Fixing government pay scales
The actual problem with government salaries lies with how the basic pay scales (BPS) are structured
The writer is a public policy expert and an honorary Fellow of Consortium for Development Policy Research. He tweets @hasaankhawar
Last week I wrote an article about low salaries of civil servants, the widening gap between public and private sector salaries and its grave implications for governance. The actual problem with government salaries lies with how the basic pay scales (BPS) are structured within the unified pay scale system.
With an ironic distribution these grades range from one to 22 with various salary stages within each grade. Within the federal secretariat, for instance, the management staff belongs to BPS-17 to 22, with six grades defining salary structure. Whereas there are 16 different grades to define salary structure of support staff like peons, drivers, clerks, assistants, superintendents, etc, with many of them even claiming grade 17 and above, giving them wider mobility on these grades as compared to skilled employees. Consider the case of a driver, for example, who can be anywhere in grades 4, 5, 6 and in some cases even 9 or 11. I also know of at least one driver working in grade 16 in Punjab, through personal upgradation.
Similarly, secretarial staff starting off as junior clerks and typists in grades 5 or 7 now moves all the way up to grades 16 and 17 as superintendents and private secretaries through promotions and other adhoc measures over the years. According to some estimates, about 85% of government wage bill is spent on these subordinate grades, with staff having extremely poor capacity and low or no value addition, with the exception of technical staff in a few engineering or social sector departments. Dr Ishrat Husain recommended a hiring freeze on subordinate grades’ recruitment in 2009. In comparison, doctors joining as medical officers in grade 17 move only about 3 grades, without specialisation, whereas engineers coming in grade 17 also mostly retire in 19 or 20.
While the majority of public-sector technical and professional staff, including engineers, doctors, professors, economists, civil servants and scientists, belong to four grades from 17 to 20, with a selected few moving to 21 and 22, non-skilled and support staff occupy 17 grades, with some of the individuals climbing up as many as 10 grades or more within their careers.
These grades are also heavily tilted towards higher salaries for lower grades. A background paper by Usama Ahmed describes that the salary of grade 22 was 25 times the salary in grade 1 in 1972, which has now come down to a multiple of nine. Even more interesting is the fact that the salary of a BPS-22 federal secretary is merely 2.5 times the BPS-16 salary of a superintendent or private secretary.
Solution to fix these pay scales should be three-pronged. Starting with the need to redefine or in fact invert these grades, with 3-4 grades defining non-skilled and support staff, 2-3 grades for technical subordinate staff such as diploma engineers and paramedics and allowing for more grades for technical and professional services to take into account their differences.
Secondly, salaries fixed for these grades should be based on regular indexation to keep them in line with inflationary pressures and market realities, irrespective of them being on a par with the private sector or at a discount. Unfortunately, government salaries have been decided in isolation from market realities, resulting in increased pay level disparity in public and private sectors especially for higher grades resulting in poor talent retention.
Thirdly, the current compensation structure should be simplified by doing away with adhoc allowances and introducing pay-for-performance incentives, such practice was discarded in 1983, creating perverse incentives for public servants not to perform.
There is a need to differentiate between salaries of civil servants and the cost incurred to government. As billions of rupees of public money spent on sprawling houses and lavish lifestyles of bureaucrats have cost the government dearly, with the fruits being enjoyed by only a few. There is a need to move towards transparent and effective implementation of monetisation, bringing transparency and equity to government salaries while rationalising the cost to the government.
Published in The Express Tribune, April 24th, 2018.
With an ironic distribution these grades range from one to 22 with various salary stages within each grade. Within the federal secretariat, for instance, the management staff belongs to BPS-17 to 22, with six grades defining salary structure. Whereas there are 16 different grades to define salary structure of support staff like peons, drivers, clerks, assistants, superintendents, etc, with many of them even claiming grade 17 and above, giving them wider mobility on these grades as compared to skilled employees. Consider the case of a driver, for example, who can be anywhere in grades 4, 5, 6 and in some cases even 9 or 11. I also know of at least one driver working in grade 16 in Punjab, through personal upgradation.
Similarly, secretarial staff starting off as junior clerks and typists in grades 5 or 7 now moves all the way up to grades 16 and 17 as superintendents and private secretaries through promotions and other adhoc measures over the years. According to some estimates, about 85% of government wage bill is spent on these subordinate grades, with staff having extremely poor capacity and low or no value addition, with the exception of technical staff in a few engineering or social sector departments. Dr Ishrat Husain recommended a hiring freeze on subordinate grades’ recruitment in 2009. In comparison, doctors joining as medical officers in grade 17 move only about 3 grades, without specialisation, whereas engineers coming in grade 17 also mostly retire in 19 or 20.
While the majority of public-sector technical and professional staff, including engineers, doctors, professors, economists, civil servants and scientists, belong to four grades from 17 to 20, with a selected few moving to 21 and 22, non-skilled and support staff occupy 17 grades, with some of the individuals climbing up as many as 10 grades or more within their careers.
These grades are also heavily tilted towards higher salaries for lower grades. A background paper by Usama Ahmed describes that the salary of grade 22 was 25 times the salary in grade 1 in 1972, which has now come down to a multiple of nine. Even more interesting is the fact that the salary of a BPS-22 federal secretary is merely 2.5 times the BPS-16 salary of a superintendent or private secretary.
Solution to fix these pay scales should be three-pronged. Starting with the need to redefine or in fact invert these grades, with 3-4 grades defining non-skilled and support staff, 2-3 grades for technical subordinate staff such as diploma engineers and paramedics and allowing for more grades for technical and professional services to take into account their differences.
Secondly, salaries fixed for these grades should be based on regular indexation to keep them in line with inflationary pressures and market realities, irrespective of them being on a par with the private sector or at a discount. Unfortunately, government salaries have been decided in isolation from market realities, resulting in increased pay level disparity in public and private sectors especially for higher grades resulting in poor talent retention.
Thirdly, the current compensation structure should be simplified by doing away with adhoc allowances and introducing pay-for-performance incentives, such practice was discarded in 1983, creating perverse incentives for public servants not to perform.
There is a need to differentiate between salaries of civil servants and the cost incurred to government. As billions of rupees of public money spent on sprawling houses and lavish lifestyles of bureaucrats have cost the government dearly, with the fruits being enjoyed by only a few. There is a need to move towards transparent and effective implementation of monetisation, bringing transparency and equity to government salaries while rationalising the cost to the government.
Published in The Express Tribune, April 24th, 2018.