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This study aims to examine the relationship between pay and performance with special focus on the Malaysia Remuneration System (MRS). In the Malaysian Civil Service, the practices of performance pay was first introduced in 1991 under the implementation of the New Remuneration System (NRS). The system gave paramount emphasis in the aspect of performance, thus marked a paradigm shift in the Malaysian compensation practices. The MRS which was introduced in 2002 continued to weigh in the performance aspect as the main indicator in evaluating employees' achievement. Objective assessment of employees' performance has been developed through the implementation of Competency Level Assessment (CLA). It tries to build linkage between pay and performance, hence pay is believed to be a source of motivation. An attempt, therefore has been made to assess the degree of effectiveness of the MRS in strengthening the pay-performance link in the Malaysian government.