"Despite the risk where your job survival is dependent on purely performance and network, it nevertheless promote a more meritocratic image than the civil service where the scholars are destined for high places if they don't screw up."

I see the public sector scholarship system somewhat comparable to the private sector companies leadership development program for their top talent (even available for fresh undergraduate). Citigroup has very well established Management Associate Programs, and many of the MA rise up to take up senior/top positions, and the company will pay for their graduate studies. Many of the companies hiring from where I am studying have top tier leadership program where there will be bigger responsibilities and more visible opportunities to succeed (and fail), and of course higher compensation to attract the right talent.

The data we need to have is whether fewer % of AOs are asked to leave for poor performance as compared to the % of employees in these global MNCs are asked to leave their leadership development program if we are to benchmark the pay of the AO to the private sector.

Sze Meng,

True that the Civil Service might have the kind of "scholarships" that mirrors leadership programs from the MNCs like the Citigroup and Bristol Myers Squibb. As KTM put it rightfully, the devil is in the details and the implementation of our scholarship system somehow did not achieve what it is intended.

Somehow these programs don't have that kind of potential maximization in the civil service. Perhaps, I might be wrong, but the individuals who goes thru the civil service scholarship programs have too little risk as compared to those from the private sector. I wonder whether it takes people with a certain amount of "bureaucrat" genes to withstand the kind of things they do in business. Perhaps, the Peter principle works better to those in civil service, because most of my friends in the private sector who goes thru these programs you mentioned, are enjoying what they are doing, taking big leaps in their career despite they have to take risks in big projects and the possibility of being fired for a big flop.

I am probably one of those who is on the position that the civil service cannot emulate the private sector, no matter how hard they try.

I wish PSC cholars who took up a PSC scholarship at 18 because of their strong desire to serve the public through the government, after 4 years of being exposed to all the myriad of opportunities, and still happy to come back to serve in the civil service will weight in on this topic of comparing the scholarship to the private sector leadership development programs.

I am sure there are PSC scholars who will still want to come back to serve in the government after college even if they are not bonded, because of the desire to be a civil servant and serve the public through policy work.

I will love to hear from their perspectives. Not sure if any of these individuals read this thread though given the limited target audience.

Hi Sze Meng,

I am not convinced that age 18 is always the best time to recruit somebody into the Civil Service with a scholarship. People change between matriculation and graduation -- and if I were an employer, I'd much rather take a new graduate who clearly wants to join my organisation, as opposed to somebody who signed on 4 years previously but now is not that keen.

There is a role for funding people at the point of entry -- but this should be reserved for those who cannot otherwise afford the sponsored course of study.

I've written a bit about this in a previous article:

Scholarships: of bonds and bondage

BL,

I am probably one of those who is on the position that the civil service cannot emulate the private sector, no matter how hard they try.

There is no reason for the Civil Service to emulate the private sector. It's all about understanding the structural problems and addressing them in a manner that is incentive compatible. The Civil Service has moral hazards which are not found in the private sector.

SN,

I am not convinced that age 18 is always the best time to recruit somebody into the Civil Service with a scholarship. People change between matriculation and graduation -- and if I were an employer, I'd much rather take a new graduate who clearly wants to join my organisation, as opposed to somebody who signed on 4 years previously but now is not that keen.

Agree on both counts, but there's not much of a choice here given the global competition for talent. Govt just have to be more accepting of bond breaking.

There is a role for funding people at the point of entry -- but this should be reserved for those who cannot otherwise afford the sponsored course of study.

There's no reason to fund people who cannot afford using scholarships. There are bursaries and study loans available -- and if people cannot afford to go overseas on their own, then study locally loh.

The big problem that the KTM sees in the scholarship system are these kids who die die want to go overseas to study when their parents cannot afford it and so they take a scholarship (though going to local university is perfectly affordable), even though they have no inclination for work in the public service EVEN BEFORE THEY start. In the end, they end up being unhappy when they get back. They dun get much sympathy from the KTM.

KTM,

There is no reason for the Civil Service to emulate the private sector.... The Civil Service has moral hazards which are not found in the private sector.

