Finance Ministry pours cold water on federal employees

ISLAMABAD: The government’s announcement for the approval of honorarium equivalent to three basic pays for all the federal government employees, has surprised the Finance Ministry, which insists that the actual order is meant only for those employees who are entitled to get this special incentive in routine.

A senior Finance Ministry source told this correspondent on Saturday that the order, as reflected in the media, was the consequence of a misunderstanding and is likely to be clarified by the ECC. “There is no such approval for the payment of honorarium equivalent to three-month basic salaries to all the federal government servants,” the source said.

The source explained that as against over a million federal government servants, this honorarium will be given to a few thousand government employees belonging to different government departments for their extraordinary work like how officials/officers of Finance Ministry, FBR and Parliament are paid honoraria every year for their budget related work.

According to the official notification issued by Secretary to the Prime Minister, Fawad Hassan Fawad, on Friday the PM/chairman of the ECC has seen and is pleased to order that all employees of the federal government shall be given honorarium equivalent to three basic pays for the financial year 2017-18.

Sources in the Finance Ministry, which had moved the summary on the subject, said the PM’s office notification is defective as it conveys a wrong message. The ministry said the summary never talked about any such honorarium for “all federal government servants”. The Finance Ministry summary, these sources said, was concerning “Grant of special performance incentive to the officers/officials of the federal government” and did not talk of any proposal for any number of incentive pays for “all the federal government servants”. The Finance Ministry’s summary was moved following PM’s directions on a case regarding grant of special honorarium to the officers/officials of the office of the Attorney General for Pakistan.

According to the summary: “This issue has been reviewed in Finance Division. As such, there is no reward regime for high performing individuals in the federal government. However, a special dispensation is prescribed in the Rules…. Provide that special compensation can be given for work that is not included in normal duties and is occasional and intermittent in nature.”

The Finance Ministry explained that the present practice of grant of honoraria is based on the ECC decision under which honorarium to employees up to BS-18 is given with the approval of principal accounting officer. The cases of honorarium for employees in pay scale BS-19 and above are approved by the ECC chairman, in relaxation of the policy.

The Finance Ministry in its summary proposed parameters for a new incentive regime under which those performing well in the federal government could be given honorarium on the basis of key performance indicators. The ministry said that the proposed new incentive policy will be finalised only after consultation with all stakeholders. The summary added since the finalisation of the new incentive policy will take some time, it is proposed that the past practice of granting honoraria may be continued and the Ministry of Finance may be delegated powers to approve the cases of honorarium for those recommended for 2017-18. The summary contained the annexure including names of officers recommended for the honorarium.

The PM’s office order, the Finance Ministry sources clarified, pertains to those included in the list of officers annexed with the summary. It does not cover all the federal government employees.

The Finance Division proposes that an incentive regime with the following features may be introduced:

(i) Each Division of the federal government will be allocated annual budget for the purpose.

(ii) The Principal Accounting Officer (PAO) may be delegated powers to grant honorarium.

(iii) Each Division/ Department shall prepare Key Performance Indicators (KPIs), in consultation with the Cabinet Division. The Division/ Department shall become entitled to honorarium only if it achieves at least 80% of the pre-agreed KPIs.

iv) The employees in BS 1-18 shall be given one honorarium equal to 100% of basic pay. Justification for regarding honorarium shall be recorded by PAO.

(v) The officers in BS 19-22 shall be given one or two honoraria equal to 100% of basic pay, on the basis of performance evaluated through achievement of assigned KPIs.

(vi) The honorarium to officers in BS 19-22 shall only be granted to a maximum of 50% of the total number of officers in these grades in a Division/ Department.

(vii) The cabinet Division shall issue detailed instructions for preparation of KPIs.

These policy parameters will be finalised after consultation with other stakeholders such as the Cabinet Division, the Establishment Division etc.

The final shape of this policy will depend on whether or not a proposal for the enhancement of salaries of employees (BS 17-22) which is in the pipeline is approved. The policy for honorarium once finalised shall be made effective from the next financial year i.e. 2018-19.