Julio Nabais

1
Civil Service Salary Reform Process in Portugal
during the 1990s The Creation of a New System

• Julio Nabais
• OECD, Sigma Programme
• Vilnius, 14 December 2006

2
Presentation Plan

• Why a new system of remunerations (NSR)?
• The creation and implementation of the NSR
• the objectives
• strategy
• methodology
• The NSR main characteristics
• The NSR its development
• The (N)SR Current challenges
• Lessons to be learned

3
1. Why a new system of remunerations (NSR)?

• The old system (30s) was
• rigid and unable to cover new needs and diversity
• too complex
• inconsistent
• lacking coherence
• an obstacle in HRM development retaining staff
  problems

4
2. The creation and implementation of the NSR
(i) the objectives

• To create a newly remuneration system
• internal fairness
• external competitiveness
• To modernise the public employment system
• To develop the public management system
• To include all the civil servants in the new
  remuneration system

5
2. The creation and implementation of the NSR
(ii) the strategy

• Political support at higher level (PM)
• Solid policy analysis
• Strong leadership
• Small motivated team teamwork
• Creating allies the negotiation process step
  by step
• Communication (internal external)
• Evaluation

No discussion about the career's system
6
2. The creation and implementation of the NSR
(iii) the methodology (1)

• White Paper
• Evaluation of the existing system
• Proposals
• Adoption by the Government
• General guidelines
• Time-limit
• Budget ceiling
• Team set up

7
2. The creation and implementation of the NSR
(iii) the methodology (2)

• Action plan
• to define the general principles (qualitative) on
  salaries, management and public employment
• to adopt new salary scales for general careers
• to adopt new salary scales for the main special
  corps (teachers, doctors, )
• to adopt new salary scales for the remaining
  civil servants

8
2. The creation and implementation of the NSR
(iii) the methodology (3)

• Negotiation
• discussion about the White Paper
• negotiation of the qualitative principles
• negotiation of the quantitative development
• internally
• MoF / Budget
• ministries
• externally the trade unions

9
Professional Groups Relative Salary Positioning
900
800
700
600
500
400
300
200
100
MANAG
DOCTORS
SENIOR OFFICER
DIPLOMATS
TEACHERS
NURSES
SPECIALISTS
ADM ASSIST
MAN WORK
AUXIL
10
3. The NSR main characteristics

• Unitary system - same main principles, rules and
  components for the whole CS in central, regional
  and local Public Administration (PA)
• Components basic salary, working conditions
  supplements, social allowances. No Performance
  Related Pay (PRP)
• A general scale (Ind100 ? Ind900) with some
  special scales (for special groups defined by
  law) scales are autonomous but with some common
  parameter
• Ind100 value updated yearly by negotiation
• in 2006 321,92
• Basic rule some functionsome salary (for the
  whole PA)

11
The monthly net remuneration

• The amount of the index (depends on the career,
  the level and the rank)
• (e.g. adviser 1st rank I610 1 963,71)
• Supplements (if)
• (risk, shift work, night work, extra work, )
• Social allowances
• (family allowances, )

12
The career dynamics and salaries
e.g. administrator
Senior adviser 710 770 830 900
Adviser 610 660 690 730
Principal 510 560 590 650
1st class 460 475 500 545
2nd class 400 415 435 455
Trainee 310
Promotion by seniority and merit
Index 100 321,92
Progression by seniority (3 years)
13
4. The NSR its development

• Central management of the NSR (MoPA and MoF) but
• Problems with some transitory rules
• Pressure from some powerful groups in CS
• Political inconsistency / lack of continuity
• Supplements the weakest part of the system
• Some experiences of PRP
• Spiral of salaries

14
5. The NSR Current challenges

• Introducing some PRP mechanisms
• Reinforcing internal fairness (reviewing unfair
  developments) and external competitiveness (more
  flexibility in adjusting to the economy and to
  the employment market conditions)
• Increasing the compression rate
• Better linkage between supplements and real
  working conditions

15
6. Lessons to be learned (1)

• Need of political support
• Clarity of the objectives
• Accurate strategy
• Go step by step
• Flexibility and patience to negotiate but
  firmness on the objectives however some
  diversion regarding the initial forecast is
  highly probable
• Permanent cost/budget check and control

16
6. Lessons to be learned (2)

• Firmness in implementation, consistency in
  development and capacity in management
• Assessment of the results and permanent
  monitoring of the system
• Sustainability estimate costs at short, medium
  and long term
• Be careful with the transitory rules
• Communicate (internally and externally)

17
SOME FINAL REMARKS

• Each PA system results from a complex
  environment
• System background
• Historical evolution
• Political, economical and social context
• Negotiation process
• Information about other PAs systems is a source
  to help inovation and to improve own solutions
  (not copy/paste)
• Some common principles exists and should be
  followed in order to prevent same errors

18

• Thank You!
• ACIU !