Title: A New Era for Civil Service: Iran Implements Performance-Based Pay System
In a significant move to modernize its public administration, the Islamic Republic of Iran has officially rolled out a new performance-based salary system for government employees. This comprehensive reform, hailed as the most substantial change in compensation policies in recent years, aims to replace traditional payment mechanisms with a model that directly links earnings to productivity and the achievement of organizational goals.
A Landmark Reform in Administrative Systems
Approved and communicated as part of the directives for the Seventh Development Plan and operational budgeting, the new bylaw marks a distinct shift in how public sector salaries are structured. The core principle is straightforward: an employee’s effort, work quality, and the percentage of program completion will now directly influence their take-home pay.
Senior officials have underscored that this initiative is designed to enhance transparency, boost productivity, and rectify past inequities in payments. According to Mr. Rafiezadeh, Head of the State Management and Planning Organization, non-mandated benefits for employees will now be calculated based on their performance, ensuring that those who contribute more to organizational objectives will receive greater advantages.
Why This Reform Was Essential
In recent years, the existing payment structures within executive bodies had faced considerable criticism. Experts argued that the system lacked fairness, as differences in employee performance were not reflected in their earnings. This was identified as a key factor behind diminished motivation, lower productivity levels, and dissatisfaction among specialized personnel.
The new performance-based payment system seeks to break this cycle. The government’s objective is to align compensation directly with employee output. The primary goals of this overhaul are:
- Increasing motivation and effort within government offices.
- Preventing non-transparent and unnecessary payments.
- Aligning payments with operational budgeting.
- Improving the quality of public services for citizens.
- Fostering constructive competition among staff.
- Strengthening administrative and managerial discipline.
Officials state that the proper implementation of this plan will not only reinforce administrative justice but also reduce the extraneous financial burden on government bodies, allowing active and hardworking employees to receive their rightful status and rewards.
The Mechanics of Evaluation and Scoring
A cornerstone of the new bylaw is its detailed mechanism for evaluating employee performance. Each staff member will have a formal evaluation form that must be signed by both the manager and the employee. This form includes specific metrics such as quality of task completion, achievement of program goals, administrative discipline, supplementary activities, and specialized indicators.
This documented process ensures that no payment is made without legal documentation. Should an employee disagree with an assessment and refuse to sign, it will be interpreted as non-acceptance of the performance rating and will have an immediate impact on their non-mandatory benefits.
Breakdown of the New Payment Structure
To better understand the new performance-based payment structure, the following table outlines the main components of employee earnings:
| Type of Payment | Description | Status in the New Bylaw |
|---|---|---|
| Mandatory Salary | Fixed salary as per employment contract | Unchanged, according to previous law |
| Non-Mandatory Benefits | Includes overtime, allowances, bonuses, and other benefits | Entirely dependent on performance percentage |
| Annual Bonus | Based on quality of performance and annual review | Structurally changed, fully performance-based |
| Overtime Pay | Based on effective hours and output | More limited and controllable based on performance |
| Productivity Allowance | Proportional to the percentage of goal achievement | Increases or decreases based on actual performance |
This table clearly illustrates that the most significant changes apply to the “Non-Mandatory Benefits” category, which constitutes a major portion of employee income that was previously disbursed without a precise framework.
Impact on High-Performing and Low-Performing Employees
The performance-based payment plan explicitly benefits employees who are more active throughout the year and fulfill their responsibilities thoroughly and accurately. Under the new system, these individuals can expect to receive higher compensation than before.
Conversely, the impact on less productive staff will be notable. Employees with low output and productivity will receive fewer benefits compared to the past. In essence, payments will henceforth be based on genuine merit, not merely job title or seniority.
Executive authorities have stated that the plan is designed to make staff who strive to enhance organizational quality feel distinct and valued—an aspect that had been neglected for years within the administrative system.
The Crucial Role of Managers
Managers are pivotal to the success of this new plan, as the responsibility for scoring, recording performance, and final approval of evaluation forms rests with them. Consequently, organizational managers are obligated to assess their staff’s performance with precision and transparency.
Mr. Ghaempanah, the Vice President for Executive Affairs, emphasized that managers are also subject to this plan. This means that if a manager achieves only 60% of the organization’s goals, their own payment will be adjusted to 60%. This is intended to provide managers with greater incentive to guide their employees effectively.
Phased Implementation and Timeline
According to the State Management and Planning Organization, the plan will be implemented in phases. This approach will allow both employees to gain the necessary familiarity and government bodies to establish the required infrastructure. A phased rollout will also help identify and rectify any potential issues.
Authorities have announced that organizations are required to complete performance evaluation forms starting from the current period, paving the way for the plan’s full implementation in the coming months.
The Dawn of a New Chapter
The performance-based payment plan represents one of the most serious reforms of the administrative system in recent years. Designed to increase productivity, transparency, motivation, and justice, it has the potential to significantly transform payment methodologies.
Employees who demonstrate greater activity will now receive the true reward for their efforts, while low-performing staff will no longer be able to benefit from high advantages without corresponding output. In the long term, this reform is expected to elevate the quality of the country’s administrative services and transform an outdated payment structure into a new and efficient model.