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UNDP

Sub-Regional Resource Facility for the


Pacific, Northeast, and Southeast Asia

Bangkok SURF

Civil Service Personnel Management

Key issues for consideration when


assisting civil service personnel management reforms
in developing countries

Patrick Keuleers
Policy Advisor (Governance - Public Administration Reform)
March 2004

United Nations Development Programme

Bangkok SURF

March 2004

Table of Content

I. INTRODUCTION........................................................................................................................1
II. KEY ELEMENTS FOR CONSIDERATION.............................................................................2
a) General introduction................................................................................................................2
b) Building the civil service management system the example of Timor-Leste.......................3
II.1. The scope of the Civil service..............................................................................................3
II.2. The fundamental choice between a position system or career system.................................5
II.3. The choice between a centralised or a decentralised system the personnel management
machinery...............................................................................................................................8
II.4. Salary and compensation....................................................................................................11
II.5. Ethics and Integrity in the Civil Service............................................................................16
III. CONCLUSION........................................................................................................................25
Annex 1: Overview of possible responsibilities for the different institutions involved in civil
service personnel management......................................................................................................28
Annex nr 2: Advantages and Disadvantages of various institutional arrangements for civil service
personnel management:.................................................................................................................29

This is a first draft of a paper to be presented at the UNDP global Sub-Practice meeting on Public
Administration Reform. Not yet for quotation.
The views presented in this paper do not necessarily represent the views of the United Nations
Development Programme.

I. INTRODUCTION
Civil service management is a not a modern technique. The Romans and the Chinese have built their
empires on the performance of an efficient civil service. Today, with an increasing attention on good
governance as a means to eradicate poverty, there is also strong evidence that a skilled, motivated,
efficient and ethical civil service is a key requirement (see text box 1). Access to quality public
services depend in large measure on the skills and motivation of the public employees who provide
these services or oversee their delivery. The importance and impact of the work of civil servants
involved in budgeting or tax administration should also not be underestimated.
While the more traditional Public Administration Reform (PAR) as a focus for development has lost of
its importance in the donor community, in favor of more attractive topics such as human rights, access
to information and local governance, there is still a strong believe among PAR practitioners that
democratic governance is difficult to achieve without an established public administration. It is also
argued that the latter has been far more vital to economic development in historical fact than either
free elections or parliaments (as witnessed in most of the Asian tigers 1). An economic system based
on free markets cannot function without a stable and efficient public administration. In addition, an
established civil service contributes to security and makes it possible to have a peaceful and orderly
political succession, and thus genuine pluralism. To speed up poverty reduction, civil society
involvement is not enough, a robust and effective civil service is required 2.
Obviously, the effectiveness of public organizations and their interaction with the private sector and
civil society depends fundamentally on people. An efficient civil service management system is thus
required, as it can lead to improved motivation, effectiveness and hence, better services to the private
businesses, the public and the poor in particular. This explains why the promotion of a professional
and merit-based civil service remains one of the core six service lines within UNDPs PAR subpractice.
This paper will present some of the key issues and challenges that need be taken into account to
support a longer-term strategic plan for the management of civil service personnel. Using the
example of Timor-Leste where UNDP has been closely involved in the development of a new
framework for the management of the civil service (and drawing also on the initial policy paper
prepared for this purpose 3), the paper will analyse various aspects of the HRM policy in the civil
service, such as scope, institutional aspects, pay and compensation system and questions related to
ethics and integrity.
Since developing countries consume many ideas generated by technical expertise from OECD
countries, recent innovations in these countries are also influencing reforms in the developing world.
But while certain values are obvious and considered universal (efficiency, effectiveness, transparency,
service to the people, compliance with ethical rules) replication of the New Public Management
concepts appears less evident.
Nonetheless, there are several change factors around the world that are driving the public sector
reform agenda in many countries. Globalisation, technology innovations, the quest for more efficient
resource management and alternative, cost-effective service delivery as well as new perceptions on
work-life policies oblige governments to seek more flexible systems to manage their personnel. Focus
is now more on mobility, employability and skill acquisition and development. There is however no

Some Asian countries have achieved economic growth and poverty reduction with less attention to economic
freedoms than has been the case elsewhere. China Vietnam, Malaysia, Singapore have higher competitive ratings than
the Philippines and Indonesia, despite lower rankings in civil liberties and political rights (Wescott, 2004, 2, see also
Keuleers 2004a)
Discussions on the draft PAR Practice Note (Democratic Governance Network October 2003)
Keuleers P., Human Resource management in the Civil Service in Timor-Leste, Background paper to the Capacity
Development for Governance and Public Sector Management Program, UNDP, Dili, June 2001.

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single solution; more than any other reform process, political, economic, social and cultural conditions
shape the way civil service reform is implemented in a given country 4.

II. KEY ELEMENTS FOR CONSIDERATION


a) General introduction
A framework for Human Resource Management (HRM) in the Civil Service covers all key elements of
the personnel management system (HR planning and establishment control, recruitment and
classification, career management - including wage policies, performance management, HR
development - and exit strategies). It also needs to focus on the organisational capacities to
implement the system, i.e. the different institutions and agencies in charge of HRM in the civil service.
While each civil service system is different because tailored to different cultural, political and
administrative environments, the following characteristics of an effective civil service are considered
conducive to furthering the process towards better governance in a given country.

Despite the success of the UNTAET mission in establishing a transition administration and in creating a public
service in a post-conflict country, fact is that this administration, founded upon a wide variety of technical inputs,
management cultures, approaches and solutions, has left the East Timorese with an imported system of government,
which doesnt seem to be fully understood and accepted by the East Timorese. While exposure to comparative systems of
governance and public sector management is essential, the building of the East Timorese Nation cannot proceed on the
basis of simply replicating systems that have been imported from other cultures. It is therefore essential, in the near
future, to link the upgrading of technical and managerial skills to the gradual inculcation of a set of organizational and
managerial norms and values which build upon the Timorese culture, provided that these are compatible with a costeffective and accountable system of governance (Keuleers 2001, 2)

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Text box 1: Characteristics of an effective civil service as a prerequisite for good


governance (Keuleers, 2001, 4):

Adjusted to the level of social and economic development in the country;


Efficient and effective in the delivery of services;
Highly professional and capable of offering the best technical advice to the democratically
elected government;
Operated according to merit-based principles, combined with culturally sensitive
management practices;
Loyal in the execution of the policies of the acting government, while operating in
accordance with the Constitution and the laws;
Strongly committed to the public interest;
Disciplined and intolerant of unproductive or unethical behavior;
Honest and devoted to serving the population in an unbiased and impartial manner;
Broadly representative of society;
Upholding fair administrative practices, transparent in its operations and accountable to
the citizens and their representatives;
Willing to hire the best people available at each level, based on a fair and transparent
recruitment process and to maintain competitive pay practices that will foster a
motivational climate for state employees;
Strongly in support of proper training and development at all levels;
Capable and willing to develop partnerships with various groups and organizations in civil
society.

In light of the above, most governments constantly need to answer the following questions:

How to make the civil service sufficiently attractive to enable the recruitment of qualified people,
in particular for the professional and senior managerial positions?

How to retain them, motivate them and make sure that they will carry out their duties with
devotion, commitment and integrity?

How to constantly improve the quality and productivity of their work?

b) Building the civil service management system the example of Timor-Leste


While most civil service reform projects take place within an established civil service, operating on the
basis of long standing traditions and regulations, in the case of Timor-Leste, the challenge was to
develop a complete new civil service statute that was nationally owned and that reflected the
Timorese perception of how their public administration should operate. In that process of deciding on
the kind of civil service management system for the newborn country, there were many issues that
needed debate and regulatory development. Among these, the following five issues were considered
key for the design of the system:
(1) Scope of the civil service. Who will be subject to the civil service Act and who will be subject
to different statutes or the labour law?
(2) The kind of classification system that would underpin the management system: a personnel
ranking system (or man-in-rank-system) or a position system (or job-in-rank system)5. Both
models have advantages and disadvantages that need to be looked at in light of the local
context and management capacities, before making a decision.

All too often a so-called universal model is proposed, based on whether the technical assistance is experienced in
the common law system or the civil law system, ignoring that there exist different models of personnel management
systems.

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(3) The choice between a centralized and a decentralized personnel management system and
on the kind of institutions that would be responsible for the implementation of the HRM
system, and for the enforcement of standards of conduct for both the civil servants and the
politicians that try to patronise them. Should HRM be the sole responsibility of a central agency,
or should it be delegated to the various heads of departments or heads of agencies. Again
there are advantages and disadvantages.
(4) The structure of the pay scale. While decisions related to the design of the pay scale are
often considered a merely technical issue, they reflect a certain perception of society
(egalitarian, elitist..) and are thus highly political in nature. The structure of the pay scale lies at
the centre of the HRM framework because it directly influences many of the HRM functions.
(5) The measures (policies, procedures and practices) to promote and secure ethics and
professional integrity of both the civil servants and the political leadership.

II.1. The scope of the Civil service


The public sector comprises a range of employment regimes (contractual staff, part-time employees,
civil servants, police, etc.). Arrangements vary between countries, but in general the civil service
constitutes a core group of staff within the larger group of government employees or public servants 6.
Traditionally, because they serve the public interest, civil servants are those who are on permanent
contracts, and who are subject to a unilateral employment contract with the state (the civil service
laws and regulations7) that is different from other contractual arrangements in the economy (e.g. the
labor law, regulations for employees of the State Owned Enterprises or the military).
Consequently, the traditional civil service employment is related to the principle of tenure of office and
job security. Civil servants generally have greater protection from dismissal than private sector
employees.
In most countries the magistracy, the police, the military, SOE employees and the contractual
government employees8 are excluded from the civil service regulations 9. In some countries, health
workers and teachers are also not part of the civil service, in others they do (e.g. France, Laos,
Vietnam, ). With regard to local government employees different choices are possible. Under an
integrated civil service system all civil servants and local government staff are subject to the same
statute and conditions of service; they can move freely between positions in central government and
local governments (France, China, Korea, Laos, Vietnam,..). The second option is to have a special
statute for staff recruited by the local governments which allows better accountability to the local
electorate. A third option would be to have each local government recruit its staff on the basis of
individual contracts, in accordance with the labor law.

7
8

In Timor-Leste, initially all public servants including the police and the magistracy were under the same civil service
regulations and pay scale. This has gradually changed; today the police, the military and the magistracy are no longer
considered civil servants. While a certain level of divergence is required, caution is required; at present, Timor-Leste has
not yet developed sufficient capacity to manage a variety of personnel management systems. An integrated system
simplifies the management of state employees and also allows for greater mobility of staff between different organizations
of state, both at central and local levels.
Civil service terms and conditions of employment can either be approved by the legislature (Law) or by the
government.
Initially, in Timor-Leste, contract staff were recruited on a temporary basis according to a pay scale of 5 grades
corresponding to the first 5 levels of the civil service grading structure. However, the salary levels were slightly lower than
the ones used for civil servants.
The magistracy is excluded because of the independence of the courts, requiring special terms and conditions of
service for this professional group. Contractual workers (temporary positions or non-core positions such as cleaners,
drivers, gardeners, guards.) usually sign an individual contract ruled by the Labor Laws or by special regulations issued
for contract staff employed by the state.

