Irish Water says its system for paying bonuses to workers will not allow staff to increase their overall salary.
The company claims that maximum pay, including bonus payments, would not exceed the agreed salary in an employee's contract.
It said the system for performance-related pay means employees actually lose money if they don't perform at the highest level.
A spokeswoman for the company said the most senior managers in the company could lose up to 19% of their salary if they do not meet the highest standards.
Middle-ranking workers could lose up to 9% of their salary, while the lowest-ranking workers could lose up to 4%.
The spokeswoman added that even when employees earn the highest possible wage, their salary still matches the average wage of others in similar companies.
It had been claimed that even staff at the new utility who are deemed not to meet expectations are in line to receive "performance related pay" of around €9,000 a year.
That led to a flurry of criticism from Government ministers.