IRISH Water staff may earn annual pay rises in addition to their 'performance-related' bonus payments.
The employees will benefit from the annual increase, if similar firms give their staff a pay rise.
The so-called 'Pay Progression' mechanism was agreed between management at Irish Water's parent company Ervia and unions last year.
This benchmarked salary increase is completely separate to the payment of performance bonuses, which was revealed last month.
And even staff who only meet some of their work targets are eligible for the annual awards.
A spokesperson for Ervia insisted that there was no automatic entitlement to pay increases.
And she noted that due to a pay freeze, the wage hikes will not come into effect until 2016, and only if there were similar hikes in other companies.
Any increases would have to be sanctioned by the company's board, which is expected to review its pay structure at its first meetings.
Under the performance pay system, workers can get between 2.75pc and 15pc of pay, but a further 4pc payment that was available for those who exceeded expectations has been withdrawn.
Ultimately, it could see workers receiving yearly hikes in their basic pay once there were increases at rival or similar companies.
Conversely, it's believed that pay wouldn't be reduced if there were pay cuts at other firms.
Staff who did not meet all their targets would also benefit, although they would get smaller increases than better performing colleagues.
However, some staff who are paid more than 20pc above market rates or those who fail to meet any performance targets would be excluded from the benchmarking exercise.
The payment system is available to all staff below the grade of Chief Executive Officer.
Private consultancy firm Towers Watson, which conducts pay surveys at comparable firms, is believed to be responsible for the calculation of any increase.
The 'Pay Progression' salary model is based on wage structures at parent company Ervia, formerly Bord Gais.
Ervia has said its pay model has led to savings of €34m over a number of years, as the system substituted annual guaranteed pay increments. These were paid to staff automatically.
A spokeswoman for Irish Water said there will be no guaranteed or automatic pay increases after 2016, when its pay freeze ends and said the increases were not guaranteed.
"The pay model was put in place to reflect market best practice and with extensive external benchmarking," she said.
"It is not unusual to outline to staff how their salaries might progress over time, particularly where staff have agreed to a pay freeze."
Salaries at Ervia and Irish Water range between 80pc and 120pc of market averages.
Meanwhile, former minister Joe Costello said that the Government has to go "back to the drawing board" with regard to Irish Water and questioned whether the semi-state was fit for purpose.
In among the strongest attacks on the organisation from a government TD yet, Mr Costello said on RTE Radio One's This Week that "the entity that has been put in place and the work that has been done to date are totally inadequate".
Mr Costello, who was a minister at the Department of Foreign Affairs and Trade up until three months ago, said that there needed to be a "new plan" drawn up for the introduction of the controversial water charges.
"I think the Government should go back to the drawing board in relation to Irish Water.
"We should examine the existing body that is there, Irish Water itself, to see if it's fit for purpose," he said. "I'm not exactly sure it is. It hasn't covered itself in glory so far."
Mr Costello also said the debate in the Dail that took place over establishing the utility, was "totally inadequate".
And he even went so far as to question the fairness of introducing charges before every household had a meter - a policy that it already underway.
"We need to do it properly, not half the households have been metered at this point in time," he said.
"How can you possibly have a fair charge in place until such time as to know exactly that you have all of the ground work done and the structures are put in place in that respect."