PERFORMANCE – ORIENTED PAYMENT IN PUBLIC SERVICEKerstin Georg, University of Applied Administrative Studies of North-Rhine-Westphalia

Would you try to work more faster, harder, better for more money?

Regulatory framework

The TVÖD –

the collective bargaining law of civil service

Since 2007 government agencies have to implement and use the instrument of perfomance-based payment.

It applies to all public employees but not for public servants.

So far public employees and public servants were payed only according to

• their age• their family status• number of their children• Length of service and the function in their job

But now it seems like a new age has begun…

• What is performance?

• What do we need performance-oriented payment for?

• How can you make performace measureable?

• What assets and drawbacks do we have to face?

Practical implementation

Concrete example: Pilot project within the City council of the City of Cologne…

The City Council of the City of Cologne

Cologne is the 4th biggest city of Germany

The City Council of Cologne engages 15.300 employees (4.300 public servants)

At least 1 Million customers (the inhabitants of Cologne)

2007 Pilot Project to implement the performance-oriented payment with a budget of 2,8 Million €

Performance-oriented payment within the Cologne City Council

Expectations on performace-oriented payment:

Improvement of the official attendance Enhancement of the motivation of the

employees Getting a new management tool

Performance is the achievement of objectives and the compliance of defined requirements and assignments.

Management by objetives

Management tool - based on voluntary agreements between manager and their employees

SMART- Conditions for voluntary agreements

Specific Measureable Abitious Realistic Terminated

Advancement of profitability

-Increase of cost recovery by x %

Advancement of effectiveness and efficiency

-Decrease of non-conformity by x %, Shortening of the processing-time by x%

Advancement of the service quality

- Decrease of affliction by x %

Examples for Management by objectives

Systematic performance evaluation

Establishment agreements define evaluation criterias, which have to be:

measurable verifiable transparent understandable for every employee

Difference to Management by objectives:Employees have no voice

Example for systematic performance evaluation criteriasCategories Example

Quality of work Correctness

Quantity of work Amount of work

Attitude/ Teamwork Ability to work in team

Management Delegation

Profitability Economical handling with material

Flexibility Initiative

Chances of perfomance-oriented payment in public service Equitable incentive pay

Advancement of a cooperative leadership

Problems get earlier to the fore

Positive effects on intrinsic and extrinsic motivation factors

Increased personal responsibility of the employees

Consolidation of leadership skills

Transparent assessment criteria

Performance improvement by the employees

Risks of perfomance oriented payment in public service Problems with the measurability of performace

Increase of the expenditure of time for planning and matching the work cycle

Political decissions can affect the agreement of objectives negatively

Increase of bureaucracy and administration effort

Additional expenses for employee trainings and information

Thank you for your attention…..