I take your point but I don't see why the Civil Service is adapting so much private sector methods of assessment and incentives. Precisely, because of the moral hazards, that is why it is not possible to adopt some best practices of the private sector, for example, benchmarking the salaries of top civil servants to the private sector given that the amount of risk that these top civil servants are subjected are far too minimal as compared to the top guns of private sector. Somehow, my answer to your "structure" issue is that incentives and structures in social enterprise are appropriate to benchmark rather than the private enterprises, for example, Shell.

That being said, I am totally fine with them getting paid better. The legal service is probably one of those in my exceptions list, where the civil service has no choice but to try very hard to match the private sector in terms of pay and incentives. Because if we don't have good lawyers in the government to champion law and order and leak them to the private sector, it will be a problem.

SN,

I agree with you on that point. If I am not wrong, DBS and some of the government linked companies have stopped that kind of scholarships for 18 year olds.

From the government's perspective, I can see why they want to lock someone down at 18.

1. If the government let some of them leave for US (by virtue of their kind of scholarships), it is unlikely for them to come back. In short, monopolising talent is an important feature of our civil service and I doubt that they will give it up, given the rationality of maintaining the status quo of the organization.

2. As usual, our government wants to exercise the advantage to exercise the option of acquiring them first and then worrying later (if they decide to break bond and move on).

SN

I agree age 18 is not the best time to decide if you want to be a public servant, even in the administrative service until 28 or 30 years old (assuming the scholar serves the 6 years bond.

Conversely, there will be a number of PSC scholars who do want to serve the public in the civil service at 18, and still continue to want to do so after they graduate even though they seen all these opportunities out there.

I will love to speak to more scholars like these or hope maybe one of them can join this discussion thread.

BL

I think about the cost of capital to the government in securing scholars via scholarship. Conversely, think about the cost of captial to GLCs such as DBS to spend $250K on securing a scholar who may or may not break bond.

Another way to look at it is the need for pay equity in the public vs private sector at different level of responsibilities.

One key issue is that DBS can spend the 250K to find the right talents in the open market and pay someone higher wages. The government is constrained in doing that because the pay distortion will be too great at a junior level (below director level where most of PSC scholars are still serving the bond).

Therefore the SR9 benchmark (age 32 where most scholars have no bond) replaces the additional pay after Director level because directors are usually not bonded by then and therefore does not implicitly received the "additional" pay increase of the scholarship monies (250K) amortized over 6 years.

It is about $ and cents...and the need to have pay equity at the junior level where it is harder why a 26 years old with 2-3 years experience is paid 2-3 times than its peers, when it is easier to justify for someone who has 6-8 years of working experiences.

If you amortized 250K linearly over 6 years (72 months), it is an additional $3500 a month of "extra" pay to attract the top young talents (fresh from universities) to the public sector. The $3.5 K is actually higher because you received the money way earlier (before you start working!), so the same 250K if invested over 6 years in a 5% FD is actually higher.

A ballpark will be real present value of $4K addition pay a month.

A consultant or i-banker fresh from university as an undergraduate in the top global firms (Mckinsey, BCG, Bain, Goldman, Merill, Morgan etc) based in Singapore is getting average $7-9K monthly base pay (based on a global wage of USD50-55K a year starting) with bonus of $15-90K($90K for an i-banker). These firms pay global wages regardless of where you live adjusted for only tax differences. So to attract these people to the civil service, a $3.5 K of additional "pay" + the normal base of $3-3.5K make it more comparable.

Not sure if this analysis is done in PSC/PSD, but this is pure market force at work.

BL

Just to add....

Not sure if all the ministers are able to directly received their private sector benchmark pay if they leave now for the private sector, but for Singaporean undergraduates, I do know from my experiences that a number of these scholars have offers from the top-tier global consulting and investment banks firms when they were graduating, so they do go through these financial calculations implicitly or explicitly.

OBVIOUSLY not every PSC or GLC scholars want to work in a consulting or i-bank and some also do not make the cut. However, there are some (and a reasonable number) who consider working for these firms and have offers from these firms.

One of my Singapore scholar friend from MAS (since left after serving for a few years) did a summer with Goldman Sach offer in the West Coast in 2001 and received an offer for 2002 which was amazing given that all the i-banks were hiring very few in the massive downturn, but he return to MAS as financially it was impossible for him to pay back the scholarship if he break his bond but personally, I do think he feel a sense of responsibility to MAS too for giving him the opportunity to study overseas. He will not be able to afford to study overseas without the scholarship.