Dear Colleagues,

Civil Service Pay Adjustment 2001

The Finance Committee of the Legislative Council approved last Friday the proposal for Civil Service pay adjustment of 2.38% for the lower and middle pay bands and 4.99% for the upper pay band with retrospective effect from 1 April 2001. After two to three consecutive years of pay freeze, the pay adjustment should be welcomed by all of us.

However, the pay rise was not arrived at without disputes. Some criticised the significant difference between the adjustment rate for the lower and middle bands and that for the upper band as unfair. Others challenged that the practice of granting salary increase to all civil servants irrespective of their performance had deviated greatly from the performance-based pay system in the private sector.

I would like to share with you my views on the above criticisms. On the discrepancy in the adjustment rates, I wish to reiterate that the rates of increase follow the findings of the pay trend survey, which reflect the actual market changes and economic restructuring in Hong Kong. The mechanism has been in use for many years as the basis of the annual Civil Service pay adjustment. While it is not perfect, it is highly objective and generally fair, and therefore widely accepted by civil servants and the community at large. I am open to any suggestions on improvements to the existing mechanism, or even the development of a new one. However, it would be reckless to make any changes at this stage in the absence of a consensus. To narrow the disparity, we have brought up the adjustment rate for the lower band to that for the middle band but it should be noted that even such a move was questioned by some members of the public.

I earnestly hope that Colleagues would look beyond the annual pay adjustment. We have a well-established promotion system in the Civil Service. Examples of staff finding their way to the top through promotion from basic ranks are plenty. We should take a proactive attitude and do our best to upgrade ourselves through training and life-long learning.

As regards a performance-based pay system, we all know that the private sector operates differently from the public sector. Complete conformity is impracticable. In the private sector, where profit-making is of utmost concern, an employee's ability to make money for the company directly or indirectly is often a criterion for evaluating his performance and determining his pay. The public sector cannot adopt an identical approach. Nevertheless, we agree in principle that we should move closer towards this direction. It is with this in mind that we have launched a pilot scheme this year to implement by phases the Team-based Performance Reward Scheme in nine volunteer departments. With this scheme, I hope that the concept of merit-based reward will be inculcated in the Civil Service.

Last year, the Civil Service Bureau issued a circular to remind departments that the existing measures for deferment and stoppage of salary increment should be invoked if the performance of an officer is considered to be below the required standards in an appraisal. We shall conduct a progress review early next year to confirm if there is any need to further strengthen these performance management tools. As for those whose performance is persistently poor, arrangements are already in place whereby actions such as compulsory retirement or dismissal may be taken.

Time and again I have stressed that the Civil Service is very much a part of the community. Our pay rise this year has been supported by the public. This should serve as a reminder to all of us to keep up our performance and integrity, and to continue to enhance the quality of our work. We are at the service of the people.

Yours sincerely,

(Joseph W P Wong)
Secretary for the Civil Service