Session 8

Civil Service Pay Structure

Professor Momtaz Jahan

 “The Heart of the Matter” --------Pay
• “Fair days work” is a major concern for the employers/managers.
• “Equal pay for equal work” is the employees concern.
• To balance between these two concentrations wage and salary
administration has become more important for every organizations.
• The general quality, efficiency, integrity, and morale of the civil service
depend to a large extent on a just and rational pay policy.
• Appropriate pay commensurate with the level of responsibilities is
essential to attract the best available talents to join civil service.
 “The Heart of the Matter” --------Pay
• It can be said that the payment of a salary which does not satisfy the
minimum reasonable needs of a civil servant is an invitation to
corruption. While payment of high salary is not by itself a guarantee
for integrity and honesty of public service.
• Public officials must be adequately paid by the government, or private
interest will lure them away.
• Inadequate salaries in public service are an expense, not an economy.
 Determinants of Pay Policy
• Cost of Living/ Living Wage
• National Economy
• Level of Employment in the Country
• Prevailing Salary Structures in the Private Sectors/ National and
International Comparison
• Government’s Ability to Pay/Availability of Funds/ Sources of
Government Revenue
Contd.
• Gap between Minimum and Maximum Salary Limit
• Existing Hierarchical Levels in the Government Sector/ Size of the Civil
Service
• Value of the Job/ Contribution of the Individual
• Expectation of Civil Servants
• Civil Servant’s Bargaining Power
 Pay/ Salary Structure
• According to Bangladesh Service Rules (BSR)
Pay Structure means the amount drawn monthly by a government
servant as the pay has been sanctioned for a post held by him,
substantively by reason of his position in a cadre, and any other
emoluments which may be specially classified as pay by government.
Contd.
• Salary and Benefits of BCS officers are :
1. Basic Pay
2. House Rent Allowance in accordance with the area of residence
3. Medical Allowance
4. Allowances (Two festival bonuses as well as 20% of the basic as
Bangla New Year Allowance)
5. Educational Expenses for two children at the rate of Tk.500
6. Other Allowances (Travel, Domestic, Hill Tracts)
Gradual Evolution of Pay Structure After
1971
• Changes in pay structure have been made by the government in 1973,
1977, 1985, 1991, 1997, 2005, 2009, and 2015 through the formation of
National Pay Commissions (NPCs), which recommended upward revisions
in pay for all grades of civil servants. (However, it was National Pay and
Services Commission (NPSC) in 1977).
• There is no established machinery for determining the pay structure of
civil service. The usual practice has been to go in for revision of pay
structure from time to time at an interval of 4 to 6 years.
• Sometimes the various civil service unions demand upward revision on
grounds of rise in the price of basic necessities and the government
provides interim relief in the form of dearness allowances.
 Features of Present (8th ) Pay Structure
• At present there are 20 salary grades in BCS. Top 9 grades are for class 1
officers.
• Each grade except Grade 1 (officers of this grade has fixed salaries)
includes a pay scale consisting of basic salary and yearly increment.
• The annual increment is a percentage of the basic pay. Those in grades
20 to 6 get increment at the rate of 5%, for grade 5 the rate is 4.5%, and
for grades 3 and 4 it is 4% and for grade 2 it is 3.75% of the basic.
• Increments will be given on July 1st every year.
• According to the 8th National Pay Scale the highest basic pay is Tk. 78000
and the lowest is Tk. 8250.
Contd.

• Although the highest basic pay is Tk. 78000 the Cabinet Secretary and the
Principal Secretary to the PM get a basic of Tk. 86000 while Senior Secretaries
are entitled to get Tk. 82000.
• Officers of these grades are not entitled to any annual increment.
• In the 7th national pay scale the highest basic was Tk. 40000 and the lowest was
Tk.4100.
• An officer who joins government service by BCS exam. gets a basic pay of Tk.
22000.
• The new structure has dropped the class categories, selection grade, and time
scale.
8th national Pay Scale
• Grade 1 Tk. 78000 (Fixed)
• Grade 2 Tk.66000---Tk.76490
• Grade 3 Tk.56500--- Tk.74400
• Grade 4 Tk.50000---Tk.71200
• Grade 5 Tk.43000---Tk.69850
• Grade 6 Tk. 35500---Tk.67010
• Grade 7 Tk.29000---Tk.63410
• Grade 8 Tk.23000---Tk.55470
• Grade 9 Tk.22000---Tk.53060
Challenges of national Pay Structure in BCS
• The construction of the salary structure in the civil service lacks the
application of rational principles. It is not precisely linked to changing
economic conditions in society and the external labor market.
• There is a wide disparity in salary structures between public and private
sectors.
• The consumer price index is not always taken into account when
constructing and modifying salary structures.
• The nature of work is not judged as an important criterion and the individual
job performance does not impact upon salary increments. There is no actual
incentive present to motivate the officials for good and efficient work.
Contd.
• In the long run a civil servant only works as well as he is paid. The
inefficiency in the civil service in Bangladesh that is widely complained is
in part due to the reduced real wages of different categories of civil
servants.
• The low salaries of civil servants have contributed to the demoralization
and lack of commitment among the civil servants and prompted many of
them to adopt unfair means for earning livelihood.
• Conflict and in-fighting for posts and privileges are prominent by the lack
of appropriate incentive systems. This has direct bearing on the standard
of output of the civil servants----- “As incentives collapse, so will
performance.”
Contd.
• Eighth Pay Commissions have been set up since independence and their
recommendations implemented yet there have been little improvement to
the situation.
• All the Pay Commissions failed to take a realistic view of the pay package
and the cost of living index.
• The tendency of the Pay Commissions to increasingly narrow the gap
between the highest and the lowest salary groups has adversely affected the
higher civil servants most.
• It was not realized that educational backgrounds, nature of responsibility,
experience and mental acumen of senior civil servants and lower level
employees are radically different.
The Future Direction
• To ensure adequate compensation for public servants, a number of policy
decisions need to be taken.(World Bank, 2002)
1. The civil service needs to be rationalized in terms of size. Excess manpower
needs to be reduced.
2. Extreme caution should be taken in future to select the best possible
candidates.
3. Qualified public servants should be paid as per their counterparts in the
private sector.
4. Compensation should be based on performance and productivity. The
present system of automatic yearly pay increase needs to be reviewed and
eventually discontinued.
Relationship between Pay and Corruption
• Robert Kligard’s Equation: • World Bank’s Equation
C= M+ D- A C= M+ D- A- S
C= Corruption S=Salary
M= Monopoly
D= Discretionary power
A=Accountability