Human_resource management under change, romania

8/7/2019 Human_resource management under change, romania

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down in the rst royal constitution have survived in Romania until today. TheRomanian Civil Service suffered greatly in the Communist era. The connection betweenthe Communist Party and the public apparatus was extremely strong, and no speciallaw existed regulating the status of civil servants (Mihai, 2005a, b). However, theconsolidation process in Europe and Romanias Accession to the EU have clearlystrengthened the application of European standards of HRM in the countrys publicadministration. HRM practice in the Romanian Civil Service is in a state of transitionfrom a traditional Personnel Management form dominated by payroll-relatedrecord-keeping and compliance with more professional HRM systems such asrecruitment, performance-related record-keeping and mix (seniority and jobevaluation), remuneration and grading systems). The key challenges for themodernisation of HRM in this sector are to understand how the current HRMfunction in this sector performs when measured against the need to implement reformin the Civil Service, and to identify the changes, which are required to play a morestrategic role (Ulrich, 1997).

The aim of this paper is to present a number of initiatives which have beenspearheaded by the Romanian government in the eld of HRM in the Civil Service. Amore specic purpose is to determine the modelling strategy which best reects thereform programme of HRM in the Civil Service, the topic of our study. In this paper, weare attempting to supplement existing research into New Public Management (NPM)by outlining the modernisation of a range of public HR functions in the country, and wewould like to explain how this special issue arose, to provide a historical perspectivefor the work undertaken by the Romanian National Civil Servant Agency (NACS) andto outline the context and signicance of each of the attempts at modernisation in theHRM eld. The paper seeks to bridge the gap by reporting on the research andconsulting work of the authors in the Romanian Civil Service.

Management systems in the civil serviceGeneral trendsThe public sector, at least in the form regarded today as conventional, was establishedmore than 100 years ago although its roots go back hundreds of years (and, as with,for example, China, for several thousand years).

The traditional bureaucratic (or Weber/Taylor) Civil Service system has alsoexisted for more than 100 years, and was associated with the emergence of publicadministration systems in countries undergoing industrialisation in the second half of the nineteenth century. In such a system, a Civil Service was based on bureaucraticregulations and the scope of its responsibilities normally included conventional, formaland hierarchical functions, with length of tenure and relevant work experience beinghighly regarded. However, behind the stereotype of the traditional Civil Service, therelay some signicant variations e.g. the Weberian model and the British class-system.The Civil Service in most Central and East European countries was, prior to thechanges which took place at the end of the 1980s, very tightly controlled by theCommunist Party.

Osborne and Gaebler (1992) argues that western societies are moving towards a newentrepreneurial paradigm of public management. As part of this evolution, at thebeginning of the 1980s and within the framework of the New Public Management(NPM or managerialism) which basically involved emphasising business solutions

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and efciency comprehensive reform programmes began to be introduced in severalEnglish-speaking countries (in the UK itself, New Zealand, Australia, the USA andCanada) (UN, 2005). According to Hajnal (2004, p. 21) and others (Hood, 1998; Flynnand Strehl, 1996; and Gru ning, 2000) the roots of NPM (New Public Management) dateback to the obscure past with most frequent reference to the activities of the FultonCommittee undertaken in the sixties and their summarised recommendations.Nevertheless, the political attitudes personalised by the emblematic gures of Thatcher (the UK Premier) and Reagan (the US President) were the bases to which theemergence and rapid increase of NPM can be most closely connected.

These efforts provided both a model and experience, which are also valid in thoseEuropean countries embarking on their own transformation. Gualmina (2008, p. 93)believes that these efforts have been completed in those European countries whereinstitutional factors combined in such a way as to build up a favourable situationalcontext (see Table I).

According to Ferlei et al. (1996), there are different models of NPM:.

The market-based (Thatcherite) model was driven by efciency (Beardwell andHalden, 2001): The key tools were: nancial and managerial control, rigorousaudit, deregulation and some empowerment. The classical model of PublicAdministration emphasises the good use of procedural regulations, as opposedto the NPM, which focuses on results rather than procedures and reects liberaleconomic strategies.

. The so-called downsizing and decentralisation model driven by exibility,contraction and outsourcing (Clark et al., 2001), management by inuence andstrategic inuence.

. The search for excellence model, which is based on bottom-up principles andwhich leans heavily on collective culture.

.

The highest level of public service orientation is recognised as being within theambit of NPM, where the more signicant elements include service quality,measurement of client satisfaction and the power to inuence of elected bodies.In recent years effective public sector management has come, increasingly, to beregarded as something more than the modernisation of public institutions andsimple cost-reduction in the public sector. The number of contemporary worksdealing with theoretical NPM criticism in a comprehensive and analytical way isvery small, with one noteworthy representative of these being Gru ning (2000).Today, increasing attention is paid to issues such as establishing dynamic

Bureaucratic (Taylorian/Weberian) Public

Management New Public Management (NPM)Normative Performance orientation becoming importantFormal Required continuous exibilityBased on bureaucratic regulations Key components: effectivity, openness and

forecastingHierarchicalPosition-orientedClosed career-basedExpecting continuous renewal of knowledge,skills and competences

Promotion based on educational level and serviceyears

Table I.Comparison of traditional

and new publicmanagement approaches

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relations with civic society and the private sector, the improvement of servicequality, increasing societys assumption of responsibilities, together with seriousparticipation by citizens in decision-making and the expression of their views interms of public service performance (UN, 2005; Welch and Nuzu, 2006).

