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

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

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

4
Foundation position system or personnel ranking
system?

• 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

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

6
Pay and compensation policies

• 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

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

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

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

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

11
Merit versus patronage

• 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

• 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

12
UNDPs 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

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

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

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

16
Centralised versus decentralised system

• 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

• 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

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

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) .