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Today however the distinction between civil service legislation and labor law is being softened and
over time, the traditional system of tenure for life for civil servants is likely to be further eroded.
Especially since the New Zealand reforms, more and more countries are recruiting their public
employees (especially managerial and professional staff) on the basis of renewable fixed-term
contracts, part-time employment, etc. so as to ensure a stronger link between employment and
performance. New Zealand now treats all public and private workers on an equal basis and
recruitment for positions is open to candidates from both the private and the public sector. In New
Zealand and Australia the period of notice for dismissal is the same in the private and the public
sector (OECD 1999, 19). Switzerland recently abolished the status of public servant 10. In other
countries, other categories of public servants (e.g. contractual staff) are now subject to certain
provisions of the civil service act (e.g. provisions regarding ethics and code of conduct, transparency
in recruitment).
NPM differs from traditional approaches in that it is client-focused, gives a priority role to management
and emphasizes empowerment, entrepreneurship, effectiveness and a dynamic organizational culture
modeled on the private sector. This constitutes a major change since public administrations have
traditionally emphasized values such as stability, hierarchy, compliance and risk avoidance. NPM
reforms thus require a thorough change in culture which cannot come by simply changing regulations.
NPM reforms mainly took place in the Common Wealth countries; yet, some are already taking
measures to counter the negative aspects of the initial wave of reforms (see text box 2). Countries
under civil law traditions appear to be less in favour of the New Public Management concepts.
Despite many reforms over the past years, France still has its career civil service and public sector
employers still face many obstacles when terminating a contract of a civil servant on economic
grounds (OECD 1999, 19). So do the many countries that have mirrored their civil service personnel
management system to the francophone system.

10

All public sector employees are now under an individual contract offering somewhat grater protection against
dismissal (OECD, 1999, 17).

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Text box 2: The rise and fall of New Public Management?


Throughout the 90s New Zealand went through one of the most far-reaching public sector reforms ever
attempted anywhere else in the world, mainly featuring privatization and reform of public sector operations in
accordance with market concepts of competition and efficiency. It resulted in the widespread dismantling of
vertically integrated departments, the institutional separation of policy from operations, the flattening of
management hierarchies and the creation of an autonomous delivery agencies. Public management moved from
a rule-based approach to a results-based approach. Senior managers were granted considerable discretion over
operations, but the autonomy was constrained by reporting, monitoring and accountability requirements.
Accountability was based on performance agreements.
But the reforms came at a high cost. Many of the staff lost their jobs and those who remained were subject to an
increasingly stressful work-environment, and reduced job security. The reforms that were cited by so many as
the model reform of the recent times appeared to be less successful than initially thought. In terms of civil service
management one of the concerns raised was that the dismantling of a unified civil service through the devolution
of the employment function had eroded a sector-wide ethos of service, while constant restructurings had sapped
morale in many agencies (Shaw, 3, Lawton, 6). Interestingly also, some argued that the decoupling of policy and
operations compromised the quality of policy advice.
Since the change in government in 1999, consecutive centre-left ministries have begun to address the
institutional damage sustained during the first generation of the reforms (Shaw, 2003, 1), a process that
appeared to be warmly welcomed by the civil servants themselves. In May 2003, the Cabinet agreed to a Human
Resource Framework which will coordinate the training and management of staff across each of the government;
departments. Work is also being done on simplifying the accountability arrangements which apply to
departments and on shifting departments focus from the production of outputs to the achievement of outcomes
(Shaw, 11). The main change is that employees are now becoming much more involved in influencing the
running of their departments.

II.2. The fundamental choice between a position system or career system


As in most organisations, civil servants are subject to a certain grading system that defines their
salary, professional status and/or hierarchical rank. There are two main approaches to allocating
individual employees to a grade in the civil service pay scale:
1) the personnel-ranking system or man-in-rank system
2) the position system or job-ranking system.
The personnel ranking system or man-in-rank system (also associated with the so-called
career system) is a qualification-based classification of employees, particularly used in the civil
service, which allocates rank and pay based principally on the formal characteristics of the individual
(educational background and seniority): the employee is rated. Unlike the position system, the
salary is only loosely connected to the content of the job. Usually civil servants are classified into
levels, corresponding to the various education levels in the country. These levels are usually
subdivided into grades and echelons with regular pay increments based on performance and/or
seniority. The concern is to have equal pay for comparable qualifications. The level or grade
gives an indication about the nature of the functions that the civil servant is entitled to carry out, but it
is not directly linked to the position they hold. Instead, the system is based on an individuals
potential rather than their current position. The civil servant would keep his or her grade even if the
position were cancelled (e.g. a military colonel remains a colonel whether in the field or at
headquarters).
The personnel-ranking system is based on the general practitioner concept. Employees are
recruited for a sector but can be transferred from agency to agency and from one type of position to
another. Their salary is that of their current grade in the career system; it is not directly linked to their
position.

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The position system (or job-in-rank system) is a salary system, established on the basis of job
evaluations, and thus focusing on job contents rather than personal characteristics of the job holders.
It establishes a hierarchy of jobs on the basis of a systematic analysis of their content: the job is
rated. This system requires job evaluations and job classifications, conducted by specialized
personnel. The different positions are grouped into levels based on their level of complexity. The
concern is to have equal pay for comparable jobs. Each level is normally subdivided into echelons
or steps with regular pay increments based on performance and seniority. The position system is
based on the specialist concept, i.e. each particular job requires a specifically qualified person. In
principle, this person is transferable only to another position involving similar duties and degree of
responsibilities, and is thus linked to a similar level of compensation in the pay scale.
The personnel ranking system is often associated with the so-called career system 11 or because
civil servants start their careers in the entry grades (usually based on their educational degrees) and
then evolve in the career structure while occupying successively different positions, according to preestablished rules and schemes of service (internal recruitment)12. There are only limited possibilities
for lateral entry. Top officials usually go through a certain hierarchy of positions before they get
appointed to the top functions in the ministries. The system thus perpetuates the notion of a chosen
elite in the civil service, with recruitment for the senior levels usually being centralized and based on
highly selective and competitive recruitment procedures. This approach provides a government with
greater flexibility in allocating employees to different jobs, because transfers do not affect their grade
and base pay. Also, the personnel-ranking system encourages individuals to obtain additional training
to qualify for higher grades. There is thus a strong emphasis on career development. The personnelranking system has its origin in the French civil service and has been widely adopted outside Europe,
in particular in developing countries under francophone or Portuguese influence.
In contrast, position-based systems (e.g. Nordic countries, Commonwealth OECD countries, USA)
are usually associated with more open systems, as they allow more open access to positions and
thus lateral entry. In position-based systems the emphasis is placed on selecting the best-suited
candidate for each position to be filled, whether by external recruitment or via internal promotion or
mobility. People often switch between private sector jobs and public sector jobs. The position system
encourages people to perform well in order to demonstrate that they are qualified to take on jobs of a
higher grade. Recruitment is often decentralized, with line managers given more discretion in hiring
staff including offering market-based salaries and short-term contracts in hard to recruit professions.
The position system has a long tradition in Australia, New Zealand, Canada and the USA as well as in
developing countries under common wealth influence.
The choice between the two systems determines the kind of technical assistance that is required,
skilled in either or both of these systems. It also has an impact on the type of personnel management
skills required. For example, a position system requires time consuming job descriptions and job
evaluations, and thus special information to be gathered on the different jobs (skills and responsibility,
duties, degree of supervision needed, hazards etc.). In contrast, in many developing countries that
have adopted the career system, job descriptions are not always available. The system is less laborintensive. Because the position system is more complex to manage 13 and requires specific skills (for
job analysis, evaluation and classification) caution is required and capacities need to be assessed
before trying to adopt the position system in developed countries 14.
11
12

13

14

Also called the closed system or Mandarin system.


The proper balance between internal and external recruitment lies at the very heart of human resource management.
External recruitment allows to bring in new ideas and hence to avoid inbreeding. Internal recruitment creates opportunities
for advancement and allows making the best possible use of existing capacities (which is an important catalyst for human
motivation).
The technical nature of job evaluations can cause problems: a review of one such scheme in South Africa found that
while it was effective in its own terms, the technical nature of the scheme created problems of sustainability once the
consultants had withdrawn (McCourt 2000, 13).
Capacity constraints in developing and transitional countries suggest the desirability of unified classification and pay
systems (e.g. France, Japan, Netherlands) rather than differentiated classifications for different entities of government
(ADB, 756)

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But the two systems are not mutually exclusive and while usually one approach dominates, in
practice, many civil service systems incorporate elements of both approaches (ADB, 428). For
example, position systems often introduce academic qualifications as criteria for recruitment. Also,
while position-based systems allow lateral entry from outside the government, there are often
restrictions to this for recruitment to mid- and top-level managerial positions. While personnel ranking
systems are usually associated with close career systems, there are examples of position systems
that are also closed career systems (e.g. Singapore and India). Another typical example of a mixed
system is the introduction of the Senior Executive Service concept (see text box 3), which allows to
link the position system with the benefits of the man in rank system (while there could be a job
evaluated salary structure for the lower categories, the senior managerial positions would benefit from
a more flexible career system). In addition, career systems also use certain elements of the position
classification system. For example, in the French system, civil servants enter professional groups
(cadre-corps) which are divided into administrative corps and functional corps such as engineers and
doctors. Mobility between these corps is not always evident. Another option is to have a career
system, for all civil servants and to introduce a job evaluated salary structure for the senior grades
only, often with fixed-term contracts and more attractive remuneration. This would have the
advantage of reducing the heavy workload related to job analysis and job evaluation that comes
along with a rigid position system. Broad-banding (the widening of salary ranges) is also a way to
make more flexible use of the position system. It involves the reduction of position classifications, the
grading of staff in broader bands, allowing staff skills and performance to be taken into account
(OECD, 1999, 18). The USA is adopting this system, and is also testing person-based techniques (or
skill rating) rather than position-based techniques for setting and adjusting pay.
Text box 3: The Senior Executive Service (SES)
The SES is a mobile cadre of senior executives that have broad management and professional expertise. The
purpose of the SES is to prevent the management of individual departments from becoming "in-grown" and to
promote policy coordination between departments (World Bank Website). The SES can be deployed wherever
they are needed to promote the efficiency of the government. They have special conditions of employment
including higher salaries. Depending on the country, the system tries to solve: (1) the problem of inadequate
compensation and difficulties in attracting qualified staff for senior positions, (2 lack of responsiveness of the
senior staff to the priorities of the political leadership or (3) absence of an interagency service-wide elite cadre
(ADB, 437).
In certain countries, the members of the SES are hired on short-term contracts, with high salaries and
correspondingly, less job security15 (e.g. New Zealand, Australia). But in other countries that adopted the
mandarin system (e.g. Japan16, Singapore) the SES is a closed career system - hierarchical, small and highly
selective with competitive and merit based recruitment usually through a central agency. Applicants are usually
young and enter a fast track career system with the opportunity to advance to senior positions within a few
years17. The system is a rank in person system where one is hired not for a specific job but as an individual
suited to occupy many jobs. In France they enter prestigious training centers such as the ENA (Ecole Nationale
dAdministration). The system also includes intensive socialization to internalize core service values (ADB, 438).