While NPM originated in an admiration for business-like efciency, most recently anew model has evolved, which focuses on creating public value. This new value can becreated by:

. multiple stakeholder orientation;

. constructive interaction between the private and public sectors;

. recognition of the citizen as key stakeholder;

. openness and transparency;

. normalisation of employment; and

. client orientation.

We are fully aware that an important challenge facing Civil Service leaders is how tore-orientate or reinvigorate a long-established Civil Service which incorporates itstraditional dedication or commitment, while, at the same time, promoting innovationand efciency of HRM in this eld.

Experiences in countries in transitionThe one-party political and power system in CEE countries collapsed at the end of the1980s and these countries are now well underway in their transition from dictatorshipto democracy (Kornai, 1980; and Thurow, 1996). The breakneck speed of the capitalistrenaissance over the past 15 years has bound a number of countries more closely to thewest than at any time in previous years. Eight new member-states (the Czech Republic,the three Baltic States, Hungary, Poland, Slovakia and Slovenia) who joined in 2004and two still-newer members (Romania and Bulgaria) who joined in 2007 have all hadto face a rapid transition from centralised state control and national economic planningto free-market, globally competitive capitalism unprecedented in world history(Peng, 2000). This difcult political and economic process has also had consequencesand created opportunities for the Romanian Civil Service.

In the late 1990s several modernisation programmes started in the region forexample, a new Public Management system was introduced into several CEEcountries. The enthusiastic dissemination of this model to countries in transition wasseen by some as a new attempt to colonise development administration with astandardised, western-style approach.

In the meantime, as mentioned previously, increasing doubt has been observedamong the post-communist countries of the region in relation to the universalapplicability of NPM principles and techniques (Hajnal, 2004).

Nevertheless, the language of NPM, and the principles of client focus,decentralisation, the separation of policy-making from implementation and the useof private partners for service delivery continue to inform current thinking.

In recent years several studies of the Civil Service in the accession countries havebeen published, and among these we can mention Verheijen (1999), Bossaert andDemmke (2003). Verheijen (1999, pp. 330-1) and Bossart and Demmke (2003, p. 9) note

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that classical western career systems appear to be main source of inspiration in theCivil Service of transitional countries. Bossart and Demmke (2003), pp. 9-10) identiedcertain convergences between the Civil Service and the private sector in Westernmember-states. However they observed that HRM modernisation programmes in theCivil Services of transitional economies aim to create employment frames which aretotally different from conditions in the private sector.

Within the last few years, experience in a number of reform-orientedmember-states seems to suggest that they have not been driven by humanisticconcepts, but rather by organisational motives Demmke cited J.R. Thompson (2003,p. 94).

Sources of modern HRM methods in the civil serviceGenerally speaking, HR activity in most Central and East European countries, prior tothe regime change, was very tightly controlled by the state. HR-related issues wereunder the close control of the party and heads of state. The traditional HR philosophyfollowed an industrial, production economy bias (Kovari, 1995), and the key positionsin Civil Service institutions were closely monitored by the party and by statebureaucracy. Management was not considered as a profession and decisions regardingpromotion were not based on performance assessment (Pearce, 1991). In several cases;the selection of specialists and personnel-related decisions were heavily inuenced byparty- and government politics and objectives, and the party instructed directors tocombine the elements of individual and collective leadership. People attempted to avoidtaking individual responsibility to the maximum extent possible (Pearce, 1991), andonly a few high-ranking civil servants accepted the associated risks. Employees,superiors and directors seldom had sufcient information to make appropriatedecisions and communication often moved in a single direction that is, downwards.There was no difference in terms of employment. Civil servants were subject to the

regulation of the Labour Code. Trade unions, of course, also existed under the previousregime; but only as a part of the government machine; and no less than 90 per cent of employees in both the public and private sectors were trade union members.

Academics and professionals alike have argued about possible sources of modernHRM for the public sector, and in this connection two major approaches can beidentied:

(1) The internal approach . Many practitioners assume that the problems andopportunities can only be solved through internal resources. The new HRmodels and solutions can successfully develop within the public sector.

(2) The external approach . Supporters of this orientation believe that the renewal of the public sector can be rooted in borrowing from a number of other areas of research as well as from the private sector. This would not only produce newsolutions, but would also place the public sector in its cultural and politicalenvironment. It views the role of public manager as an active and motivatingagent (Kettl and Milward, 1996; OECD, 2005). Nevertheless, it also recognisesthat many of the more radical reforms attempted in countries such as NewZealand and the UK are too ambitious and present real dangers for mosttransitional countries. Simply to have the public administration execute the willof its political masters is often a challenge in itself (Alford, 1993; Moore, 1995;Schwartz, 2002) (see Figure 1).

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International companies have a signicant advantage compared to local companiesand public institutions in the introduction of various HR tools and methods (Lewis,2005). We had already undertaken research into this in the early 1990s. Localcompanies and Civil Service organisations are pioneering collective bargaining ratherthan applying the latest HR methods. Naturally, this statement can be challenged, aswith all general trends, and we are aware of several state-owned companies or stateinstitutions where HR practice is well ahead of that of some international companies,but the lack of nancial resources, or constantly changing business or organisationalconcepts often hinder the application of modern HR methods and procedures even if the basic intentions are good. On the other hand, due to the fact that the public sector is(correctly) driven by relatively strict rules, new innovative instruments are more easilyimplemented in the private sector with its much greater exibility.

