just the Administrative Service and the Judiciary, but everywhere, including policemen, teachers, accountants and the average civil servant who serves the public wholeheartedly and does his best to serve the public, we will continue to pay competitive market salaries. That is the best way to make sure that we can continue to recruit and retain officers in the Public Service to serve members of the public. But we will take suitable comparators for each job in the Public Service where there are equivalent jobs in the private sector. For example, if a person works in an administrative job in, say, the back room of one of our organisations, we will try and take a comparable job in the private sector and set the salary according to that. If a person is an accountant, economist or a lawyer, we would take comparables as well. Similarly, we will apply the same principles for the Administrative Service and the Judiciary.
In terms of maintaining competitiveness and sufficient numbers, we have seen in the past from our experience that where salaries have gone out of line with what is happening in the market, we have had difficulties in recruiting and
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retaining officers. Because we have maintained salaries at a comparable level – we lag, we do not lead – but at a comparable level, we have been able to maintain our recruitment and our retention.
May I ask the Deputy Prime Minister whether competitive salary is the only way to retain talent within the Public Service? There had been Administrative Officers who left the service and have become seemingly quite critical of Government policies. Is there a provision for Administrative Officers to come up with differing suggestions to the Government and have a proper dialogue with the Government so that policies that we develop would be able to match their expectations of what they are expected to do within the Civil Service?
Obviously, salaries are not the only way in which we recruit, attract and retain officers. The officers also look for worthwhile jobs, a job which is respected by others in the community and also they are motivated by being able to do something larger, for the community, for Singaporeans as a whole. So, they are motivated not by just the bottom line of a company, but really their bottom line is the well-being of all Singaporeans. These are the motivations of public officers who come in and will stay for a long time.
There are many opportunities and avenues for officers to express their views. In fact, before a policy decision is arrived at, there are often very many different options which are explored. In that process, officers are encouraged to exercise their initiative and creativity in developing these policies. A number of the policies that have been developed have had significant inputs from our officers, for example, the Jobs Credit Scheme, Workfare Income Supplement (WIS) and so forth. These are important inputs that they have provided. There may well be a difference in views of what is a better policy or what is a better way of executing things, but these are natural in any organisation. But we do expect, that once a decision has been made, our officers will follow through and see through the execution well. That is also expected of any organisation that an officer serves in.
I thank the Deputy Prime Minister for his explanation. During the debate last year, one of the key issues that we raised was connectedness. When we talked about salaries, there was also a concern that political office holders were not that connected because of the scale of salaries that they earned. For members of public who are watching this right now and the feedback that the salaries are still going to remain for Administrative Service Officers, the question would be how do we ensure that
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the Administrative Service continues to be connected and understanding of public sentiments as well as public needs. The feedback that we often get is that civil servants are highly paid and, therefore, there is a concern whether they are still connected to the ground.
This is, indeed, one of the things which the Public Service as a whole, not just the Administrative Service Officers, needs to take very seriously. There are many avenues for this. I would say that the ongoing "Our Singapore Conversation" has been a very useful exercise in hearing public feedback, getting views, not just on policies but on how policies are executed and transmitted. Those have all been very valuable opportunities. We also encourage our public officers, whether they are Administrative Officers or not, to get involved in the community. A good number of them actually have spent some time volunteering for various good causes. We also institutionally and structurally have our public officers, especially our Administrative Officers, attach to various organisations, for example, the CDCs. I know of one of our officers now who is working in the frontline in one of our public hospitals, dealing with public feedback. This provides opportunities for our officers to gain an understanding of issues on the ground, and we will find more opportunities for them.
Madam, I agree with the Deputy Prime Minister that civil servants should be paid competitive salaries, especially those who are strong performers and those who are at the frontline. I have three questions to ask.
What is the actual formula that is currently being used for pegging Civil Service pay, especially for the top civil servants? Is it pegged at the 90th percentile or 75th percentile because that is a typical way by which the private sector, for example, will peg their salaries? The second question is this. The Deputy Prime Minister spoke about the Long-Term Retention Plan. I would like to find out a little bit more about that. How much of it is a financial component and how much of it is a non-financial component? Also, in HR management, what is the onus, therefore, on the employer, which is the Civil Service itself, to build other non-financial factors, such as culture, to make people want to stay and want to contribute to build our nation together? The last question is really on accountability. Political office-bearers now, we know, go to the polls every five years and if they do not perform and for various reasons, they are out. In the private sector, CEOs are evaluated based on either the bottom line or non-bottom line, certain KPIs, and so forth. So, it is pretty obvious for their accountability. I just want to seek the Deputy Prime Minister's clarification on what would be the accountability for top civil servants in the work that they do?
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They are almost on par or, if not, higher than what the Cabinet, for example, is making. So, I would like to seek clarification from the Deputy Prime Minister.
There are quite a few questions. I will try and answer all of them. If I forget some of the questions, please repeat them. I will try my best to answer them. On accountability, we do have a process by which officers are assessed by the Head of Civil Service and also the Chairman of the PSC on an annual basis. Officers have, of course, to state their KPIs and performance indicators. In the process of coming to their assessments, the Head of Civil Service and the Chairman of the PSC do consult the Ministers whose Ministries these officers are working in. So, that is one process. We have a very rigorous process, in fact, of assessing performance in the Civil Service, especially for those in the top ranks of the Civil Service.
We also have performance bonuses. This is not always usual in most public services. We do have performance bonuses and therefore, how much and how well an officer has performed in a given year, how he has contributed, are taken into account in determining his bonus. There is a range and it is not fixed.
Where do we set our salary points? The same principles apply across the whole Public Service. We choose comparables. Then, we look at what type of officers we are trying to recruit and retain. We do indeed sometimes choose the 75th percentile, and sometimes the 90th percentile, depending on the range and the group of persons that we are looking for.
These are basically similar to HR principles that are used in the private sector. We do use HR consultants from the private sector who have experience in compensation and remuneration to help us to devise the schemes that we have. There are probably several other questions which I have not answered but I will be happy to answer them.
What about the Long-Term Retention Plan? How much of it is made up of the financial components, and how much of it is non-financial?
While I spoke only of the monetary side, which is the Long-Term Retention Plan, of course, there is a whole range of other things which motivate a person to stay. The most important motivation for a person to stay in the Public Service is that he gets happiness out of other people's happiness – it basically comes down to that. If you get happiness only from the remuneration package that you have, then I think the Civil Service is really the
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wrong place for you. Your ultimate satisfaction and happiness must really come from seeing other people happy, other people doing better in life – that is, our fellow Singaporeans, the public at large and the community. So, that is the ultimate satisfaction for a public servant. We try to bring that across to our public servants in the course of their work, in the courses that they attend and so on. But that motivation comes from inside the person as much as it does from what somebody tells him. So, that is one aspect.
The other aspect of motivating our people is we try and give them development opportunities. We have a system where officers have 100 hours of training a year. We give our officers opportunities to go for developmental courses, both within the Public Service and also other kinds of courses, to improve themselves or to get higher qualifications, postgraduate degrees and so on. These are ways in which we develop our officers, keep them motivated and also increase their ability to contribute to the Public Service and to Singapore.
PAPERCUTS