Timor-Lest has opted for a career system and has decided to impose an age limit for recruitment to
the civil service 18. Clearly, Timor-Leste needs to train and prepare a new generation of young
15

16

17

18

In the US the SES contains both career civil servants and externally
recruited persons. Canada also tried o develop a new interdepartmental corporate identity for senior managers and to
increase their mobility throughout government (ADB, 440). The Netherlands are also making plans for establishing a SES.
Just recently, UNDP provided assistance to the government of Sierra Leone for reforming its SES. Bangladesh also has a
particular system for grooming its senor executive, most of whom are selected from the Administrative Cadre.
The SES in Japan is recruited on the basis of a highly competitive selection process. They enjoy security of
employment and can retire relatively early. Most of these civil servants then bring their skills and knowledge of the
administration to the private sector and as such contribute to improving cooperation between the public and the private
sector (ADB, To Serve and to Preserve, 387).
Depending on the context, it may be important to ensure an ethnic
balance of the SES. In India, training centers coach candidates from disadvantaged groups.
Given that the country lacks qualified people and that nationals from the Diaspora may return in the future to their
country and join the civil service, the policy paper (2001) had proposed a more open system (for the short-term), without
and age limit for recruitment to the civil service.

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managers that will fill higher-level management and policy positions in the future. This justifies
adopting the mandarin model, emphasizing the grooming of a core of centrally recruited managers,
who could switch easily from one department to another19. This would prevent uneven distribution of
scarce expertise in government, with certain high profile departments having sufficient professionals,
while the less prestigious sectors would be weaker in senior management staffing (political
appointees - for example those recruited to the ministerial cabinets - are not to be included in this
core group of career professionals). In line with similar developments in other countries that have
opted for the creation of a Senior Executive Service the core group of senior managers should be
offered targeted training20, interesting career opportunities and high prestige, and, possibly in the near
future, better remuneration.

II.3. The choice between a centralised or a decentralised system the personnel


management machinery
The capacity to implement a HRM management system includes skills, systems, processes, attitudes
and behavior. It involves people and organizations. It usually involves a policy agency, an oversight
agency to ensure fair and meritorious practices and a financial control and monitoring unit. In the
Anglo-Saxon countries, Public Service Commissions 21 usually retain control over recruitment and the
management of higher-level personnel and may also oversee implementation of the disciplinary code.
They sometimes act as an appeal body for the grievances from employees 22.
All PSCs are necessarily situated high within the institutional hierarchy, (and most are established by
the constitution,) to provide them with the authority necessary to perform their inter-ministerial
function23.
In countries that are under the civil law system, a ministry or government agency under the Prime
Minister is usually in charge of civil service oversight while the Ministry of Finance ensures financial
management and establishment control. Appeals are internal or can be to the administrative courts
that guard against political interference in the functioning of the public service (e.g. Belgian Council of
State). There can also be a Civil Service Council that acts as a consultative body for all civil service
management related policies and regulations or an Inter-ministerial Committee (as in the case in
Mozambique).
Annex 1 provides some ideas on the kind of roles and responsibilities that can be assigned to various
key players in the personnel management machinery. A single model clearly does not exist and even
within the Anglo-Saxon system or the Civil Law system there are a variety of institutional
19

The idea merits attention as there may be a high turnover rate in the years to come, especially when the private sector
starts to take off. The younger generation of competent civil servants may be willing to stay if there is the prospect of an
interesting career in the civil service.
20

21
22
23

With the assistance of the UNDP project Support Capacity Development for HRM in the Civil Service, the National
Institute of Public Administration is in the process of establishing a Leadership Management and Development Centre.
The Public Service Commissions were actually created to set up a politically more neutral civil service because of
the wide-spread patronage system in the beginning of the 20th century.
There can also be more than one Public Service Commission (e.g. in Malaysia there are separate PSC for the
Judiciary, the police, teachers. These creations often come as a result of devolution of powers to the ministries.
Some commissions are directly responsible to the President (e.g. Bangladesh). Others are appointed by the Cabinet
with consent of Parliament (e.g. in Japan, the National Personnel Authority is a commission-type agency attached to the
Cabinet). In Malaysia, the members of the independent public service commissions (public service commission, education
service commission, judicial and legal service commission etc) are appointed by the King, on the advice of the Prime
Minister. In Singapore, the chairman and members of the PSC are appointed by the President on the advice of the Prime
Minister. Thailand had a hybrid system, where the Civil Service Commission includes ex-officio members (the Prime
Minister, the Permanent secretary of the Ministry of Finance, the Director General of the Budget, the secretary general of
the National Social and Economic Development Board and the secretary general of the Civil Service Commission) plus a
number of elected members as well as members selected by the King for their particular knowledge and expertise.

Page 9

arrangements24 each with their advantages and disadvantages and each also having to manage
delicate relationship between the key actors involved: the central institutions and agencies and the
ministries. The degree of personnel management responsibilities assumed by ministries and line
agencies depends on how centralized the overall system is. This raises the key question on the
appropriate level of centralization/decentralization of the personnel management system.
Indeed, whether the system is inspired by the Anglo-Saxon model or the Civil Law model, each
country needs to decide on the degree of centralization/decentralization of civil service personnel
management. Successful centralized systems display a high degree of control over most personnel
functions but micromanagement is the main treat. Successful decentralization systems usually
operate within an appropriate and robust accountability framework with strong oversight and
monitoring from the centre. The characteristics of each system are summarized below:
A centralized personnel management system retains close supervision of the human resource
management functions at central level, especially those that have a direct impact on the budget.
While the system features a high degree of control and standardization, it does not necessarily imply
that there is only one single central body in charge of controlling all personnel movements. Powers
are usually divided between a central body in charge of policy-making, an oversight agency
responsible for the implementation of rules and regulations and a financial control organ, in charge of
payroll management and budgetary control. While there may be overlapping 25, the system creates
certain checks and balances and enables to curb excessive concentration of authority for civil service
management (Nunberg 1995, 15). The advantage of a centralized model is that it makes key
personnel management bodies directly responsible to the political authority. Therefore, in certain
countries, the central agency reports directly to the Prime Minister (e.g. Malaysia).
Under a centralized system, certain personnel management functions can be delegated to the
department level (records management, recruitment of lower-level staff, daily management etc) but
this delegation is subject to central policy guidelines and control.
The decentralised model increases the decisional autonomy of the line managers on most
personnel matters, leaving the center only with the responsibility to define broad guidelines and
monitor their implementation. The majority of the personnel management functions (recruitment,
promotion, grading, manpower planning and control, as well as training and development
management) are handled by personnel management units in the ministries or agencies 26. In this
case, the central bodies set the policy guidelines, issue regulations, advise on the implementation of
these policies and regulations, perform quality controls 27, promote and disseminate sound and
innovative practices, monitor the performance of the personnel management units in the
departments. In a number of countries however, appointments to the senior executive positions are
kept under direct control of the central bodies28.
The advantages of a centralized system are the following:
24

25
26

27
28

The Bangkok SURF is currently conducting a comparative study of the institutional arrangements for civil service
personnel management in Asia and the Pacific; the study could be expanded to other regions, in particular since the Asia
Pacific case studies mainly feature variations on the Anglo-Saxon model.
E.g. in the Philippines, both the Civil Service Commission and the Department of Budget and Management can set
pay scales and salary grades ().
Under the New Public Management, human resource management functions have been decentralized, with
managers of specialized agencies now given increased responsibility for human resource planning (including workforce
adjustment), recruitment and performance management (e.g. New Zealand, Australia, UK, Canada).
The Belgian government established a central agency to streamline administration and implement a service
satisfaction Rating system.
In Singapore, in 1995, recruitment, promotion and transfers of most civil servants were devolved from the three
public service commissions to a system of personnel boards, but the Public Service Commission continues to be in
charge of recruitment for the administrative service, promotion of all senior officers, disciplinary cases and appeals (ADB,
433). In Australia, decisions to recruit staff are taken in the line agencies, except for the Senior Executive Service (OECD
1999, 21).

Page 10

It allows economies of scale within the human resource management function


It enables to promote in-depth skill development of employees within the central agencies
(development of a cadre of personnel management specialists)
It enables tight establishment control systems in order to maintain civil service numbers within
financially approved limits (although this is not automatic 29)
It reduces the risks of nepotism and corruption.

The disadvantages of the centralized system are the following:


Decisions on key issues which affect the departments directly (human resources) are taken
elsewhere.
Responses to demands coming from the departments and localities may be slow 30
Employees in the personnel agency may have a restricted view of the overall goals and
challenges of the departments.
Excellent communication between the central agency and the departments is required.
The advantages of a decentralized system are the following:
reduces central controls and therefore allows managers to take rapid personnel management
decisions in response to perceived needs.
enables to curb excessive concentration of authority for civil service management
could improve co-ordination between staff and line functions within each department
The disadvantages of the decentralized system are the following:
the public administration looses economies of scale. The system needs sufficient technical
and management capacity in each department and at the central level to execute the
personnel management functions. This could be a problem in a country that already has a
lack of sufficient qualified human resources.
the multiplication of HRM units in each department increases opportunities for fraud,
patronage and corruption, which are less likely when uniform standards are enforced 31.
Establishment control may become more complicated (uncontrolled staff increases).
co-ordination between the departments and the central agency in charge of personnel
management may become very difficult.
HRM Units in each department identify with the immediate needs of their sector rather than
with the needs and constraints of the public administration as a whole.
lack of technical specialization in personnel management.
since a decentralized system requires information to be fed back up to the system, more
sophisticated systems of information and financial management may be required, thus
increasing the need for sufficient capacity at all levels.
To conclude, a decentralized recruitment system requires a strong tradition of public service and a
robust personnel system to start with 32. The risks in terms of inequity and corruption are significant.
29

