Pat Breen (Clare, Fine Gael)
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Question 113: To ask the Minister for Finance if he is satisfied with the operation of performance related pay. [21861/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Following a decision by the Government on the implementation of recommendations in Report No. 38 of the Review Body on Higher Remuneration in the Public Sector, schemes of performance-related awards were introduced for the levels of Deputy Secretary and Assistant Secretary in the civil service, the Deputy Commissioner and Assistant Commissioner ranks in the Garda SÍochána and the ranks of Brigadier General and Major General in the Defence Forces.

The schemes of awards are based on performance by reference to demanding targets. The pool for performance awards is 10% of the pay bill for the group concerned. Within that overall limit individuals can receive payments of up to 20% of pay (although payments at that level would be very rare).

I have no role in the decisions on awards. Decisions on awards are made by the Committee for Performance Awards (CPA), which includes a majority of private sector members. The main roles of the Committee are to monitor the application of the scheme of performance-related awards and to bring independent judgement to bear in approving objectives for the persons covered by the scheme and in approving recommendations for awards.

Details of the procedures, the numbers covered by the schemes, the range of awards and the total amounts paid in Departments are outlined in the annual reports of the Committee (available on the website www.finance.gov.ie). The annual reports provide a commentary on how the schemes have operated each year and the CPA make suggestions about how aspects of the scheme can be improved.

The performance related pay schemes are monitored by an independent body — the CPA — and I am satisfied that the CPA is fulfilling its remit in relation to the schemes.

There are separate schemes of performance-related awards for senior staff of local authorities and the health service. The Committee for Performance Awards in the Local Government sector deals with the assessment of performance for senior managers in local authorities. For senior managers in the health service, the board of the HSE/relevant agency makes awards based on the agreed criteria. The scheme is quality assured by the PRA Oversight Committee which is chaired by the Secretary General of the Department of Health & Children.

Schemes of performance-related pay can also apply to the Chief Executive Officers of non-commercial State sponsored bodies (and in some cases, to the second tier of management). The Review Body considered that certain conditions should be in place non-commercial State-sponsored bodies before schemes of performance-related awards were introduced for the CEOs of those bodies. Where these conditions are met, the Board of the body concerned can submit a scheme to the parent Department and, subsequently, my Department for approval. These schemes are also based on the achievement of stretched targets and provide for a maximum bonus of 20% of pay. The guidelines provide that awards of between 15% and 20% should arise only in the most exceptional situations where performance has surpassed all reasonable expectations and has resulted in the achievement of a major goal of the body. Decisions on the level of payment to be awarded are the responsibility of the Board of the body concerned.