Presented to: Presented by: World Bank Staff Gary Reid PREM - - PowerPoint PPT Presentation

The World Bank

Presented to: World Bank Staff PREM Knowledge & Learning Week Washington, DC April 17-19, 2007 Presented by: Gary Reid Coordinator, Administrative & Civil Service Reform Thematic Group PREM Public Sector Governance

The World Bank Page 2 Gary Reid Civil Service Reform Course

Outline

What is the civil service? What are the objectives of CSR? Why bother with CSR? CSR track record Addressing the technical challenges of CSR Building blocks of human resource

management (HRM)

Tools for designing HRM reforms Addressing political economy challenges of

CSR

Improving the Bank’s support for CSR

The World Bank Page 3 Gary Reid Civil Service Reform Course

What is the Civil Service?

The World Bank Page 4 Gary Reid Civil Service Reform Course

What are the objectives of CSR?

Ensure a fiscally sustainable wage bill Get and keep the right staff

Ensure depoliticized personnel management Enforce professional conduct standards Offer terms of employment that attract and retain

required human capital skills and talent.

Provide due process protections

Make staff productive

Motivate staff to achieve organizational

• bjectives

Provide needed complementary inputs

The World Bank Page 5 Gary Reid Civil Service Reform Course

Why bother with CSR?

Effective public administrations matter

(WDR 1997)

Meritocratic CS management matters

(Rauch and Evans (2000); Anderson, Reid and Ryterman (2003); Recanatini, Prati and Tabellini (2005))

Lousy pay can matter (Gorodnichenko and

Sabirianova Peter (2006); Van Rijckeghem and Weder (1997))

The World Bank Page 6 Gary Reid Civil Service Reform Course

CSR track record

Not especially impressive (OED (1999) Particularly sensitive to political

commitment (SSIU (2005); GMR (2006); Levy and Kpundeh (2004)

Poor monitoring of immediate impacts

The World Bank Page 7 Gary Reid Civil Service Reform Course

Addressing the technical challenges of CSR: HRM Building Blocks

Ensuring a fiscally sustainable wage bill

Employment and wage bill management

Getting and keeping the right staff

Ensure depoliticized personnel management Offer terms of employment that attract and retain required

human capital skills and talent

Personnel management practices

Making staff productive

Motivate staff to achieve organizational objectives Enforce professional conduct standards Provide needed complementary inputs

The World Bank Page 8 Gary Reid Civil Service Reform Course

Ensuring a fiscally sustainable wage bill

Establishment correction: Retrenchment

• ptions

Establishment control

Establishment registry linked to salary payment

system

Establishment authorization procedures Recruitment authorization procedures

Job evaluation and position classification Salary setting

Structure Individual salary setting

The World Bank Page 9 Gary Reid Civil Service Reform Course

Ensuring a fiscally sustainable wage bill

Establishment control systems and

practices

Salary setting systems and practices Retrenchment, downsizing or rightsizing Continuous monitoring and evaluation of

establishment and wage bill control effectiveness

The World Bank Page 10 Gary Reid Civil Service Reform Course

Establishment control systems and practices

Authorizing positions Authorizing new hires Tracking positions and personnel Linking treasury and establishment control

systems

The World Bank Page 11 Gary Reid Civil Service Reform Course

Salary setting systems and practices

Setting salary structures Setting individual salaries Tracking individual and aggregate wage

bill payments

Linking treasury and establishment

control systems

The World Bank Page 12 Gary Reid Civil Service Reform Course

Retrenchment, downsizing or rightsizing

Big-bang reductions vs. institutional reforms

aimed at improving priority setting and management

Ensuring adequate planning of the reform

effort

Addressing sources of resistance Sequencing Targeting reductions Facilitating re-entry into the labor force for

retrenched workers

Making severance attractive and cost-effective

The World Bank Page 13 Gary Reid Civil Service Reform Course

Continuous monitoring and evaluation of establishment & wage bill control effectiveness

Total employment (overall and by

• rganizational unit and/or program/sector –

total and relative to, e.g., population)

Employment composition (overall and by

• rganizational unit and/or program/sector)

Total wage bill (overall and by organizational

unit and/or program/sector – in absolute terms and also relative to, e.g., GDP, total recurrent costs, etc. – relative to Government-adopted target)

