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the civil servants. This time around, the revision upward was substantial with the Support Group II getting an increment of 35% and Support Group I an increase of 25%. Higher-ranking officers from the Management and Professional Group, and the Premier Grade Groups (JUSA), received an increment of 15% and 7.5%, respectively.17

Thus, with the 2007 increase, civil service pay has become more comparable, if not better than the private sector. Lower-level workers in the government receive a minimum wage of at least RM1000 together with medical benefits for self and family, as well as a pension, while workers of the same level in the private sector receive between RM500 and RM600 monthly with minimal medical benefits.18 Early career graduates in the private sector may draw a starting salary of RM1800 to RM2500, depending on the nature of the work, and the organization, as well as the industry. In the civil service, it may be higher, as shown in Table 11.5. The stability of tenure of government jobs is also often seen as an attraction, however, the salary increments and upward mobility is still slow in comparison to the private sector. Unlike the private sector, which may swiftly decide on human resource matters such as promotion, in the public sector, such affairs have to be referred to the central agency, and given the size of the public sector and the numerous schemes of service and salary grades, this certainly affects the pace. Still, the civil service is fast becoming the career of choice given the attractive remuneration package.19

Other benefits enjoyed by civil servants, such as medical benefits for life and for the whole family, a generous pension scheme, housing loan with an interest rate of only 4%, scholarship for full-time postgraduate studies with full-pay, maternity leave for two months with full pay, career development opportunities in terms of training and professional recognition, has managed to retain civil servants over the years. The introduction of performance-based and competency-based performance appraisal through the NRS, followed by the MRS was also an attempt by the government to cap the flow of its workers to the private sector. Only in areas such as medicine, where the salary gap between the public and private sector is too wide, is the issue of brain-drain significant. This is also being addressed by the government giving a generous allowance to doctors and other health professionals, but the disparity between public and private pay is too wide for the government to match, especially for medical specialists in private practice [25]. The starting salary for a sample of posts in the civil service is as in Table 11.3.

11.4 Civil Service Pension Scheme

It must also be pointed out that the pension scheme is one of the unique features of the Malaysian civil service, and a discussion on the compensation and benefits for the Malaysian civil servants is inadequate if the pension scheme is not deliberated on. The civil service pension scheme is also a legacy of the British administration, which was introduced in 1875. It is a non-contributory scheme that provides support to employees in public service after they retire and to their dependants for a specified period after their death. The pension formula is calculated from the last drawn salary divided by the length of service subject to a maximum of 25 years, but the resulting amount

17The Malaysian Bar, May 22, 2007, Record pay rise: Between 7.5% and 42%, http://www.malaysianbar.org.my/ news (accessed September 30, 2009).

18The Star Online, February 16, 2009, In times of volatility, government jobs offer security, http://biz.thestar. com.my (accessed September 29, 2009).

19The Star Online, December 16, 2007, The civil service beckons, http://biz.thestar.com.my (accessed October 1, 2009).

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must not be more than half of the last drawn salary.20 Prior to the NRS, a civil servant would have to work with the government for at least 10 years before he or she is put on the pensionable scheme. However, under the NRS, the duration was shortened to 3 years, provided the employee has been confirmed in service. The pension is provided to a retiree for life, and in the event of his death, it is extended to his spouse, also for life; and to the children, until the age of 18 years. It is one of the benefits that have greatly contributed to the retention of workers in the public sector. The compulsory retirement age in Malaysia is 58 years, although civil servants are allowed to retire at 40 years of age, but they can only receive their pension at the age of 58.

Under the NRS, civil servants are also given the option to join the Employee Provident Fund (EPF), which relies on contributions from both employee and employer. The EPF was also established during the British administration in 1951, with the objective to provide financial support to employees on retirement, or of disability or death in work, to workers outside the public sector. Since 1997, employees contribute 11% of their salaries to the EPF while employers contribute 12%. However, in 2008, employees were allowed to reduce their contribution from 11% to 8% in order to give them more disposable income.21 Employees are allowed to withdraw from the fund, which includes accumulated interest and dividends, on reaching the retirement age of 58. Apart from saving for retirement, contributors are also allowed to make partial withdrawal for housing, medical expenses, and children’s higher education from time to time.

