Difficulties in Implementing Logic in the Remuneration of Public Employees
The attempt to motivate people in public administration meets with tradition, distrust, politics and inability
[12.4.2005, TREND / Zuzana Horníková and Ján Záborský]
“The government considers as its obligation to provide state employees with the necessary existential base. By providing for the employee from the material point of view, the government expects him no longer to be under pressure from material troubles and to devote himself all the more eagerly and loyally to the work tasks he is given.” This is the reasoned report on the salary law dating from 1926. In former Czechoslovakia, this was the most important modification of service pragmatics in the field of remuneration. Already at the time, the government was aware of the fact that adjusting remuneration without negative motivations and imbalances is not easily. It solved, for example, the dilemma of how to deal with deformations caused by remuneration according to age, or classification into salary classes.Where have the remuneration systems of employees progressed since then? Does the public sphere have a clear picture of how to pay them and what to demand of them? These questions are not only important because every year tens of billions of crowns go from the state budget on the salaries of bureaucrats, teachers, doctors, policemen and judges.They have to be addressed for the simple reason that they concern a large amount of people whose quality of work has an influence on the quality of life of individuals and companies. Bureaucrats prepare laws, issue decrees, authorisation, are an extension of the state’s arm in relation to citizens and businessmen. Without motivated teachers, Slovakia will never make it to a knowledge economy. Along with nurses, policemen, soldiers, customs officers, firemen and the clergy, there are over 450 thousand public employees in Slovakia. And remuneration is able to influence the quality of their work – in what way, depends on how it is set.
Problem zero – lobbying and habit
Public administration as an employer pays according to several models. One concerns state employees, other employees in the public interest, such as teachers and doctors. Policemen, soldiers, judges and customs officer fall under different rules. “In such a diversified environment, having a single system is not effective. This is why I do not consider diversity to be a problem, but instead the irrationality and inefficiency of partial mechanisms” admits the state secretary of the Ministry of Labour, Miroslav Beblavý.
The current government is trying gradually to introduce changes to the remuneration system and to eliminate lack of motivation at least partially. In fact, it always meets with opposition, whether from the trade unions, local government or individual departments. Together they are afraid that changes will means a downgrade in the position of “their people”. And this is regardless of whether the government is trying to implement a liberalisation of remuneration, cancel inadequate advantages in the state service or completely eliminate the specific social systems of strong elements.
This alarmist fear of change above all stems from enrooted egalitarianism and habit. Everyone received more or less the same for many years – even though it meant everyone received little. It became apparent during the attempt to liberalise remuneration and give local government and public schools greater freedom. At present, they can choose: either they can follow the single table modified by government decrees, or they can adopt their own system. To this day, universities follow the legislation. Villages and towns are also careful. “I am not aware that they use this possibility massively, it is more a case of isolated cases,” says the vice-chairman of the Association of Towns and Villages of Slovakia, Jozef Turčány.
The remuneration system is a subject for promoting close departmental interests. Even the offices of the Parliament, the President or the Ombudsman regularly request their own, naturally, more advantageous system. Last year, the office of the Government and the Office for the Protection of Personal Data joined the ranks of the lobbyists. The department of finance has just one answer to these efforts: further special remuneration systems are not justified. The opposite, rather, is true.
Problem number one – competitiveness
Remuneration influences the ability of the public administration to compete with private companies on the labour market. This is its first, and long-term, problem. For a long time, it has become uninteresting for young, ambitious and mainly high quality people.
It used to pay according to qualifications and the number of years in service. Focus on performance was minimal. This was most evident in key positions which required language, management and specialist knowledge. For the same position, private companies offered salaries which were several times higher, as well as a more motivating environment.
SOURCE: Ministry of Finance SR The basic de-motivating element – age factor for salary increases – has already been eliminated from state service. Key posts in ministries, called the nomination state service, do require a lot from their employees, but in comparison with others also offer a lot: the highest salaries and the highest above-rating remuneration. In this way, a further prerequisite for motivational remuneration has been created: the operational assessment of every employee by his superior.In the public service, remuneration according to age still exists, even though last month the parliament approved a law which changed the status in schools, at least; it is favourable to young teachers. An improvement in competitiveness is demonstrated earlier and in a more significant way with bureaucrats. The Office for State Service claims asserts that the attractiveness of the state service is on the rise, varying according to region, positions and offices.
Problem number two – assessment
Operational assessment only concerns state employees, i.e. usually bureaucrats in ministries. Since 2003, it is repeated every year and it affects whether the bureaucrat receives more in one year’s time or not. At first glance, it appears to be a good idea.“It is a good idea, but for the moment it is ahead of its time,” says the managing partner of S&K Management Systems Pavol Boroš. He justifies himself by saying that in fact the assessors are not ready to make assessment and differentiate between subordinates.On top of this, several of them did not pass the required training to enable them to assess in a professional and objective way. And those assessed are not able to accept criticism and see it as a challenge to improve themselves. “This is why the assessment is only a formality for the moment, according to the information I have,” concludes P. Boroš. The human resources consultant Ľuboš Polakovič is mainly wary of the assessors’ objectivity. “So the important thing is to have a good relation with one’s boss, and not to provide results, because the bosses’ level is low,” he states harshly. The Office for State Service is more optimistic, even though it admits that professionalism and objectivity still have room for improvement.
