SEMINAR ON CAPACITY DEVELOPMENT DURING POLITICAL TRANSITIONS SENEC, SLOVAKIA 21-23 NOVEMBER, 2005

1. SEMINAR ON CAPACITY DEVELOPMENT DURING POLITICAL TRANSITIONSSENEC, SLOVAKIA 21-23 NOVEMBER, 2005 The Tanzania Selective Accelerated Salary Enhancement (SASE) Scheme Ted Valentine, Consultant

2. SASE Scheme: Introduction • Tanzania adopted the SASE scheme in February 2000 as an integral component of its medium term pay reform strategy. • The SASE scheme was designed and developed for the purpose of facilitating the strengthening of public service capacity in the short and medium term by: • Accelerated pace of pay reform was required to: • attract and retain professional, qualified technical and managerial personnel required for improved service delivery and production of government strategic outputs; • jump-start the public service reform effort; and • rationalising salary supplement payments (SSPs) paid by donors and transforming ad hoc SSP arrangements which distorted the incentives regime into a more systematic effort that would be complementary to the Medium Term Pay Reform Strategy (MTPRS). UNDP CDF Seminar on Capacity Development During Political Transitions

3. Why SASE? • Complemented medium term pay policy (MTPP) objectives and to support an accelerated pace of salary enhancement for qualified skilled personnel personnel. • Pace of pay enhancement too slow weakened both: • capacity building efforts; and • competitiveness of the public service in attracting and retaining qualified skilled personnel. • Pay enhancement required to improve performance and service in the near term. • Redress the limitations of the donor SSPs. UNDP CDF Seminar on Capacity Development During Political Transitions

4. The Scheme Design The SASE scheme was to be selective in two ways: • First, accelerated salary enhancement would be targeted at posts which have the greatest impact on service delivery, the reform effort and the strategic outputs of government. • And second, the scheme would be phased-in, starting with public service MDAs that have: • Leading roles in change management and potential impact on the socio-economic well-being of the average Tanzanian citizen; • Well advanced formulated strategic plans and poised for implementation of their respective reform programmes; and • Already been selected for inclusion in the first phase of the implementation of the Performance Improvement Model (PIM); inclusion in the first phase of the SASE scheme will prove complementary in their performance improvement effort. UNDP CDF Seminar on Capacity Development During Political Transitions

5. Implementing SASE-scheme intervention would not be without its challenges, as much learning-by-doing would be required. • Structured and implemented properly, it could offer significant benefits to addressing problems of low motivation, lack of competitiveness of the salary structure, and capacity building constraints in the public service. • The clear challenge was to devise a system of selective salary enhancement that would be perceived as fair, objective, and transparent by major stakeholders. • While the risks associated with the SASE scheme were perceived as great, the cost and risks associated with maintaining the status quo (low pay, lack of incentives which undermines capacity building and efforts to improve health service delivery) were seen as too high and inconsistent with the requirements for improved public sector performance, accelerated growth and poverty reduction. UNDP CDF Seminar on Capacity Development During Political Transitions

6. SASE Scheme Implementation in Principle The SASE scheme was envisaged to be implemented as follows: • The GoT would adopt and adhere to a medium-term target pay structure, which covers the period FY2000/01 through FY2004/05. • Donors would agree to provide the GoT with budgetary support to supplement salaries of SASE-scheme funded positions, i.e., donor support would allow the government to pay many of its core personnel FY2004/05 salaries in the current fiscal year. • The basic salary for a given fiscal year would be set out in the MTPRS. The amount of the supplement in a particular fiscal year would be the difference between the target salary and the basic salary for the given fiscal year. • Donors would agree to phase-out LCC arrangements and PIUs. The SASE scheme target salary scales would serve as the benchmark for the payment of any salary supplements, as this would allow the government to internalise such supplementation as and when donor support is phased out. • Each fiscal year, as the government makes salary adjustments in line with MTPRS, the gap between actual government pay levels and the target pay levels would be reduced, thus, reducing the donors’ financial commitment, as the government’s ability to pay competitive compensation rises. UNDP CDF Seminar on Capacity Development During Political Transitions

7. SASE Scheme Implementation in Practice SASE implementation practice was assessed at the macro (public-service wide) level and the micro (MDA) level. • The major macro level issues related to SASE implementation, includes: • The lack of Government’s adherence to the pay reform targets and the MTPRS. • The slow pace of rolling-out the scheme (only four MDAs were beneficiaries) and (later) the decision of Cabinet to restrict the scheme to current beneficiaries. • The SASE-scheme funding arrangement and the possible temptation to projectize the scheme. • The revision of the time horizon for implementing the scheme, from 2000/01 – 2004/05 to 2004/05 – 2009/10. UNDP CDF Seminar on Capacity Development During Political Transitions

