Pay of central government employees will be linked with productivity

February 28, 2015, 4:21 AM

NEW DELHI: The 14th Finance Commission has suggested linking pay with productivity with a focus on technology, skills and incentives, a move aimed at raising the productivity of government employees.

The panel has recommended that in future additional remuneration be linked to increase in productivity.

The Seventh Pay Commission is expected to submit its recommendations by August and it has been asked to look at the issue of raising productivity and improving the overall quality of public services in the country.

The Sixth Pay Commission had also said that steps should lead to improvement in the existing delivery mechanism by more delegation and de-layering and an emphasis on achieving quantifiable and concrete end results. Emphasis is to be on outcome rather than processes, it had said. The earlier Pay Commissions had also made several recommendations to enhance productivity and improve administration.

The 14th Finance Commission’s recommendations assume significance at a time when the Narendra Modi government has focused its attention to improve the delivery of public services and is taking steps to use technology to improve efficiency.

The Union government has taken several steps to shore up the bureaucracy and has changed the way attendance is measured in government offices.

“Further we recommend that Pay Commissions be designated as Pay and Productivity Commissions with a clear mandate to recommend measures to improve productivity of an employee,” said the 14th Finance Commission headed by former Reserve Bank of India Governor Y.V. Reddy.

The Reddy panel said productivity per employee can be raised through the application of technology in public service delivery and in public assets created.

“Raising the skills of employees through training and capacity building also has a positive impact on productivity. The use of appropriate technology and associated skill development require incentives for employees to raise their individual productivities,” the Reddy led panel said.

“A Pay Commission’s first task, therefore, would be identify the right mix of technology and skills for different categories of employees. The next step would be to design suitable financial incentives linked to measureable performance,” the panel said.

An internal study by the Commission showed that the expenditure on pay and allowances (excluding expenditure for Union territories) more than doubled for the period 2007-08 to 2012-13 from Rs 46,230 crore to Rs 1.08 lakh crore.
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