The proposed government pay structure would cost government over P1.4 billon a year in wages.
A report by a Malaysia’s Performance Management and Delivery Unit (PEMANDU) prepared for Directorate of Public Service Management (DPSM), points out the current salary structures are below the market, and made a number of recommendations that are could rectify the situation.
Currently, government wage bill accounts for 9.4 percent of the GDP, and under the proposed recommendations from PEMANDU, the wage bill would represent approximately 10.3 percent of the GDP, which would still be below the regional Sub-Saharan bench mark of 11 percent.
In its analysis, PEMANDU says the current government pay structure does not follow the norm in terms of range and notches as it is complex and difficult to manage and salary rates are deemed below market rates and thus not competitive in terms of attracting and retaining talent and the required skills for the country to become a high performing public service sector.
In the current structure, the PEMANDU report states that the range within each grade from Grade C to Grade E is narrow, hence with passage of time, it is feared this would create a bulge of employees who are stagnated at the top of the scale.
The report further states that many of those who have reached the salary ceiling would remain there for a long time as the number of positions at the next level is usually less and consequently, the number of available posts much less.
The situation of employees who are stagnated at the top of their salary scale is said to be terrible, for example, at the Ministry of Basic Education 82.7 percent of the employees are reportedly stuck at the ceiling of Grade C1, which is said to be impacting on productivity.
In response to this, PEMANDU has made a number of recommendations regarding the government pay structure.
The new revised structure will, according to the report, have a wider range per grade with the range increasing as the grade goes up.
This would enable employees to progress in terms of salary advancement as the ceiling would now be higher.
In addition, the new structure will have an overlap between grades which would range from 67 percent to 86 percent, which would allow an experienced employee in a lower grade to earn a higher salary, which may not be at par with a new entrant at the next grade without the need for any promotion.
Fixed notches would be abolished under the new structure.
For teachers, PEMANDU proposes to have only one grade, which is C, instead of the current 4 levels (C1, C2, C3 and C4).
Under the new structure, a teacher would be able to reach over P180, 000 in wages per year, as compared to the maximum of P87, 000 a teacher can reach under the current C4 scale.
PEMANDU also notes in its report that there is a huge gap between the public and private sector at higher grades.
To narrow the gap, PEMANDU recommends three options, the first being wholesale salary adjustments across board; Performance Management and Development.
The third recommendation is for Grade E and F to be compensated on a total annual remuneration policy.
With regards to wholesale salary adjustment, a number of options are available such as 10 percent adjustments across all grades or 20 percent adjustments for Grades A and B, 15 percent for Grades C and D and 10 percent for Grades E and F.