Noting that a merit-based system for bonuses is the norm in the private sector, Universiti Malaya professor Nazari Ismail said the system should be implemented in the public sector as well to motivate civil servants to perform.
“There will be complacency if good performances are not rewarded,” he said.
Ramon Navaratnam, an economist with the Malaysian treasury for 28 years, said civil servants should “learn to compete for rewards” like their counterparts in the private sector.
The two economists objected to a statement by Cuepacs president Adnan Mat last week that said such a policy could lead to a lack of motivation among civil servants who miss out on the bonus. He said civil servants should be viewed as a team as opposed to a “one man show”.
Using the Bell Curve system
Navaratnam said: “The same bonus for all gives rise to mediocrity.” Instead there should be a merit-based bonus system for all those who get more than a half-month bonus, and the bonus scheme should be based on the “Bell Curve” used by economists.
“With the Bell Curve, the top 5% of performers will get the highest reward regardless of rank. The bottom 5% will get little or no bonuses and the middle performers will get the average reward. That’s fair!”
The Cuepacs statement disagreeing with a merit-based system for bonuses came after an earlier proposal by the Malaysian Academic Association Council to award civil servants bonuses based on merit and sector.
Adnan said awarding bonuses based on merit would be subjective and added that if bonuses were awarded based on sector, it would give the impression that certain sectors in the civil service are not as important as those that get higher bonuses.
Another economist, Shankaran Nambiar, agreed that it would be difficult to position one sector on a higher level than another. However, each department would have its own KPIs which could be used to gauge an individual’s performance.
Need to reduce the size of the civil service
“Surely (it) would be possible to quantify achievements at an individual level,” Nambiar said. “A more pressing problem is how the size of the public sector can be reduced. Reducing the number of employees would also reduce pension payments that have to be made,” he said.
Adnan said last week that civil servants “deserve a bonus” instead of the special allocation they are usually given at year-end, although disagreeing with the merit system for bonuses. He hoped the government would consider allocating funds for a bonus in the Budget 2021.
Navaratnam said that with the country currently in recession – the gross domestic product shrunk by a record 17.1% in the second quarter of the year – lower bonuses were crucial to safeguard the Budget’s integrity.
“We must signal good fiscal management principles during this time of recession. When the economy improves, more bonuses can be given,” said Navaratnam, former treasury deputy secretary-general.