ministry of finance, finland tuomo vainio 6.10.2003 o:\pam\2003\kalvot\pariisi\1 performance-related...

$: MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6.10.2003 o:\pam\2003\kalvot\pariisi\1 PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND ASSESSING$
6.10.2003 o:\pam\2003\kalvot\pariisi\1MINISTRY OF FINANCE, FINLANDTuomo Vainio

PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND

ASSESSING PERFORMANCE-RELATED PAY POLICIESExpert Meeting

OECD, Paris7.10.2003


Public sector personnel in Finland

The state administration 123 000 persons, 4,9 milliard €

Municipalities and federations of municipalities 426 000 persons(schools, hospitals, etc.)


The State administration personnel by sub-sector 2001

29357

19613

11310 10453 10055 9301 9214

62064509 3449 2859

1629 1538

0

5000

10000

15000

20000

25000

30000

35000

Univer

sity

educa

tion

Defen

ce F

orces

, Bord

er G

uard

Police,

resc

ue se

rvic

es

State

funds

man

agem

ent &

insu

rance

and fi

nanci

al s

ervi

ces

Resea

rch

Busines

s se

rvic

es

Admin

istra

tion o

f just

ice

Operat

ions

at M

inis

try le

vel

Regio

nal a

nd envi

ronm

enta

l ser

vice

s

Transp

ort an

d com

munic

atio

n and re

late

d ser

vice

s

Other

educa

tional

and tr

ainin

g ser

vice

s

Social

affa

irs a

nd em

ploym

ent s

ervi

ces

Other

oper

atio

ns

ParttimeFulltime


COLLECTIVE AGREEMENTS IN THE STATE SECTOR

Ministry of Finance/SEO

- The Government approves - The Finance Committee ofParliament approves additional costs

COLLECTIVE AGREEMENTS FORSTATE PERSONNEL

- expenditure framework- general employment terms- labour peace obligation

Central Statesector employeeorganisations

Employer Agencies

- Ministry of Financeapproves

- pay systems - flexible working hours- other agency-specific issues

Agency-levelemployee unions

Employers’ nationalcentral organisations,including StateEmployer’s Office (SEO)

INCOMES AND LABOUR-MARKET POLICY AGREEMENTS

Employeenational central organisations

Agency-specific collective agreements


Overview of the new remuneration system

Personal/performance pay

Job-related part of pay

Demand levels


The structure and the message of the new system

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

Parts of the remuneration

Basis Message


Example of a NPS (without RBR)

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

5,5

6

1 2 3 4 5 6 7 8 9 10 11 12

Demand levels

Mo

nth

ly p

ay

- 10

00 €

Basic salaries Individual performance salaries


0

10

20

30

40

50

60

70

80

90

100

1 2 3 4

Pe

r ce

nt Personnel

Agencies

Progress of the NPS Estimated by the Agencies in March 2003

Situationin March 2003

Estimate: inthe end of 2003

Estimate: inthe end of 2004

Target: in thebeginning of 2005


40

20

5

42

24

10

4

67

0

10

20

30

40

50

60

70

80

Industry etc. Service etc. State Muncipalities

Pe

r ce

nt

of

pe

rso

nn

el

Sphere

Paid

Spheres of the RBR’s and paid RBR’s


Amounts of the RBR’s

4,4 4,4

2 2

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

Industry etc. Service etc. State Muncipalities

per

cen

t of t

he

ann

ual

sal

ary


Experiences of the NPS

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 o:\pam\2003\kalvot\pariisi\1 performance-related...

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