Dear Colleagues,

Development of an improved
pay adjustment mechanism for the civil service:
A Consultation Paper on the Proposals on the Methodology of the
Pay Level Survey and the Application of the Survey Results

In November 2003, the Civil Service Bureau (CSB) issued a progress report to outline the relevant policy considerations and the work plan for taking forward the development of an improved civil service pay adjustment mechanism for long-term adoption in the civil service.  I am writing to inform you of the launch of a two-month consultation on proposals regarding the pay level survey methodology and the general approach for applying the survey results.

To recapitulate, we seek to establish a coherent framework for periodic reviews of civil service pay levels and civil service pay adjustments in accordance with the guiding principle underpinning our established civil service pay policy, i.e. that civil service pay should be broadly comparable with private sector pay.  The conduct of periodic pay level survey is an important component of the improved mechanism.

During the past 18 months, CSB with technical support from an outside consultant has held intensive discussions with the Steering Committee on Civil Service Pay Adjustment Mechanism (the Steering Committee) Note 1 and the Consultative Group on Civil Service Pay Adjustment (the Consultative Group) Note 2 on various issues relating to the design of the survey methodology and the application of the survey results.

Following these discussions, the consultant has made recommendations on the methodology of the pay level survey.  In parallel, CSB has formulated broad proposals on the application of the pay level survey results.  These recommendations and proposals, which are set out in a consultation paper we have issued today for extensive consultation, have taken on board many of the views and comments expressed by the staff representatives on the Consultative Group. 

On the pay level survey methodology, the consultant's recommendations seek to obtain private sector pay data in a professional manner, based on comparison of groups of broadly comparable jobs, in order to assess the extent to which civil service pay is broadly comparable with private sector pay.  In developing his proposals, the consultant has in particular reviewed the experience of the last Pay Level Survey conducted for the civil service in 1986 and taken steps to address the identified shortcomings of the methodology adopted for that survey.

As regards the application of the results of the pay level survey, we propose that as a general approach, we should, following consideration of the survey results and other relevant factors, draw up a new set of civil service pay scales to reflect broad comparability between civil service pay and private sector pay.  The new pay scales will be applied to new recruits who join the civil service after a prospective date.  As for serving staff, we propose that if the pay level survey results reveal that civil service pay levels exceed private sector pay levels, the pay of all serving officers, irrespective of their appointment date, should be frozen until it is caught up by the private sector pay level.  But the pay disparity will be noted and will be taken into account in the subsequent annual civil service pay adjustment exercises before the next pay level survey. 

It is an undisputed fact that our civil service pay adjustment mechanism has room for improvement.  The proposals we have put forward for consultation represent a pragmatic approach which strikes a balance between the interests of civil servants on the one hand and the expectations of the community at large on the other.  They are also conducive to the maintaining of a stable and efficient civil service.

The two-month consultation will end on 7 January 2005.   To facilitate access to the proposals contained in the consultation paper, we have uploaded the consultation paper and the consultant's final report on the homepage of CSB at http://www.csb.gov.hk.  We shall also hold consultation sessions for Departmental Consultative Committee members and staff union representatives, among others, in the coming few weeks.

I invite civil service colleagues to read the consultation paper and to send in your comments either direct to CSB or through your bureau/department/grade management, unions or associations.  We aim to make a decision on the pay level survey methodology and the general approach for applying the survey results in the light of the consultation feedback before commencing the field work of the pay level survey in the first quarter of 2005.

The development of an improved civil service pay adjustment mechanism is an important milestone in our efforts to improve the civil service pay system.  We shall continue our deliberations on other pay-related issues, including the conduct of grade structure reviews for individual grades/ranks, in due course in a step-by-step manner.  We shall consult staff fully as we take these matters forward.

I shall write again to keep you posted on future developments of the current exercise.  Meanwhile, I look forward to receiving your views and comments on the proposals set out in the consultation paper.

Yours sincerely,

(Joseph W P Wong)
Secretary for the Civil Service

 

Note:

1	The Steering Committee comprises selected members drawn 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.
2	The Consultative Group comprises staff representatives from the staff sides of the four central consultative councils and the four major service-wide staff unions.