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© OECD
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CIVIL SERVICE PROFESSIONALISATION IN THE
EUROPEAN EASTERN NEIGHBOURHOOD
Public Administration Reforms in the EU and OECD In the context of financial constraints
Christoph Demmke, Advisor to the OECD
Tbilisi, 4-5 November 2014
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Introduction
• Report on Studies for the EU Presidency in 2011 – 2013 in the framework of the EUPAN network (n = 25 EU countries)
• OECD Survey on the Impact of Budgetary Constraints on HRM (2014) Discussed and adopted in OECD PEM network 32 countries Survey in early stage, finalisation in 2015
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Is the Public Service reform resistant – a myth !
• Reform of Organisational structures• Debureaucratisation• Abolishment of careers, • Mobility policies• Towards new Work systems
• Reform of Public Employment • Reform of Working Conditions • Changes as to the division of public and private tasks
(Outsourcing, Shared Services)• Leadership reforms • Value Changes
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Many changes but uncertainty about reform outcoumes
• Many prevailing perceptions – not innovative, private sector is better
• Reform fashions and broad concepts: Sustainable PA, Agility, Resilient, Engagement etc.
• Many hasty and ad-hoc approaches • More reforms than evidence about outcomes• People not assets but cost factors• Increasing expectations, less capacities
4
EL CY FR DE ES IT AT PLMT
Mean LV SK UK CZ0
10
20
30
40
50
60
70
80
90
100
Debureaucratisation but no new universal model, no convergence
0% = Bureaucracy, 100% = Post-Bureaucracy, Source: Demmke/Moilanen 2010)
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Variations of (perceived) reform pressures in the EU (2007)
Considerable variations between public administration traditions Little relevance of country size and HR system
technological developmentscitizen demands
p.a. top executives
p.a. employees
staff representatives / unions
political parties
public in general /media
private sector
other interest groups
supranational organisations
very low1 2 3 4very strong
economic situation / budgetEU legislation / integration
national parliament / legislation
socio-demogr. developments
Scand.
Scand. Transition
Continental
Transition
Contin./Transition
Mediterr.Mediterr.
Scand.
Anglo.
Anglo.
Anglo.
Mediterr.
Mediterr.Contin.
Transition
Mediterr.
technological developmentscitizen demands
p.a. top executives
p.a. employees
staff representatives / unions
political parties
public in general /media
private sector
other interest groups
supranational organisations
very low1 2 3 4very strong
economic situation / budgetEU legislation / integration
national parliament / legislation
socio-demogr. developments
Scand.
Scand. Transition
Continental
Transition
Contin./Transition
Mediterr.Mediterr.Mediterr.Mediterr.
Scand.
Anglo.
Anglo.
Anglo.
Mediterr.Mediterr.
Mediterr.Mediterr.Contin.
Transition
Mediterr.
EC
EC
administrative decentralisation
political decentralisation
strengthening accountabilitystrengthening policy coherence
quality management
aligning public-private employm.
HR decentralisation
budget decentralisation
performance management
open government
customer orientationethics / codes of conduct
e-governmentpublic-public partnerships
private sector involvement
relativelylow influence1 2 3 4
very high influence
new public management
good governanceuse of market-type mechanisms
austerity/saving programmesAnglo./Scand.
Scand./Anglo.
Continental/Transition
Anglo. small
Scand. small
Continental small
Anglo.
Scand. Continental
Scand. small/Anglo.
Scand. small/Mediterr.
Scand. Continental
Continental
Scand.Anglo.
Scand.
Anglo. Continental
Mediterr./Continental
Anglo.Mediterr.
Transition
administrative decentralisation
political decentralisation
strengthening accountabilitystrengthening policy coherence
quality management
aligning public-private employm.
HR decentralisation
budget decentralisation
performance management
open government
customer orientationethics / codes of conduct
e-governmentpublic-public partnerships
private sector involvement
relativelylow influence1 2 3 4
very high influence
new public management
good governanceuse of market-type mechanisms
austerity/saving programmesAnglo./Scand.
Scand./Anglo.
Continental/Transition
Anglo. small
Scand. small
Continental small
Anglo.
Scand. Continental
Scand. small/Anglo.
Scand. small/Mediterr.
Scand. Continental
Continental
Scand.Anglo.
