Sunday, October 26, 2008

Civil service performance scheme - pay rises for all

Where is the radical reform in the civil service ? Sunday Times figures show that almost every civil servant in the country has received a pay increase. The Government seemed happy to let the civil servants write the budget and now we find that the oversight process for employees in the civil service, the Performance Management and Development System (PMDS) has standards so low that in essence the civil servants are writing their own pay rises. According to the Department of Finance, the pay bill for 2008 will be €2.1 billion up 6.7% from 2007 (€1.9 billion). This sparks the questions about pay freezes, reform, and job security of civil servants. Its worse in the wider public sector where the average wage increase is around 8.9% or so and adds €1.5 billion to the wage bill per year.

Mark Tighe in the Sunday Times (26/10/2008) had reported a number of shock findings in the PMDS scheme for performance rating of civil servants. It seems that if you turn up to work and sleep at your desk for the day, you'll still get your raise while you work in the Irish civil service. It seems that those who word hard in the civil service are being hampered and the top quality of these hard workers are not being rewarded in relation to their colleagues. Whether it is a failing of training or for management needs to be discovered because this kind of carry on would last less than five minutes in any Multinational in this country so why should it be allowed to fester in our civil service ?

Tighe got the view of Union leader's such as Tom Geraghty who claim the scheme has improved performance but does not his surprise that were not more people in the poor performance categories as ``Everyone things they are a swan but there are bound to be a few ducks''. He further conceded that management had to motivate people and that ``telling them that they are useless isn't a great way of doing that''.

The figures released to Tighe show the soft reality of the civil service. These are especially harsh when compared with the civil service-wide PMDS evaluation (PDF) by Mercer Human Resource Consulting which was completed in May 2004. The suggested figures for percentages in levels are vastly different, perhaps Mercer was thinking along the lines of the private sector where only true performance and merit is rewarded. The consultants report further noted that the PMDS system itself was weak at distinguishing between the different performance levels, in highlighting which staff performed well and in handling those ``few ducks'' who underperformed. The figures shown below highlight how the civil service is over egging the pot (on the left) by being top heavy in the 3, 4, and 5 categories. The consultants report (on the right) showed a more private sector view with correspondingly lower numbers in the higher categories and a vast increase in comparison to the underachieving categories.

Sunday Times versus Mercer Human Resource Consulting PMDS figures

The most telling problem with this system is that the consultants found that it was not linked to decisions on promotions, pay increases, or career development. Senator Alan Kelly of Labour has recently (8th October, 2008) voiced further concerns about PMDS as it currently only being applied to the lower grades of the civil service and that its implementation in the senior manager grades has left a lot to be desired.

Even a bad scheme like PMDS is better than no scheme. Local Authority workers (~35,000) and Health Service Executive staff (~111,000) are not yet in such a ranked/rated scheme. In the case of the Local Authority, they are considering it and in the HSE they have one but it doesn't use any kind of ranking or rating. It really is no surprise that the HSE has a bad record for its management not knowing who is currently employed but without ranking for staff, one wonders how the staff get assessed with any due consideration.

Mark Tighe has a second Sunday Times article point out that 74.2% of all public-sector workers earned more than €40,000, further break downs show that even in the higher pay categories the public sector employees are still ahead of the average private sector counterpart. Two examples, between €50,000 to €100,000 its 29.1% of public sector workers to just 13.1% of private sector worker and above €100,000 its 2.5% public sector to 1.9% private sector. These figures are basic figures and do not include any additional loading for job security or the guarantee of a pension for public sector employees.

Tighe spoke to Jim Power, chief economist with Friends First who pointed out the reality that ``in the private sector thousands of workers are being let go and salaries are being cut by 10% to 20% in some companies. It is clear the public-sector unions believe the adjustment in the economy must be borne entirely by the private sector''. Brian Lenihan has stated a reform of this area will be ``messy and unpleasant'' so instead he's waiting for a task force to deal with the problem instead. I think I'd prefer the approach of Richard Bruton to sorting out the mess because regardless of politics, he at least seems to understand the problems (overview of reform approach, Reform through Recovery response to Budget).

An annual increase of €1.5 billion in the national public sector pay bill or €100 million for the over 70's medical card, hhmmm I think I know which problem I'd be tackling if I was in government. There was an elephant in the room for this budget, it was and still is public sector reform. Tackling this one issue would provide all the funds to provide universality for health care and education and they'd still be cash for capital development. If only there was some leadership and grasp of reality in the current Government we might cushion the impending hard landing as it stands this is an avalanche gathering speed which will plunge us into a Japanese style recession without prompt and hard calls by the Government.

Labels: , , , , ,

Wednesday, October 15, 2008

Inflation versus Innovation - Budget 2009

A great hullabaloo was given to the announcement in yesterday's budget that €300m was being earmarked for the continued implementation of the Strategy for Science, Technology and Innovation.

Science Foundation Ireland is up €7m from last year to €179m
Enterprise Ireland is up a little over €3m from last year to €127m

I'd like to point something to the Minister - inflation is running at 4.3% according to the CSO so that means that both SFI and EI are actually running behind inflation, so no new schemes or extra changes here. This will probably mean that there will probably be more contracting of existing schemes rather than a directed push for more innovation, research or commercialisation. The meagre 5% rise in R&D tax credits to 25% isn't worth anything to the figures I've done based on my own tech transfer experiences. The final insult is the lack of any effort to provide a broadband infrastructure to deal with the third world or worse state of this critical technological engine of change.

This adds onto my disgust at the treatment of OAPs and marginalised sectors of society. Well done, Minister - no reform, no strategy. At least Ray `the knive' MacSharry could claim some reform in the public sector but this is a joke of a budget with the private sector, the old, and the marginalised left to suffer the pain.

Labels: , ,