PM signals review of performance-based pay system

Prime Minister, Dr Andrew Holness, has signalled that the Government intends to revisit the issue of performance-based remuneration in the public service, with greater consideration to be given to productivity and economic growth.

Holness disclosed that the matter remains on the table following implementation of the public-sector compensation review.

The Prime Minister was addressing the Permanent Secretaries’ Board Retreat at Sandals Ochi Beach Resort in St Ann on Friday, August 14.

He recalled that prior to implementation of the compensation review, the Permanent Secretaries’ Board had been asked to develop an alternative approach for introducing performance-based pay.

“I had asked the Permanent Secretary Board to come up with an alternative way of introducing a system, an incentive-compatible system of performance-based pay,” he said.

Holness outlined that consideration had been given to linking additional remuneration for Permanent Secretaries and Director Generals to transparent performance measures.

“I thought it was a lovely proposal as to how we would attach the pay of Permanent Secretaries, and I believe we at that time considered Director Generals, to a performance system that your pay would go to a certain level, and additional pay would be based upon a transparent, publicized metric of performance,” he said.

The Prime Minister noted that the Government ultimately proceeded first with the wider compensation review.

“Now we have gone through the compensation review, I am aware that there are still outstanding matters. Not everyone is happy. There are still matters to be resolved,” he acknowledged.

Holness said efforts will continue to address outstanding issues across the public service.

He indicated, however, that the question of performance-based remuneration will also have to be revisited.

“I want to signal that there has to be a review and reform of our performance-based system, one that is more aligned to the growth of the economy, one that promotes efficiency and effectiveness and so it is not off the table. It is something that must be discussed,” the Prime Minister said.

Holness argued, however, that increases in remuneration must be accompanied by improvements in productivity, if workers are to realise sustainable gains.

“Every increase in wage, without a commensurate increase in productivity, is inflationary,” he said.

The Prime Minister said greater productivity must therefore become an important part of the national conversation.

“We have to improve our productivity. Otherwise, we’re fooling ourselves,” he pointed out.

Holness told the Permanent Secretaries that they have an important role to play in establishing administrative systems capable of delivering Government mandates effectively.

“I need you to put in place the administrative systems that deliver the mandate effectively and efficiently. I need you to be ambassadors of efficiency,” the Prime Minister said.

- JIS News

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