The return of performance pay for public service bosses could be a good thing - if done right.

The Minister-in-charge, Nicola Willis, confirms it will be back by the next financial year.

In 2018, then-State Services Minister Chris Hipkins cut performance pay, attempting to slow CEO salary growth.

Victoria University Researcher Geoff Plimmer says many studies show it can be disastrous - so it needs to be carefully implemented.

"I think you need to have really good measures, you need to audit them, make sure they're reliable - you need to update them occasionally as well, that seems to help."

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