Reform civil service instead of raising pay

Nuraida Mokhsen, Jakarta

The government will raise the take-home pay of civil servants by an average of 20 percent next year. This pay increase, according to the Vice President, is expected to boost the performance of civil servants.

Considering civil servants' real income will only increase slightly, it is very unlikely that this policy will promote work motivation. Besides, the salary structure is still based on rank. Such a structure provides no incentive to improve productivity, as civil servants' ranks have nothing to do with performance.

Currently, monthly basic salaries of civil servants range from Rp 575,000 (US$ 57) for the lowest rank to Rp 1.8 million for the highest rank. Those who are appointed to structural and functional positions also receive position allowances ranging from Rp 20,000 to Rp 4.5 million. In addition, civil servants also receive honoraria from many different projects. Nevertheless, take-home pay of high-ranking officials is still much lower than those of their counterparts in the private sector.

With the 30 percent increase, the take-home pay of government employees with an elementary school background will be Rp 747,500. This is fair enough since it is very close to the minimum wage for Jakarta. But for most senior civil servants, with a 7 percent increase their take-home pay will only be Rp 6,741,000, an amount considered still below their real market value. The rise, therefore, will not have an impact on performance nor on corruption.

It is a dilemma whether or not to raise the salary of civil servants. In the fiscal year of 2005, approximately Rp 35 trillion has been allocated from the state budget for salaries and allowances of central civil servants, police officers, military personnel and pensioners. In addition, approximately Rp 40 trillion has been set aside by regional governments for regional civil servants. This means that Rp 75 trillion is needed annually to pay salaries and allowances of civil servants.

If civil servants' salaries are made comparative to the private sector, as proposed by Erry Riyana Hardjapamekas, deputy chairman of the Corruption Eradication Commission (KPK), the government would need to set aside at least Rp 200 trillion a year from the state budget. In addition, the government should also allocate more funds for pensioners, as their pension will automatically increase. Considering the current state of the economy, it is highly unlikely that the government can provide such a large amount of money from the state budget, unless the number of civil servants is drastically reduced.

Suppose that the government could afford to pay the salaries of civil servants based on market value, there would be no guarantee that this would promote civil servants' performance, for low pay is not the only reason for low work motivation. Ineffective design of the salary structure and scale has also significantly contributed to low performance.

Under the current system, monthly salaries are calculated based on a civil servant's rank and years of service. Rank is defined based on education and years of service. This means that the salary level is very much affected by years of service (seniority). Surprisingly, performance does not have a direct impact on rank and salary. Every four years one's rank will automatically move up one step, regardless his or her performance. Such a practice has discouraged work motivation. Why should civil servants work hard if colleagues who do not perform also get the same salaries?

To promote civil servants' performance, the government should introduce a more systemic and comprehensive civil service reform. Government functions should be redefined and its structure should be made more rational and mission-driven. Unnecessary positions should be cut. Recruitment of new civil servants should be based on real needs.

All civil servants should be appointed to positions rather than to ranks. They should have clear job descriptions so that their performance can be measured objectively and they can be held accountable for their actions. Recruitment and promotion should be based on merit and the process should be made transparent.

Salary structure and scale should be redesigned. It should be based on job value. Incentives should also be provided for those who perform well. For this purpose, the government should reintroduce professional job classifications to the civil service and perform job evaluations.

Attempts to implement civil service reform have been made by many agencies at the central as well as regional level. Those initiatives, however, tend to be partial and sometimes conflict with each other. This is due to the fact that regulatory responsibilities for the civil service are fragmented among various agencies, like the Ministry of Administrative Reform, the Civil Service Agency (BKN), the National Institute of Administration (LAN) and the home ministry. Coordination among central agencies and between the central and regional governments is poor. As a result, the quality of public services remains poor.

Without comprehensive civil service reform, the bureaucracy will remain the same and civil servants will remain self-oriented rather than public service-oriented. To ensure that the reform is effective, the President should form a special task force for civil service reform. This tasks force could be given a mandate to prepare a grand strategy for civil service reform and coordinate the implementation of the reform program. This strategy could be expected to improve coordination, speed up the process and ensure the effectiveness of reform.

This task force should report directly to the President. Its members should be selected from those who have genuine knowledge and experience in this area. In addition, they should also be strongly committed to reform. They could be recruited from inside as well as outside the bureaucracy.

The process of preparing and delivering the reform agenda should be participated in by all relevant parties, including civil society. By doing so, it could be expected that the reform's objective, to create an efficient, effective and accountable civil service, could be effectively achieved.

The writer is adviser for Civil Service, Partnership for Governance Reform in Indonesia and can be reached at nuraida.mokhsen@undp.org