30

31

32

The Indonesian system featured a highly centralized and top-down approach, with an omnipresent deconcentrated
administration responsible for the delivery of essential public services and for maintaining order and security. Poor
personnel management and lack of establishment control led to an overstaffed civil service, with low productivity and a
high degree of absenteeism. Although the majority of the civil servants were underpaid, at the senior levels, staff enjoyed
a range of benefits and corruption was widespread.
In Timor-Leste, district administrations complained about the long delays between the conduct of the selection
interviews (in the districts) and the final approval of the recruitment of the candidate by the central agency. In several
cases, the selected person already found another employment and was no longer available.
In Nepal, a consultation exercise conducted with internal clients of the Public Service Commission revealed a strong
preference for a centralized model of staff management: clients had greater confidence in the integrity of the PSC than in
that of their own departments and agencies (McCourt 2000, 9).
The degree of decentralization should be directly related to the strength of the personnel agency(ies) at the center,
the degree of central control over establishment management and the quality and enforceability of central policy
guidelines (Nunberg, 1995, 35). Consequently, in post-conflict countries like Timor-Leste, with a still fragile personnel
management framework, a centralized civil service management model probably provides the best starting point as it

Page 11

Developing countries therefore need to cultivate well-functioning and accountable centralized


recruitment systems before they consider giving their line ministries total discretion in recruitment
(ADB 436). Once a certain level of administrative discipline achieved, the country can move towards
a more decentralized system33.
For the same reasons, it is also recommended to maintain a degree of central control over subnational civil services. First, because of the need for economies of scale in tasks such as wage
administration and training. Second, in many developing countries, there are scarcities of skills and
some remote areas may not be able to attract the right quality of civil servants without offering high
incentives. Some degree of centralization could improve the chances of a more equitable delivery of
services across the country. Third, for budgetary reasons the center usually takes an interest in
controlling the size of the civil service, to avoid the high cost associated with a ballooning sub-national
civil service. Finally, in conflict and post-conflict countries the civil service can be a powerful tool for
nation building and unity (World Bank 2003).
To overcome the weaknesses of either of the two models, many countries apply a hybrid system,
which combines elements of both the centralized and the decentralized system and therefore, allows
overcoming. Under a hybrid system, there is usually a strong central agency. Many countries also
have a centralized system for the higher civil service and a more decentralized system for the lower
ranks. But as mentioned above, any form of delegation would require an assessment of both human
and infrastructure requirements and existing capacity throughout the system, linked to planning for
future training and investment. It should also be noted that, whatever the model adopted, its success
will depend on the prestige that is given to the personnel management function in government and
the placement of qualified personnel in the centralized or decentralized bodies. For these reasons,
special training programs for Human Resource Management Officers need to be designed 34.
The Table in Annex nr 2 summarizes the advantages and disadvantages of various institutional
arrangements for civil service personnel management.

II.4. Salary and compensation


The goal of a government employment and wage policy is to achieve a workforce with the size,
motivation, professional ethos and accountability needed to provide quality public services, design
and implement public policy, execute budgets and preserve the key assets of society (ADB, 409,
754). The basic principles of a compensation policy are summarized below (text box 4).
Establishing an effective and easily manageable pay policy for a completely new administration is not
an easy task. On the one hand, it is essential to establish a pay and compensation system that can
attract, motivate and retain high quality employees in particular at the most senior levels. On the other
hand, tight budgetary constraints usually restrict the possibility to increase civil service wages.
The following are some of the key elements that need to be discussed when designing a pay and
compensation system:
1. The compression ratio of the pay scale
2. The comparison between public sector wages and private sector wages
3. Bonuses and allowances

33

34

enables a tighter control on staffing levels and financial controls. Once a certain level of administrative discipline achieved,
the country can move towards a more decentralized system (Keuleers, 2001).
Laos piloted a highly decentralized system in the 1980s which brought the country close to bankruptcy, then
launched a policy of recentralization after the proclamation of the Constitution in 1991, and more recently started to pilot a
policy of improved deconcentration and selected devolution in certain municipalities.
With support from the UNDP HRM project the National Institute of Public Administration in Timor-Leste will design
and deliver a HRM training package for all HRM officers and middle and senior management in the civil service.

Page 12

Text box 4: Main problems and Basic principles of a compensation policy

Main problems with pay and compensation (McCourt 2000, 12)


1. Inadequate pay across the board
2. Opaque remuneration systems
3. Unclear link between pay and responsibilities.
4. Unclear link between pay and performance
5. Insufficient pay to retain employees with scarce skills.
Basic principles of a compensation policy (ADB, 389)
1. Equal pay should be given for equal work performed under the same conditions
2. Differences in pay should be based on differences in work performed, responsibilities assigned, and
qualifications required.
3. Government pay should be comparable (not necessarily equal) to private sector pay.
4. Government compensation structures should be periodically reviewed and systematically revised to assure
their continued validity.

1. The compression ratio of the pay scale


The compression ration indicates the comparison between the mid-points of the lowest salary grade
to the midpoint of the highest salary grade. Compression ratios can vary from as much as 30:1 to 2:1
(ADB, 395). A highly compressed pay scale (e.g. 1:2) reflects a more egalitarian society (e.g. most of
the former communist countries had very compressed salary scales official salaries in Laos and
Vietnam are still highly compressed). A decompressed pay scale (e.g. 1:10) reflects a more elitist
society, where power distance is much higher (e.g. France). Many countries apply a compression of
1:5 or 1:6. (E.g. Belgium35, the Netherlands)36.
In general, developing countries usually have highly compressed salary scales, making it particularly
difficult to attract qualified candidates for the senior positions in the civil service. But remedies are
politically sensitive and require a serious trade off to be made between granting pay increases for the
higher ranks and expanding employment. A serious decompression of the pay structure, with pay
increases only for the higher levels, is often perceived as inequitable (especially in a country where a
lot of political support needs to be drawn from the lower socio-economic strata). Decompression can
be very sensitive in case the majority of the civil servants (teachers and health workers) would feel to
have been left out of the pay review37. There is also a risk that an increase in the higher salary levels
for the civil service, in turn, will create pressures for pay increases from elsewhere in the economy,
especially from the NGOs and donor projects.
To accommodate these difficulties, a number of countries have piloted new incentive structures for the
senior ranks of the civil service without modifying the salary structure for the rest of the civil service. In
Cambodia, UNDP has been assisting the government with the establishment of the Priority Mission
Groups. Others have opted for the concept of a Senior Executive Service (see text box 3). Still others
35

36

37

Most European countries are practicing a ratio situated at approximately 5: the highest salary in the public
sector is five times higher than the lowest salary. These countries try to practice a similar overture in the different
components of the public sector (administration, army, justice, etc.). E.g. the Netherlands practice an overture of 6,
Belgium has increased the overture of the civil service salaries from 4.5 to 5, the American general service (GS salaries)
practices an overture of 4.24 (senior executive and senior level excluded) (De Weerd, 1999).
In Timor-Leste the wage structure established under UNTAET and still in place is compressed by international
standards with a compression ratio of 1 to 4.25. Scarcity of candidates for senior positions increases the pressure to offer
higher wages. On the contrary, there has been no difficulty recruiting civil servants at the lower levels of the pay scale
(levels 1 to 4) indicating that those salary levels are appropriate and match the domestic labor market. In fact, most
NGOs and other employers offer similar rates. Level 4 (teachers and health workers) also does not seem to have
witnessed major problems.
The difficulties encountered with the teachers corps forces many countries to establish a separate statute and pay
scale for this professional group. In Burundi in 1994-1995, most of the problems related to the design of a new pay scale
were related to the pay levels of the teachers and health workers.

Page 13

offer generous benefits in kind for the senior civil servants such as free housing, car, mobile phone
etc.
Text box 5: The Priority Mission Groups in Cambodia
The issue of salary supplements is a vital one in Cambodia. The overall amount spent on incentives paid by
different donors is estimated at not less than USD 3 million per annum from multi - and bilateral donors.
Recently, the Cambodian Government designed an approach to accelerate reform and provide performancebased rewards to Priority Mission Groups in key ministries, aiming to seek out and reward motivated civil
servants with appropriate knowledge and experience, enabling them to work in groups or teams that can
successfully deliver priority missions of change in their respective organizations, in a transparent and efficient
manner. Cost-effective performance is the chief criterion for earning the allowance that will be paid promptly
according to levels established in accordance with the Government's budgetary abilities. While initially limited to
1000 civil servants, the program will gradually be rolled out as more ministries and agencies are ready and
willing to move to a result-based performance approach. The Government is to bear the direct performance costs
(i.e. the allowances) of these groups, but financial and technical co-operation has been and continue to be
required to assist the Government operationalizing them. UNDP is providing support to the Royal Government of
Cambodia to operationalize as well as better articulate and advocate for the PMG initiative. Initially, projects
underway with the support of external partners could be turned into PMGs to enhance ownership and
sustainability.
(UNDP Practice Note)

2. Public sector wages and private sector wages


Generally, in industrial countries, the gross salary of a civil servant with a secondary or technical or
pre-university education level is more or less equivalent to the GDP per capita (De Weerd 1999, 21).
In countries with low revenues, salary levels can be much higher and often presents a multiple of 5 to
12 times the GDP per capita. When it reaches up to 10 times the GDP per capita, the wage bill
usually represents a heavy burden38.
Civil service wages should be comparable but need not necessarily match those in the private sector.
In general, public sector wages are 70-80% of private sector wages (ADB, 410) (except in Singapore
where public sector wags are highest). However, since employment is offered by various
stakeholders in the development process (NGOs, donor projects, embassies) and since salaries are
a vital component of economic policy, it is necessary to closely monitor the evolution of salaries in
these sectors39. Mechanisms are required to gather sufficient data on salaries and compensation. In
Timor for example, a number of experienced civil servants from the former Indonesian administration
were reported to be employed by NGOs, donor funded projects, international agencies and
diplomatic missions. The Guidelines on wages and conditions of service for NGO staff in East Timor
that were established by ETTA were respected with regard to the lower pay levels but for the
professional and managerial staff, NGOs were paying much higher rates than the ones offered by
ETTA40. Ironically, competition among NGOs, donors and development agencies for scarce local
competencies thus created certain difficulties which the same international community by all means
was trying to solve41...
38

39

40

41

In Timor in 2001, the annual salary of a level 4 civil servant was about 5.6 times higher than the GDP per capita
(1860 US$ compared to 329 US$), which is reasonable for a country which depends almost entirely on donor
contributions to pay for its current budget. The annual average salary of a Lao civil servant was only 257 US$ (1999),
compared to a GDP per capita of 350 US$.
Regular comparison between different types of wages is required. However, the objective of periodic reviews can be
met effectively only when the compensation structure and levels are appropriate to begin with and functions of staff and
related classification is clear. Most important of all is to have a periodic revision of government compensation structure. In
Singapore decisions on wages for the government and the private sector are made together in independent National
Wage Councils.
It was reported that national consultants (University level) working on donor funded projects earned between 300 and
1,500 US$ per month. Those with previous international experience could make between 1,000 and 2,500 US$ per
month. A civil servant in the highest level (level 7) now makes 361 US$ (January 2003).
In 1996, the UN agencies in Cambodia agreed to a Memorandum of Understanding (MOU) on policies, procedures
and rates for supplementary payments to government personnel. AusAid decided to "shadow" the UN system's

