8th Pay Commission: Key factors behind salary hike recommendations of 1st to 7th pay panels

While such details are expected to emerge gradually in the coming months, aspiring and existing central government employees will find it interesting to know the factors or principles that guided the previous pay commissions in framing their salary recommendations.

Factors that guided pay commissions

However, the 2nd CPC moved beyond subsistence, focusing on hiring individuals with minimum qualifications to ensure the efficient functioning of the system.

As per the study, the 3rd CPC added three important concepts of “inclusiveness, comprehensibility, and adequacy” for a sound pay structure.

The 4th CPC based its recommendations on factors such as “rational and simple pay structure, motivation to staff, roles based on qualification.”

Comparision with the private sector

For the first time since independence, the 5th pay commission attempted a comparison of government employees with private sector employees.

The 5th CPC envisioned the role of the state as a “model employer”. To frame its recommendations, it not only considered the principles of equal pay and equal work but the demand and supply-related factors such as productivity and comparability like in the private sector, as per the study

However, the 6th CPC played down the comparison with the private sector because both the entities and roles were not similar.

7th pay commission: Focus on retaining the best talent

As per the 7th CPC report, the pay panel ensured that employees should not stagnate, but instead have fair opportunities to progress based on merit and secure better emoluments, thereby preventing frustration.

The 7th CPC ended the concept of separate grade pay for different levels and replaced it with a pay matrix. Additionally, it also refined the Modified Assured Career Progression (MACP) system.

Commenting on the salary recommendations, the 7th CPC noted, “The remuneration package is such that employees would feel that they are valued and they are fairly paid and their remuneration is not less than a person who is similarly situated in another organisation."

However, it also remarked that “employees who have outlived their utility, their services need not be continued.”