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PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND

ASSESSING PERFORMANCE-RELATED PAY POLICIES Expert Meeting OECD, Paris 7.10.2003. PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND. Public sector personnel in Finland. The state administration 123 000 persons, 4,9 milliard € Municipalities and

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PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND

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  1. ASSESSING PERFORMANCE-RELATED PAY POLICIES Expert Meeting OECD, Paris 7.10.2003 PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND

  2. Public sector personnel in Finland • The state administration 123 000 persons, 4,9 milliard € • Municipalities and federations of municipalities 426 000 persons (schools, hospitals, etc.)

  3. The State administration personnel by sub-sector 2001 35000 29357 30000 25000 19613 20000 Parttime 15000 11310 10453 Fulltime 10055 9301 9214 10000 6206 4509 3449 5000 2859 1629 1538 0 Research Other operations Business services University education Administration of justice Police, rescue services Operations at Ministry level Defence Forces, Border Guard Other educational and training services Social affairs and employment services Regional and environmental services Transport and communication and related services State funds management & insurance and financial services

  4. COLLECTIVE AGREEMENTS IN THE STATE SECTOR Employers’ national central organisations, including State Employer’s Office (SEO) INCOMES AND LABOUR-MARKET POLICY AGREEMENTS Employee national central organisations Ministry of Finance/SEO COLLECTIVE AGREEMENTS FOR STATE PERSONNEL Central State sector employee organisations • The Government approves • - The Finance Committee of • Parliament approves • additional costs • expenditure framework • general employment terms • labour peace obligation • Employer Agencies • Ministry of Finance • approves Agency-specific collective agreements Agency-level employee unions • pay systems • flexible working hours • - other agency-specific issues

  5. Overview of the new remuneration system Personal/performance pay Job-related part of pay Demand levels

  6. The structure and the message of the new system

  7. Example of a NPS (without RBR)

  8. Progress of the NPSEstimated by the Agencies in March 2003 Situation in March 2003 Estimate: in the end of 2003 Estimate: in the end of 2004 Target: in the beginning of 2005

  9. Spheres of the RBR’s and paid RBR’s

  10. Amounts of the RBR’s

  11. Experiences of the NPS • All phases in the building process of the NPS are important and have positive repercussions (e.g. surveying the real content of each job) • Management by objectives becomes concrete reality with the NPS • Leadership possibilities and skills improve • Personnel find the NPS more justified because pay differentiation is motivated by the accepted criterias

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