“they pretend to pay us, and we pretend to work” · “they pretend to pay us, and we pretend...

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Page 1: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

“They pretend to pay us, and we pretend to work”

Public employment & wage bill concerns

in developing and transition countries

Page 2: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

On the one hand …

Wage bills ballooned as new ministries, departments and enterprises were createdLittle left over for public investment programsResources so thinly stretched that service delivery sufferedMultilateral lending institutions direct that public employment bill should be reduced e.g. HIPC conditions

Page 3: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

On the other ….

Civil service pay is generally considered lower than that in private sector, see http://www1.worldbank.org/publicsector/civilservice/development.htmLow pay

discourages talented persons from joining the civil serviceSaid to encourage corruptionDisincentive for high quality service delivery

If the government can’t hire and pay teachers and health staff, how will human capacity be built?

Page 4: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

What is the real wage bill?

Who is being counted?Allowances monetized?Are officials being paid from the development budget? Off-budget funds?Has government’s liabilities for pension and retirement benefits been calculated?

Page 5: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

An affordable civil service?

What is the shape of the civil service pyramid?

Related compression ratiosHow do CS wages compare with private sector? – any labor market surveys?

Comparisons at top, middle and lower levelsAdministrators vs. technical staff

Business process re-engineering & Functional reviews

Page 6: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

Rightsizing difficulties

Employment numbers & location not known –insufficient PMISCivil servants are well organized, high collective bargaining powerFew opportunities in private sector to absorb all excess staffRevolving door syndrome

See World Bank website at http://www.worldbank.org/research/projects/downsize/index.htm

Page 7: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

Changing employment conditions

Too much job security?What is the value attached to job security?Contract-based employment

Legal framework for downsizingSeparation benefits and voluntary retirement

How much will these cost?

Page 8: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

Civil Servants value job security

57%

56%

51%

64%

54%

55%

64%

35%

31%

40%

31%

44%

32%

31%

0% 50% 100%

East Caribbean

St Vincent & Grenadines

St Lucia

St Kitts & Nevice

Grenada

Dominica

Antigua-Barbuda

no amount worth consideration 40% or more

Page 9: “They pretend to pay us, and we pretend to work” · “They pretend to pay us, and we pretend to work ... Rightsizing difficulties ... Separation benefits and voluntary

Public Expenditure Analysis and Management Staff Training May 23, 2002

Linking pay to performance

Performance agreementsPerformance linked pay

Bonus, merit increments

Performance goals, measures and appraisalHigher pay = higher performance?