No annual increment for non-performing employees: Pay panel

Says this will act as a deterrent for complacent and inefficient employees

Central government employees should not be allowed to earn annual increments if they fail to meet performance criteria, the Seventh Pay Commission has said.

It has also recommended introduction of Performance Related Pay for all categories of central government employees.

There is a widespread perception that increments as well as upward movement in the hierarchy happen as a matter of course. The perception is that grant of Modified Assured Career Progression (MACP), although subject to the employee attaining the prescribed threshold of performance, is taken for granted, the panel said.

“This Commission believes that employees who do not meet the laid down performance criterion should not be allowed to earn future annual increments. The Commission is therefore proposing withholding of annual increments in the case of those employees who are not able to meet the benchmark either for MACP or a regular promotion within the first 20 years of their service.”

"This will act as a deterrent for complacent and inefficient employees. However, since this is not a penalty, the norms for penal action in disciplinary cases involving withholding increments will not be applicable in such cases. This will be treated as an efficiency bar," it said in the report submitted to the government.

Additionally, for such employees there could be an option to leave service on similar terms and conditions as prescribed for voluntary retirement, the panel said.