A record salary hike for civil servants was announced by the Malaysian Prime Minister today. The 7.5 – 35 percent salary increase (about USD$2.5b annually) is expected to benefit more than 1 million civil servants (as well as half a million of pensioners) in Malaysia. The authorities expect that this pay hike will contribute about 0.5 percent to Malaysia’s economic growth this year and another half percent in 2008.
What are the implications on HR in the private sector? Will there be a new effort by the industrial & trade unionists to increase our minimum wage? Inflation vs. COLA? Is it a worthwhile effort to reward their performance? Any link with poductivity? Will it be a shift in hiring trend for young graduates?