Oecd HR Peer Review Brazil 2010

OECD Reviews of Human Resource Management in Government
braZil 2010
FEDERAL GOVERNMENT
OECD Reviews of Human Resource Management in Government: Brazil 2010

FEDERAL GOVERNMENT
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisations statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members.
This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries.
ISBN 978-92-64-08221-2 (print) ISBN 978-92-64-08222-9 (PDF) DOI 10.1787/9789264082229-en Series: OECD Reviews of Human Resource Management in Government ISSN 2074-3335 (print) ISSN 2074-3327 (online)
Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.
OECD 2010
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FOREWORD 3
Foreword
The OECD Review of Human Resource Management (HRM) in the federal government of Brazil (executive branch) builds on the work conducted over the years by the OECD Public Employment and Management Working Party (PEMWP, formerly Human Resource Management Working Party, HRMWP), under the leadership of the OECD Public Governance Committee. This report including the assessment and recommendations was discussed at the annual meeting of the OECD PEMWP that was held on 15-16 December 2009 at OECD headquarters in Paris. While policy options presented in the review are based on the lessons learnt from the experience of other OECD member countries, the review process has ensured a high level of consultation with multiple stakeholders so that policy options are relevant and attainable within the specific context and policy priorities of the governments under review. This review was produced by the OECD Public Governance and Territorial Development Directorate in co-operation with the federal government of Brazil (executive branch) and the World Bank. The OECD is grateful to all those in government and non-government organisations who went to great lengths to provide the OECD with the necessary information and analysis for the review in a very open and transparent manner, including: Parliament officials; the Executive Secretariat in the Ministry of Planning; the Secretariats of Human Resources, of Public Management, of International Relations, and of the Federal Budget in the Ministry of Planning; the Department for Coordination and Control of Government Enterprises in the Ministry of Planning; the Ministries of Foreign Affairs, Education, Social Security, and Finance; the Ombudsman Office; the National School of Public Administration (ENAP); the Court of Accounts; the Vargas Foundation; Banco do Brasil; Petrobras; Empresa de Correios e Telgrafos Empresa Brasileira de Infraestrutura Aeroporturia (INFRAERO); public service unions (CONDSEF Confederao Nacional dos Trabalhadores do Servio Pblico Federal; SindiReceita Sindicato Nacional dos Analistas-Tributrios da Receita Federal do Brasil Frum de Entidades Sindicais de C T; CUT Central nica dos Trabalhos; and Departamento Intersindical de Estatstica e Estudos Scio-Econmicos); the Bank of Social and Economic Development (Banco Nacional de Desenvolvimento Econmico e Social BNDES); the Municipality of Rio de Janeiro; the Institute of Social Security of So Paulo; the Institute of Social Security of Municipal Civil Servants (Municipality of So Paulo); and the University of So Paulo. Most of the work in preparation for the review was carried out by the Secretariat of Human Resources in the Ministry of Planning who has shown a tremendous commitment to the success of the review.
OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010
4 FOREWORD A team of international senior practitioners from OECD member countries participated in the peer review process: Mr. Bunzo Hirai, Ministry of Internal Affairs and Communication, Japan; Mr. Kevin Mahoney, Office of Personnel Management, United States; Mr. Jacky Richard, Council of State, France; Mr. Xavier Sisternas, Antifraud Office of Catalonia, Spain; Ms. Tatyana Teplova, Treasury Board Secretariat, Canada.
The OECD is grateful to their governments for allowing these high-level officials to participate in the review. Their participation has substantially contributed to the quality of the review. In addition, the project was conducted in full collaboration with the World Bank. Mr. Jeffrey Rinne led the exercise for the World Bank, whose team included Ms. Evelyn Levy and Mr. Mariano Lafuente, under the supervision of Mr. Nick Manning. The project was led and co-ordinated by Ms. Elsa Pilichowski (OECD Secretariat). The report was written by Mr. Oscar Huerta Melchor (OECD Secretariat introduction, pensions, division of responsibilities), Ms. Maria Maguire (Consultant competencies, job categories, training and learning, core values and reform implementation strategies), Ms. Elsa Pilichowski (workforce planning), and Mr. Knut Rexed (Consultant performance management and acquiring human capacity). Mr. Barry Anderson (OECD Secretariat) supervised the project. Statistical data and analysis were produced by Mr. Jani Heikkinen (OECD Secretariat quantitative data and analysis), and Mr. Emmanuel Job (OECD Secretariat qualitative data). Ms. Doranne Lecercle (Consultant) edited the publication. In addition to the project team, very useful comments were received from Nadim Ahmad (Statistics Directorate, OECD Secretariat); Luiz De Mello (Economics Department, OECD Secretariat); Stphane Jacobzone, Janos Bertok and James Sheppard (Public Governance and Territorial Development Directorate, OECD Secretariat).
