Government Employee Benefits — Step Increment (Salary Increase thru Length of Service and Meritorious Performance)

In our post about Government Employee Benefits – Salary and Salary Increase, we said that one of the four (4) instances when a government employee receives a pay raise (salary increase) is through a Step Increment.

What is a Step Increment?

Under the Compensation Plan for government employees, crafted by the Department of Budget and Management (DBM), a Step Increment is the increase in salary from step to step within the salary grade of a position (e.g., Salary Grade 1 — from Step 1 to Step 8, Salary Grade 2 — from Step 1 to 8, and so on)

Click here to view a sample copy of a Salary Schedule (Salary Grade and Step Increment Table) of government employees showing their Salary Grade and Salary Step.

Guidelines on the Grant of Step Increment

According to Republic Act No. 6758, effective January 1, 1990 step increments shall be granted based on merit and/or length of service in accordance with rules and regulations that will be promulgated jointly by the DBM and the Civil Service Commission.

Under the guidelines jointly issued by CSC and DBM in 2012, a government employee may receive a pay raise (salary increase) through Step Increment in two (2) ways, either or both by:

1. Step Increment due to Meritorious Performance; and/or

2. Step Increment due to Length of Service.

Under the said guidelines, a government employee may progress from Step 1 to Step 8 of the salary grade allocation of his/her position in recognition of meritorious performance based on a Performance Management System approved by the CSC and/or through length of service.

Grant of Step Increment Due to Meritorious Performance

The grant of Step Increment due to Meritorius Performance is limited only to five percent (5%) of all incumbent officials of an agency in a given year.

For instance, if there are 100 employees in an agency, then only five (5) employees may be granted step increment due to meritorious performance. The performance rating to be used shall be based on the Agency Performance Managemet Sytem approved by the CSC.

How to be entitled to Step Increment due to Meritorious Performance?

By the term itself, a government employee may be entitled to Step Increment if he/she has meritorius performance based on the Performance Managemet Sytem of his/her agency as approved by the CSC.

A government employee may be entitled to two (2) step increments if he attained two (2) ratings of “Outstanding” during the two (2) rating period within a calendar year.

Example: If the employee concerned currently has Salary Grade 11, Step 1; this shall be adjusted to Salary Grade 11, Step 3.

On the other hand, a government employee may be entitled to one (1) step increment if he attained one (1) rating of “Outstanding” and one (1) rating of “Very Satisfactory” OR two (2) ratings of “Very Satisfactory” during the two (2) rating period within a calendar year.

Example: Using the previous example, the salary of the employee concerned shall be adjusted from Salary Grade 11, Step 1 to Salary Grade 11, Step 2.

Grant of Step Increment due to Length of Service

Another way on which a government employee may received salary increase is by Step Increment is through length of service.

The pay raise (salary increase) in the form of Step Increment due to length of service may be given to a government employee every three (3) years, provided the following conditions are complied with:

• 3 years of continuous satisfactory service in present position in the same agency

In case the government employee transfers to another agency, the 3-year rule includes the length of service in his/her previous agency and to another agency on the same or comparable position and salary grade.

Unlike in Step Increment due to meritorious performance where a government employee may receive up to two (2) step increments, a government employee is entitled to only one (1) step increment for every three years of service on the same position.

Adjustment of Salaries in view of Step Increment

A government employee may receive an increase in his salary through Step Increments, but only up to Step 8 in the Salary Schedule under implementation.

Hence, if the actual salary of the government employee is already at Step 8, he/she is no longer entitled to step increment, unless he/she is promoted to a higher position where his/her Step will go back to Step 1 of his/her new position.

Is it allowed to simultaneously grant both Step Increments?

Yes. A government employee may be granted both step increment due to meritorious performance and length of service provided the employee is qualified.

Documents showing the grant of Step Increment

A government employee qualified to receive step increment will receive a Notice of Step Increment (NOSI) from the Human Resource Office of the agency concerned. The NOSI shall be the basis in adjusting his payroll, service records, and other related files of the employee concerned.

Salary Differential due to Step Increment

Go to this post to learn about how to compute salary differential due to Step Increment.

Do you have any question?

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