The World Bank Page 14 Gary Reid Civil Service Reform Course

Government employment, as % of population

0.9 0.9 1 1.2 1.4 1.8 0.3 0.7 0.8 0.7 0.9 2.5 0.8 1 5.1 1.1 1.6 3.4

1 2 3 4 5 6 7 8 9

Africa Asia ECA LAC MENA OECD

Percentage of population Central Government Local Government Teaching and Health

Early 1990s

Source: World Bank Policy Research Working Paper

The World Bank Page 15 Gary Reid Civil Service Reform Course

Central Government Wages & Salaries

6.7 4.7 3.7 4.9 9.8 4.5

2 4 6 8 10 12

Africa Asia ECA LAC MENA OECD %

• f GD

P

Early 1990s

Source: World Bank Policy Research Working Paper 1996

The World Bank Page 16 Gary Reid Civil Service Reform Course

Getting and keeping the right staff

Ensure depoliticized personnel

management

Enforce professional conduct standards Provide due process protections Offer terms of employment that attract and

retain required human capital skills and talent.

The World Bank Page 17 Gary Reid Civil Service Reform Course

Ensure depoliticized personnel management

Rules and procedures governing major

personnel actions

Division of responsibilities for

management of personnel according to rules

Continuous monitoring and evaluation of

evidence of depoliticization

The World Bank Page 18 Gary Reid Civil Service Reform Course

Rules & procedures governing major personnel actions

Recruitment and selection

Ensuring competition Well defined criteria based on accurate job

descriptions

Tiered screens (long listing, short listing, final

selection)

Promotions Transfers Performance evaluations (see below) Career development Disciplinary actions

The World Bank Page 19 Gary Reid Civil Service Reform Course

Division of responsibilities for management

• f personnel according to rules

Personnel policy making: Establishing the

rules

Personnel management: Implementing the

rules

Oversight of personnel management:

Ensuring that implementation of the rules is consistent with both the letter and the spirit of those rules

Redress: Protecting staff from misuse or

abuse of the rules

The World Bank Page 20 Gary Reid Civil Service Reform Course

Continuous monitoring and evaluation of evidence of depoliticization

Incidence of competitive recruitments by

things like type of position, organizational units, political appointments vs. civil servants

• vs. other staff, etc.

Annual and quarterly turnover rates mapped

against changes in political leadership -- by things like type of position, organizational units, political appointments vs. civil servants

• vs. other staff

The World Bank Page 21 Gary Reid Civil Service Reform Course

Enforce professional conduct standards

Conflict of interest provisions Asset declaration requirements Codes of conduct (Immunity protections)

The World Bank Page 22 Gary Reid Civil Service Reform Course

Due process protections

Checks on all major personnel actions Tenure protections Redress

The World Bank Page 23 Gary Reid Civil Service Reform Course

Offer terms of employment that attract and retain required human capital skills and talent

Remuneration Personnel management practices

The World Bank Page 24 Gary Reid Civil Service Reform Course

Remuneration

Composition

– linked to human capital (core salary) – linked to non-human capital factors (e.g., housing entitlements, transportation allowances, etc.)

Transparency

– Cash vs. in-kind elements of remuneration – Rules-based vs. discretionary assignment of particular elements of remuneration – Checks on setting of individual remuneration packages

Competitiveness of total remuneration package

– Static (public/private comparators) – Dynamic (potential for career growth: compression ratios)

The World Bank Page 25 Gary Reid Civil Service Reform Course

Romania Remuneration Pattern: Total Remuneration

The World Bank Page 26 Gary Reid Civil Service Reform Course

Sierra Leone Pay Competitiveness

Ratio of average GoSL pay to median of private sector pay

0% 10% 20% 30% 40% 50% 60%

B1 (G1-2) B2 (G3-4) B3 (G5-6) B4 (G7) B5 (G8-9) B6 (G10) B7 (G11- 12) B8 (G13- 14)

The World Bank Page 27 Gary Reid Civil Service Reform Course

Personnel management practices

Encourage human capital improvement by staff

Personnel performance evaluation Performance-linked promotions Potential for human capital skills growth On-the-job learning/human capital skills acquisition Training Transfer opportunities

Make work intrinsically rewarding

Develop staff loyalty to the organization and its objectives (Akerlof

and Kranton (2005); Wilson (1989); Kaufmann (1993); Simon (1991))

Fairness with which personnel are managed (see “depoliticization”

above; Levine and D’Andrea (1990); Akerlof and Kranton (2005))

Supportive management (Tendler (1997); Appelbaum and Batt (1994)) Job design so that individual staff have the ability to visibly impact

their unit’s performance, participatory work management practices, etc.) (Tendler (1997); Appelbaum and Batt (1994); Levine and D’Andrea (1990); Akerlof and Kranton (2005))