TABLE OF CONTENTS 5
Table of Contents
Executive Summary ................................................................................................................ 11 Synthse .................................................................................................................................... 15 Assessment and recommendations ........................................................................................ 21 Notes .................................................................................................................................... 37 Introduction............................................................................................................................. 39 I.1. The federal government general characteristics ......................................................... 39 I.2. Structure of the executive federal government .............................................................. 40 I.3. General economic situation ........................................................................................... 43 I.4. An overview of Brazils public management reforms................................................... 45 Notes .................................................................................................................................... 51 Chapter 1 Workforce planning and management ................................................................ 53 1.1. The size and cost of the workforce in the federal government of Brazil ...................... 54 1.2. Accounting for public employees and their costs ......................................................... 63 1.3. Strategic workforce planning ........................................................................................ 67 1.4. Promoting whole-of-government goals regarding efficiency and costs ....................... 83 1.5. Salary setting and careers ............................................................................................. 88 1.6. The role of unions ......................................................................................................... 96 1.7. Adjusting an ageing public service to an ageing society .............................................. 98 1.8. The Brazilian public services pension system ........................................................... 101 1.9. Promoting governments goals regarding diversity .................................................... 113 1.10. Conclusion ................................................................................................................ 116 Notes .................................................................................................................................. 118
6 TABLE OF CONTENTS Chapter 2 Strengthening government capacity .................................................................. 123 2.1. Managing competencies ............................................................................................. 124 2.2. Job categories and career paths................................................................................... 141 2.3. Acquiring human capacity and talent ......................................................................... 161 2.4. From training to learning ............................................................................................ 173 Notes .................................................................................................................................. 185 Annex 2A.1 Job profile template.......................................................................................... 187 Chapter 3 Enhancing performance orientation and building leadership......................... 189 3.0. Introduction................................................................................................................. 190 3.1. Enhancing performance orientation ........................................................................... 191 3.2. Managing senior management .................................................................................... 208 Notes .................................................................................................................................. 223 Chapter 4 Strengthening human resource management reform in the Brazilian federal government ............................................................................................. 225 4.1. Core values ................................................................................................................. 226 4.2. The division of responsibilities in human resources management ............................. 246 4.3. Reform implementation strategies .............................................................................. 272 4.4. General conclusions .................................................................................................... 293 Notes .................................................................................................................................. 296 Bibliography .......................................................................................................................... 297 Tables Table I.1. Table I.2. Staffing levels in the federal government of Brazil .............................................. 41 Ministries and secretariats (with secretaries of ministerial status) in the Brazilian federal government ................................................................................ 42
Table 1.1. Employees, retirees, and pensioners in the civil servant pension scheme ........... 106 Table 2.1. Integrated view of corps, positions and salaries in the Spanish civil service after the 1984 reform (simplified). Example with corps and positions belonging to group A1 ......................................................................... 158 Table 4.1. HR Professional standards in the UK Cabinet Office ......................................... 261 Table 4.2. Public administration reform challenges and possible policy tools .................... 279
TABLE OF CONTENTS 7
Figures Figure 1.1. Figure 1.2. Figure 1.3. Figure 1.4. Share of public sector employment in total employment in Brazil over time ..... 55 Public sector employment as a share of total employment, the labour force and population in selected countries ................................................................... 55 Compensation of general government employees as a percentage of GDP ........ 57 Compensation of general government employees as a percentage of GDP (2006) and share of general government employment in total employment (2005) .................................................................................................................. 57 Share of compensation of general government employees as a percentage of GDP divided between social employers contributions and wages and salaries ................................................................................................................. 58 Compensation of employees and output at basic prices between general government and total economy in selected countries .......................................... 59 General government production costs as a percentage of GDP .......................... 59 Costs of goods and services produced by non general government organisations (mostly private sector) and funded by government (general government intermediate consumption and social transfers in kind) as a share of GDP ....................................................................................................... 60 Share of public sector employees at different levels of government in selected federal countries .................................................................................... 61
Figure 1.5.
Figure 1.6. Figure 1.7. Figure 1.8.
Figure 1.9.