Increased interaction among west and east European civil servants has led to theadoption of best practice (Massey, 2004, p. 25). In many cases, western consultants oradvisers, paid by different donor institutions (World Bank, EU) are recruited from

cohorts of retired western civil servants. Bertucci (2008, p. 1062) argues that donoragencies, both bilateral and multilateral, have attempted to transfer to a developmentcontext theories and practices adopted at various times in developed countries. This iswhy western public sector consultants try to offer package solutions of New PublicManagement or western-style HRM without a critical analysis of their transferability(Jun, 2009, p. 162)

In this respect, it is important to note that an increasing number of experts recognisethe issues and dangers of a one-sided approach. Many authors assert that, instead of criticising internal or external approaches, we should act and reap the benets. Reformexperiences demonstrate that the same reform instruments perform differently andproduce very diverse results in different country contexts (OECD, 2005, p. 22).

The modernisation of the Romanian Civil Service is partly driven by externalagencies (World Bank, EU, ILO). Our direct experiences prove that the integration of Romanian public service in the European Public Administration Area has begun.Mihai (2005a, b) believes that Romania has beneted from EU assistance in the publicadministration eld since 1992, long before becoming an ofcial EU candidate country.Nevertheless, support was increased after 1998, when Romania started to be monitoredby the European Commission through its annual Regular Reports.Romanian public service succeeded in implementing several projects within theframework of PHARE (e.g. National Public Service Ofce, a competitive examinationsystem, the regular publication of informational brochures, etc.), which are successfuland productive. Even professional experts made efforts, although the Unied CivilService Benet System (SCSBS) and the necessary legislative provisions have not yet

been accepted.

Figure 1.Sources of HR methods

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The role of HRM HRM in Central and Eastern Europe and in Romania has moved with incredible speed,and today the attention of the specialists working in a successful institution is focusedon change and training-related issues (see Figure 2).

The general trend observed in HR in Romania can be summed up as gradualwesternisation. Talented members of the work-force are now recognised asconstituting a competitive edge in both business and non-prot organisations.Throughout the region, university graduates with up-to-date technical and managerialskills are in demand, with the former egalitarian pay structure giving way to sharperdifferentiation. In addition to know-how, the soft side of competence communicationand inter-personal skills have become more highly evaluated. In contrast, the role of bureaucracies and the power of trade unions have been eroded, although they have byno means disappeared. Changes in labour laws have brought exibility for bothworkers and employers (Gross et al., 2007).

From the point of view of our topic, it is worth mentioning that, in addition to its

traditional administrative and interest-reconciliation features, its increased strategic,and consultancy roles are also being more frequently recognised (Condrey, 2005).When HR experts introduce various HRM systems or solve tasks of organisationdevelopment; their work resembles that of external consultants in many ways, andsome believe that HR experts play the role of internal consultants in these cases. Brown(2004, p. 305) believes that the applicability of HRM to public sector organisation isclearly established but it does not easily t HRM as a strategic partner in achievingorganisational competitiveness and business outcomes.

Key objectives of the Romanian civil serviceEstablishing democratic and efcient public administration is the foundation of amodern democratic state. Romania is building this foundation and has made it a toppriority of the Romanian Government. The goal is to achieve European standards andvalues of transparency, predictability, accountability, adaptability and efciency.Romania recognises that this is a great challenge.

Figure 2.Different roles of HR

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According to the requirements of the EU Accession process, this diagnosis demands anumber of priorities for the reform of public administration:

. Reforming the Civil Service to ensure the creation of a professional corps of civilservants, stable and politically neutral, by creating a unitary and coherent legalfoundation and by offering professional training and human resourcemanagement with the full commitment of ministries, agencies and all othergovernmental institutions.

. Continuing the decentralisation/deconcentration process to improve the deliveryof public services and to create a coherent assignment of responsibilities,nancial resources and rights to all levels of local government.

. Strengthening the process through which public policies are formulated bycreating coordinated systems and increasing the capacity to managegovernmental structures.

Beyond these three priorities, public administration reform also focuses on accelerating

the adoption of modern information management systems throughout all levels of thepublic administration system as well as the streamlining of administrative procedures.Despite all the progress, the actual situation is complicated by the variety of normativeActs regulating the legal framework for public administration personnel. This denotesinsufcient integrated regulation for the management of public administrationpersonnel, but it is also an effect of the French-like legislative system (the StatutePertaining to Civil Servants was enacted into law by Parliament, but the norms forapplication are adopted by Decree).

Management bodies of public sector reformRomanian public service reform (see Figure 3) started in 2001 and its most importantdirect contributors are:

. The Public Administration Reform Central Unit (CUPAR), which operates withinthe framework of the Ministry of the Interior and Administrative Reform. It wasestablished in 2002 in order to ensure the central coordination of publicadministration reform.

. The National Institute of Administration (NIA), which also operates within theframework of the Ministry of Interior and Public Administration, its main taskbeing to combine, organise and implement training and further education in theeld of public service.

Figure 3.Governing organisationsin Romanian publicservice reform

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. The National Agency of Civil Servants (NACS), also operating within theframework of the Ministry of Interior and Public Administration, its main taskbeing to combine, organise and execute HRM tasks in respect of the Civil Servicebody (which exceeds 100,000).

Across OECD (2005) member countries, the organisation and structures of centralHRM bodies vary signicantly. The Austrian Federal Government recentlypublished a study, in which they summarised the fundamental characteristics of organisations coordinating public administration reforms in 20 European countries among them Romania. Their research showed that the countries examinedachieve the integration of their organisations leading reform among stateinstitutions in several ways:

. Within the Prime Ministers Ofce Ireland, Italy, Lithuania, Poland andTurkey.

. Within the Ministry of Finance Cyprus, Finland, France and Sweden.

.