Page 14

3. Bonuses and allowances


Apart from their base salary, civil servants usually also receive a variety of bonuses and allowances 42,
both monetary (transportation, housing, meal, travel or cost-of-living allowance) and in kind (free
transportation, free meals, free housing). Some allowances are related to the profession
(responsibility allowance43, on-call allowance44, meeting allowance) others are related to the personal
situation of the employee (spouse allowance, dependency allowance etc.).
Bonuses are usually performance related. They are provided as an important incentive for workers to
enhance performance and effectiveness. But a recent WB study analyzed the bonus systems applied
by revenue authorities in 14 countries and found that there is no evidence that bonuses automatically
increase the effectiveness of revenue departments45. The WB study thus highlighted the risks
inherent to a system that rewards the goal of increasing revenue. In Denmark and in Latvia for
example, tax payers were harassed by tax officers and both systems had to be modified. (WB, 2004).
In Ghana, bonuses provided only to the staff of the Revenue Service soon became the reference
point for similar demands from the other civil servants (WB 2004). Bonuses also raise important
questions. Given financial constraints, should bonuses be given only to managers or certain
categories of staff46 (with the risk of undermining staff morale) or should they cover all staff equally?
Should they be given for collective performance 47 or should there be a combination of group bonuses
plus supplemental bonuses based on individual performance 48? What should be the amount of the
bonuses, compared to the base salary 49? In how far should managers be allowed to use discretion in
the allocation of bonuses, with a risk of undermining the legitimacy of the system 50?
But the foundation of any bonus system is the performance appraisal system, which in many
developing countries remains problematic. Robust relevant performance targets and indicators are
required. They must be clear and known to staff and managers. Targets used as performance
indicators should be SMART: specific, measurable, achievable, relevant, and timely (World Bank
transparent and coordinated approach to project-related salary supplements (UNDP Cambodia).
42
43
44
45

46

In OECD countries base salaries constitute more than 90% of civil servants total wage package.
In Laos civil servants that occupy a management position are entitled to a position allowance, based on an allowance
scale with 5 echelons.
An on-call allowance can be given to doctors or nurses who need to be on stand-by for any emergency calls.
As always, there are exceptions. According to the ADB, in a Latin-American country there was a 60% increase in
customs revenue within one year, after customs officials were allowed to receive a percentage of the revenue collected
(ADB, 624).
In the Philippines, the fact that bonuses were only given to tax inspectors, negatively affected staff morale (World
bank 2004); in Laos, plans to provide bonuses for tax officers were rejected because tax officers were already seen to
have sufficient (legal and illegal) benefits that other civil servants did not have.

47

48

49

Team-based or collective bonuses only make sense when dealing with activities that depend on the collective efforts of
many persons in a unit. (E.g. a fire-brigade, a special intervention unit in the military, a team of computer operators who
need to enter all personnel records in an automated data base etc. But there is a risk that team based incentives
become considered as a collective entitlement, rather than a performance-based portion of the salary.
Initially in Denmark, only managers of the tax departments were given bonuses; in Latvia and Ghana, all staff wee
included in the bonus scheme of the tax department; in Brazil, Romania and South Africa bonuses were given to all staff
based on collective performance (when the unit reaches the target), with plus supplemental bonuses based on individual
performance (World Bank 2004).
Since bonuses are closely influenced by the civil service culture, itself reflective of the collective culture in society,
figures vary according to the countries. In OECD countries base salaries constitute more than 90% of civil servants total
wage package In Denmark, the total bonus cannot exceed 25% of base salary. In Morocco, bonuses can reach 100% of
base salary, in Brazil 50%, in Romania 300%. In Brazil, tax units focused mainly on the large tax payers, to increase the
collective bonuses (World Bank 2004).

50

Transparency of the system is thus crucial. In Albania for example, the names of the bonus recipients are published
(World Bank 2004).

Page 15

2004). In addition, performance management should be (1) task oriented (measuring results against
predetermined targets) and (2) participative (involving both employee and supervisor. In the absence
of a robust, transparent and effective performance appraisal system, caution with bonuses is
required, in particular since managers appear unwilling to differentiate among their employees 51.
Monetization of benefits is also an important aspect of the reforms, aiming to rationalize wages and
make the salary system more transparent. But the exercise is not always easy to conduct. The reason
is that non-transparent bonuses often compensate incognito for low salaries for the senior levels
(compressed pay scale). Monetization of benefits is also risky as the monetized system often starts
to reproduce the same benefits (e.g. starting with housing allowance for senior civil servants).
Increasing transparency prematurely may also generate uncontrollable and unaffordable pressure for
equalization of benefits and across the board pay increases (Worldbank.org).
In Timor-Leste, there has been a deliberate choice to avoid the proliferation of special allowances.
The current salary system consolidates all payments to civil servants into one monthly base salary.
This allows maintaining both simplicity and transparency in salary management.
But the high amount of non-monetized or non-transparent bonuses and advantages also means that
salary levels in developing countries may actually not be as low as often estimated. For example,
permanent secretaries in Zambia appear to earn only 5 or 6 times as much as the lowest paid
government employees. However, when the in-kind benefits such as housing, cars, telephones, etc.
are taken into account, permanent secretaries earned 50 times as much as the lowest paid
(Worldbank.org). In Uganda, the pay compression ratio between the highest and the lowest pay of
1:6.8 changed to 1:100 after non-monetary allowances and benefits were included (McCourt 2000,
12).
There has also been reason to believe that higher wages and bonuses can prevent corruption,
especially if corruption is believed to result from low government pay. But several studies have shown
that there is no conclusive evidence on the link between compensation and corruption, and that
without improvements in accountability, higher wages and incentives will not necessarily improve the
efficiency and integrity of the civil service (see also Text Box 6).
Text box 6: Does Indonesia have a low pay civil service (Bulletin of Indonesian Economic Studies,
2001)
It is usually maintained that Indonesias civil servants are poorly paid and have been for decades. But surveys
conducted in the late 90s indicate that government workers with a high school degree or less earn wages
over their private sector counterparts. While those with more than a high school education earn less than their
private sector counterparts, the difference is in keeping with private/public differentials in other countries.
Moreover, for many civil servants basic salary and standard allowances do not capture the total compensation
received. With more salary increases having been decided after the survey, total government pay may now
exceed private pay for all but a fraction of all government employees. So while it has long been alleged that
the low pay of civil servants in Indonesia is responsible for widespread corruption, results of the surveys cast
doubt on these conclusions. Corruption appears to be much more a response to opportunities than to the
search of a liveable income.

One country in Asia that has made serious improvements in civil service pay and compensation is
Malaysia. In 1992, Malaysia introduced a new salary system featuring three types of salary
increments (horizontal, vertical and diagonal) based on assessment of performance panels. The
system features (1) recognition of expertise and experience rather than academic qualifications; (2)
annual progression based on individual performance; (3) salary increases for each service sector
differentiated according to the needs and importance of the service and (4) additional allowances and
benefits such as paternity leave and club membership. Each department has a quota for how many
51

In Burundi (1995), 5 ratings were possible ranging from very good to unsatisfactory. 99% of the civil servants were
rated very good and consequently, received the maximum annual salary increment equivalent to three pay steps. In Laos
and Vietnam, performance ratings had little connection to the work actually performed compliance to party instructions
and political behavior were the main performance indicators.

Page 16

employees can enjoy salary progression. Interestingly, civil servants had been offered a choice to join
the new system or remain in the old system: 95% choose the new system (ADB, 403, see also
McCourt 2000, 13).
Pay and employment policies are among the most important human resource initiatives to be taken
by developing countries (McCourt 2000). The political and economic sensitivity of these reforms
explain why no progress has been made in this area in Timor-Leste. While the draft Civil Service Act
is now being discussed in the National Assembly, the design of a new pay and compensation system
is still in progress.

II.5. Ethics and Integrity in the Civil Service


Although governments have different cultural, political and administrative environments, they often
confront similar ethical challenges, and the responses in their ethics management show common
characteristics (OECD, 1998).
Over the past decade there has been increased interest in public sector ethics, mainly as a reaction
to public sector reform in general, and to the negative impacts of the New Public Management wave
in particular52 (Maesschalk, 2003). But apart from trying to restore trust in government, it is also a
reaction to the changing values in society. Two approaches to ethics management usually dominate:
(1) the compliance approach (external control) stresses formal rules and procedures, with limited
choice for the individual employee; (2) the integrity approach (internal control) stresses socialization
in order to strengthen the moral judgment capacity of the employee (discretion in ethical decisionmaking). (Maesschalk, Lawton). Both approaches are complementary, but again, the success of their
application depends on organizational culture and reigning values in society 53.
During the initial post-conflict period, there is a need to put in place basic structures to ensure
transparency and integrity in civil service management. Both in Timor-Leste and in Afghanistan a
Public Service Commission was established to oversee the management of rudimentary civil service
regulations. But as the national system of government evolves and starts to consolidate, choices
need to be made on the kind of institutions, rules, procedures and practices that will be established to
manage ethics in public life. This normally includes ministers, civil servants, members of Parliament
as well as members of autonomous or semi-autonomous public bodies.
This section will look in particular at the two HR functions that are directly related to the management
of an ethics infrastructure in the public service: (1) The application of the merit-principle in recruitment
and promotions and (2) Managing Conflicts of Interest. By means of introduction, the text box below
summarizes the 12 principles for managing ethics in the public service as defined by the OECD
(OECD, 1998)54.

Text Box 7: 12 Principles for Managing Ethics in the Public Service


52
53

54

As central regulations and controls are reduced, the role of public values and the public interest concept that they
reflect become increasingly significant (ADB, 610).
Civil servants, socialized in a dominantly hierarchical environment (high power distance e.g. France) may not feel
very comfortable when given more discretion to decide themselves on the acceptability of certain behavior. They may
prefer rules and strict regulations to guide their behavior (Maesschalk 2003).
The Nolan Commission in the UK (Committee on Standards in Public Life established by the Prime Minister in 1994)
had defined 6 general principles of conduct which underpin public life: Selflessness, Integrity, objectivity, accountability,
openness, honesty and leadership (Standards in Public Life, 1995). The principles chosen by the US government include:
loyalty, public duty, honesty, impartiality, obedience to laws and fairness. New Zealand is concerned with integrity,
professionalism, lawful obligations, honesty, loyalty, efficiency and respecting the rights of others (Lawton 2003).

