Dear Colleagues,

Phase One Final Report of the
Task Force on Review of Civil Service Pay Policy and System

I am writing to inform you that the Administration has earlier today received from the Standing Commission on Civil Service Salaries and Conditions of Service, the Standing Committee on Disciplined Services Salaries and Conditions of Service and the Standing Committee on Directorate Salaries and Conditions of Service the Phase One Final Report of the Task Force on Review of Civil Service Pay Policy and System and has immediately released the report for public consultation.

As you are aware, the comprehensive review of civil service pay policy and system is being carried out in two phases.  The Task Force under the three afore-mentioned advisory bodies has just completed an analytical study on recent developments in civil service pay administration in five selected countries, namely Australia, Canada, New Zealand, Singapore and the United Kingdom under phase one.  Taking account of overseas experience, the particular circumstances in Hong Kong as well as the feedback from concerned parties received during the consultation exercise on the Interim Report of the Phase One Study, the Task Force has in its Phase One Final Report suggested priority areas for more detailed study in the short, medium and long term.

In brief, the Task Force recommends that :

* For the short term, the Administration should devise a practical framework and methodology for conducting a pay level survey and review the pay trend survey methodology.  Meanwhile, it should consider the appropriate interim measures for the annual civil service pay adjustment exercise.

* For the medium term, the Administration should consider improvements to the staff appraisal system in support of the introduction of performance pay and flexible pay ranges to civil servants.  The new arrangements should preferably be introduced at the directorate level initially, with rollout to other levels at a later stage.  Consolidation of job-related allowances should also be adopted as a target, as part of a move towards a "clean wage" policy in the long run.

* For the long term, decentralisation of pay administration should be adopted as a target.  Care should be exercised in determining the scope and pace of implementation.

For details of the Task Force's recommendations, please refer to the full report, which can be downloaded from the homepage of the Civil Service Bureau at http://www.csb.gov.hk.

The Task Force has emphasised that its recommendations as set out in the Phase One Final Report are conceptual in nature and that more detailed study is required under phase two before any specific changes are made to the current policy and system.  The Task Force has also underlined the need for any improvement measures to be introduced at a measured pace so as to facilitate their smooth implementation.

I appreciate that the future development of the civil service pay policy and system is a matter of considerable concern to civil service colleagues.  There is also a fair degree of public interest in the subject.  Thus, before the Administration takes a view on the best approach for taking forward the second phase of the comprehensive review, we would like to hear the views of civil servants and other interested parties on the broad directions of future development suggested by the Task Force.  For this purpose, we have released the Task Force's Phase One Final Report this afternoon for public consultation until 15 November 2002.  I encourage you to spare some time to read the Task Force's report and to send in your comments through your unions or associations or by yourselves before the end of the consultation period either by post to Civil Service Bureau, 10/F, West Wing, Central Government Offices, Ice House Street, Central, or by e-mail to csbdiv2@csb.gov.hk.

I would like to reiterate that at this stage the Administration has an open mind on the detailed conduct of the second phase of the comprehensive review of civil service pay policy and system.  As I have emphasised on many previous occasions, we shall take forward the review exercise with prudence.  On the one hand, we shall continue our efforts in modernising our civil service pay policy and in providing more flexibility in our pay system to facilitate better matching of jobs, talents and pay.  On the other hand, we shall keep firmly in mind the need to continue to offer an attractive and worthwhile career for people with a mission to serve the community while taking due account of the wider costs and benefits to the community.

I shall write again to keep you posted on future developments of the review exercise.  Meanwhile, I look forward to receiving your views on the Task Force's Phase One Final Report.

Yours sincerely,

(Joseph W P Wong)
Secretary for the Civil Service