Scand.
Anglo. Continental
Mediterr./Continental
Anglo.Mediterr.
Transition
Context, fashions and pressures determine reform priorities?
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Since 2008 budgetary constraints as No 1 reform pressure but situation of countries differ
….a widening gap as regards the implementation of reform measures (Germany, Sweden, Luxemburg vs. Portugal, Greece, Spain, Japan etc)
Evidence on impact of budgetary constraints on HRM policies „thin“
Framework for recessionary bundles and reform trajectories in the field of managing
budgetary constraints and impact on HRM Source: Paul Teague et al. (adapted)
Soft employee focused reform path
Responsible restructuring
Tough efficiency focused restructuring/
downsizing path No compulsory lay
offs Voluntary lay-offs High use of
communication/leadership to explain rational for HR bundles
Focus on efficiency, productivity, innovation and learning, skill training, reallocation and value management
Retention of staff Abolishing seniority Employees involved
in developing options for responding to the recession
Further investments in skill, learning and innovation policies
Focus on Leadership Introduced short-time
working while maintaining pay
Improved workforce planning
Relaxing Job Security Reform of Civil
Service Status Flexibilisation of
Working Time Longer Working hours Reform of Pension
systems Introduction of
voluntary departures Furloughs Reform of holiday
system Active new health
policies in order to reduce sickness rates
Reform of bonus system (cuts)
Dismissal for poor performance
Replacement of civil servants by more fixed-term employees
Increasing training efficiency
Reform of promotions Professionalization of
recruitment system, mobility policies
Maintenance of skill, learning and innovation and leadership policies
Introduced outsourcing after careful evaluation of added value
Set up new shared services after careful evaluation of added value
Downsizing personal Cut wages, reform
pension system Enhanced job
security abolished Working longer,
reform of holiday system
Tightened discipline, time keeping and attendance requirements
Promotions and recruitments frozen
Reduction of civil servants
Abolishment of civil servant status
Enhanced outsourcing and introduction of new shared services
Staff performance managed more rigorously
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No 2 Reform pressure Demographic challenges/ Age management
Measures in order to boost public employment participation
• Increase participation rates of older employees • female participation
Enhancing greater immigration Attempts to increase fertility rates Increasing labor productivity and efficiency
Efficiency Fighting discrimination, enhancing inter-
generational fairness
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Still, all EU/OECD countries face a common challenge
• Is it possible a) to do more with a smaller workforce, enhance productivity while increasing efficiency, b) remain an attractive employer who can retain and attract employees in a more competitive context?
• More uncertainties than evidence
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Some Trends
• EU
• OECD
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Current employment trends
• Public employment• Composition of workforce• Alignment of working conditions between
public and private sector• Changes in employment conditions such as
pay, training, job security etc• Reform outcomes: Impact of the crisis on
workplace behavior, trust, stress, positive outcomes
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Size: General public employment trend in the EU
• Trend is very clear: there is a strong decrease in employment in central administrations of the EU Member States (26 responses, overall score 4.241)
• Trend is very strong in those countries which are subject to austerity measures (11 countries, score 4.45) but almost equally strong among non-austerity countries (15 countries, score 4.07)
1 1=increase in employment, 5=decrease in employment
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EU: Public employment trends and impact on employment groups
• Some countries cut employment as regards different employment categories due to financial constraints (e.g. ES, IT, PT, BG, EL etc) Overall, biggest reductions in civil service
employment (exceptions in DE, IT, PL, BG) Slight decrease in fixed-term employment but
also increase in some cases (DE, NL, EC)• In some countries, fixed-term employees
almost do not exist (MT, PL*) on central governmental level, in others strong group (Sweden 18%, Portugal 16%)
Public law employees
Labour law employees
Fixed-term employment (*)
No austerity measures
Mean 3,36 3,15 2,92N 14 13 12
Std. Dev. 1,008 ,987 1,165
Austerity countries
Mean 3,91 3,64 3,11N 11 11 9
Std. Dev. ,944 1,120 ,928
TotalMean 3,60 3,38 3,00N 25 24 21Std. Dev. 1,000 1,056 1,049
General public employment trend on central level by austerity and non-austerity
countries in EU-27(1=increase in employment, 5=decrease in employment)
(*) flexible, limited and/or short-term contracts
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OECD: Overall trend in central public employment
since 2008High decrease: 17.9%
Moderate decrease: 46.4%
No relevant change: 10.7%
Moderate increase: 21.4%
High increase: 3.6%
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OECD: Use of instruments in reducing employment levels
since 2008
18
Non or partial replacement of retiring staff
Recruitment freezes
Annual productivity targets (eg: 0.5% personnel reductions)
Outsourcing
Dismissals
Decentralisation of employment to lower government level agencies
Privatisation
0% 20% 40% 60% 80% 100%
Frequent use Moderate use No use
Percentage of responding countries
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A changing workforce
• The changing composition of Public Employment
• Towards a core civil service
• Changing Status and alignment
• Changing Working Conditions19
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Government in the 21st century
20
• Composition• Status, Working Conditions
• Size• Structure
From unified to fragmented,
decentralisation of HR, agencification, shared services, outsourcing etc.