Page 17

1. Ethical standards for public service should be clear (civil servants and political officials should know where the
boundaries of acceptable behavior lie). Codes of conduct service this purpose.
2. Ethical standards should be reflected in the legal framework (laws and regulations provide the framework for
guidance, investigation, disciplinary action and prosecution)
3. Ethical guidance should be available (socialization facilitates ethics awareness, but ongoing guidance and
internal consultation mechanisms should be made available to help civil servants (and politicians) apply ethical
standards).
4. Public servants should know their rights and obligations
5. Political commitment should reinforce ethical conduct of public servants
6. The decision-making process should be transparent and open to scrutiny (this also points to the role of the
legislature and the press)
7. There should be clear guidance for interaction between the public and the private sector.
8. Managers should demonstrate and promote ethical conduct (by providing appropriate incentives, adequate
working conditions and effective performance assessments)
9. Management policies, procedures and practices should promote ethical conduct
10. Public service conditions and management of Human Resources should promote ethical conduct (this relates
amongst others to recruitment processes, promotion and adequate remuneration).
11. Adequate accountability mechanisms should be in place within the public service (internal as well as outward
accountability to the public)
12. Appropriate procedures and sanctions should exist to deal with misconduct
(Source: OECD Principles for managing Ethics in the Public Service)

(1) The application of the merit-principle in recruitment and promotions 55


a) Introduction
UNDP supports the development of a representative, responsive, accessible and accountable public
administration that is capable to provide efficient services to the population and to the government of
the day. Merit-based human resource management in the civil service is key to achieve this objective.
The merit principle in the civil service entails the appointment of the best person for any given job,
made through recruitment or promotion based on explicit merit rules. Politicization implies hat the
choice of public officials is strongly influenced by their political leaning or their personal links with a
group or party.
The merit system features impartiality and neutrality in the choice of public officials, which leads to
the practice of competitive recruitment and promotion 56. Merit-systems also include the establishment
of provisions to ensure that both the procedures and the officials in charge of
selection/evaluation/promotion are politically neutral and that there is an independent or neutral body
to oversee the implementation of these provisions (public service commission, civil service council,
administrative courts, ).The essence of merit criteria is that they are specified and contestable
failure to appoint a candidate can be appealed and reviewed against explicit specifications for the
position.

Text box 8: Merit-based recruitment arrangements draw from eight key elements (World Bank Website):
55

56

Most of this chapter has been derived from Keuleers, P. (2003 a), The Merit System versus Political Appointments,
Bangkok SURF, June 2003.
Merit-based selection can be through a system of university-style competitive examination (as in Pakistan and
Korea), or by scrutinizing educational qualifications (as in Singapore). Such methods are fair and command public
confidence, but they define the best person for any given job as the one that does well in examinations. According to the
WB (worldbank.org), a recent analysis found a very weak correlation between academic qualifications and job
performance.

Page 18

1. A job analysis leading to a written statement of duties (the job description) and the knowledge and skills which
the jobholder will need (the person specification)
2. An advertisement disseminated to eligible groups, including a summary of the job analysis
3. A standard application form
4. A scoring scheme based on the person specification
5. A short-listing procedure to reduce applications, if necessary, to a manageable number
6. A final selection procedure based, again, on the person specification, and including a panel interview
7. An appointment procedure based on the scoring scheme
8. Notification of results to both successful and unsuccessful candidates

b) UNDPs position
Evidence shows however that pure merit-based systems are rather exceptional and that political
appointments are common in most civil services 57. The classical solution so far adopted in civil
service reform programs in developing countries was to depoliticize the civil service (Sheppard: 2),
introduce recruitment systems based on open competition and administered by politically
independent Civil service Commissions, reduction of political influence through tenure of office and
merit-based promotions. The merit-system was advertised as the antidote to patronage, nepotism,
cronyism and other traditional practices that have undermined civil service. Large amounts of funds
have been spent on these civil service reform projects, yet merit-based reforms have not always been
very successful, mainly because these reforms did not sufficiently take into account the political and
social context in which they were to be implemented 58.
At the International Conference in Seoul 59, it was argued that patronage systems are not necessarily
and under all circumstances bad, they may even work well under certain circumstances, and with
appropriate checks and balances in place (the USA offers a good example see Gilman). Meritbased career systems also have their disadvantages.
Supporters of the political patronage system argue that the system allows flexibility, that it fuels
democracy (since it allows political parties to recruit and reward their members for their active political
involvement) and that it allows to create a cadre of loyal political appointees that help to make
government more efficient. It also allows for regular rotation of policy makers/advisors in accordance
with the will of the people, as expressed in the election polls. For those, the patronage system is seen
as a logical consequence of democracy (common opinion in the US). They will argue that the merit
system often generates an inward looking bureaucracy that protects itself against any form of outside
influence and becomes even a blockage to further reforms (the powerful cadres-corps in France are a
good example of this clan spirit, where the corps itself took over the control of the selection
procedures) (Keuleers, 2003 ).
Supporters of the merit system see this system as an important (but not a sufficient) condition for
combating corruption and nepotism in the civil service. The system better allows for transparency in
57

58

59

Typical exceptions are (1) Elected officials, (2) Political appointments (elected officials choose some political
advisers, (3) Affirmative action (several administrations have used recruitment / hiring practices to speed up the
advance of members of a disadvantaged group, such as women or certain ethnic minorities), (4) Internal appointments
and transfers (most administrations have restricted certain promotion posts to existing staff in order to minimize
transaction costs and to provide career development opportunities. (.)
In Cambodia, the World Bank pushed for downsizing the civil service even though the political coalition created by
the countrys peace agreements was partly based on expanding the civil service to absorb a large number of functionaries
from incoming parties. (World Bank 2003).
International Anti-Corruption Conference, Seoul May 2003, Workshop on Politicization in the Civil Service.

Page 19

personnel management and responds to the fundamental principles of non-discrimination and


equality of access to public office. For this group, the merit-system thus reflects a human rights-based
approach to civil service reform. The merit system also helps to lessen the constant pressure of
parliamentarians (or the Crown) on ministers to plan the appointment of their followers. Linked to a
career civil service and life tenure, it allows for continuity and neutrality in the public administration
(Keuleers, 2003).
Interestingly, the mere justification that the merit principle allows for the equality of access to the
public service is also used by those in favor of the patronage system; they argue that the patronage
system allows candidates of other political leanings to gain access to the higher positions when
winning the elections.
The current thinking is thus to adopt a more balanced view of the relative advantages and
disadvantages of the merit and patronage systems and acceptance of the need to consider the nature
of political or other institutional constraints (Sheppard: 6) when designing civil service reform
solutions (in particular with regard to the senior civil service appointments). That is why a number of
countries have adopted hybrid systems, whereby a percentage of senior civil servants or those who
occupy positions of policy/advisory function are political appointees 60. Such a system takes into
consideration the reality that every elected government tends to secure for itself the services of a
cadre of trusted senior personnel tasked to facilitate the implementation of its programs (UNDP, 2004,
draft). Hybrid appointments in developing countries could be a better way to recognize political
realities, rather than to blindly advocate for a merit-based system, that may have little chance to
succeed.
Text box 9: Hybrid systems pool system
Many countries have a hybrid system in which merit is accompanied by subjective political judgments. In such a
system, merit is a necessary but insufficient condition for appointment. The most common solution is a "pool
system" which places the candidate in a pool upon satisfying the merit criteria. Those in the pool are then
available for subsequent political selection. In France, pool management is undertaken by providing a job
guarantee in the career civil service to all discretionary appointees, so that their dismissal will be effectively
cushioned. In Germany, the approximately 140 most senior positions are all hybrid appointments effectively
managed under a pool system. Appointments to these senior positions automatically lapse on a change of
government, with an option for the incoming government to reappoint them. Under the pool system used in
Belgium, access to the pool is determined by a university degree and passing a civil service examination.
Subsequently, a political selection is made from the pool (World Bank, Website).

The principle is thus that politically inspired selection for appointments in the civil service, while
inevitable, should be linked to merit selections, embedded in a strong ethical framework and
counterbalanced by an effective system of checks and balances 61. The fundamental principle is
to limit the discretionary powers of politicians over recruitments and promotions.
To enable this, UNDPs policy advice in the area of civil service reform, advocates for the following:
Identification and publication of the restrictive list of positions that are considered political in
nature;
Clear procedures for recruitment and promotion, ensuring transparency in the selection
process and inclusion of formal checks and balances/appeals in case of arbitrary action;
Restricted discretionary powers of politicians over selection processes (short-listing of
candidates should be the sole responsibility of a pluralistic selection panel/commission
politicians would only e allowed to make a final choice between short-listed candidates);
Adequate qualification standards and regular performance appraisals for senior positions;
60

61

The application of merit criteria to hybrid appointments are usually overseen by an independent body or subject to
legal scrutiny (e.g. the possibility of appeal before the administrative court in Belgium, or the necessity to consent by the
legislature as is the case in the USA).
The arrangements to ensure that pure political appointments are constrained vary across the OECD. In France,
numbers are limited by hard constraints in the budgets available to ministers to hire within their cabinets (ministerial
advisers) and the Prime Minister specifies the numbers of officials that can be hired within those cabinets.

Page 20

A code of conduct that stresses the objectivity (senior officials should make choices and
promotions on merit), accountability (senior officials should submit themselves to whatever
scrutiny is appropriate to their office) and loyalty (i.e. they commit to execute and support the
policies of the government in place) of the civil servants;
Constitutional and legal guarantees (e.g. the Civil Service Act) stressing the right of
candidates for (non political) public employment, not to be discriminated against because of
their sex, ethnic origin, political, economic, religious, philosophical, cultural or social opinions
or conditions.
Strong monitoring of the implementation of these legal and regulatory provisions (either by
the central agency for civil service personnel management or an independent institution such
as the PSC).
Appropriate internal and external appeal mechanisms (either to an independent institution
e.g. the Public Service Commission- or to the administrative courts).

