The Lee Kuan Yew approach to public sector pay

John McGill delves into the former Singaporean leader Lee Kuan Yew’s approach to public sector pay. 

Lee Kuan Yew, the tough, uncompromising leader of Singapore, who recently passed away, was noted for his views on public sector pay. To quote from a recent tribute to the leader.

“…He attracted foreign investment by building communications and transportation infrastructure, made English the official language, created a super-efficient government by paying top administrators salaries equal to those in private companies, and cracked down on corruption until it disappeared…”

One particular statement made by Yew, when questioned on high pay for cabinet ministers and senior civil servants, summed up his take on the topic: “You know the cure for all this talk is really a good dose of incompetent government. You get that alternative and you’ll never put Singapore together again: Humpty Dumpty cannot be put together again… and your asset values will be in peril, your security will be at risk and our women will become maids in other people’s countries, foreign workers.”

Certainly no mincing words there. No agonising about the sacred duty of public service to accept less money; just set pay levels and then shift focus onto more important matters.

Determining pay at the higher levels in this manner means, of course, that those lower down will be affected positively. Did LKY see any essential difference between the public and private sector? Apparently not and that signals a very major difference in approach, impact and style.

But wait, there’s more. Reflecting a very different approach, teachers pay in Singapore is also somewhat unusual from our New Zealand perspective, as noted in this extract:
“Before joining the teaching profession, Mr Andy Lee, the programme director of IT at Bukit Batok Secondary School, spent seven years as a civil and structural engineer… Mr Lee benefited from the competitive performance-based-remuneration and bonus system for teachers. He now earns much more than he used to as an engineer. He also appreciates the various professional development and upgrading opportunities available at the Ministry of Education (MOE).”

To the outsider, teachers’ pay in New Zealand appears rooted in a hierarchical-based system with a level of complexity that defies belief (the recent computer system debacle was in part related to the complicated system that exists).

Roles are rewarded more for inputs rather than outputs and all parties appear to dislike it.
In contrast, a system that has such positive incentives to attract specialist graduates like engineers and a reward system that has a link to performance really does look attractive.

Yes I know, most Kiwis would not live with the totalitarian aspects of life in Singapore (just the prescribed therapeutic-chewing-gum-only law would throw most of us), but maybe the third-richest country in the world has some lessons for us.

Its wealth has come from the ability to be a port, regional hub, and a manufacturing and professional services centre. True, in income terms it’s not pretty, with one of the highest levels of income inequality in the developed world.

Still the attitude towards pay at the top, and elsewhere it seems, is a different one, and well worth a look I would suggest. 

Sources: Lee Kuan Yew quotes: National Geographic January 2010; Guardian March 23, 2015; Teachers Quote: The Straits Times February 12, 2011. John McGill is the chief executive officer at Strategic Pay. 

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