Modeling Civil Service Pay

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Modeling Civil Service Pay Employment Strategy
in East Asia
Using the Civil Service Financial Model A Rapid
but Comprehensive Approach to Civil Service Reform
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Why does East Asia need civil service pay and
employment reform?
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Most East Asian governments have managed their
wage bills well over the last three decades
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Public sector employment levels have also been
relatively well-managed in the region
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The crisis highlighted the need for better civil
services
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Tight budgets place greater emphasis on ensuring
pay and employment practices result in efficient
service delivery
Increased political voice, demands for
accountability, and emphasis on reducing
corruption
The crisis has prompted a new look at improved
civil service management
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How do we assess East Asian civil service
management?The pace of modernization varies
most countries could do better
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(No Transcript)
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Given the tight, post-crisis fiscal constraints,
progress on civil service management may require
pay and employment fundamentals to be
adjusted.How can governments navigate a
sensible but timely course of reform?
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The Civil Service Financial Model can provide an
essential policy tool for governments wishing to
plot a realistic civil service reform strategy
Macro-analysis to determine appropriate size and
costs of the civil service
Micro functional review to determine staffing and
incentive levels in the civil service
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The Civil Service Financial Model
Plugs in desired attributes of future civil
service
Reconciles with current empirical reality and
sets targets
Models reform program of costs and timing for
reaching goals
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Employment no change
Anyland Reform Scenario A
Personnel spending as a proportion of GDP
increased from 2.25 to 2.75
Salaries increase to 90 of private sector
levels over 10 years
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Employment hiring freeze3 attrition over 10
years
Anyland Reform Scenario B
Personnel spending as a proportion of GDP
decreased from 2.25 to 1.5
Salaries increase to 90 of private sector
levels over 10 years
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Cambodia
Situation
Problem
Reform options

• Low wage bill (1.7 GDP)
• Very low average wages (2.5 time less than
  national minimum wage)
• No accurate information on remuneration,
  placement, skills of employees

• Pressure from a certain IFI to contain wage
  bill
• Higher salaries necessary to attract more
  skilled civil servants
• This IFIs solution cut employment immediately

• World Bank solution provide targets for
  salary adjustment, decompression, wage bill
  envelope and rightsizing options through modeling
  exercise offering options for different salary
  increase / rightsizing options

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East Timor
Situation
Problem
Reform options

• New country with no parameters
• UN organization acting as interim government

• Setting civil service pay and employment rules
  is an arbitrary exercise
• Budget planning and pay and employment
  assumptions must be made

• Determine wage bill envelope
• Determine salary scale
• Determine staffing numbers
• Simulate pay and employment scenarios

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Government ends up with

• A tool to facilitate policy formulation
• A vehicle for dialogue among key stakeholders
• Ongoing capacity for pay and employment monitoring