o:\pam\2003\kalvot\pariisi\1

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
Police, rescue services
Administration of justice
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, includi
ng State Employers 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-level employee unions
Agency-specific collective agreements

• 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
Parts of the remuneration Basis Message
Result-Based Reward The result of the unit or its part Lets do it together (results, quality, good service)
Personal/ performance part Performance and possession of professional skills Develop yourself, struggle to good results and good quality
Job-related part of pay Demands of the job Acquire and use professional skills, try to attain demanding jobs
7
Example of a NPS (without RBR)
8
Progress of the NPS Estimated 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 RBRs and paid RBRs
10
Amounts of the RBRs
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