Within Ministry of Public Administration Bulgaria, Luxembourg, Sloveniaand Spain.

. Within the Ministry of the Interior Germany and the Netherlands.

. Within the Prime Ministers Ofce the Czech Republic and the UK.

. Research also showed that the most frequently found (65 per cent) organisationalstructure in the countries examined was departmental organisation. It operatesas a directorate in 20 per cent of countries, while 5 and 10 per cent of the countriesanalysed had established a separate Ministry or Agency. As can be seen in thediagram, in Romania the authority for serving and leading the public service interms of reform is UCRAP, which works as a department within the Ministry of the Interior and Public Administration Reform.

According to our research, the most important issues in public administration reformin these countries today are strategic management, HRM in public service,performance appraisal (UN, 2005) and e-government.

According to other analyses, the main motivations for public administration reformin European countries are: EU Accession, broadening democracy, New PublicManagement, Good Governance, etc. (Van den Berg, 2006).

Key assumptions for civil service modernisationWe assume that modern management HR approaches can effectively contribute to thesuccess of Civil Service modernisation in Romania on the basis of certainassumptions:

Previous regulationIn the Romanian principalities of Moldova and Muntenia the position of civil servant isrst mentioned ofcially in 1831-1832. The rst Romanian Constitution (1886) inClause 131 (paragraph 5) declared that Civil Servant status has to be regulated in aseparate Act.

The rst notable professional work detailing Civil Servant status was published in1904 and written by Paul Neglescu.

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which are driven by radical structural changes, for example, the privatisation of certaingovernment functions or the adoption of new management technologies, have noteliminated the most important distinguishing features of both sectors.

Centralisation versus decentralisationThe organisations and ofces in the Civil Service must provide the increasinglycomplex services demanded by residents and business, and at an increasingly higherlevel, throughout the world, and they must also do this within increasingly tightbudgetary limits. It is, therefore, of key importance to ensure the availability of employees with appropriate knowledge, skills and behaviour in good time and in theright position for carrying out these duties. Prudent, professional work is required toachieve this, and HR strategy has to be harmonised with the overall strategy of theorganisation. It is equally important that the jobs should be compatible with thedemands and qualities of those lling them. Job analysis and job evaluation, theremuneration system, performance management, personnel development and thefurtherance of career-building all require attention. These have to be supported by HR,and in this way efciency can be enhanced and, in the labour market, the public sectorcan become competitive with the organisations of the private sector.

To promote this approach many nations in Central and Eastern Europe (e.g.Slovenia in 1990, Poland in 1988 and Macedonia in 2000) established dedicated legalbodies of Central Public Administration, responsible to a Ministry (of Administration,of the Interior or similar). The public sector HRM service is fully decentralised, withresponsibility given to the ofcial heads of organisations, who have a great deal of genuine freedom in this area. Ministers are responsible for personnel management inministries as central authorities. In line with the objectives of the state reformprogramme, Hungary established a National Civil Service HR and educationalsecretariat in the Prime Ministers Ofce, managed by a state secretary and operationalfrom the 1 January, 2007. This central body is charged with the coordination of all HRactivity at central and local government level.

For the creation and development of a professional, stable and neutral body of civilservants, the Romanian National Agency of Civil Servants has been set up as a legalentity under Law 188/1999 on the Status of Civil Servants, and it is a specialised bodyof central administration.

The day-to-day management of human resources and of the public positions areorganised and carried out within every public authority and institution by a specialiseddepartment, which is required to collaborate directly with the Agency.

Changes in the role of HRM According to the UKs (EU) PresidentialReport on Human Resource Management (2004)we can conrm that there is broad acceptance among EU Member States that a majorrole of the HR function is to supply advice on strategic organisational development.Much EU-wide research (Demmke et al., 2006a, b) distinguishes between HR roles atcentral and local levels, and the roles and services which are included under the termCivil Service HR vary widely. However, Civil Service HR practice does follow adecentralised approach and should be framed within centrally agreed regulations andpolicies.

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years from 12.03 per cent in 2003 to 13.14 per cent in 2006. Most of these are in localpublic institutions (22.07 per cent) as opposed to central authorities (5.74 per cent). TheGovernment prohibited the employment of new civil servants in 2005 and 2006 forbudgetary reasons, although this ban was lifted at the end of last year. In comparingthe years 2003 and 2004, we can see a decrease (from 87.97 to 83.81 per cent) in thepercentage of civil service positions occupied, although the period from 2005 (84.03 percent) to 2006 (86.86 per cent) showed an increase. The number of female civil servantsin 2006 was estimated as 72,556 (65 per cent) and that of males as 39,068 (35 per cent).This split between the number of females and males has remained relatively stable forthe past four years since, in 2003, the ratio was 64 per cent female and 36 per cent male.

In respect of educational background, out of a total of 115,650 employed in the CivilService, 65,400 had undergone long-term higher education (56.55 per cent), 4,476 had hadshort-term higher education (3.87 per cent), and 45,774 were high-school (secondary-school)graduates (39.58 per cent). Education, of course, can be a sign indicating high ability. Thepercentage of the total population who had completed at least Higher Secondary educationand who were between 24 and 64 years old was 74.2 per cent in 2006, 73.1 per cent in 2005,71.5 per cent in 2004, and 70.5 per cent in 2003 according to Eurostat statistics. Thepopulation as a whole is becoming slightly better educated, so providing a greater supplyof those with a higher potential for improving the Civil Service.