The World Bank Page 28 Gary Reid Civil Service Reform Course

Making staff productive

Motivate staff to achieve organizational objectives. Build staff loyalty to organizational objectives Performance-oriented management of organizational

units

Meritocratic personnel management Performance appraisals that actually sort staff

by their contributions to organizational unit’s

• bjectives/outputs

Promotions linked to reliable performance

evaluations

Provide needed complementary inputs

The World Bank Page 29 Gary Reid Civil Service Reform Course

Performance-oriented organizational management

Organizational unit objectives are a

precondition for individual personnel performance objectives

Regular monitoring and assessment of

• rganizational unit performance should

reinforce regular assessment of individual personnel

Performance rewards for individuals need to

be conditioned on organizational unit performance

The World Bank Page 30 Gary Reid Civil Service Reform Course

Personnel performance appraisals

Occur regularly and in a timely fashion

Formal (e.g., annual) Informal (constant feedback on performance and encouragement

from immediate superior)

Sort by performance

Criteria Behaviors Results (especially those agreed in advance) Multiple sources (not just immediate superior) Quality checks on performance assessments Rules that limit concentration of ratings in a single category

Feed into personnel management actions

Remuneration Annual salary increases One-off bonuses Promotions Career planning Training Negative actions, such as non-promotion, demotion or, in the

extreme, dismissal

The World Bank Page 31 Gary Reid Civil Service Reform Course

Addressing the technical challenges of CSR: HRM Reform Design Tools

HRM diagnostic tools Functional reviews Personnel (civil service) censuses Public/private salary surveys Pay and employment simulation models Professional conduct standards diagnostic

resource

The World Bank Page 32 Gary Reid Civil Service Reform Course

Addressing political economy challenges of CSR

• Contingent factors are key
• Reform path is ex ante indeterminate but

constrained

• Implementation matters more than design
• Interdependence of institutional reforms

matters

• Importance of continuously monitoring

immediate impacts of CSR efforts

The World Bank Page 33 Gary Reid Civil Service Reform Course

Holding CSR Efforts Accountable

What to monitor?

The World Bank Page 34 Gary Reid Civil Service Reform Course

I nstitutional Reforms Better functioning institutions Better functioning organizations Policy Outcomes Other organizational production function factors

The World Bank Page 35 Gary Reid Civil Service Reform Course

Institutional Reform Monitoring Gap

Needed indicator characteristics Capture extent to which the immediate objectives

• f specific institutional reforms are being achieved.

Track impacts that can actually be detected within a

relatively short time span

Types of indicators that could meet this monitoring

gap:

widely recognized prerequisites for such impacts changes in organizational behavior that suggest

that one or more of the immediate objectives of an institutional reform are being furthered.

The World Bank Page 36 Gary Reid Civil Service Reform Course

Quarterly turnover rates

• f political appointees

plotted against changes in political leadership Quarterly turnover rates of political appointees plotted against changes in political leadership should exhibit larger spikes after changes in political leadership than is the case for civil servants Quarterly CS turnover rates plotted against changes in political leadership Quarterly civil service turnover rates that spike immediately following a change in political leadership suggest that civil service appointments and departures are significantly influenced by political pressures. Turnover unrelated to changes in political leadership

Indicator Rationale Objective

Depoliticization

The World Bank Page 37 Gary Reid Civil Service Reform Course

Average Quarterly Turnover Rates

11.2% 2.8% Quarters not immediately following a change in political leadership 14.3% 2.1% Quarters immediately following a change in political leadership 11.7% 2.7% All quarters

Political Appointees Civil Servants Period[1]

• employees. The civil servants data encompasses two changes in political leadership, while the other data encompasses only one

change in political leadership. Changes in political leadership occurred in September 2001 (new Parliament, new Cabinet, no change in Prime Minister) and August 2002 (new Prime Minister, new Cabinet).

