Israel's Defense Ministry Replaces Bonus System with Permanent Salary Increases

Israel's Ministry of Finance, Ministry of Defense, and the Ministry of Defense Employees' Union have signed a groundbreaking collective agreement to replace the decades-old "bonus" (incentive pay) system with permanent salary additions that count towards pension and social benefits. The new agreement also introduces incentives for perfect attendance and excellence awards.

This reform aims to align the salary structure with the current demands of work within the Ministry of Defense. Key changes include a new percentage-based salary increase, replacing fixed bonuses, which will grant administrative, academic, engineering, and technical staff a 14.3% raise. Social workers will receive an increase between 10.73% and 15%. Additionally, 25% of employees in eligible job grades will receive annual excellence awards, and senior staff in grades 42-44 and above will get a fixed monthly raise. Monthly incentives for non-absenteeism due to illness and awards for students based on goals and output are also part of the agreement.

Union and ministry officials hailed the agreement as a modern and advanced step that encourages excellence and achievement, enhancing job stability and certainty. They emphasized its role in maintaining the quality of public service and adapting to both peacetime and wartime needs. The agreement is seen as a potential model for other public sector entities in Israel.