The total number of authorise positions in the Manpower Plan has increased by 9per cent to 130,000, and almost 10 per cent of the total number of authorised positionsin the Romanian public sector are in the Civil Service. At local level each public bodyprepares its Manpower Plan in which they propose the number of positions to bebudgeted for. The Ministries assemble these plans from the various subordinatedbodies and the plans from both are then sent to NACS.

The career development of civil servants is based on the annual Manpower Plan.General longer-term demographic factors, which would affect the supply, would

include the total growth of the working-age population based on birth rates, mortalityrates, net immigration rates and the rates of those taking retirement. Anotherconsideration would be the ageing of the workforce and any increase in life expectancy.This would affect two areas the amount of experience in the workforce and theaverage exit age from the labour force. A question, therefore, might be raised as towhether the age of retirement should be increased if the workforce is, on average, olderand if the possibility of early retirement exists. The growing role of technology shouldbe considered also, since fewer staff may be needed as more processes can be handledby technology and certain processes can be handled centrally for example, a centralcall/e-mail centre answering common tax questions (see Table II).

Variable 2006 2005 2004 2003Average exit age from the labour force 63.0 59.5 62.7Birth rate (%) 1.32 1.29 1.27Life expectancy (male) 68.68 68.25 67.66Life expectancy (female) 75.70 75.53 75.04Mortality rate (%) 12.8 11.9 12.3Net immigration 2 6,483 2 7,234 2 10,095 2 7,406Proportion of population age 65 and over (%) 14.7 14.4 14.2

Table II.Longer-term

demographics inRomania

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requirements laid down by law, and the best candidate is selected after beingsuccessful over the whole process. This system is also used in Romania through thecompetition system, which consists of three elements: documentation/dossier check,written tests and interviews; and the candidate who is successful in all phases has theopportunity to be hired. Internal recruitment in the Civil Service is applied mainly as amethod of promotion to leading positions and, as such, provides opportunities to thosewho are already working in the service.

A further model which is, to some extent, similar to internal promotion is the FastStream process, which is successfully practised in many countries. This processentails that civil servants (graduates or experienced professionals) can be rotated, thatis, given the chance to work in numerous positions in order to acquire as muchexperience as they can. This is a useful way to have experienced employees inpositions where recruitment is very difcult due to a lack of available qualiedapplicants, and it is also a good way of retaining civil servants by offering a careerpath. This approach is currently under development in Romania.

There are categories of civil servant:. Those subject to the Civil Service Law (1999). This applies to those in executive

positions who have excellent results in their performance appraisal but have notmet the legal requirements for normal advancement. These may be promoted tohigher, executive positions that is, advanced in grade after participating in anational contest.

. Public managers a special category of civil servants who benet from aspecial training programme, in Romania and abroad, including internships indifferent institutions, and who are subject to special regulations regardingpromotion.

A trend towards enhancing mobility for civil servants is also a general issue in EUcountries and aims to motivate and retain senior civil servants who would otherwisecease their efforts when they reached the highest post open to them. A further projectrelating to this concern operated in parallel, also aiming to improve mobility in thehigher ranks of the Civil Service in Romania. According to the specic regulationsconcerning their careers, persons holding a position in this category can be moved fromone position (e.g. prefect) to another (e.g. Government secretary) by Government Decree(somewhat similar to the rotation system for prefects in France).

In most newly acceded countries, entrance to posts and recruitment procedures forsenior civil servants are governed by detailed statutory regulation.

In all newly acceded member states, entrance to the Civil Service is legallyrestricted by criteria such as a recognised university degree, knowledge of the nationallanguage, no criminal record, good health or having completed military service(Bossart and Demmke, 2003, p. 34).

Certain special restrictions apply in Lithuania, Bulgaria, Latvia and Estonia, wherea close relationship is considered as a disqualication factor. Full-time employment inthe former secret service is considered as an exclusion factor in Latvia.

The overwhelming majority of states such as Bulgaria, the Czech Republic, Cyprus,Turkey, Latvia, Lithuania, Slovakia, and Slovenia have a classical career system asshown in the following list of characteristic elements (Demmke, 2004):

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. Public Law contract and appointment of civil servant.

. Only appointed to rst post.

. Special statutory educational requirements for career.

. Limited recognition of professional experience gained in the private sector.

. Remuneration system laid down by statute (advancement on seniority principle).

. Job for life.

. Code of conduct for civil servants (including special disciplinary law).

. Work process based more on rules than targets.

. Emphasis on accuracy, fairness and rule of law.

. Subordination of the performance principle.

. Special pension system.

The system used in Hungary at national and local level for hiring and promotinggovernmental employees to Civil Service positions is based on competence. The meritsystem uses educational and occupational qualications, testing, and job performanceas criteria for selecting, hiring, and promoting civil servants. Conditions for entry intothe public service are generally identical in all branches of the national economy, andselection and recruitment are fully decentralised.

Civil servant status may be given to a Hungarian citizen with a clean record whomeets the educational requirements. Civil servant status is usually given for anindenite period, although the civil servant may resign at any time.

One way to enter the service is by means of competitive examinations: to enter atthe rst level, a candidate must, with some exceptions, pass a basic administrativeexamination. A further advanced administrative examination is to be passed by those

who are to be appointed to executive positions. The established career system setsgrades based on individual qualications and years of experience. To undergo acompetitive examination to ll a position is legally possible, but not compulsory.

The recruitment practice in the Hungarian Civil Service follows a decentralisedapproach. The local and central government institutions can ll vacant or newlyapproved positions in different ways: by internal job posting, public announcement orthrough personal channels.

