Any pay rises awarded to public service workers under the latest benchmarking review will be used to secure productivity improvements across the public service, the Minister for Finance has said.
Mr Cowen made the remarks as he announced the appointment of the second public service benchmarking body this afternoon.
Senior counsel Dan O'Keeffe will chair the pay review body and its members will include former Siptu general secretery Billy Attley and Arts Council chair Olive Braiden.
Also appointed were John Malone, a former secretary general of the Department of Agriculture and Thomas McKevitt, former deputy general secretary of the Public Service Executive Union.
The other two members appointed by the Minister are Willie Slattery, managing director of State Street International (Ireland) Ltd and Prof Brendan Walsh, Emeritus Professor of Economics at UCD.
Mr Cowen said agreement had been reached with the public service unions on the terms of reference and membership of the benchmarking body.
The first benchmarking body was established under the Programme for Prosperity and Fairness to undertake a fundamental review of the pay of public service workers vis- à-vis the private sector.
Mr Cowen said the whole point of the exercise was "to move away, permanently, from the traditional approach based on relativities".
"It is important that public service pay is in line with the market - so that we can continue to attract high calibre people who can provide excellent health, education services etc."
He said the benchmarking process was never intended as a once-off exercise. The second public service pay agreement under Sustaining Progress provided for a further benchmarking review to begin in the second half of 2005 with a report to be made towards the end of 2007.
"It also provided that the parties will review the operation of the first benchmarking exercise and consider ways in which, having regard to the experience gained, the process can be improved and streamlined. The parties consider that the body should seek to ensure the optimum level of transparency consistent with the efficient and effective operation of the benchmarking process," Mr Cowen said.
Mr Cowen said it was too early to tell whether the review will find that pay increases are warranted for some or all of the public service groups whose pay is being examined.
If there is little or no movement in private service salaries, beyond the standard terms of the national pay agreements on a like-for-like basis with the public service jobs, then the awards for the public service workers will reflect this, he said.