Albania: Depoliticization

The World Bank Page 38 Gary Reid Civil Service Reform Course

% of CS performance evaluations falling in highest rating category Variance in performance evaluations is a necessary but not sufficient condition for an effective performance evaluation process. % of CS staff for whom annual performance evaluations were completed Performance evaluations are a necessary but not sufficient condition for merit-based CS management practices that link some rewards to performance. Effective performance evaluation practices % of CS vacancies filled through advertised, competitive procedures Competitive recruitment and selection procedures enhance transparency, fairness and the

• dds of merit-based CS

management practices Competition in recruitment and selection

Indicator Rationale Objective

Meritocratic Civil Service Management

The World Bank Page 39 Gary Reid Civil Service Reform Course

Albania: Meritocratic CS Management

88.6% (2004) 0% (2000) % of CS staff for whom annual performance evaluations were completed 43.2% (2004) 57.8% (2001) % of CS performance evaluations falling in highest rating category 94% (2004) 70% (2002) % of CS vacancies filled through advertised, competitive procedures Most recently Pre- or early reform Indicator

The World Bank Page 40 Gary Reid Civil Service Reform Course

Indicator Rationale Objective

Ratio of average Secretary General total remuneration to average Junior Officer total remuneration A higher vertical compression ratio[1] provides a reasonable indicator of opportunity for salary growth over a CS career. Ratios of average CS to private sector total remuneration by Title A CS salary structure that yields a consistent ratio of CS to private sector comparator salaries across Titles enhances capacity to recruit and retain qualified staff within all CS skill sets. Average CS total remuneration as a % of average economic sector wages Increases in average CS total remuneration relative to average economic sector wages suggest increasingly competitive CS remuneration. Competitive remuneration

Attract and Retain Qualified Staff

The World Bank Page 41 Gary Reid Civil Service Reform Course

Indicator Rationale Objective % of civil servants receiving the lowest performance rating in two successive years who have left the CS within the following year. As CS management practices improve, poorer performing civil servants should exit the CS at non-trivial rates, thereby improving average quality of CS incumbents over time. Continuousl y weed out poor performing staff Average number of qualified (long-listed) candidates per advertised CS opening As CS positions become more attractive, the average number of qualified applicants per advertised CS opening should increase. Attract qualified staff

Attract & Retain Qualified Staff (cont.)

The World Bank Page 42 Gary Reid Civil Service Reform Course

Albania: Attracting Qualified Civil Servants

134% (2002) 53% (2000) Average CS total remuneration as a %

• f average economic sector wages

4.1 (2004) 6.3 (2000) Ratio of average Secretary General total remuneration to average Junior Officer total remuneration 10.2 (2004) 5.9 (2003) Average number of qualified applicants per advertised position 1.04 to 1.91 (2002) 0.44 to 0.67 (2001) Public/Private Competitiveness Ratio

Post-salary reform Pre- or early reform Indicator

The World Bank Page 43 Gary Reid Civil Service Reform Course

Indicator Rationale Objective

Actual budget-financed

• verall wage bill as a

percentage of GDP Overall budget-financed wage bill (covering not just the civil service, but all budget- financed public employees) should be consistent with Government’s fiscal program Budget-financed wage bill is fiscally sustainable Actual CS wage bill as a percentage of GDP CS wage bill as a fraction of GDP should be consistent with Government’s fiscal program Civil service wage bill is fiscally sustainable

Ensuring Fiscally Sustainable Wage Bill

The World Bank Page 44 Gary Reid Civil Service Reform Course

Albania: Fiscally Sustainable Wage Bill

4.7% (2004) 4.8% (2000) Actual budget-financed

• verall wage bill as a

percentage of GDP

Post-salary reform Pre-salary reform Indicator

The World Bank Page 45 Gary Reid Civil Service Reform Course

Improving the Bank’s Support for CSR

Systematically monitor CSR immediate impacts Hook CSR to reforms that citizens care about Integrate CSR support into Bank support for

improving public service delivery

Include CSR as part of an anti-corruption strategy Tailor Bank’s support to address the political

economy challenges of CSR

Mount Bank’s support with staff capable of

addressing the technical challenges of CSR

The World Bank Page 46 Gary Reid Civil Service Reform Course

9 18

• No. of

projects

3 6

• No. of

projects

36% 87%

Projects with Satisfactory

• r better (%)

11 15

• No. of

projects

CPIA (Q16) < 3.0

100% 78% 58% 24

ACSR ACSR

83%

Projects with Satisfactory

• r better (%)

CPIA (Q16) from 3.0 to 3.5

85%

Projects with Satisfactory

• r better

(%)

PFM PFM

83% 39

Projects with Satisfactory

• r better (%)
• No. of

projects

CPIA (Q16) Greater or equal to 3.5 All projects

PFM operations perform satisfactorily regardless of governance starting point,

but ACSR operations are successful only in stronger settings

OED Evaluated PSGB-mapped projects with PFM (without ACSR) and ACSR (without PFM) primary themes, FY00-FY05

The World Bank Page 47 Gary Reid Civil Service Reform Course

Q&A