Merit-based promotions aim to assign the right people to the right jobs and making full use of their
potentials and skills. In many countries, seniority remains an important criterion for promotion. Other
countries use a combination of both. India for example gives much weight to seniority. Singapore
values merit most. Although there is a need for cultural sensitivity, a seniority based system usually
over time weakens incentives for efforts and self-improvement (ADB, 400). It is nonetheless
acknowledged that in countries with governance weaknesses, seniority must retain a major role in
advancement decisions to insulate government employees from political interference and avoid a
perception of favouritism and discrimination (ADB, 459).
But merit-based promotions require the presence of a performance appraisal system, which is a
cultural sensitive62 management device that must be carefully studied before implementation. Many
systems are eventually abandoned because they appear to be incompatible with the national culture
or because of strong internal opposition63 .
The New Public Management model has radically changed the traditional approaches to
recruitment and career management, allowing managers to choose their own mix of staff and other
resources to deliver programs efficiently and effectively within a hard budget constraint. The goal is to
allow managers to employ the skills they deem necessary to carry out the job, without the rigidities
created by a central agency determining who and how many should be employed. But such a highly
devolved management system requires certain conditions to be in place, in particular (1) An effective
funds control framework, (2) Regular performance monitoring and (3) A strong performance
culture, featuring responsible financial management, mission achievement, economy and efficiency
(World Bank website).
The above mentioned conditions are not always available in developing countries 64. Nonetheless, the
Australian and New Zealand public management model has been implemented in several Pacific
Islands and is now also being implemented in Mongolia. Ownership ove these reforms has been
questioned and cultural aspects also seem to have been overlooked (Keuleers, LDCs, 11). In Samoa
for example, serious concerns were raised as to how departmental autonomy on hiring and wages
62

63

64

Many Asian countries stress rule-based compliance and group cohesion whereas western countries tend to emphasize
values of individual achievement and risk taking.
In Laos, a new performance evaluation system was developed early 1999 and submitted to the government in
November 2000. The UNDP funded GPAR project had hoped to test the new performance evaluation system in some pilot
organizations but so far the government has not been willing to move this reform further. As noted in the evaluation report
of the project, it may be that the project has not chosen, with the personnel performance evaluation system, the best test
case for pilot implementation. As mentioned in the report, in Laos, this is an extremely sensitive issue given the fact that
the civil service is not yet a body independent from political patronage at any level. Even a small pilot implementation
carries heavy implications for for the wider system. The reticence of officials to test these waters is hardly surprising.
Using data from the IMF Kaufmann was able to identify only 13 out of the 74 potential candidates for support under
the US Millennium Challenge Account that had complete budget deficit data for 1998-2000 (Keuleers 2004 a, 13)

Page 21

combined with fixed-term contracts would work in practice in a small society where family and kinship
ties are particularly strong (Keuleers, 2004, 11).
Caution is thus required when copying the New Public Management Model in developing countries.
New democracies in particular encounter specific difficulties, especially where strong independence
movements become almost the sole ruling power that sees political patronage as an obvious
compensation for years of suffering and struggle for independence (Keuleers, 2004) 65. This also
explains why (in Timor-Leste for example) there are strong political forces in favor of a decentralized
system, with delegated authority to ministers for recruitment and promotions. But the risk of
politicization of recruitments and appointments is imminent in a newborn democracy like Timor-Leste.
There is also a history of corruption and nepotism under the Indonesian rule. These deficiencies can
easily reoccur in a context where central institutions are weak, job opportunities are scarce,
government salaries are not so high and controls are fragile (Keuleers, 2001). Therefore, in a new
and still fragile democracy, UNDPs policy advice was to have a uniform policy adopted throughout
the civil service, with formalized and standardized procedures. As long as checks and balances are
not sufficiently in place a decentralized system entails the risk that new political leaders will use the
civil service as a means to develop a larger group of faithful supporters by creating additional public
employment. Therefore, the entire process needs to be transparent and the central agency needs to
be able to monitor and control the movement of personnel across the public administration.
(2) Managing conflicts of Interest66
The separation of public and private interests in the conduct of all public officials is a precondition for
accountable and transparent government. The decisions and actions of an office holder should not be
affected, or appear to be affected, by personal interests.
Conflicts of interest cannot be avoided, they exist and are usually based on legitimate interests which
public officials may have as private citizens. But they need to be defined, identified and managed in
order to foster public confidence in the integrity of public officials and public decision-making, without
unduly inhibiting the effectiveness and efficiency of the public organizations concerned. A too-strict
approach may deter some people from seeking public office (OECD, 2003). An adequate conflict of
interest policy should be able to ensure that effective procedures are deployed for the identification,
disclosure, management and resolution of conflict of interest situations. Ideally, such a policy should
give a range of examples of private interests which could constitute conflict of interest, in particular for
certain high risk sectors such as procurement agencies and tax and customs administrations.
A conflict of interest policy can include the following measures (ADB, World Bank website):
- Laws and regulations, including provisions in the Civil Service Act,
- Adequate remuneration.
- Codes of conduct and codes of ehics67,
- Institutional arrangements (offices of public ethics, commissions, special courts).
- Asset declaration (whereby public officials are (periodically) required to declare their personal
economic situation for scrutiny by a state authority.
- Prohibiting ownership of certain business interests
65

66

67

By the end of the ETTA period rumors started to spread that all these initial recruitments done by ETTA would not
necessarily guarantee a career in the future public administration. There were also rumors that a new wave of political
appointments could be expected after the installation of the elected government, jeopardizing the administrative and
social stability that was so badly needed. Therefore, mechanisms had to be developed to ensure that transparency and
impartiality of the recruitment process is secured for the future (Keuleers, 2003, 11).
A conflict of interest involves a conflict between the public duty and private interests of a public official in which the
public official has private-capacity interests which could improperly influence the performance of their official duties and
responsibilities. A potential conflict arises where a public official has private interests which are such that a conflict of
interest could arise if the official were to become involved in relevant (i.e. conflicting) official responsibilities in the future
(OECD, 2003).
A code of ethics relates to the ethical conduct o public officials. A code of conduct is wider in scope, covering a range
of organizational practices and employee conduct (Lawton, 2003).

Page 22

Introducing administrative law restrictions on holding other jobs and accepting gifts
Introducing administrative law requirement that officials must transfer decisions to someone
else if there is a potential conflict, that elected officials must abstain from voting, and that
judges must relinquish their seat when there is reasonable doubt on their capacity to make
impartial decisions.
Administrative or criminal law restrictions on the use of information for personal purposes.
Awareness raising and information campaigns to inform other civil servants and the public at
large on how certain cases have been handled68.

Text box 10: Objectives of a code of ethics (Lawton, 2003):


1. Offer a clear statement of values, roles and duties, rights and responsibilities
2. Clarify the ethical behavior expected of public officials
3. Act as guidelines in developing ethical conduct
4. Provide a consistent set of criteria for ethical conduct
5. Clarify procedures and sanctions to deal with misconduct
6. Minimize ambiguity and reduce uncertainty
7. Promote public trust and confidence and strengthen external credibility
8. Generate pride among staff
9. Reaffirm the values of the public service
A special case is where civil servants engage in private sector activities after having left the public
office69. Not all cases constitute potential cases of conflict of interest but special regulations may be
required to define under which conditions a public official who is about to leave the public office may
negotiate an appointment or employment in another sector 70. In particular where governance systems
are weak and accountability is loose, post-retirement incentives may be a dangerous practice (ADB,
405).
(3) Measures taken in Timor-Leste
Timor-Leste still has a long way to go in developing its systems and institutions responsible for civil
service personnel management. Nonetheless, at this early stage of nation building, a number of steps
have been taken to strengthen ethics and integrity in government.
First, the draft civil service act that was prepared by the Public Service Commission with UNDP
support (and following a participatory process 71) aims to establish a civil service management
framework that promotes integrity, excellent performance and merit. The Act defines 10 core values
that should guide the work of the civil servants: (1) Loyalty, (2) Integrity, (3) Impartiality, (4) Service,
(5) Respect, (6) Transparency, (7) Accountability, (8) Efficiency and effectiveness, (9) Diligence and
professionalism and (10) Responsiveness.

68

69

70

71

UNDPs policy over the past years has changed with annual integrity reports now being widely circulated, identifying
cases of unethical conduct and the way in which hey have been handled. To reinforce ethical behavior a summary of the
annual report is distributed by the Administrator to all UNDP staff.
In one of the previous sections, the example was given of the Senior Civil Service in Japan, where it is common
practice for retired senior civil servants to work for the private sector. That practice seems to benefit both the private sector
(knowledge of the administration) and the government (improved collaboration with the private sector).
In the UK the Nolan Commission recommended that senior civil servants seek clearance from an independent
advisory committee before joining private companies, for at least two years after leaving office. Ministers and special
advisors should be subject to a similar clearance system (Report of the Committee on Standards in Public Life). France,
Germany, Japan, Republic of Korea, Norway, Sweden and Switzerland all have post-employment regulations (ADB, 613).
See Country Case Study on Public Administration Reform Building the Public Administration in a Post-Conflict
situation The case of Timor-Leste, Bangkok SURF, March 2004, page 10.

Page 23

The Act also defines the six principles of employment that should guide members of the
government and state officials, which include the merit principle, access to a fair grievance system
and equal opportunities for all.
Rights of civil servants are based on core principles such as non-discrimination, equal rights for men
and women, access to information required to perform their duties, protection against abuses etc.
Obligations of civil servants include service to the public, honesty, integrity and ethical behavior, as
well as the obligation to inform irregularities. The section on incompatibilities includes provisions on
conflict of interest, giving responsibility for disclosing a potential conflict of interest to the civil servants
themselves. Special provisions apply to senior civil servants (and any employee or group of
employees specified by the government 72) who must submit to the High Administrative, Fiscal and
Audit Court annually a written declaration of his or her personal assets, liabilities and financial
interests (including the interests of their spouse and children). Civil servants are allowed to hold an
employment outside normal working hours, provided that these activities are not in conflict with their
duties as a civil servant and that they received prior authorisation from the minister.
The draft act proposes the establishment of Disciplinary and Administrative Committees in each
ministry, composed of representatives from management and from the civil servants. These
committees would be responsible for providing advice on all questions related to recruitment,
promotion and disciplinary action in the ministry. The committees would also be responsible for
internal appeals. External appeals would be lodged to the Department of Public Service (in the
Ministry of State Administration) and ultimately to the High Administrative Court. The mandate of the
Ombudsman for Justice and Human Rights would also include looking into complaints that involve
corrupt behaviour.
It was also proposed that a Public Service Remuneration Review Board be established under the
chairmanship of the Minister of Planning and Finance, to advise the government on the wage and
compensation policies and to study and monitor the evolution of wages in the other sectors 73.
Second, with UNDP support a Human Resource Management Manual is in the process of being
finalized. The Manual explains the details of the civil service act and related HRM policies. It will serve
as a training guide for HRM officers, directors and ministers.
Third, UNDP will support a broad socialization and public information campaign, including publication
of the Civil Service Act and its distribution within the government and among the broader public,
publication of the HRM Manual and making it available to HRM officers, as well as public managers
and politicians, and distribution of the Code of Conduct (upon initial appointment, all civil servants will
receive a copy of the Civil Service Act and the civil service Code of Conduct. This will help to ensure
the inculcation of public service values and the homogeneity of the public sector ethos.
Fourth, UNDP is providing assistance to the Minister of State Administration for the establishment of a
Help Desk in the Directorate of the Public Service, a special unit that will provide guidance and advice
to civil servants, HRM managers and politicians on how to implement the civil service regulations,
including assistance on the application of the conflict of interest policy. This idea is still in its initial
stages but once established and its personnel trained, there will be government-wide information
campaigns on where and how to obtain such advice.
72

E.g. tax officers and procurement officers.

