Guest article: Latin America’s civil service ten years later: same old, same old? - Mariano Lafuente Inter-American Development Bank

Human resource management in the public sector is often neglected in Latin America because it can be politically very sensitive. But it is crucial for institutional effectiveness and, over the medium term, for legitimacy too. What public policies and public services can achieve depends heavily on the quality of the civil service. Moreover, public sector human resource management an field in which the region certainly has room for improvement.

Our recent book: “Serving Citizens: A Decade of Civil Service Reforms in Latin America (2004-2013)” analyses how human resource management has evolved in the civil service in sixteen Latin American countries during the last decade. The methodology is based on the Ibero-American Charter for the Public Service, signed by these countries back in 2003, and which was applied in 2004 and 2013.

What did we find? The region made progress in the last ten years, but not as much as we hoped when the Charter was signed. The regional average performance moved from 30 to 38 points out of 100. This average hides significant disparities among countries. One group has improved substantially, typically from a low base. This group includes El Salvador, Dominican Republic, Paraguay, Peru, but its rate of improvement leads us also to classify Chile in this group even though it started with a high score. Another group of countries has made less progress. This group includes Brazil, Mexico, Colombia, Uruguay, and Costa Rica, all of which began from high or at least medium level scores. However, it also includes Bolivia, Guatemala and Honduras which started from lower initial scores.

In which fields have countries made most progress? We have seen both significant achievement and more Latin American countries making efforts in, for example, extending merit-based and competitive processes for people applying for public sector work. For example, many countries are now using centralised public employment online portals. There have been improvements in personnel information systems, stronger civil service agencies, and better job descriptions. The weakest improvement has been in performance appraisal, promotion processes, mobility within the public service, and pay management.

What can be done? We propose a ten point agenda to raise the level of talent management in the public sector in Latin America. This agenda is not a ‘one size fits all’ garment. Rather, the agenda has to be varied to suit the particular civil service development and context in each country. We urge countries to

1.      Reduce their excessive reliance on generic measures of merit, and introduce more flexibility into HRM. Ten years ago, the main goal was “a career civil service for all”. Today in those countries where the career system has been consolidated, the main challenge is now the excessive rigidity in promoting talent, in firing staff for consistently bad performance, or moving them horizontally among ministries.

2.   Reduce the emphasis on uniform and centralised procedures for the whole civil service and instead allow departments and agencies to take measures to attract, recruit, motivate, and retain staff with the appropriate skills for their organisational needs. In the twentieth century, civil service agencies typically focused on ensuring that rules were complied with. Today, these rules tend to be create bottlenecks than allow a process which actually adds value. Central regulation and decentralised operation seem now to be the way to move.

3.      Gradually and selectively introduce specific employment systems for certain sectors or positions, thereby complementing existing career paths. This is needed especially at the senior management level and for some occupations such as information technology expertise.

4.   Professionalise the senior civil service. Over three quarters of OECD countries manage their top public managers as a separate cadre. In Latin America, only Chile and Peru do so.

5.      Institutionalise management and information systems. Countries now need to move from running a payroll module alone to running much more comprehensive systems that support effective human resource management in every respect.

6.      Implement competency-based management, but avoiding overly complicated designs.

7.      Improve performance appraisal by developing realistic and strategic visions. There are no magic solution that ensure an effective performance appraisal automatically in every case. Pragmatic solutions are needed to avoid a situation in which that 99.9% of permanent staff are rated excellent every year, and to ensure that the appraisal is actually useful to make human resource management decisions.

8.    Enhance pay policy to attract and retain staff, and motivate people to invest in their skills and managers to focus on the skill set of their whole workforce. This applies especially to those countries which have not updated their pay policy in many years but which have the fiscal space to do so.

9.    Improve compensation management to contain the wage bill. This is a huge issue in some countries, which can be improved also through management reforms.

1.   Attract and retain young talent in the public sector. Several countries suffer from an ageing public workforce. Again, in some of these countries, those few young people who do enter the public service tend leave to for jobs in the private sector after a few years, because they are disappointed with how things are run in government. Programs such as UK’s Fast Stream, the Presidential Management Fellowship in the US and Practices for Chile focus on this objective.

As well as giving snapshots of the position in 2004 and 2013, and offering our ten recommendations, the book also examines the political economy of civil service reform in Latin America. We do this using case studies in three areas – senior executive service, pay policy and safeguards against politicisation. From these, we derive a few lessons learned on strategies to push forward this agenda.

These strategies are:

1.      Promote closer cooperation between the civil service agency and the fiscal institutions. While it seems pretty obvious, too often political struggles make this cooperation unusual. From a reformer’s perspective though, a basic first step is to avoid creating new opportunities for vetoing reforms with appropriate fiscal rules.

2.      Design gradual reforms. Countries should resist the temptations to look for too-simple and too general solutions, and to try to solve all their problems affecting the civil service at once. This applies in both the design and implementation phases. The challenges of reforming public sector human resource management are very complex. Both political and technical obstacles have to be overcome. It’s important to have a clear road map but also to take great care over selecting the initial actions to be taken.

3.      Prioritise improving human resource management practices over enhancing legal frameworks. Politicians always have incentives come up with new laws or decrees. But improving practices at the organisational level is much more urgent. Legal changes can usually be introduced later.

4.      Strengthen the technical capacity of the civil service agency. Without a central agency capable of carrying out a solid policy analysis, design, execution and evaluation, reform objectives are unlikely to be achieved. Strengthening human resource management units in line ministries is crucial.

5.      Increase the incentives for politicians to support and commit to civil service reform. Of course, politicians are loathe to risk their political capital in complex reforms which have are long-term or diffuse benefits but where costs are very clear in short-term. It is vital to build coalitions for reform coalitions with people both inside the civil service and with sectors outside government including business. Secondly, politicians need to see clear links between civil service reform and their governments’ other priorities.

6.      Promote learning opportunities. Overcoming fear of failure is difficult in the public sector. Inevitably, though, complex reforms are subject to mistakes and delays. Capacity tends to be built during implementation, not before. So it is advisable to leave enough learning space for the practitioners, so that they can make continuous adjustments and improvements.

Mariano Lafuente is a Senior Public Management Specialist at the Inter-American Development Bank. He specialises in human resource management in the public sector, in reforms to the central executive, and in performance management. Previously, he was a Public Management Specialist for the Latin American and Caribbean region at the World Bank. Recently, he also co-authored the book: “Governing to deliver: reinventing the center of government in Latin America and the Caribbean” (2014). His Twitter account is @LafuenteMariano