Iran Approves Performance-Based Pay System for Government Employees
In a significant move to modernize its public sector compensation, the Iranian government has approved the executive bylaw for a new performance-based payment system for civil servants. The initiative, a key part of the country’s Seventh Development Plan, aims to link earnings more directly to employee productivity and output.
A Shift in Compensation Policy
Alaeddin Rafizadeh, a relevant official, elaborated on the new approach in a recent interview. He emphasized that the government’s strategy, repeatedly endorsed by the President, is a decisive shift towards “performance-based payment.”
This new framework was formally cemented last week with the government’s approval of the executive bylaw for Article 18 of the Seventh Development Plan, which specifically addresses “operational budgeting and payment based on performance.”
Implementation and Next Steps
Rafizadeh outlined the path forward, noting that the focus is now on implementation. He clarified that while Article 106 of the Seventh Plan provides the legal foundation for a “special allowance,” the government is tasked with executing it with due consideration for the national budgetary conditions.
Following the official notification of the newly approved bylaw, authorities will work to align a portion of non-mandatory benefits with the annual coefficient—a figure that is typically adjusted upwards at the start of each Iranian calendar year. This process will also provide a mechanism for addressing demands related to the application of new coefficients.
This reform is positioned as a structured effort to create a more dynamic and equitable wage system within Iran’s civil service, aligning remuneration with individual and institutional performance.