Civil Service salary adjustments are considered annually.  Under the established annual civil service pay adjustment mechanism, the Government decides on the size of the annual adjustment having regard to the following factors: net pay trend indicators derived from an independent private sector pay trend survey, the state of the economy, changes in the cost of living, the Government's fiscal position, the Staff Sides' pay claims and civil service morale.

The purpose of the private sector pay trend survey is to track pay movements in the private sector.  The survey produces the gross pay trend indicators, which represent the movements in private sector pay for different salary bands during the period from 2 April of the previous year to 1 April of the survey year.  The payroll cost of civil service increments is then deducted from the gross pay trend indicators (which take into account additional payments such as year-end bonuses) to produce the net pay trend indicators.

The results of the pay trend survey are subject to validation by the Pay Trend Survey Committee which is currently chaired by a member of the Standing Commission on Civil Service Salaries and Conditions of Service (Standing Commission) and comprises representatives from the Standing Commission, the Standing Committee on Disciplined Services Salaries and Conditions of Service, the Joint Secretariat for the Advisory Bodies on Civil Service and Judicial Salaries and Conditions of Service, the Staff Sides of the central consultative councils and the Administration.

On 25 February 2003, the Government announced its decision to develop an Improved Civil Service Pay Adjustment Mechanism based on the existing mechanism.  The improved mechanism should comprise the conduct of periodic pay level surveys to compare civil service pay levels with those in the private sector, the conduct of annual pay trend surveys based on an improved methodology and an effective means for implementing both upward and downward adjustments.  

On 13 March 2007, the Chief Executive-in-Council endorsed the improvements to the methodology of the pay trend survey, which represented the outcome of months of extensive consultation with Staff Sides representatives.

Useful Reference

- Papers for Legislative Council :