New figures show hundreds of public servants are still getting performance payments, even as redundancies in the sector have hit a nine-year high.
A State Services Commission survey confirms the number of public servants laid off is up more than 80% on the previous year.
But figures released to Radio New Zealand under the Official Information Act also show performance payments of up to $25,000 being paid out.
Overall, 11 Government agencies made 1430 performance payments in the year to the end of June.
The Corrections Department made 478 performance payments, the highest $22,350.
The Ministry of Health made 379 payments, the highest $25,000.
The Ministry of Social Development made 11 payments averaging $8,140.
The ministry says some payments relate to historical contractual arrangements and since 1 July the majority of staff are no longer entitled to performance pay.
Department of Labour made three payments, the Ministry for the Environment one and Agriculture and Forestry none.
State Services Commissioner Iain Rennie says performance payments are appropriate and those receiving them are delivering important services to New Zealand.
He told Morning Report the payments are one tool to motivate public servants but he will be assessing chief executive's performances on a case-by-case basis.
Mr Rennie says other rewards, such as professional development oppportunities, can in some cases be better motivators and the state sector is moving away from using performance pay.
Public Service Association national secretary Brenda Pilott says performance payments are not a good incentive in the public sector and they need to be phased out.
The State Services Commission's Human Resource Capability Survey shows in the year to the end of June, 301 employees were made redundant, an increase of 82% on the previous year.
The commission says that's the highest number of redundancies since 2000, when 781 employees in the public service lost their jobs.
However, the average base salary in the Public Service increased by 5.3% to $62,713 (from $59,532 in 2008).
The survey also shows public service workers took an average of 7.5 days of sick and domestic leave, the highest since 2003.