Golden Handshake

According to Landau (1969), golden handshake is an economic jumpstart or an incentive for redundant staff to voluntarily leave the civil service and start productive lives that better contribute to the growth of the economy. This is because the government is trying to downsize its civil services due to increasing shortfalls in government recurrent and development budgets (Macgregor et al, 1998).

In the Malaysian context, a golden handshake is a payment in lieu of accumulated leave when a civil servant retires. A civil servant can accumulate a maximum of 15 days of their annual leave in the year and may collect a maximum of 150 days before retiring.

In another example, the former prime minister Datuk Seri Najib Razak obtained a RM1 million golden handshake payment from the government's coffers in his final month of civil service in May 2018. His gross income was RM58,605.15 a month including salary as prime minister, salary as a member of parliament and other allowances. According to Section 21(1) of the Members of Parliament (Remuneration) Act 1980, a former prime minister is entitled to allowances and privileges that may be determined by the cabinet from time to time.

References

Macgregor, John & Peterson, Stephen & Schuftan, Claudio. (1998). Downsizing the civil service in developing countries: The golden handshake option revisited. Public Administration and Development - PUBLIC ADMIN DEVELOP. 18. 61-76. 10.1002/(SICI)1099-162X(199802)18:13.3.CO;2-E.

https://www.edgeprop.my/content/1519145/najib-received-rm1m-golden-handshake-final-month-pm

https://www.mstar.com.my/lokal/semasa/2008/12/12/cuti-gantian-golden-handshake-sektor-awam-150-hari/#Ik9smUJju1OD4JK1.99