73

The draft also contained a proposal to create a dual career track for the senior positions in the civil service, providing
senior staff in the professional positions (senior advisors, senior professionals) and equally attractive career, and as such
avoiding the situation where senior civil servants only seek for management positions. The proposal is to have two grades
in the highest levels: a professional grade and a management grade with easy mobility between the two grades.
Classification of public servants into grades in this level will be on the basis of their level of education, professional
experience and selective competition.

Page 24

Fifth, the UNP project is also assisting the Institute of Public Administration (INAP) with the creation of
a Leadership Development Centre and the delivery of a Leadership Development Program. The
program which will target senior officials at central and local levels and politicians within the
government and the National Assembly. The program will include a special module on Ethics and
Conflicts of Interest. In addition, ethics and conflict of interest training will be mainstreamed into the
other training programs provided to other levels of civil servants, including the induction courses.
The draft Civil Service Act has been discussed in the Cabinet meeting and amendments have been
made. Most of the articles on values and core principles have been canceled and are now integrated
into a code of ethics, attached to the act. While it would have been recommended to have a more
comprehensive tool, the code of ethics is very general in nature but it is expected that it will be
complemented by specific Codes of Conduct, applicable to certain ministries (e.g. the Ministry of
Foreign Affairs has already announced that it will prepare its own Code of Conduct to reflect its
particular objectives and mission74). Regular revisions and amendments in light of experiences are
required.
It is to be expected that more changes will be made to the initial draft as the act is further debated in
the Cabinet and in the National Assembly. It is also evident that institutional arrangements for the
management of the civil service and promoting ethics in particular, remain weak. The Public Service
Commission has been abolished. The idea of creating a National Civil Service Council (with
representation from the civil society and the civil servants) has not been maintained. The Office of the
Ombudsman for Justice and Human Rights, as well as the High Administrative and Fiscal Court
(which are both Constitutional bodies) have not yet been established. Today, all complaints are
handled by the Directorate of the Public Service. Much depends thus on the integrity and firm
judgment of its Director and the political backup of the Minister of State Administration. There have
been already a number of cases of irregular recruitment and promotions. Conflicts of interest are on
the rise, as an increasing number of civil servants are also occupying jobs in the private sector 75.
Corruption is also on the rise especially in the revenue collection services.
Obviously, once the Act approved, a whole set of regulations and procedures will need to be finalized,
dealing with all aspects of human resource management in the civil service (transfers, promotions,
dismissal, performance appraisals etc.). These rules and regulations need to provide a robust
foundation for ensuring that the core civil service principles of professionalism, loyalty, integrity,
transparency, service to the public etc. are translated into practice. The rules must also guarantee
that the civil service is managed honestly, fairly and consistently and that political interference is
limited.

74
75

Australia has a broad public service Code of Conduct from which individual agencies design their on more detailed
codes. IN other countries, codes of conduct are entirely agency-based (ADB, 615).
Private Training Centers (even called universities) are mushrooming in Dili. Some of them are managed by the same
persons who need to take public sector decisions outsourcing civil service training. Many civil servants teach after their
official working hours.

Page 25

III. CONCLUSION
Civil service reform in developing countries requires continued commitment from the government and
the donor community as the process takes time and resources to achieve. Much will depend on the
successful development of local capacities for public sector management and policy development.
Despite the need for technical expertise, the political, social, economic and cultural dimensions of the
reforms should not be underestimated. Similar administrative reform projects may have different
meanings and different prospects for success when applied in countries with distinct national
administrative traditions (World Bank Website). For example, "performance pay may appear entirely
compatible with the values of individualistic countries that are oriented towards personal competition
(e.g. the USA, Australia, New Zealand) but they appear far less compatible in many developing
countries, either because they conflict with local values (which may be more oriented towards group
cohesion), or because the foundations for implementing such reforms are not in place. The question
then is how to adapt good management principles to the reality of informal systems and cultural
values.
These political, social and cultural contexts of the reforms have often been overlooked. In this regard
the peer reviews that were organized on the initial draft of the civil service act in Timor- Leste were
interesting as they confirmed the often stereotype approach taken by many consultants when
assisting in the design of civil service reforms. Members of the peer review team who came from the
francophone tradition leaned towards the French model and proclaimed a far more legalistic
approach to human resource management. The members who came from the lusophone countries
leaned more towards the Portuguese model, while the Anglo-Saxon peers stressed the need for a
Public Service Commission and borrowed their advice heavily from the New Public Management
Model. Neither of these proposals was acceptable to the Timorese, reason why UNDP was requested
by the government to work directly with the Civil Service Commission to review the initial draft and
design a system that matched the local culture and conceptualization of a national civil service.
Improving public administration and civil service personnel management systems is one of the most
difficult challenges in developing countries, because of the complexity of the process and the political,
social and economic implications. The conclusion is thus to be cautious when implementing civil
service reforms in developing countries and to avoid imitating the human resource management
practices of some developed countries. Many of these innovations presuppose a robust personnel
system and some even have high inequity and corruption risks that can be particularly high in
developing countries (ADB, 462).
Accountability systems, required to enhance the integrity of public governance, are still too weak in a
new nation. Some institutions have not yet consolidated. There is still an overemphasis on
organizational accountability (to the administrative and political superiors) and professional
accountability (to professional peers). Political accountability (to Parliament), legal accountability (to
the administrative Court) and administrative accountability (to ombudsman, auditors and inspectors)
are still weak, so is downward accountability to the population. Because all these institutions, systems
and processes are still new, it is required to review all policies on a regular basis (e.g. initially every
two-three years) to evaluate their effects.

Page 26

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2004.

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Annex 1: Overview of possible responsibilities for the different institutions involved in


civil service personnel management.
Organization

Roles and responsibilities

Public Service Commission


or an Inter-ministerial
Committee

Make proposals and give advice to the Cabinet on civil service policies, regulations and
administration of the civil service system
Interpretation of the Civil Service Act and related regulations and solving problems
arising from its enforcement
Give advice to Cabinet concerning the organizational development of government
agencies
Guidelines for recruitment, staff appraisal, promotions, career development, etc.
Consider manpower planning policies for the civil service
Approval of high-level appointments76
Special appeal cases which cannot be decided elsewhere
Recommend personnel management improvements to the legislative & the executive
Assist the Civil Service Training Institution (or equivalent body) with the preparation of
policies and regulations, standardized procedures, program formulation and planning,
clarification of objectives and strategies, coordination, monitoring and evaluation etc.
Overall nationwide manpower planning for the civil service
Recruitment (except for the lower levels) and organizational control of recruitment levels
Pay and grading management and control (accreditation of degrees and other
credentials for the purpose of instatement and appointment of civil servants and
determination of the appropriate position level and salary steps)
Prepare model job descriptions and establish standards for the classification of positions
Data base management (all civil servants) record keeping (higher levels) and oversight
of the maintenance of personnel records in the departments
Advise and support to departments and agencies with regard to personnel planning and
delegated management responsibilities.
Controls the implementation of policies and regulations by the departments
Conducts basis personnel management research
Distributes information on best practices related to supervision, performance
management, work environments, in-service training etc.
Coordinate activities related to training and professional development of civil servants
Supervision of government officials studying or training abroad
Manpower control and control of the wage bill.
All financial aspects of personnel management, including pay, pensions, manpower
control.
Recruitment of staff in the lower levels
Disciplinary action and complaints
Record keeping
Daily personnel management
Assist the different agencies in the department in the preparation of their organization
charts, missions and corresponding staffing plans and annual HRDP (human resource
development plans)
Prepare the overall annual HRDP of the department.
Monitor and promote the professional and personal development of civil servants in the
ministry
Report regularly to the Public Service Commission regarding personnel administration in
the department.
Provide advice and support to managers in the performance of their HRM
responsibilities.
Responsible for all liaisons with the Training Institution and other training institutions
(see model job description attached).
Performance management
Identification of the individual training needs of his subordinate staff.
Monitor the probation of newly recruited employees and certify that this probation period
does or does not warrant the employees continuation as a civil servant

Central Agency in charge of


Civil Service Personnel
Management

Office of the Budget Pay


roll unit
HRM units in the (larger)
departments

All line managers

76

The Public Service Commission should determine the list of positions that are exempted from competitive
selection (political positions, certain advisory positions in the ministerial cabinets ) as well as those that are not
subject to the commissions control (labor jobs, temporary jobs, ...).

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Annex nr 2: Advantages and Disadvantages of various institutional arrangements for


civil service personnel management:
OPTION

ADVANTAGES

DISADVANTAGES

Public Service Commission


with an executive office
(Office of the Public Service
Commission could be
CISPE)

Non-partisan institution for personnel


management
An independent Commission, combined
with a strong technical office could be an
appropriate solution, if responsibilities are
well defined

Central Personnel Management


Agency under a Cabinet
Minister (such as the DPS
today)

Enables economies of scale


Enables development of core group of
personnel officers.
A central agency is already in place (DPS)

Civil Service Management


under the Finance Department

Establishment control is closely linked to


budgetary control.
Would be cost-effective in a country like
East Timor.
Links personnel management to a
prestigious and strong central department.
The more important current and future
problems that need to be solved are
budget related (Pay and compensation,
staffing levels).
Civil Service Development is not just a
technical problem but also a political
problem. An inter-ministerial body could
be appropriate to deal with the political
issue.
The development of an East Timorese civil
service requires consultation and debate.

The quality of the commissions work


depends on the quality of its
commissioners and of its office.
If too much involved it may
complicate personnel management. It
could also undermine the principle of
responsible management in the
departments.
Need for competent personnel
management correspondents in the
departments to make the link with the
commission.
Possible delays in handling personnel
management issues.
Could undermine the principle of
responsible management in the
departments.
Need for highly competent staff in the
central agency.
Need for competent personnel
management correspondents in the
departments to make the link with the
central agency.
Human Resource Management function
merely seen from a financial
perspective.
May obstruct the development of a core
cadre of personnel officers.

Inter-ministerial committee, with


an Executive Office (could be
DPS).

Mixture of various agencies

In this case, functions would be divided


between a central policy making body, a
personnel management agency and a
financial control body. An inter-ministerial
commission for manpower planning,
composed of representatives of these
three key agencies, could be responsible
for establishment control These various
agencies and organizations would
counterbalance each others authority.

HRM may become very political.


The fact that some ministers will sit on
the committee and some would not
could create tensions.
In case all would sit on the committee it
would mean that the cabinet becomes
responsible for personnel management.
The members wont have sufficient time
to devote to this function.
Risk of overlapping of functions and
responsibilities.
Not a cost-effective solution for a small
country, especially if the larger
ministries also want to have their HRM
units.

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