When a disgustingly overweight person gluttonously swallow a plate for four, it is only right for a doctor to kindly advise the person to slow down and go on a healthier diet. It would be almost sinful if the doctor kept his wisdom to himself. In the same light, it is almost sinful not to criticize the Malaysian civil service for going on an unhealthy diet of salary increase.
I believe that I speak within the same wavelength with many others when I say I would like to see a respectable civil service. I would like to see a civil service that creates envy among those not on its payroll. I would like to see a civil service that attracts not contempt but admiration among the public.
The Malaysian civil service could do just that by raising wages and benefits within the institution as well as downsizing. One of two components of the policy has been exercised this week. Unfortunately, it has not been done properly. When the Prime Minister announced the pay hike, it is not a step forward but instead, it is a step backward.
High wages, given proper condition, is a tool to attract the best talents into any organization. Furthermore, wages reflect productivity and productivity between individuals might differ. Hence, there should be variance among wages when productivity levels differ, vertically as well as horizontally. In order words, wages increase across individual of different productivity level should not be uniform, horizontally or vertically, unless productivity itself is uniform.
The hike recently declared by the Prime Minister is clearly being executed without respect to productivity. It seems that everybody is being rewarded equally horizontally and thus, it does not discriminate high and low productivity individuals. Therefore, its carrot and stick model lacks the stick while everybody gets a carrot. In short, the policy is blunt.
While that method might reward deserving individuals with wondrous work effort, it also rewards under-performers. If an organization rewards low performance — as much as high productivity workers, no less — the better workers would sooner or later realize that one would get the same rewards with less effort. Thus, given time, the average productivity would fall toward the lowest point.
This undiscriminating reward system requires resources and the over-generous act of rewarding everybody requires tremendous resources. Scarcity unfortunately is real. Nobody needs an economics degree to know this, save, maybe, the communists. Eventually, there will be insufficient resources to sustain the over-generous model. This unsustainability will bring the civil service back to square one: low paid public sector. Moreover, it prevent the introduction of competitive salary levels across similar productivity levels needed to attract the best talents available.
If the civil service aspires to be the employer of last resort, then the over-generous model might work marvelously well in its favor. As an employer of last resort, the civil service would prefer quantity to quality.
For a respectable civil service, the model must reward performers and punish slackers. What the civil service needs is a proper carrot and stick model. Reward the able, sack the slackers and through this, stop being an employer of last resort. I say it again: increase the salaries within the civil service to competitive market rate and downsize. The civil service must get on a healthier diet.
In the final analysis, the recent hike is a perfect example of blunt and poorly designed policy. Blunt policy, including blanket fuel subsidy among others, creates unintended and possibly adverse consequences. This blunt policy of unselective wages increase in the civil service without attention to productivity in particular will create adverse unintended consequences that will further lower the standard of the Malaysian civil service.
Blunt policy might help the Prime Minister winning an election but it is not good enough to build a better society.
p/s — I might have unwittingly given the impression that productivity is the only determinant of wages. I apologize but I do not imply as such. Just to clear the air, there are other determinants of wages. One of them is scarcity of skills.
5 replies on “[1236] Of bad pay hike to ruin the civil service”
Dear xpyre,
For #1, it depends on the quantum of the raise. High a enough a raise, the flat regime would cost more than the recently announced raise. (I am unsure what do you mean by real increase though. I cannot see how inflation is being incorporated into the discussion meaningfully). FYI, I have written earlier how overzealous pursue in achieving income parity is unwanted.
For #2, I have heard so too but if it is about achieving parity, I do not believe it would achieve that target in its current form, as I have described in this blog post.
Regardless, I think the most important question is how does the raise increase competitiveness?
One thing, though: from what I heard, this pay increase was to sort out disparities between levels of pay between top civil servants and junior staff, right? Won’t it turn out that the real increase in allocation for wages for the civil service be less than if the increases were flat across the board? The spending, therefore, may not be as much. Can anybody confirm this?
Secondly, I’m wondering if this recent wage increase exercise has less to do with productivity than correcting wage disparities between the private and public sector? I totally agree with what you say about productivity, but I’m wondering if that is the focus where the wage increases are concerned.
Dear both,
Thanks for coming.
I would like to make it clear that when I wrote horizontally and vertically, I mean levels of the organization structures. Horizontal would refer to everybody on the same level. Vertical would refer to the difference between the CEO and the cleck, etc.
Its also not going to solve the bridge of income between the civil service and private sector, only delay it for another round.The “Mendatar” and “Melintang” increment system is too outdated where even civil servants from the professional category only gets less than 200 per year, as opposed to as much as 400-600 in some private held companies,especially the larger ones like the one I am attached to.Also, this income disparity is further widened by the annual bonus payouts, which is in most cases significantly lesser in terms of quantum as well as gross amount,than the private sector.
Its a double edged sowrd situation where while the income per capita and disposable income level averages for the population increase, so does price hike occurences and so on.The biggest real estate hike in Malaysia occured during the last civil service salary increase.Those who benefit would be profiteering businessmen while the common man is left poorer.Unless they uniform out the civil service salary to a similar model to that of the private sector, this infinite loop of “Suffer 10 years-Attempt Leverage-Price Hikes/Inflation-Back To Square One” will continue.
Meritocracy should be introduced to the civil service as well.Rewarding the lazy and hardworking with the same amount, at least to me, is a mild form of Mao communism, all are given the same thing anyway.
me wonders what’s the digital-online-system-paperless-blablabla systems are for? maybe we need like 5x civil ‘servants’ to tell us it’s ‘Offline’ and come back another day.
if Bedol takes populist approach on puny issues like arguing with AFC on MUFC, he should heed the ppl’s to quit… sleeping on the job.