Civil Service Modeling: Simplifying

concretecakeUrban and Civil

Nov 29, 2013 (3 years and 6 months ago)

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Civil Service Modeling: Simplifying
the Complexities of Civil Service Pay
and Employment


Why Model?


Two Dominant Approaches to Civil
Service Pay and Employment Reform


1.
Macro
-
Analysis: The Meat
-
Axe
Approach?

2. Micro
-
Review: The Bean
-
Counting
Perspective

Macro
-
Analysis to determine appropriate
size and cost of civil service



How it works:

o
Gross criteria to gauge nature and extent of reform
needed

o
(Wage bill/GDP; government employment per
capita; salary compression ratios, public
-
private
wage relativities)


Pros and Cons:

o
Broad
-
brush reform guidance but over
-
simplified
basis for government policy and lending terms and
conditions

Micro
-
Reviews (Functional Analysis) to
determine staffing and incentive levels



How it works:

o
Bottom
-
up scrutiny of individual organizational
units


objectives, tasks, and resource
requirements


Pros and Cons:

o
Accurate picture of on
-
the
-
ground reality

o
Inconsistent methodology


wide variability in
quality

o
Hard to do


takes forever

o
Difficult to sum up parts: challenge to build
coherent civil service strategy for whole based on
micro
-

unit
-
based details

Both approaches left big problems un
-
addressed



Low Government Policymaking Capacity for
CSR


CSR
-
P&E Reality Hopelessly Complex

o
Competing Sectoral Considerations

o
New Wrinkles: Decentralization

o
Conflicting Government Objectives (Social
Welfare vs. Fiscal Prudence)



Flimsy Empirical Basis to Donor
-
Country
Dialogue (Discussion often on different
pages)

What is the CS
-
P&E Model?


Civil service modeling as middle
-
range analytic
tool to bridge gap in existing approaches



Uses country customized data to render the
key attributes of current P&E situation

o
Pay and grading arrangements

o
CS employment numbers

o
Sectoral/ministerial geographical particulars


Establishes reform objectives and
parameters



Five
-
year CSR vision



o
Wage bill envelope

o
Compression ratio and salary levels

o
Public
-
private relativities

What is the CS
-
P&E Model?


Civil service modeling as middle
-
range analytic
tool to bridge gap in existing approaches



Simulates reform options


calculating and
demonstrating costs of alternative policy
measures

o
assumptions about timing and extent of
retrenchment or retirements

o
implications of different levels of pay raises

o
altering sectoral employment levels (teachers,
health workers)

The Joys of the Model



Provides governments with hands
-
on tool for
plotting realistic reform strategy with concrete
targets


Sorts out wheat from chaff


focus on big
picture


Raises level of dialogue with donors (and
donor understanding of issues)


Helps policy makers combat special pleading
of sectoral interests


The Woes of the Model



Cannot (should not) render all detailed characteristics
of individual country CS reality (Trade
-
off between
simplicity/clarity and accuracy)


Garbage in
-
Garbage Out (Poor data mean targets
may be off)


Cannot make hard decisions for policy makers


Haven

t dealt with some critical issues (pensions
variables hard to incorporate)


Cannot replace good establishment management
systems (HR database, tight payroll controls, etc.)


Cannot provide detailed information for reform
implementation (for retrenchment; severance
package design, etc.


consultancy needed)



East Asia Experience

Pilots in 6 Countries: Capacity Building Grant from
ASEM


Cambodia

Timor Leste

Philippines

Mongolia

Indonesia


Thailand

Cambodia: The situation


Wage bill low by international comparators (US$ 52.4
million, 1.7% of GDP in 1999), but revenue
projections missing targets set by Fund


Very low average wages (4 times less than national
minimum wage) and very compressed from top to
bottom, 2:1


Census being carried out, but meanwhile no accurate
information on numbers, placement, skills of
employees


estimated 164,000 civil servants (14 civil servants per 1000
population)

Cambodia: The problem


Pressure from Fund to maintain wage bill


Higher salaries necessary to attract more skilled civil
servants


Fund

s solution: cut employment immediately
(yesterday), but clueless about how much


arbitrary target of 15%, allowing across the board 10% wage
increase


Our solution: provide targets for salary adjustment
and decompression, wage bill envelope, and
rightsizing options through modeling exercise over
several months

Cambodia: Reform options


Raise salaries, but keep wage bill constant, by
retrenchment (see chart on costs of employment)


Different degrees of salary increases will mean
different retrenchment imperatives

East Timor: The Situation


New country with no parameters
--

wage bill
envelope, salary scale, numbers and types of civil
servants (and functions and structures) all still to be
determined


U.N. organization acting an interim government


setting wage precedents with its own staff


setting up structures, rules and budgets over next few fiscal
years, with various binding consequences for East Timorese
government when constituted 2002
-
3.


donor group meeting in Lisbon end
-
June to determine East
Timor

s immediate future

East Timor: The Problem


With little private sector activity, fluctuating prices and
fluid labor market
--

and invasion of expatriate
assistance
--

setting civil service pay and
employment rules is an arbitrary exercise


East Timor: Reform options


Budget planning assumptions


GDP conjectured at pre
-
ballot levels (US$ 300 million)


Revenues (donor
-
funded and later own
-
sourced) 15% of
GDP


Expenditures set even with revenues (US$ 45 million)


Pay and employment assumptions


Employment 15,000 (about half of Indonesian civil service in
East Timor province)


Wage bill 65% of total expenditure (high by international
standards)


Salary scale
--

only information on basic wage from cost of
living study


Compression ratio of between 4:1 and 7:1

East Timor: Short to middle
-
range approach


Determine salary scale


using Indonesian comparators


find reservation wage for benchmark jobs through quick and
dirty comparator pay survey


cost of living study for living wage


Determine wage bill by affordability and international
comparators


Try to match up rough functions and structures and
staffing


Use above and international comparators to
determine staffing numbers


Simulating future civil service pay and employment
scenarios (Australian Dept of Finance providing
assistance for modeling exercise)

Results

Cambodia


Govt. and donors on same page (single
sheet)


Govt. proposed better


though not
satisfactory


P&E strategy


Pinpointed analytic work agreed upon


Bank placing CSR at center of PRSC