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Terms of Reference of the Commission mandated it to devise ways for transforming the Central Government organisations into professional and citizen friendly entities dedicated to the service of the people. The Terms of Reference also made it incumbent on the Commission to work out a pay package for Central Government employees that was linked to promoting efficiency, productivity and economy. The Commission also had to look into the financial parameters and conditions that would govern the payment of bonus. Keeping in view the aforesaid Terms of Reference, the Commission had to devise compensation package which improves the efficiency and delivery mechanism in the Government and which rewards performance. This, in the view of the Commission, could be achieved by incorporating an incentive, over and above the normal salary, in the revised structure being recommended. This was all the more important because the thrust of the Report is to move to a system that increasingly recognizes performance and gives motivation in the form of monetary incentives, merit increments, etc. Giving monetary incentive over and above the normal salary will also ensure that the emoluments available in the Government become somewhat comparable to those available for similarly placed personnel in other sectors.