Govt ends public sector CEO bonuses
AUCKLAND: Performance pay for public service chief executives has been ended, State Services Minister Chris Hipkins announced yesterday.
Until now public service chief executive remuneration packages have included the potential to receive a discretionary payment of up to 15% for exceptional performance.
Mr Hipkins has also signalled a move to set lower pay rates when chief executives are appointed, and together the moves could save up to $4 million by 2021/2022.
‘‘The decision to remove performance pay, in addition to diallingback pay set tings, including the appointment and reappointment of chief executives at lower points in the remuneration range, will put the brakes on the growth rate of chief executive pay,’’ Mr Hipkins said.
‘‘These moves will reduce the total potential forecast expenditure on chief executive remuneration by up to $4 million by 202122.
‘‘We want a public service with an international reputation for excellence . . . motivated by a spirit of service to the community.’’
The move comes a day after Prime Minister Jacinda Ardern announced a yearlong pay freeze for MPs while a new paysetting system is devised. At present, MPs’ pay is based on a formula and the Remuneration Authority has no discretion. MPs had been about to get a 3% pay rise.
Mr Hipkins acknowledged the State Service Commissioner Peter Hughes and the chief executives for entering the agreement over chief executives’ pay.
He said it showed leadership by the commissioner.
All chief executives of core public service agencies, whose remuneration was set by the commissioner, agreed with and understood the rationale behind the new approach, Mr Hipkins said.
The Government was devoted to addressing pay levels across the public service, he said.
‘‘Part of this is paying women equally and addressing pay levels for public servants at the bottom and top end.
‘‘We have a plan to close the gender pay gap, we have introduced a living wage for all lowpaid public servants and now we’re removing performance pay for chief executives.’’
‘‘International research shows that individualised performance pay is not an effective incentive for higher performance for complex roles such as these.
‘‘The Government also believes that performance pay is counterproductive to achieving the collaborative teambased approach and collective leadership that is critical to achieving better outcomes for New Zealanders.’’ — NZME