In Romania public position vacancies can only be lled by promotion (but only formanagement or leading positions), transfer, and redistribution or by competition. Anycompetition is based on the principle of open competition, transparency, professionalmerit and competence, as well as on the equal opportunity principle, which permits anycitizen who meets the legal requirements to gain a public position. The probationperiod is 12 months for civil servants holding Class I executive positions, eight monthsfor Class II positions and six months for Class III positions.

The appointment of executives and civil servants to leading positions is made bymeans of an administrative order issued by the head of the public authority orinstitution of central or local administration. This order must be in writing and mustmeet particular requirements: it sets out the legal basis for the appointment, the nameof the civil servant, the title of the public position, the starting date in the post, the placeof work, and the remuneration.

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In respect of the conditions for entering the service, the law requires that theapplicant must not, during the last seven years, have had his service terminated fordisciplinary reasons. It might be thought that seven years in respect of disciplinaryreasons is too long a period and that it would be more appropriate to have a three tove year period, depending on the seriousness of the cases, this being the case in othernational regulations and also the practice of various countries in the European Union.

Performance appraisal In general, a performance appraisal system is used with two main objectives. One of these is to be able to evaluate accurately an employees performance, and the other,which has only recently emerged as important, is to lay foundations for employeedevelopment. Public institutions managed in the traditional way tend to concentrate onthe former, but modern institutions strive to reach both goals simultaneously (Devriset al., 1981; and Bratton and Gold, 1999).

Performance appraisal practices vary signicantly across cultures, and it is

especially difcult to develop a system, which can be used to evaluate employees atdifferent levels of the hierarchy and from different cultures at the same time. Westernmanagement culture is strongly result or outcome-oriented. In western managementsystems, work and efciency are the primary performance criteria, while inex-communist business cultures, the manner or the process were very often consideredas being as important as the outcome.

In Romania, the individual professional performance appraisal of civil servants iscarried out annually, and the declared aims concern:

. promotion to higher pay grades;

. promotion on the overall pay scale;

. promotion to higher position;

. dismissal from a position; and

. establishing the training needs of civil servants.

Qualications are awarded following the performance appraisal: very good, good,satisfactory or unsatisfactory.

The individual appraisal of high-ranking civil servants is conducted by anevaluation board made up of ve people who are outstanding public administrationspecialists. They are nominated by the Ministry of Interior and Administrative Reformand appointed by the Prime Minister.

Although evaluation should be based on specic objectives, in most cases these donot exist, since there is no capacity to formulate them, or the objectives of theorganisation are neither clear, nor acknowledged by all personnel. Consequently,evaluating individual performance represents a subjective judgement coming from ahigher-ranking ofcial who bases his/her judgment rst and foremost on their informalsuperior-subordinate relationship. There is an inadequate application of performanceindicators in the assessment process.

The Civil Service in every country is very hierarchical and employees have theopportunity to reach a higher position on the public servant scale.

Law 188/99 denes promotion as a way of career development by lling a higherCivil Service position. Promotion to the next higher professional grade is based on

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competition or examination. In the case of a successful competition or examination, theposition is transformed into a higher-grade position, and the job description of the civilservant is supplemented with new qualication and responsibilities, which correspondto the position.

The examination for promotion is organised by the public authority or institution,with the approval of the National Agency of Civil Servants all within the scope of thepublic functions reserved for promotion, and within the limits of the budgetary fundsallocated.

A competition or examination is organised on the same principles and with thesame procedure as a recruitment competition.

This, of course, means that, during their career, civil servants can, in full compliancewith the law, be not only promoted but also advanced on the pay scale. Promotion interms of class, advancement to a higher professional position and progress on thesalary scale are not dependent on the existence of a vacancy, and we consider this ruleas matching the personal career perspectives of civil servants.

People participating in any competition for promotion must have the requiredseniority, which means that civil servants must have had a minimum period of servicein the grade from which promotion is sought and in the class corresponding to theireducational background.

For promotion to a higher professional rank, the civil servant must have had aminimum of four years of working experience in his current position before promotionto the higher one, and at least two years of working experience on the salary scale classfrom which he is promoted.

For promotion to leading Civil Service positions there are additional requirements tobe met. It is necessary to have a Master or post-graduate degree in publicadministration, management, or other discipline related to the respective publicposition. All the conditions regarding the recruitment of civil servants must be fullled

and there should be no disqualication resulting from an undisclosed administrative ordisciplinary penalty. However, the conditions laid down in the job description of thehigher post must also be met and a successful applicant must have been given Class Iranking.

The 2006 Order, which modies the Civil Service Law of 1999, introduces thepossibility of faster promotion. Two different sets of conditions are provided by themodication. The beneciaries of this opportunity can be civil servants who graduatedin special public administration training for the public manager position.Alternatively, they may be civil servants who have at least one years experience inthe rank corresponding to their Civil Service positions, whose last annual performanceappraisal was evaluated as very good, who are subject to no disciplinary oradministrative penalty and who have participated in a professional developmentcourse during the last year.

Training In most countries in the region the distinction between the meanings of training anddevelopment is blurred. The term training is used in a broad sense whenever staff training is meant, although we must bear in mind that Anglo-Saxon terminologymakes no distinction:

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. training refers to activities designed to teach low-level and less-qualiedemployees, to improve their skills used in performing their current work; while

. development involves developing managers and professionals abilities with aview to future assignments. According to this view, training is a valuable andworthwhile activity aimed at facilitating the development of others.

The traditional notion of training in the public sector was based on organisationalstability since public organisations were, in fact, rather static. Training was relativelystraightforward and heavily skewed toward the beginning of employees careers.Individuals were hired for specic jobs in many public sector organisations and wereassumed to possess already all the skills needed The current notion guiding humanresource development is to deploy personnel strategically, not only by initial training,but also by retraining and refocusing, and to change management style andorganisation culture also. Training and education are more evenly spread throughoutthe entire career of the public servant (Daley, 2002, p. 216).