Leaner, smaller but shortages in some
sectors
Diversity (women, ageing,
representativeness, international)
"Hollowing out" of status , reform of
WC (pay, allowances etc.)
Composition. Towards a new public workforce
• Status exercised by nationals
• Discrimination
• Young age structure, early retirement
• Dominance of male employment
• Dominance of public law status• Dominance of experts, recruited on
the basis of qualification and expertise
• “Stagnant”workforce
• Status exercised also by non-nationals
• Principle of non-discrimination, Diversity, Representative Government
• Ageing of workforce, increase of employment rates of older employees
• Increase in female employment
• Dominance of labour law status • Continuous adaptation of skills,
competency management • Mobile workforce, restructuring,
shifting
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Hospitals
University
Education
Military
Police
Judiciary
Diplomatic service
Government agencies
Central government
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Central civil service
Specific civil service
Not part of civil service
Towards a core central civil service? (EU 25)
• Differences in working/employment conditions decreasing amongst civil servants and public/private sector employees
• Differences remain as regards pay, recruitment, job security, career development
• However, also pay, job security, recruitment policies etc. are being reformed and further flexibilised etc.
Alignment trends amongst public employees and private sector employees
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Differences between civil servant employment and contract employment by issues (average)
(1=very much, 2=somewhat, 3=fairly little, 4=not at all)
health insurance
working time arrangements
holiday arrangements
ethical obligations
pension system
right to strike
pay systems
career development procedures
job security
recruitment procedures
1.0 1.5 2.0 2.5 3.0 3.5 4.0
3.4
3.2
3.1
2.8
2.7
2.6
2.5
2.4
2.2
2.0
dif
fere
nt
sim
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Reforms of employment conditions
• EXAMPLES: Job Security Pay Training
25
The end of life-time tenure? Termination of civil-servant employment by EU Member State (1=Yes, 2=No)
A B C D E F G H Germany 1 0 0 0 0 0 0 1 Greece 1 0 0 0 0 0 0 1 Luxembourg 1 0 0 0 0 0 0 1 Belgium 1 1 0 0 0 0 0 2 Cyprus 1 0 0 0 0 0 1 2 Ireland 1 1 0 0 0 0 0 2 Italy 1 1 0 0 0 0 0 2 Portugal 1 1 0 0 0 0 0 2 Spain 1 1 0 0 0 0 0 2 Austria 1 1 0 0 0 0 1 3 Malta 1 0 1 1 0 0 0 3 Sweden 1 0 1 1 0 0 0 3 Czech Republic 1 0 1 1 1 0 0 4 Estonia 1 1 1 1 1 0 0 5 France 1 1 1 1 1 0 0 5 Hungary 1 0 1 1 1 1 0 5 Lithuania 1 1 1 1 1 0 0 5 United Kingdom 1 1 1 1 1 0 0 5 Bulgaria 1 1 1 1 1 0 1 6 Denmark 1 1 1 1 1 1 0 6 Finland 1 1 1 1 1 1 0 6 Latvia 1 1 1 1 1 1 0 6 Netherlands 1 1 1 1 1 1 0 6 Poland 1 1 1 1 1 1 0 6 Slovakia 1 1 1 1 1 0 1 6 Slovenia 1 1 1 1 1 1 0 6 Romania 1 1 1 1 1 1 1 7 Mean 1.00 0.71 0.61 0.61 0.54 0.29 0.18 3.93
A = Disciplinary reasonsB = Poor performanceC = Restructuring D = Downsizing E = Re-organisation F = Economic difficulties G = Other
H = Sum
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But limited changes in employment protection since
2008
It has become easier to dismiss public employees
It has become easier to dismiss civil servants
Notice periods have been shortened
Other
0% 20% 40% 60% 80% 100%
Yes No Cannot say
Percentage of respondent countries
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Focus is on remuneration reforms in central public administration since 2008
75% of surveyed countries implemented remuneration reforms since 2008
Pay freeze
Reduction or abolishment of allowances (e.g., Christmas allowance, 13th salary)
Reduction of performance-related-pay/bonuses
Reduction of remuneration for all staff
Reduction of remuneration specifically for top-level
0% 20% 40% 60% 80%
Outcome of Remuneration Reforms
Percentage of responding countries
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and on….Training policies in central public administration since 2008
Training budgets
Training days
0% 20% 40% 60% 80% 100%
Implementation of reforms in training policies: Percentage of responding countries
