The opportunities to improve remuneration system of government institutions are being studied in the work, and recommendations for public administration institutions for improving the remuneration system are being developed, having regard to the theory of personnel management and employee satisfaction with the remuneration system. Remuneration in business is affected by market regulatory mechanism, but the special situation in remuneration sphere is in the government institutions, where employees’ remuneration are artificially regulated by different laws and principles of budget allocation. Established remuneration system quality significantly impacts employees’ satisfaction and investment return from employees. Existing remuneration system of government institutions is focused on paying for the fact that person has chosen the state administration as his work place, professional competence and work results leaving in the second place. Therefore it is not possible to establish an effective state administration without changing the current remuneration system. As a result of research, proposals for improvement of remuneration system of government institutions are being developed, which allows creating qualified and motivated staff functioning of target direction and justifies the investments in the human resources.