Resisting pressure from civil service unions, the government is sticking to its pay rise offer of less than 4 per cent for its employees this year.
The decision was made yesterday by the Executive Council amid growing tension between the government and its staff.
Acting Chief Executive Carrie Lam Cheng Yuet-ngor urged unions boycotting the pay system to "change their minds".
Three police unions and those for the other disciplined services have pulled out of the pay-adjustment mechanism.
Two other unions that represent senior government employees say they will ask the chief executive to launch an independent arbitration panel.
The final offer, applying to all 170,000 civil servants as well as employees in government-funded organisations, is 3.92 per cent for those in the lower and middle salary bands and 2.55 per cent for the upper band.
If approved by the Legislative Council's Finance Committee next month it will be backdated to April.
The rises, less than the inflation rate of 4.2 per cent, are identical to the recommendations by an annual government-commissioned survey that studied private-sector pay trends.
But the unions insist that the survey results are only one of six factors to be considered.
They say morale, changes in the cost of living and staff demands should also be taken into account.
The chairman of the Senior Government Officers' Association, Philip Kwok Chi-tak, said staff were "very disappointed" with Exco's decision.
"The government could not convince us that it has considered every one of the six factors," he said after a meeting with Civil Service Secretary Paul Tang Kwok-wai yesterday.
Kwok said the association would liaise with other unions soon and urge Chief Executive Leung Chun-ying to set up an independent arbitration panel.
Lam, acting for Leung while he is in the United States, said there was "no truth" to the claim that the government considered only the pay trend survey result.
"I hope the civil service unions [that pulled out of the mechanism] due to disappointment and discontent can change their minds," she said.