Tánaiste Joan Burton has said more productivity from civil servants in return for a restoration of pay "makes sense".
Speaking on RTÉ's This Week, Ms Burton said that if Ireland can do business more efficiently, more money could be invested in vital services.
Earlier this week, Public Service Executive Union president Brendan Lawless said they would refuse any such plan.
Public sector workers are due to meet Government representatives next month.
The Tánaiste said she did not want to pre-judge those talks, but "from the view of public servants, more productivity makes sense because if we can do our business as a country more efficiently, it means that we'll have more money invest not simply in vital services.
When asked about mortgage distress solutions, the Tánaiste said that the idea of diluting the banks' power or veto and using the courts or an independent panel to adjudicate on those settlements was a "serious runner".
She said: "The important thing is that you would have the courts over-sighting bank decisions.
"Some of the bank decisions at the moment defy commercial logic because people are offering to pay what they can in terms of very greatly reduced circumstances and the banks are turning down around 25% of the deal and that's not acceptable."
Ms Burton also said she did not rule out the possibility of the Government increasing the levy on banks if they fail to reduce their standard variable mortgaged rate.
She said: "We have to see if the banks behave with due consciousness and awareness that taxpayers right around the country bailed them out [and] that it is Government's policy to actually keep people in their homes."
