After a cabinet meeting, Chief Minister Mukul Sangma announced that former chief secretary P J Bazely has been appointed chairman of the Commission with retired bureaucrats Uttam K Sangma and Lambha Roy as members.
The Commission will be notified immediately, he said, adding that the whole exercise is being done to ensure that government employees get the best returns.
The state government had in September 2009 announced an overall pay hike of 32 per cent for all its employees, with retrospective effect from January 1, 2007 in line with the recommendation of the 4th Pay Commission.
State Government Employees' Federation hailed the decision and demanded that the pay hike should be at par with the 7th Central Pay Commission's recommendations.
In another decision, the cabinet also approved a proposal to augment the corpus contingency fund from Rs 105 crore to Rs 205 crore to meet the increasing expenses of the state government.