Pathology of Various Policies for Increasing Salaries and Benefits of Government Employees in Annual Budget Laws (Case Study: Budget Laws of 2009 to 2025)

Document Type : Research Paper

Authors

1 Ph.D. Candidate, Department of Policy Making and Public Administration, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran.

2 Assistant Prof., Department of Policy Making and Public Administration, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran.

3 Prof., Department of Policy Making and Public Administration, Faculty of Public Administration and Organizational Sciences, College of Management, University of Tehran, Tehran, Iran.

4 Assistant Prof., Department of Progress Engineering, Faculty of Management, Economics and Progress Engineering, University of Science and Technology, Tehran, Iran.

10.22059/jipa.2025.407958.3836

Abstract

Objective
In public discourse and among many government employees, perceptions of annual increases in salaries and benefits are often narrowly concentrated on changes in the official salary coefficient. However, a review of the period from 2019 to 2023 shows that while the cumulative growth in the employee salary coefficient amounted to approximately 124 percent, the cumulative growth in total employee compensation costs as reflected in annual budget laws reached about 450 percent. This notable divergence indicates that, beyond adjustments to the salary coefficient, a variety of other policy instruments embedded in annual budget laws play a substantial role in shaping the net growth of government employees’ income. Moreover, unlike many general public policies, policies related to government employees’ salaries and benefits are addressed annually by both the government and parliament, making the policy cycle continuous rather than episodic. Given the repeated nature of this process and its broad distributive consequences, enhancing efficiency and fairness within it is of particular importance. Accordingly, the objective of this study is to identify, categorize, and diagnose the different types of policies used to increase government employees’ salaries and benefits in annual budget laws, and to analyze the associated shortcomings and challenges inherent in these mechanisms.
Methods
This study is grounded in the interpretivist research paradigm and follows an inductive approach. In the first stage, a comprehensive documentary and library-based review was conducted, focusing on the provisions related to salaries and wages of government employees in national budget laws enacted between 2009 and 2025. Through this systematic examination, various types of salary increase policies were identified and classified. In the second stage, the study employed a qualitative field approach to analyze the pathologies and weaknesses of the identified mechanisms. Data were collected through 30 semi-structured interviews with experts and scholars specializing in public finance, budgeting, and compensation systems. Participants were selected using multiple purposive sampling techniques to ensure relevant expertise. The interview data were analyzed using thematic analysis, allowing recurring patterns and themes to emerge. To enhance the credibility and validity of the findings, the results of the analysis were subsequently reviewed and confirmed by seven of the participating experts.
Results
The documentary analysis revealed that annual budget laws between 2009 and 2025 employed a wide range of policy instruments to increase government employees’ salaries. These instruments were categorized into 16 main types, including increases in the salary coefficient, fixed-amount additions to salaries, targeted increases in specific salary items and components, adjustments to the range and scale of salary taxation, determination of minimum employment orders, and the setting of salary ceilings, among others. The field study further identified and classified the harms and weaknesses associated with these policies into five broad categories. First, legal, legislative, and regulatory harms were observed, such as deficiencies in oversight mechanisms and weaknesses in controlling the payment system. Second, political harms included the dominance of bargaining, lobbying by interest groups, and the influence of populist considerations in decision-making. Third, technical harms were identified, including fragmented, localized, or sector-specific solutions and the growing complexity of salary increase mechanisms. Fourth, economic and welfare-related harms were associated with limited government financial resources and the lack of a clear separation between compensation functions and support or welfare policies. Finally, basic, social, and behavioral harms were noted, such as ambiguity in the underlying theoretical foundations of the payment system.
Conclusion
A comprehensive understanding of the mechanisms used to increase public sector employee salaries within annual budget laws, as well as the harms embedded in this recurring and influential policy process, is essential, particularly under conditions of significant fiscal constraint. Such understanding can contribute to improving both efficiency and fairness in the government payment system and, in turn, strengthening social capital. Based strictly on its findings, this study presents suggestions and solutions framed in short-term, medium-term, and long-term perspectives. In addition, the research outlines its limitations and offers directions for future studies in this field, with the aim of further refining knowledge and practice related to public sector compensation policy.

Keywords

Main Subjects

References

 
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Journal of Public Administration
Volume 18, Issue 2
2026
Pages 484-520

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