8. The major micro level issues related to SASE implementation includes: • The SASE beneficiary selection process in practice. • Assess the performance of institutional mechanism established to monitor implementation of the scheme. • Assess the consistency of implementation across all beneficiary MDAs. • Examine financial matters related to implementation in practice, including: • the payment of salary supplementations in practice; • tax matters, as SASE salary supplements are paid tax-exempt; and • the financial requirement related to the SASE scheme as currently practiced. UNDP CDF Seminar on Capacity Development During Political Transitions

9. Implementation practices • The approach adapted by MDAs to implementing the SASE scheme in their respective MDAs had implications on the number of posts selected, the distribution of the posts across the salary grades, and the financing requirement for the SASE scheme. (This was in part related to donor arrangements.) • There is clear lack of uniformity in the manner that the scheme has been implemented in the central MDAs vis-à-vis the Health Sector. • In the central ministries all professional and managerial posts are beneficiaries of SASE scheme salary supplements, the new personnel recruited in the professional and managerial cadres automatically qualified for SASE benefits. In contrast to this, in the Health Sector, SASE scheme salary supplements are linked to specific posts. As more and more professionals are engaged in the sector there is currently no scope for extending SASE benefits them. UNDP CDF Seminar on Capacity Development During Political Transitions

10. A clear weakness in the implementation process has been the focus on personnel in the beneficiary MDAs headquarters, as significant proportion of the eligible staff in headquarters received salary supplements, few outside headquarters benefit. Inadequate attention has been paid to the potential use of salary supplementation as a tool to attract and retain personnel in rural and remote areas. • Following a more inclusive approach to SASE scheme implementation will result in a much higher financial requirement than would a more selective approach. • It is doubtful that an inclusive approach would be affordable given the financial requirements consistent with roughly doubling the basic salaries of all professional, managerial and qualified technical personnel in the short-term. Besides, the reporting and monitoring challenges in the Health Sector must be addressed before a more inclusive approach with be workable in that sector. UNDP CDF Seminar on Capacity Development During Political Transitions

11. Assessment of the impact on work performance. • Evidence indicated that access to SASE-scheme salary supplements has had a significant positive impact on performance of beneficiaries at both the individual and MDA levels. • beneficiaries were willingness to perform job tasks, especially those specified in the individual performance agreements (IPAs), • the quality of the tasks performed have improved significantly; • there is a strong sense of commitment and dedication to work by the beneficiaries. • In addition to this, capacity building efforts have been enhanced by the improved capacity of beneficiary MDAs to: • Attract and retain qualified professional, technical and managerial staff; and • The willingness of staff to undertake further training (both formal and informal) to aspire for progression and to move up the career ladder, as the potential rewards to such training have increased significantly through access to SASE scheme salary supplements. UNDP CDF Seminar on Capacity Development During Political Transitions

12. The partial implementation of the SASE scheme combined with the slow pace of implementation of the MTPRS gave rise to unfulfilled expectations, engendering greater animosity towards the scheme than otherwise would be the case. Macro and micro level issues related to the implementation of the scheme may have given rise to unfulfilled expectations and growing resistance to the SASE scheme: • The fairness of the scheme; and • Its potential contributions of the scheme to performance improvements throughout the broader public service. • With the decision to freeze the roll-out and restrict benefits to the original four MDAs, the expectations of non-beneficiaries to become future beneficiaries were dashed. The perception of the scheme as unfair and discriminatory grew, in part as a result of unfulfilled expectations. • All and all, many non-beneficiaries indicate that the animosity towards the scheme would be greatly reduced if the government would: • Speed up the pace of implementing the pay reform programme, adhering to agreed pay trajectory; and • Proceed with the roll-out of a revised SASE scheme or some equivalent scheme to non-beneficiary MDAs. UNDP CDF Seminar on Capacity Development During Political Transitions

13. Conclusions and Recommendations • Evident indicated that implementation of the SASE scheme has facilitated improved service delivery, change management and the production of government strategic outputs by enhancing capacity in the beneficiary MDAs. By enhanced the capacity of beneficiary MDAs to attract and retain qualified skilled personnel, the access to salary supplements has indeed contributed to these organisations efforts in meeting their strategic plan benchmarks.. • Selection criteria and reporting and monitoring requirements should be harmonised across beneficiary MDAs. Implementation challenges should be addressed before consideration is given to deepening the scheme in the Health Sector. As the beneficiary selection approach is harmonised, consideration must be given to the affordability of the approach in finding a compromise between the all inclusive and strict selectivity approach. • With the SASE scheme only covers four organisations, the scope for pooling funding to enhance salaries remains limited. Under these circumstances, the pressures to create and/or expand PIUs and enclave project managements are likely to persist and grow. UNDP CDF Seminar on Capacity Development During Political Transitions

14. Adherence to medium term pay targets combined with the implementation of a well-functioning incentives scheme would assist the accelerating the pace of public service reform and improved service delivery by shifting stakeholders perceptions of the outcome of the pay reform effort from unfulfilled expectations towards mutual expectations. Communication with key stakeholders on how the scheme will work in practice (MDAs, Donors) UNDP CDF Seminar on Capacity Development During Political Transitions

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