The Pros and Cons of Career- and Position-based Systems

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The Pros and Cons of Career- and Position-based
Systems
GOOD GOVERNANCE FOR DEVELOPMENT IN ARAB COUNTRIES
INITIATIVE

• Rabat 24 25 May 2007

Knut Rexed Former Director General
Swedish Agency for
Public Management
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The OECD context

• Different political and administrative models.
• No common system for public employment, but a
  spectrum of different models and systems.
• No common evolutionary trend due to the strong
  path dependency but possibly a growing shared
  awareness of the issues involved.

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The OECD context
Position-based systems
Career-based system
Statutory
Contractual
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The OECD context

• Contractual means unlimited but revocable
  employment contracts.
• Term contracts are normally only used for
  temporary labour needs.
• Outsourcing and use of private service providers
  also provide flexibility

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Typical characteristics of Career-based Systems

• Employees are guaranteed employment, but not a
  specific position.
• Entry into the system is through a separate
  competitive process.
• Mobility within the system is through a different
  process, which can be less stringent and less
  transparent.
• There are formal rules for the system, and a
  centralized management.

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Typical characteristics of Position-based Systems

• Competitive recruitment to each position.
• No right of transfer to another position.
• Selections may be based on position-specific
  competence assessments.
• Recruitment decisions may be decentralized.

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A first archetypeFrance

• The traditional norm is a statutory career-based
  system.
• An elaborate set of different specialized
  careers.
• France is presently seeking ways to increase the
  flexibility of its career systems.
• A number of specialists are recruited to
  positions outside the career systems.

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A second archetypeGermany

• A traditional dual system with parallel
  career-based and position-based systems.
• The career-based system is governed by statutes,
  while the position-based system is governed by
  contracts.
• The model has been challenged, but there have so
  far been no major changes.

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A third archetypeSweden

• The traditional norm is a position-based system.
• Statutory governance has been replaced by
  contracts. Recruitment and promotion decisions
  have been delegated to the agencies.
• Formal career-based systems exist in the armed
  forces, and the police, judiciary and foreign
  services.
• Informal career-based systems exist in certain
  large government agencies.

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The advantages ofCareer-based Systems

• The foundation of fealty systems (as opposed to
  employment systems).
• Encourages professionalization.
• Promotes a common culture and common core values.
• Better protection for due processes and a proper
  application of the laws.

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The drawbacks ofCareer-based Systems

• Produces generalists rather than specialists.
• Tends to be static and inflexible.
• Tends to promote risk avoidance rather than
  performance.
• May be resilient to political governance.

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The advantages ofPosition-based Systems

• Enables decentralisation.
• Easier to adapt recruitment to specific
  competence need in different activities.
• Easier to differentiate pay and other employment
  conditions after the market situation.
• Easier to achieve a strong performance-orientation
  .

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The drawbacks ofPosition-based systems

• Higher transaction costs.
• Does not promote a common culture or common core
  values.
• More vulnerable for sub-optimization.
• More vulnerable for patronage.
• More vulnerable for political interference.

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The issues ofChange Management

• Revising an existing fealty structure is
  sensitive and can be difficult.
• A position based system has to be used for
  adaptation to local needs in order to motivate
  its higher transaction costs.
• The introduction of a position-based system
  should therefore be linked to investments in
  managerial competences.
• A total change of the entire system is much more
  difficult than a piece-mal change.

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The issues ofChange Management

• The optimal structure may be
• an appropriate dual structure.

Position-based systems
Services and other production functions
Traditional core functions
Career-based systems
Statutory
Contractual
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knut.rexed_at_bahnhof.se