11.5 Civil Service Neutrality

A point that deserves a mention with regard to the Malaysian civil service is the concept of civil service neutrality. Malaysia has been ruled by the multi-racial Alliance Party since independence, which is the predecessor to the current ruling coalition of political parties known as the National Front. In both the Alliance Party and National Front, the United Malay National Organization (UMNO) has been the dominant political party. The first two presidents of UMNO as well as the country’s first two prime ministers were former civil servants, which reflects the enhanced relationship between the top politicians and senior civil servants. It is also not uncommon for ministers and deputy ministers to come from the civil service, although they are required to resign from the public service in order to join politics. Despite the close relationship between politics and the civil service, Malaysian civil servants closely adhere to the concept of civil service neutrality. Though there has not been any change of government at the federal level since independence, nevertheless, political changes in state governments either from the National Front to the Opposition, or vice versa, has not in the least weakened the dedication and efficiency of the civil service to the party in power [26].

The neutrality of the civil service was also tested during UMNO’s leadership crises in 1987 and 1997. In the crisis of 1987, former Prime Minister Mahathir’s leadership was challenged by a group of ex-ministers; and in the 1997 crisis, the rift between him and his deputy caused him to dismiss his deputy, Anwar Ibrahim, from office. The tumultuous fi nancial crisis that the country went through in 1997 was among the factors that led to the leadership crisis of 1997 [27]. In both cases, however, the civil service remained neutral and gave their loyalty to Prime Minister Mahathir [28]. The strongest test of civil service neutrality, however,

20Public Service Department, Pension Division, http://www.jpapencen.gov.my (accessed March 8, 2008).

21The Star Online, November 5, 2008, EPF down from 11% to 8%, http://thestar.com.my/news/story (accessed October 1, 2009).

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was witnessed during the constitutional crisis of 1993, which erupted when the ruling party attempted to check on the prerogative powers of the Malay royalty [29]. The country, particularly the Malays, with their deep-rooted sentiment and loyalty to their sultans, were very much divided over the issue. The crisis put the country’s top civil servants in a more difficult situation since they deal directly with both the Istana22 and the political elites in discharging their duties. Despite the difficult situation, the civil service held true to the notion of neutrality, and was steadfast in its loyalty to the elected government.

Civil service neutrality was also witnessed in the aftermath of the 12th Malaysian general election held in March 2008, which was also a watershed in the political landscape of the country. For the first time in Malaysian history, the National Front lost control of four states: Kedah, Penang, Perak, and Selangor, with the Opposition continuing to retain their hold on the state of Kelantan. Overall, the opposition alliance comprising the Democratic Action Party (DAP), People Justice Party (PKR), and the Pan-Malaysian Islamic Party (PAS) won 82 seats—they had only 20 seats from the previous election—out of 222 parliamentary constituencies.23 It was also the National Front’s worst performance in a general election since independence, which also resulted in the loss of its two-thirds majority needed to amend the constitution.24 Throughout the whole episode and the following repercussions from the election, the civil service was clear in their neutral and apolitical stance. This allowed the administration of the country to proceed as usual despite the political mayhem.

In most situations, civil servants remain aloof from the media, particularly in times of crises as mentioned above. This lends credence to their neutral stance. Even in managing daily affairs of the country, civil servants rarely make public pronouncements, leaving the task of talking to the press mainly to the political masters of the respective ministries.

11.6 Civil Service Culture

Civil service throughout the world with its bureaucratic image is often perceived to be less efficient than the market-driven private sector. In this respect, the Malaysian civil service has not been spared from criticisms of inefficiency too, and was perceived as a bureaucracy that was too big and too slow to adapt to a changing and dynamic world. In the words of the then Chief Secretary to the Government, Tan Sri Ahmad Sarji:

the public service was more than not associated with “bureaucracy”; which conjures in the minds of people ine ciency and the worst of organisational nightmares. The people who have been to the “bureaucracy” experience it as red tape, infl exible policies, and being hard to do business with when decision seems to take forever [30].

Consequently, the Malaysian civil service saw numerous reform efforts carried out from the 1980s onward. The realization on the part of the government that Malaysia will not be able to

22“Istana” literally means palace in Malay, but it is generally understood to be the administrative office of the sultan.

23The Star Online, March 9, 2008, MALAYSIA DECIDES 2008, http://thestar.com.my/election/ (accessed October 15, 2009).

24Channelnewsasia.com, March 9, 2008, Malaysia’s BN coalition suffers worst electoral defeat, http://www. channelnewsasia.com/stories/southeastasia (accessed October 15, 2009).

©2011 by Taylor and Francis Group, LLC