Civil service reform

1. Civil service reform Some key issues for consideration when assisting civil service personnel management reforms in developing countries Presentation at the 1st UNDP Global Sub-Practice meeting on Public Administration reform Bangkok SURF

2. Objective of the Presentation • Political, economic, social and cultural dimensions • Unique experience of Timor-Leste • 5 key issues in civil service personnel management: • Scope of civil service • Classification system: man-in-rank or job-in-rank • Pay and compensation policies • Ethics and Integrity • Institutional aspects: centralised – decentralised Bangkok SURF

3. Scope of the Civil service • Public service – diversity of employment regimes • Traditional approach: permanent positions, tenure of office and job security • Today distinction between civil service law and labor law is softening (NZ, Australia, Switzerland) • New Public Management (e.g. Samoa) • Timor Leste: initially fully integrated system • Key issue: local government Bangkok SURF

4. Personnel ranking system Man-in-rank system Employee is rated (Personnel characteristics) Grade is connected to the person Equal pay for comparable qualifications and seniority Close career system France, Japan, Belgium, Lusophone countries Position system Job-in-rank system Job is rated (Job characteristics) Grade is connected to the job Equal pay for comparable jobs Open system UK, NZ, Australia, Canada Foundation: position system or personnel ranking system? Bangkok SURF

5. Personnel ranking system – position system - implications • Position system is more complex (job analysis, job evaluation, job classification) • But two systems are not mutually exclusive • Usually one model dominates but elements of other system can be incorporated • Restrictions on external recruitment for senior positions • Examples of position systems that are closed career systems • Senior Executive Service • Personnel ranking systems that incorporate professional classification Bangkok SURF

6. Key Problems in developing countries Inadequate pay Non-transparent remuneration systems Unclear link pay-responbilities Unclear link pay-performance Insufficient pay to retain qualified staff Key elements Compression ratio Public sector versus private sector wages Bonuses and allowances Pay and compensation policies Bangkok SURF

7. Compression ratio • Comparison between lowest and highest pay • Reforms are politically and culturally sensitive • Main problem: senior ranks • Solutions • Bonuses and allowances • Senior Executive Service Bangkok SURF

8. Public private sector wages • In general public wages are 70-80% of private sector wages • Comparable - not necessarily the same (public sector has other advantages) • Problem: NGOs, projects, embassies • Need for regular monitoring Bangkok SURF

9. Bonuses and allowances • WB: No automatic relation between bonuses and effectiveness • Foundation is the performance appraisal system • Monetisation of benefits: rationalisation and transparency • Compensation policy and corruption • Timor Leste: study tours (Malaysia, Singapore, Australia) – decision is still pending Bangkok SURF

10. Ethics and integrity • Past decade increased focus on ethics • Reaction to NPM • Restoring trust in government • Changing values in society and • Two key issues for discussion: • Merit principle in recruitment and promotion • Conflicts of Interest Bangkok SURF

11. Merit system Appointment of the best through competitive recruitment and promotion Impartiality – neutrality Allows for continuity and neutrality Rights-based approach: Non-discrimination/equal access Reduces risk of nepotism Merit versus patronage • Patronage • Appointment of the politically appropriate candidate • consequence of democracy • Regular rotation of policy makers (will of the people) • Allows for flexibility and allows to avoid in-breeding • Equal access • Risk of nepotism Bangkok SURF

12. UNDP’s position: hybrid system • Accept that patronage is unavoidable at senior levels, better to regulate • Principle: • Politically inspired selection of senior level appointments should also be linked to merit selection, embedded in a strong ethical framework and counterbalanced by an effective system of checks and balances. • The fundamental principle is to reduce the discretionary power of politicians over recruitment and promotions (e.g. Pool system) • Timor Leste: risk Bangkok SURF

13. Conflicts of interest • Cannot be avoided, but must be managed • Range of measures (civil service act, code of conduct/ethics, asset declaration, institutional arrangements (e.g. Nolan commission), restricted use of information • Special case: post-retirement appointments in the private sector (e.g. Japan) • Timor-Leste: risks Bangkok SURF

14. Measures taken in Timor Leste • Civil service Act (participatory process) • Code of conduct & principles of employment • Rights and obligations of civil servants • Institutional aspects • Manual of HRM • Help desk in the NDPS • Leadership Development centre • Mainstreaming ethics in training programs • Institutional issues Bangkok SURF

15. Institutional arrangements • Machinery for managing the civil service personnel system: different institutions involved - diversity • Differences between the Anglo-Saxon system and the civil law system • Roles and responsibilities of different agencies (oversight, policy, monitoring, finance and establishment control) • Annexes to the paper • Bangkok SURF work in progress • Centralised system or decentralised system Bangkok SURF

16. Centralised Main of HRM functions executed at central level Economies of scale and skill development in key agencies Establishment control : ex ante control mechanisms Reduces risks of nepotism Decisions taken by outsiders Slow decision-making process In post-conflict: unifying factor Centralised versus decentralised system • Decentralised • Functions devolved to ministries or special agencies • Loss of economies of scale, corporate policy/values • Ex post control mechanisms risk of staff increases • Risk of nepotism • Decisions taken by managers, speed, based on perceived need Bangkok SURF

17. Conclusion Institutional Arrangements • Decentralised systems needs robust personnel management system • Administrative discipline is required (e.g. Laos) • Solution: hybrid system: strong central agency and certain functions delegated. At central level: • Recruitment for senior levels • Establishment control • Monitoring and appeals • Often ex ante controls remain • Timor leste: hybrid system. Intensive training of HRM focal points Bangkok SURF

18. Conclusion • Example of TL highlights political, social, economic, cultural dimensions of civil service reform • Peer reviews confirmed stereotype approach • Caution when implementing reforms: assess political, social, economic and cultural climate • Pilots • Avoid copying HRM approaches from developed countries: foundations need to be in place – cultural aspects (e.g. Samoa) . Bangkok SURF