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# C. MANAGING INCENTIES TO CIVIL SERVICE PERFORMANCE -- APPROACHES TO CLASSIEYING. PAYING AND PROMOTING STAFF

Reward structures are central to performance motivation for civil servants. This section analyzes several advanced country approaches to key aspects of civil service incentive systems. It poses the following questions: What are some successful and/or innovative approaches to classifying and paying civil servants in developed countries? How should staff performance be assessed and linked to pay and promotion? What are the most constructive ways to assess staff performance? What strategies should developing countries follow in light of advanced country experience?

# How to Classify and Pay Civil Servants: Traditional Standards Vs. Flexibility

Developed government systems for classifying and paying public service employees range from traditional approaches, which emphasize centrally determined standards with little room for individual deviation, to increasingly flexible and decentralized approaches. The following discussion briefly reviews the established conventions, looks at attempts to introduce flexibilities into pay and classification systems, and then considers the implications for civil service requirements in developing countries.

Traditional civil services have relied mainly on unified pay scales with automatic, fixed step increments based on seniority and determined on a service-wide basis. Sometimes public pay scales were derived from private sector comparator surveys; sometimes they were formed in the context of collective bargaining with trade unions. The basic elements of this traditional system still operate for the majority of civil servants in many advanced countries, including Japan, France, the Netherlands, Canada, the U.S., Germany, and Korea.

These systems classify positions according to differences in job duties and responsibilities and rank these positions into occupational groups. Each group has a unified salary schedule determined by the central personnel authoe tv, often on the basis of cost-of-living analysis. Recommendations for service-wide adjustments are usually made on an annual basis. Each grade has a flat salary amount and contains a number of incremental steps. For each year of service civil servants receive one step increase. Emplovees typically have guaranteed job tenure and progress through increments automatically. Occasional variations in this system stem from the role of trade union negotiations in setting wage levels for lower level staff.

These systems pose a number of problems. They have usually been designed by technical experts in central personnel departments, not by managers who understand real line job requirements. Because traditional classification systems make it difficult for workers to exceed their job descriptions and develop new skills, they can discourage creativity and initiative. And because pay cannot be raised without promotion to the next grade, a "grade creep' phenomenon occurs.

Many countries are introducing modifications in traditional classification systems. Alterations represent attempts to moderate the rigid standardization of conditions of service to reflect more accurately actual differentiation among jobs and employees. This is being done through a variety of mechanisms. The increasingly popular practice of "broad-banding," for example, encourages flexibility. Broad-banding means recruits enter the service in a salary range rather than at a fixed point, as was traditionally the case. Moving up the ladder, increments are neither automatic (i.e. through seniority) nor fixed. Staff can therefore be rewarded more flexibly. In the US an experiment