Flexiwage

Linking public sector salaries to economic growth

Growth flowing from eGovernment, anticorruption, and other transparency-oriented systems in Resilient Places can produce advantages for public employees as well as residents.

In many cases, public officials around the world oppose initiatives that curb bureaucratic discretion and established favor-giving patterns.

Yet success-linked compensation systems are showing that civil servants can change.

Singapore's "flexible wage" system enables public officials at all levels to share in the fruits of creating a transparent business climate.

Its success-sharing compensation partnership, based on a transparent system of linking public sector pay to the efficiency of administrative services, has helped produce a remarkable transformation in the quality of the business climate.

Singapore, for almost two decades following its independence, was struggling with problems of bureaucratic mindsets and administrative inefficiency.

By the late 1980s, however, it rolled out a revolutionary policy that effectively made civil servants into stakeholders in wide-ranging private sector success. The Flexiwage policy links the salaries of the public sector directly to the economic growth rate of Singapore.

Over the years, public sector employees at all levels of Singapore's government have become interested in applying eGovernment and related innovations that improve the business climate of the country.

The Flexiwage system has enabled all civil servants in Singapore to enjoy high levels of compensation, as annual Flexiwage bonuses equal to the private sector growth rates have compounded year after year. Today, the Flexiwage bonus typically adds equivalent of about three weeks of regular salary each year per public employee.

Use of this innovation in Resilient Communities can lead to increased willingness on the part of local officials to support eGovernment and other transparency-enhancing initiatives that accelerate economic growth.

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This page has been created by the Openworld Team