Only the top 25% of performers will receive a bonus so that in future only those making an exceptional contribution will be rewarded. The move follows a decision made by the first Cabinet of the new Government to cut 5% from the Prime Minister and Ministers' pay packets.
The budget for performance related pay for senior civil servants for 2010/11 will be reduced by two thirds, delivering estimated savings of £15 million. Only the top 25% of performers will receive a bonus so that in future only those making an exceptional contribution will be rewarded.
Cameron said: "The first task for us as a new government is to get on with the difficult job of tackling our country's record budget deficit straight away. I believe that to do this we need to lead from the front. That's why last week the Cabinet and I agreed to take a 5% pay cut.
"Now we need senior civil servants to join us in showing leadership as we reduce the deficit, while protecting the vital public services on which we all rely. We all need to take responsibility if we are to overcome the problems this country faces."
The prime minister will write to all senior civil servants thanking them for their help in securing the smooth transition and setting out the need to accept the tighter restriction on the number of bonuses paid out.
Francis Maude, Minister for the Cabinet Office, added: "The Government highly values the professionalism and contribution that civil servants make to deliver excellent public services. But given the economic challenges this country faces it is right that the most highly paid civil servants play their part in reducing the public sector pay bill.
"Our next step is to ask the Cabinet Secretary, as head of the Home Civil Service, to review the overall performance and appraisal process. An effective system will reward the best performers and provide the right incentives for all to get the best for the taxpayer. We want to see a more consistent and streamlined system where bonuses are only awarded to those senior civil servants who have performed exceptionally well in achieving their department's objectives. There is no place in the modern civil service for a presumption of good performance. Rewards must be earned through excellence assessed through a hard-headed and objective appraisal process."