Civil servants are entitled to improve their professional development continuously,and public servants attending professional development courses shall receive their duepay if:

. the courses are held at the initiative or in the interest of the public authority orinstitution; and

. the courses are attended at the initiative of the public servant and with approvalfrom the manager of the public authority or institution:

At present, the training capacities of the National Institute of Administration (NIA)cover approximately 22,000 participants per year, while the total number of civilservants is approximately 110,000. Civil servants can also participate in trainingprogrammes organised by other public or private training providers. For example, civilservants from the Ministry of Finance participate in training conducted by the PublicFinances and Customs College, and also by a public training provider, such as NIATraining courses were mandatory in the Romanian public service until 2006. There isno difference now between different civil servants rankings in dening the targetgroups. A minimum training day is no longer required. In the past a minimum of sevencompulsory training days for each civil servant was provided and Table III clearlyshows that the annual training day norm was in line with practice in other countriesboth inside and outside Europe.

In the European Unions Civil Service (Demmke et al., 2006a, b) there are threedifferent approaches to training needs:

(1) The centralised model in which all TNA matters are handled centrally.

(2) The decentralised model in which all TNA matters are handled by local,meso-level and central public organisations.

(3) Most member states of the European Union follow the semi-decentralisedapproach where the strategy and the framework are centrally managed, but therealisation of the TNA is carried out de-centrally.

Different experiences (IDG, 2000) show that, in the initial phase of different changeinitiatives, knowledge-based training predominated, but it is now accepted that

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training provision should concentrate on the skills and competencies (behaviours andabilities) required to undertake different change projects successfully.

Several TNA (Training Needs Analysis) assignments have been undertaken in theRomanian public sector during last years. These analyses related to:

. Clarifying the nation-wide development needs of occupational development.TNA for each civil servant is done every year in the performance appraisalprocess. According to the ndings, every institution is obliged to draft a trainingplan for the next year. The plan is sent to NACS to establish priorities at nationallevel. NIA collaborates with NACS in the elaboration process of the curricula forthe training programmes organised in the next year.

. Due to the special characteristics of the Civil Service, NACS is responsible forregulations for civil servant training and development.

. Contributing to the successful EU-Accession of Romania, reform wasimplemented in the public sector and Structural Funds used effectively onassignments planned and executed by representatives of foreign donorinstitutions (EU, PHARE, World Bank, etc.) jointly with the representatives of the beneciary Romanian institutions and their other local partners.

Compensation and benet management Compensation (or remuneration) is an important eld of human resourcemanagement, the fundamental objective of pay management is to elaborate anduse incentive policies, strategies and systems, which assist the given organisation toachieve its objectives through motivating its employees (Milkovich and Newman,2002).

The basic scope of the systems currently in place, which ensure the promotion andremuneration of civil servants and public ofcials are determined by law and bybudgetary provisions, which together produce a rather complicated structure.

A grading system, pay scales and allowances are considered as two majorinuencing factors of the Civil Service salary system.

Number of training days

Sectors Country(ies) ManagementProfessional

staff Clerical

staff Manual

staff

Private sector NPM countries 5.0 5.4 3.5 4.6East Europeancountries

7.2 6.8 4.3 3.6

Non NPM/EE countries 5.5 6.1 4.1 4.4All surveyed countries 5.9 6.0 4.0 4.3

Public sector NPM countries 6.1 6.0 3.8 3.5East Europeancountries

7.4 6.3 4.2 3.1

Non NPM/EE countries 7.2 6.8 4.7 4.11All surveyed countries 6.9 6.6 4.4 3.8

Notes : NPM, n 2118; EE, n 769; Non-NPM&EE, n 2,118

Table III.Number of training days

per year in the samples of organisations

participating in theCranet survey 2004-2005

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Basic salaries are determined annually in the national budget and the amountcannot be lower than the previous years basic salary. Multipliers applicable todifferent pay grades increase relatively quickly in the initial phases of a career in eachsalary class, and this results in a more dynamic increase in basic pay for those startingtheir career. It is reasonable, in order to make the Civil Service attractive for youngerpeople, to accelerate their adaptation to the new working environment and to stabilisetheir nancial position.

Civil servants are eligible for a number of allowances and benets:. Extra pay (managers, extra assignments, specic working environment, foreign

languages, specic knowledge and skills, specic working schedule, etc.. Thirteenth month salary.. Motivational pay (20 per cent).. Paid holidays (21 days ).. Service year bonus (25, 30, 35 and 40 years).

In the former political system the difference between the remuneration of governmentand company employee was minimal. Today, this difference can be four or evensix-fold.

The Romanian workforce is more and more expensive, and unexpected costincreases have occurred in Timisoara and other towns in Transylvania (Popescu,2007). Multinational companies settled here are now indicating that they areconsidering relocating their plants to the Ukraine or to the Far East due to theexcessive increase in costs. Romanian public administration does not have an easyposition due to these developments in the labour market. In certain critical professionsit is particularly hard to nd a well-qualied expert (e.g. IT, Communications,Controlling, etc.) (Crudu, 2007). This situation is even worse in the mountains and in

the backward regions.The fundamental dilemma for incentive policy and strategy in the public sector isthat it must respond to the challenges of the institution and HR management withinmuch tighter legal and budgetary constraints than the private sector, and its responsesmust be adequate, adjusting themselves to practical, organisational circumstances. Itmay sound paradoxical, but it is, nevertheless, true that, in terms of the proportion of restrictions, HRM efforts must be increased towards nding exible and effectivesolutions, since the judgment of the external environment does not take theserestrictions into account.