Problem number three - tables
Tables have been a matter of course in the public sphere for decades. Their justifiability has been under discussion for equally long. They classify employees into groups according to their level of qualification and experience, and every group has its own minimum salary.The Ministry of Labour and that of Finance are urging the use of tables to be gradually reduced. They see no reason why the government should decide the salary of a cleaner at the Town Hall in Košice. The direct employer, the town of Košice, is best situated to estimate it. The reason for removing tables is also the imbalance which they cause in regions with over-large price and salary differences. This is also the case of Slovakia. It forces the state or the local government to pay without taking into account what the local market has to offer. Over-paying might be pro-people according to the state secretary of the department for labour, Miroslav Beblavý, but in reality it means that a hospital could have two nurses, yet has only one, because the states forces it into this situation. In regions with a high level of unemployment and low salaries, this even halts the development of employment in public services and employment overall, argues M. Beblavý. In his opinion, this can be resolved by abolishing tables or weighing them up. This would mean that the state determines how much more a teacher in Bratislava should receive for the same work, taking into account the higher cost of living, than a teacher in Svidník, for example. “At the moment, there is no chance of implementing this for political reasons,” M. Beblavý assesses the feasibility of this consideration.
Problem number four - differences
What caused the low motivation of state bureaucrats to work with better quality is called salary compression in specialist terms. In other words, it is the difference between the lowest and the highest salary in the given office, as well as in comparison with other offices. The highest quality employees paid the price for this, since they did not receive much more than the others.At present, the scissors are gradually opening up. The head of the operational office at the Ministry of Finance, Janka Červenáková, considers that remuneration is more flexible and is really capable of making bigger differences between bureaucrats. However, it is up to each office to what extent it used the possibilities offered by legislation. The finance department has dealt with the issue by setting aside money for heads for targeted bonuses according to the tasks of their workplace. They can use this money at any time during the year as a management tool.
Problem number five – work results
Remuneration basically has three levels. The first takes into account the position, the second the work content and the third the work result. “From this, we can see that the public sector is still using only the first two levels,” states Ľ. Polakovič. For him, salary tables mean a not very flexible and undemanding environment. And they follow one target: to keep control over salaries at least, and to make room for calculations and plans. I consider this to be their only positive point.On the contrary, in practice they cause working apathy among ordinary employees and only motivate them to push more and more noisily for a guarantee of earnings, without a guarantee of results from their part. His suggestion sounds simple: to move towards remuneration according to work results, which is still insufficient in his opinion, despite changes.Consultants from S&K Management Systems came to the same conclusion. They consider the current remuneration in the public sector more as a division of financial resources than stimulation for better performance. For S&K’s managing partner, P. Boroš, a variable salary element and its clear link to results is still missing. Legislation is gradually creating the conditions for this, but consultants can still not see its strong implementation in practice.P. Boroš suggests a double-element remuneration, where the base would be made up of a table, and the rest would be a variable element. Tables would take into account education, qualification, experience or work enthusiasm, and performance would make up the rest. Their mutual ratio would be different for ordinary employees and for heads with responsibilities. For the first group, P. Boroš suggests a 20 to 30 percent ratio to the basic salary, and for heads in key positions, the bonus could easily make up the same amount as the base. However, remuneration according to results requires that the ministry first makes clear what it wants to achieve and why.
Income comparison of certain groups of employees | ||||
(2003, Sk) | ||||
| Salary (without bonuses, rewards and personal bonus) | Operantional bonuses | Total income | Ratio to salary in the national economy (%) |
State employee | 15 649 | 2 484 | 18 133 | 126,2 |
Public employee | 11 064 | 1 653 | 12 717 | 88,5 |
incl: basic scale1 | 8 177 | 1 675 | 9 852 | 68,6 |
special scale for teachers1 | 11 963 | 1 329 | 13 292 | 92,5 |
special scale for university lecturers, researchers, nurses1 | 18 373 | 1 817 | 20 190 | 140,5 |
Employee of the police, SIS, military and judiciary guard | 10 373 | 12 276 | 22 649 | 157,7 |
Customs officer | 8 936 | 8 085 | 17 021 | 118,5 |
Fireman | 11 156 | 6 524 | 17 680 | 123,1 |
Clergyman | 6 352 | 2 290 | 8 842 | 60,2 |
1 Not including data for transferred competencies | ||||
SOURCE: Ministry of Finance SR | ||||
Foto – Miro Nôta
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