ASSESSING PERFORMANCERELATED PAY POLICIES Expert Meeting OECD Paris

ASSESSING PERFORMANCE-RELATED PAY POLICIES Expert Meeting OECD, Paris 7. 10. 2003 PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 1

Public sector personnel in Finland n The state administration 123 000 persons, 4, 9 milliard € n Municipalities and federations of municipalities 426 000 persons (schools, hospitals, etc. ) MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 2

The State administration personnel by sub-sector 2001 35000 29357 30000 25000 19613 20000 15000 11310 10453 10055 9301 10000 Parttime Fulltime 9214 6206 4509 5000 0 ca n tio ty u ed si er iv , es e rd Bo ce rc Un ce Fo li Po en f De rd ua r. G m ge t& en e , r r ue sc e nc a ur ns i se vi a nd a fin s ce l ia nc i rv se es ch ar se Re n B i us s es s i t ra in m Ad t is on e at St O fj ns at er p io try es le is at in l ta M n io at m n nd a rt o p nd m co er O th s v er t la re a ic un ed s nm ro vi a al c vi er en en nd g Re l e c So s ce i rv ng ni d an l ia fa af irs d an ce e ts en ym em 1629 s se i tra i at c du a on e ic 2859 o pl i rv 1538 s e th ns io at r pe o r O s an Tr m fu MINISTRY OF FINANCE, FINLAND Tuomo Vainio o t us io a an s nd l ve e ic c vi er 3449 6. 10. 2003 3

COLLECTIVE AGREEMENTS IN THE STATE SECTOR Employers’ national central organisations, including State Employer’s Office (SEO) Ministry of Finance/SEO - The Government approves - The Finance Committee of Parliament approves additional costs Employer Agencies - Ministry of Finance approves MINISTRY OF FINANCE, FINLAND Tuomo Vainio INCOMES AND LABOUR-MARKET POLICY AGREEMENTS COLLECTIVE AGREEMENTS FOR STATE PERSONNEL - expenditure framework - general employment terms - labour peace obligation Agency-specific collective agreements Employee national central organisations Central State sector employee organisations Agency-level employee unions - pay systems - flexible working hours - other agency-specific issues 6. 10. 2003 4

Overview of the new remuneration system Personal/performance pay Job-related part of pay Demand levels MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 5

The structure and the message of the new system MINISTRY OF FINANCE, FINLAND Tuomo Vainio Parts of the remuneration Basis Message Result-Based Reward The result of the unit or it’s part Let’s do it together (results, quality, good service) Personal/ performance part Performance and possession of professional skills Develop yourself, struggle to good results and good quality Job-related part of pay Demands of the job Acquire and use professional skills, try to attain demanding jobs 6. 10. 2003 6

Example of a NPS (without RBR) MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 7

Progress of the NPS Estimated by the Agencies in March 2003 Situation Estimate: in Target: in the in March 2003 the end of 2004 beginning of 2005 MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 8

Spheres of the RBR’s and paid RBR’s MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 9

Amounts of the RBR’s MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 10

Experiences of the NPS n n All phases in the building process of the NPS are important and have positive repercussions (e. g. surveying the real content of each job) Management by objectives becomes concrete reality with the NPS Leadership possibilities and skills improve Personnel find the NPS more justified because pay differentiation is motivated by the accepted criterias MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6. 10. 2003 11