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Reform outcomes
• Workplace behaviour• Trust• Stress, Job Intensity• Attractiveness of Public Sector Employment
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Critical challenges
• And in your country? Do you agree…..
31
Impact of austerity measures on workplace level (N=25) (Demmke/Moilanen, 2013)
inappropriate use of resources
higher stress levels and job intensity
greater tendency towards corruption
decline of ethical values
perceived unfairness (private sector)
decrease in loyalty
perceived unfairness (colleagues)
decrease of trust in the organisation
increase in anger
decrease in workplace commitment
decrease of trust in leadership
lowering of job satisfaction
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
EffectNo effectHard to sayMissing
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Effects of reforms on workplace behaviour (OECD)
Decrease of trust in leadership
Lowering of job satisfaction
Decrease in workplace commitment
Perception of unfairness compared to how colleagues are dealt with
Increase in anger
Decline of ethical values
Decrease in loyalty
Perception of unfairness compared to how private sector employees are dealt with
Unethical behaviour arising from higher stress levels and higher job intensity
Increase in inappropriate use of resources, e.g., theft and fraud
Greater tendency towards corruption
0% 20% 40% 60% 80% 100%
Effect No effect Cannot say
Percentage of responding countries
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Impact of current reform trends on work intensity and stress in central public administration
Work/job intensity
Work related stress
0% 20% 40% 60% 80% 100%
High increase Moderate increase No changeModerate decrease High decrease Cannot say
Percentage of responding countries
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Attractiveness of Public Service Employment
• Decreasing
• Challenge in times of demographic pressures and more competitiveness in the „war for talent“
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Positive challenges
• And in your country? Do you agree…..
36
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Relation better Workplace Quality/Work Organisation
37
Strongly deteriorated
Not available
Strongly improved
Moderately deteriorated
No change
Moderately improved
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Change in overall organisation of work and workplace quality since 2008
Percentage of respondent countries
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Other positive challenges
• Trend also brings many opportunities Reform of civil services, increase efficiency Placing emphasis on Innovative HRM policies Discussion on need for specific civil services and as
relationship between civil servants and private sector employees
Age management and anti-discrimination Bringing generations together
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Positive challenges
The current situation will force public administrations to improve and professionalise workforce planning and improve data management because of the need to reallocate HR resources across sectors resulting from additional demands for staff in other sector
The need to downsize public employment makes it easier to anticipate future demographic changes and pressures and forces to think more strategically on the structure, composition and size of the future workforce
The current situation opens the possibility to rethink the need for having differences (or not) in employment and working conditions between civil servants, other public employees and private sector employees
The current situation opens the possibility to rethink the division of labour between the public and the private sector
0% 20% 40% 60% 80% 100%
Totally agree Rather agree Rather not agree Does not agree
Percentage of responding countries
A j
oin
t i
nit
iati
ve o
f th
e O
EC
D a
nd
th
e E
uro
pea
n U
nio
n,
pri
nci
pal
ly f
inan
ced
by
the
EU
Future HRM challenges
• Organisational Fairness and Trust
• Towards a more refined Leadership theory (transformational, transactional, ethical leadership etc.)