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LCQ14: HKEAA's performance-based incentive scheme

     Following is a question by the Hon Cheung Kwok-che and a written reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (October 23):


     It has been reported that the Hong Kong Examinations and Assessment Authority (HKEAA) awarded performance-based incentives (bonuses), amounting to $7 million in total, to nearly 400 staff members twice in the past 12 months, breaking the records in recent years in terms of the amount and number of staff members involved, which has aroused public concern.  Meanwhile, the Government provided a grant of about $90 million as funding support to HKEAA in 2010 as HKEAA then forecast a huge deficit because of a significant drop in the number of candidates sitting for the Hong Kong Certificate of Education Examination in 2011 and the Hong Kong Advanced Level Examination in 2013, which would be held for the last time.  Yet, HKEAA recorded surpluses amounting to tens of million dollars both in 2011 and 2012.  In this connection, will the Government inform this Council whether it knows:

(a) the staff establishment and pay scale for staff of HKEAA; the respective percentages of the amount of bonuses awarded by HKEAA to its staff members in each of the past five years in the total expenditure for that year, as well as the number of staff members who were granted the bonuses;

(b) the criteria adopted by HKEAA for deciding to award bonuses to its staff; whether the Human Resources Committee of HKEAA had discussed and made recommendations on the award of bonuses; whether the authorities will consider requesting HKEAA to reduce or waive the examination fees for local candidates, or reducing the Government's funding support to HKEAA, so as to make better use of the surpluses of HKEAA; if they will, of the details; if not, the reasons for that; and
(c) the current number and names of government departments and quasi-government bodies which have set up staff bonus schemes?



     My reply to the questions raised by the Hon Cheung Kwok-che is as follows:

(a) and (b) The Hong Kong Examinations and Assessment Authority (HKEAA) was set up in 1977 under the Hong Kong Examinations and Assessment Authority Ordinance (HKEAAO) (Cap. 261).  It is an independent statutory body.  Its major function is to administer public examinations to cater for the needs of the local education system and society and assist in conducting professional and international examinations.  According to Section 9 of the HKEAAO, the resources of the HKEAA consist of the fees paid by candidates sitting the public examinations or taking other examinations or assessments conducted by the HKEAA, payments received for services rendered by the HKEAA, subsidies provided by the Government to assist towards the cost of conducting public examinations, etc.  The income of HKEAA is mainly derived from examination fees, followed by the sale of publications and provision of assessment services for individuals and organisations.

     The pay structure of the HKEAA has been delinked from the civil service and its pay level is determined with reference to that of the market without housing and education allowances, automatic annual salary increment, etc. In order to maintain a competitive pay structure, the HKEAA has implemented a performance-based variable component for the salary adjustment (i.e. "performance-based incentive scheme") since 2009. Employees with outstanding performance are awarded an incentive based on the results of their performance appraisals.

     Currently, HKEAA has around 400 full-time staff. The establishment of the HKEAA can largely be classified as the management grade, manager grade, professional/supervisory grade and general/support grade. The relevant remuneration and benefits are set based on these establishment grades.

     The HKEAA Council, Human Resources Committee and Finance Committee review the expenditure on staff remuneration annually. Based on the overall performance and financial status of HKEAA, the HKEAA Council makes decision on the need for salary adjustment and award of incentives, and determines the level of adjustment and the ceiling of such expenses. The Council comprises members from the academic sector and the business sector, as well as representatives of the Government.

     The award of a "special one-off performance-based incentive" in 2012-2013 by the HKEAA was a one-off special arrangement. Due to the change of academic structure, HKEAA had to administer the first Hong Kong Diploma of Secondary Education (HKDSE) Examination and the final Hong Kong Advanced Level Examination (HKALE) concurrently in 2012.  The workload increased substantially. The increasing trend in staff turnover since 2011 which would very likely affect the operation of these two public examinations became a concern. To ensure that an adequate number of experienced staff would be available to implement the two large-scale public examinations, the HKEAA Council endorsed in principle in 2011 the establishment of a "special one-off performance-based incentive" to boost staff morale.

     Upon the completion of the public examinations in 2012, the HKEAA Council, after reviewing the overall performance and financial status of the HKEAA in August, approved the award of a "special one-off performance-based incentive" to staff with satisfactory performance. The incentive was paid in two installments in November 2012 and April 2013.

     The total amounts of "performance-based incentive" awarded and the number of awardees in the past five years are set out at Annex.

     HKEAA reviews the examination fees of HKDSE Examination annually.  The Government has approved the freeze of the examination fees for the 2014 HKDSE Examination, which was published in the gazette on May 16, 2013. The Government will continue to take into consideration different factors such as inflation, the economic conditions of Hong Kong and the financial status of the HKEAA when vetting proposals for examination fees from the HKEAA in the coming years.  With regard to the grant to the HKEAA for conducting the 2011 Hong Kong Certificate and Education Examination (HKCEE) and 2013 HKALE for private candidates to cover the deficit for conducting the two examinations, it is granted to HKEAA on a reimbursement basis. The grant is provided to the HKEAA for meeting the actual deficit incurred in the two examinations after deducting the surplus generated from the 2012 HKALE.  It is not affected by the overall surplus of the HKEAA. The Government has all along provided non-recurrent grants to the HKEAA for launching initiatives relevant to public examinations where justified.  Not only can this practice lower the cost of running the public examinations and maintaining at a level affordable by the public, but it can also ensure the income from the examination fees are largely sufficient to cover the recurrent expenses of the HKEAA.

(c) There is no such bonus scheme as mentioned in the question or the like in the salaries and conditions of service for civil service appointments. As for the non-departmental public bodies, we understand that some of them will base on the performance of the staff in determining the payment and adjustment of salary, but we do not have the detailed information on the salary structure and adjustment mechanism of these organisations.

Ends/Wednesday, October 23, 2013
Issued at HKT 15:07


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