Toot…

I always thought it would be interesting if government agencies are corporatised. As opposed to privatisation, where public assets (government owned) are sold fully or partially into private hand, corporatisation is the adoption of corporate management system into public entities, such as school, hospitals and various other government bodies.

Those who have been following the news lately should have noticed that there will be a increase in salary of civil servant. Second Finance Minister Tan Sri Nor Mohamed Yakcop said that this increase in salary will contribute 0.5% to Malaysia’s economic growth (measured in GDP) this year and AT LEAST another 0.5% in 2008. Quoting Tan Sri Nor Mohamed Yakcop, “The pay rise would cost the Government RM6.8bil annually while the 100% increase in the Cost of Living Allowance would cost RM1.2bil annually.” Sounds good, isn’t it? Well, you can’t actually expect the economy to shrink in response to this RM 8 billion injection by the government, can you?

Quoting Tan Sri Nor Mohamed Yakcop again, the rationale behind this hike in civil servant salary is that “the Government needs to provide the salary hike not only to reward hardworking civil servants but also to retain them.” To reward HARDWORKING civil servant and to RETAIN them? No doubt, there is a portion of civil servants who are truly hardworking and capable, and those are the ones who truly deserve the pay raise. However, for those who have dealt with government bodies before would probably agree that the overall productivity of civil servants is questionable.

I remember following my father to the City Council once. It was about 10:20 in the morning when I walked into that department (seriously don’t remember which department, so don’t ask). And I swear, the sight was amazing. You’d think that the civil servants, this early in the day, would be concentrating on their job, working and contributing to the growth of our country. What I saw was ALL OF THEM talking among themselves and EATING ROTI CANAI, WITH TEH TARIK! Ah…… Right, it’s nearly half past 10, time for daily tea, eh? My father joked that all of their faces will turn green if Tan Sri Koh Tsu Koon, the Chief Minister of Penang, walked in then and there.

As for retaining civil servants as a rational behind the pay rise, it’s been long time observed that in Malaysia, getting a job in the civil service is equivalent of obtaining a “gold rice bowl”. The rice bowl never breaks and there is always rice in the bowl. This salary increase is supposed to apply to most if not all civil servants. I am having doubt on the ability of this increase in salary having any effect on retaining civil servants at all. When every civil servant gets an increase in salary, differentiation does not happen, which means the both star performers and poor performers get the salary increase, despite the obvious difference in productivity. Hence, there is no incentive for civil servant to work harder at all, no way at all this will increase their productivity.

I think that this RM 8 Billion will be better spent if it is used as a mean to increase the productivity of civil servants. One of the ways, I think, is to set up various training centres for civil servants. Civil servants who want to see some improvements in their career can voluntarily attend these trainings. I have to stress that this trainings much be done voluntarily, and that little or no cash incentives should be given to the trainee. I think this is one of the ways to separate the truly passionate and those who are there just for the cash.

Another way to encourage productivity increase is to allow differentiation to happen. Saying this, civil servants must be awarded according to their performance: high pay raise for star performers, little or none for the average, and a warning for the poor performers. Despite the supposedly low number of civil servant, I believe the “golden rice bowl” must be broken. Under performers must be removed from the civil service. I believe this is one of the most effective ways to increase the overall productivity of civil servants, since those who work hard will be rewarded by cash as well as stable career incentive. The increase in productivity, I believe, will be able to compensate for the lost in men power. The reduced number of civil servants would also mean a higher pay for the true performers, without the need for extra RM 8 billion allocated for their salary and allowance.

Star performers must be given promotions. As oppose to the well known and well established trend, promotions in the civil service seems to take into account seniority too much. Of course, those are the ones with more experience. However, is there no doubt that their experience will allow them to run a department better? In many cases, departments are headed by people near their retirement age. It is worth mentioning that their performance is questionable under this condition. Let me ask you, if you are recently promoted to head a department and going to retire in a few years, will you introduce great positive changes in the department, or will you play safe, follow the tradition, retire safe and sound, and enjoy your increased pension?

The above are just a few examples of how corporatisation can be done. I am sure that the our country can profit from this, as oppose to introducing a highly questionably and seemingly useless increase of civil servant pay hike. The RM 8 billion can be better spent, promoting solid productivity increase in the civil service in general.