Replies to LegCo questions
LCQ6: HA's awarding year-end bonuses
Following is a question by the Dr Hon Lo Wing-lok and a reply by the Secretary for Health, Welfare and Food, Dr Yeoh Eng-kiong, in the Legislative Council today (January 14):
Question:
Will the Government inform this Council if it knows:
(a) the criteria adopted by the Hospital Authority ("HA") in determining whether or not to award year-end bonuses to its management staff;
(b) whether HA plans to award year-end bonuses to them this year; if it does, of the estimated total amount; and
(c) whether HA has reviewed if the award of year-end bonuses despite the fiscal deficits conforms to the principle of proper use of public funds; if it has; of the results; if not, whether such a review will be conducted?
Reply:
Madam President,
(a) In the design and determination of the total remuneration package of the Chief Executive of the Hospital Authority (CE/HA), Cluster Chief Executives (CCEs) and Hospital Chief Executives (HCEs), an annual performance incentive award was incorporated. The award is a part of the terms and conditions provided in their employment contract.
The annual performance incentive award is intended to provide a management tool for continuous improvements in hospital services. Granting of the award in each year is subject to an annual performance assessment by an assessment panel. In the case of CE/HA, the panel comprises the Chairman of HA, Chairpersons of HA's six standing committees, and a representative of the Health, Welfare and Food Bureau. The assessment of CE/HA is based on his performance in five areas, namely - achievement of the HA Annual Plan; support to the HA Board and Committees; organisation reform and management of senior executives; management of staff and staff unions; and relations with the Government, the legislature and the community at large. In the case of the CCEs and HCEs, the assessment panel is made up of members of the HA Board, members of the relevant Hospital Governing Committee and CE/HA. Generally speaking, the panel would assess the performance of CCEs and HCEs in a number of areas, including strategic roles and direction; governance; achievement of operational/clinical objectives and results; financial planning and performance; community relations and public affairs; and staff management.
(b) The annual performance incentive award is intrinsic to the total remuneration package for CE/HA, CCEs and HCEs. The HA does not see any justification for not honouring its contractual obligation. As this year's assessment of some of these senior executives is still on-going, it is not possible to provide the total amount of the awards for 2003/04 at this time. In 2002/03, the total amount of such awards amounted to $12.6 million.
It should be noted that when HA renewed its contract with CE/HA in September 2002, CE/HA voluntarily lowered the ceiling of his annual performance incentive award from 30 per cent of his basic salary and cash allowance to 24 per cent, in view of the tight financial situation faced by the HA. The CCEs and HCEs also took the initiative in October 2002 to voluntarily reduce the ceiling of their annual performance incentive award from 15 per cent of the total basic salary and cash allowance to 10 per cent on a permanent basis. The lowering of the award ceiling by CE/HA, CCEs and HCEs was on top of two reductions in basic salary - a 4.42 per cent cut in October 2002 and a further reduction with effect from January 1, 2004 in line with the civil service pay reduction - that these senior executives had consented to.
(c) The employment contract of the CE/HA is renewed every three years and the HA Board reviews the remuneration package of CE/HA at every renewal of the contract, which is subject to the approval of the Chief Executive. The remuneration packages of all other HA staff, including the CCEs and HCEs, are also kept under regular reviews by the HA. Changes to the remuneration packages will be made, where necessary, taking into account various factors, including modern human resource management practices and overall consideration of remuneration packages in the organisation.
The HA is of the view that payment of the annual performance incentive award to CE/HA, CCEs and HCEs is a proper use of resources. Over the past decade, the award has established to be a valuable management tool for encouraging continuous improvements in hospital management. The annual performance assessment exercise has also improved the transparency of the assessment process and provided an effective mechanism for monitoring the performance of CE/HA, CCEs and HCEs.
Ends/Wednesday, January 14, 2004
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