New methodsSeveral solutions including things novel to the public sector are being tried within theframework of the compensation and benet system. For example, the following can bementioned without the need for exhaustive detail:

Analytical job evaluation, the experimental application of which began with thesupport of projects nanced by the EU and the World Bank, and through which it hasnow been applied in 10 different central and local public institutions. In relation tothese projects, the adequacy of the different systems of the scope of activities wasanalysed, and several kinds of model were worked out for the basic rate calculationfounded on analytical job evaluation. In the recommended model there are 27 payment

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categories. The curve whose gradient equals 1 (1-27 payment category) includes all thecivil servants) while in the model whose gradient 2 one curve includes the lower(1-12) payment categories, while the other includes the higher (13-27) (Danalache andPurcarea, 2007) (see Figure 4).

Act 188/2000 and its subsequent Amendments laid down general job descriptionsfor Civil Service positions. There are comparative income level studies, which havebeen applied by Romanian companies from the beginning of the 1990s mainly by thelocal subsidiaries of multinational companies. The rst survey was conducted with thehelp of the World Bank in 2006. This compared payment to personnel in the publicsector with that of their counterparts in private companies (Haygroup, 2006). Theseanalyses conrmed the experiences of previously conducted researches in Hungary(Mercer, 2004). The previously mentioned Romanian study showed that, in managerialand senior managerial positions, the difference between public and private sectorsalaries are eight to ten-fold, while, in the case of junior civil servants, this difference isonly two to three-fold. According to our Hungarian research, in every category the total

incomes of Hungarian civil servants are closer to those in the private sector. Inaddition, the difference in the case of jobs requiring only secondary school qualicationis minimal or may even produce the opposite result (see Figure 5).

Figure 4.Possible basic pay lines

Figure 5.Differences between the

total payments inHungarian and Romanian

civil service (%)

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ConclusionsMajor HRM related changes, which have occurred within the Romanian civil services,are:

. First, the civil service law together with its amendments could be considered agood basis for further development of the present HR system in the Romaniancivil service.

. Second, the central coordination body of civil service HR (NACS) was created in1999. This institution has contributed to several nation-wide projects tomodernise the legal structure (e.g. amendments to the civil service law,anti-corruption regulation, ownership declaration, etc.) and the institutionalstructure (competition, appointment of senior civil servants, Human ResourceInformation System, HR professional forum, etc.). The homepage of NACSprovides many good examples of development in the eld of HRM in the civilservice.

. Third, a new generation of well-trained civil service professionals (HR andnon-HR) were trained and developed. Different bodies (central and local) of theRomanian civil service have been actively involved in different internationalprojects and networks, driven by different donor institutions (e.g. EU, WorldBank, OECD, etc.).

. Fourth, prior to the 1990s, lengthy tenure and relevant work experience werehighly regarded, and, relative to other job categories, positions in the civil serviceand production and technical jobs were well-respected, although changes in thepolitical environment, followed by privatisation and signicant foreigninvestment, changed this trend. In the 1990s, these positions signicantlydecreased in prestige terms, while sales and marketing positions in the privatesector rose in the rankings. Nowadays, positions in the civil service area have

achieved slightly higher in benchmarking practices of private sectororganisations.. Fifth, the peoples of Eastern Europe, their languages and cultures, are extremely

diverse. In total, 21 different languages and six major religions (including RomanCatholic, Protestant, Greek-Catholic, Orthodox and Judaism live in the region.Nevertheless, the existing differences in the modernisation of HRM in the civilcervice underline that the change process is not uniform, and is dependent onlocal conditions, people, traditions, mentalities (Oehler-Sincai, 2008).

The length of a single article does not allow us to present every important HRdevelopment in a countrys public service, and our attempts at completeness aredifcult to realise since several projects and developments related to RomaniasAccession to the EU were initiated by Romanian or foreign organisations.

Romania as a EU member-state is supposedly increasingly integrated into theEuropean Public Administration Area. The establishment of traditional forms of so-called New Public Management should be followed by the introduction of modelsensuring greater decentralisation and civil participation. With the comprehensiveformation of e-government and with greater deregulation, the terms of more exibleand deregulated public administration emerge. Our rst-hand experiences permit us tostate that the National Public Administration Institute (NACS) now operating for

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eight years will operate further in the future. As we mentioned earlier, in the initialyears the creation of a legal environment and its practice were emphasised. At thispoint, in our opinion, the time has come to devote more attention to decentralisationand to formulating the terms of so-called Best or Good Practice. The point in time whenNACS becomes an HR Service Centre depends hugely on IT and telecommunicationpossibilities, on personal conditions and, not least, on the appropriate politicaldirections.

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About the authorsJozsef Poor is a Professor of Management, Faculty of Business and Economics, University of Pecs, Hungary. His recent books and book chapters include: International Human ResourceManagement (in Hungarian) (2009, Complex-Walters Kluwer), HRM in Hungary (book/chapter)

(2008, Routledge) and Management Consultancy in an Eastern European Dimension (2003,KJK-Walters Kluwer). Jozsef Poor is the corresponding author and can be contacted at:[email protected]

George Plesoinau is a Professor of Management at the University Pitesti, Arges, Romania.One of his recent books is: Case Handbook on International Human Resource Management inEmerging and Developed Countries of Europe (in Romanian and English) (2006, Olimp).

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