Figure 1.10. Number of federal government employees in the executive branch of government .......................................................................................................... 61 Figure 1.11. Selected federal expenditures including personnel ............................................. 62 Figure 1.12. Casual employees in the central government of selected OECD member countries (2005) and in Brazil (2009) ................................................................. 69 Figure 1.13. Short-term employees in the central government of selected OECD member countries and Brazil ............................................................................................. 70 Figure 1.14. Mapping human resource management strategic management in Petrobras ....... 74 Figure 1.15. Total rewards in the United Kingdom ................................................................. 94 Figure 1.16. Percentage of workers aged 50 years or over in the central/federal government in OECD member countries (2005 and 1995) and in Brazil (2005 and 2008) .................................................................................................. 99 Figure 1.17. Percentage of workers aged 50 years or over in central/federal government and the wider labour force ................................................................................. 100 Figure 1.18. Proportion of workers at the national/federal level aged between 40 and 50 years and over 50 years ..................................................................................... 101 Figure 1.19. Percentage of women in senior positions in OECD member countries in 2005 and in Brazil ............................................................................................. 114 Figure 3.1. Criteria used for assessing performance of employees in central governments of selected OECD member countries........................................... 193
8 TABLE OF CONTENTS Figure 3.2. Figure 4.1. Figure 4.2. Figure 4.3. Boxes Box 1.1. Box 1.2. Box 1.3. Box 1.4. Box 1.5. Box 1.6. Box 1.7. Box 1.8. Box 1.9. The integrated database for personnel administration in Brazil ............................. 65 The public service observatory in France............................................................... 67 Staff reductions and workforce reallocations in Japan ........................................... 71 United States: The strategic alignment system and workforce planning................ 77 Workforce and competency planning arrangements in France .............................. 78 Workforce planning in Canada............................................................................... 80 Expenditure and Workforce Reduction in the Canadian Public Service in the 1990s ...................................................................................................................... 87 Frances General Review of Public Policies (RGPP): consequences for human resource management ............................................................................................. 89 Australian bargaining parameters ........................................................................... 95 Degree to which senior civil servants are managed by separate HRM policies in central government .......................................................................... 214 Frequently stated core public service values ..................................................... 227 Countries that offer protection for whistle-blowers .......................................... 230 Extent of delegation of HRM authority to line ministries in OECD member countries and Brazil ........................................................................................... 250
Box 1.10. New Zealand bargaining parameters ...................................................................... 95 Box 1.11. Past reforms to civil servants pension schemes (prior to 2003) .......................... 107 Box 1.12. Belgiums experience with age-based supplements ............................................. 110 Box 1.13. The UK Partnership Pension Scheme for civil servants ....................................... 112 Box 2.1. Box 2.2. Box 2.3. Box 2.4. Box 2.5. Box 2.6. Box 2.7. Box 2.8. Box 2.9. Examples of competency management systems in PETROBRAS and BNDES and the Ministry for Finance ................................................................................ 130 Competency management in Belgium.................................................................. 133 The Professional Skills for Government framework in the United Kingdom ...... 136 Leadership competencies in the Canadian public service .................................... 138 Australias Integrated Leadership System ............................................................ 139 Development of competencies in the public service in Canada and New Zealand......................................................................................................... 140 Organisation of job categories in some OECD member countries ....................... 144 Canada: Occupational group structure in the core public administration............. 153 Spain: Main elements of the reform of the corps system in 1984 ........................ 154
Box 2.10. France: Rpertoire interministriel des mtiers de ltat (RIME) ....................... 156 Box 2.11. Career System in the Canadian public service ..................................................... 160
TABLE OF CONTENTS 9
Box 2.12. Recruitment in the Belgian government ............................................................... 168 Box 2.13. Recruiting organisation and processes in Belgium and Ireland ........................... 171 Box 2.14. Training and learning in governments of selected OECD member countries ...... 175 Box 2.15. Development of senior civil servants: examples from OECD member countries 181 Box 2.16. OECD survey of central government KM practices............................................. 182 Box 3.1. Box 3.2. Box 3.3. Box 3.4. Box 3.5. Box 3.6. Box 4.1. Box 4.2. Box 4.3. Box 4.4. Box 4.5. Box 4.6. Box 4.7. Box 4.8. Box 4.9. Conclusions of a study on collective performance-related pay ............................ 196 General trends in the management of senior management in OECD and European Union countries .................................................................................... 209 Senior managers in the United States ................................................................... 216 Senior managers in the Netherlands ..................................................................... 217 Managing senior managers in Chile ..................................................................... 218 The Canadian Career Assignment Program and follow ups................................. 219 OECD Principles on Ethical Conduct in the Public Service (1998) .................... 229 France: Clarifying, diffusing and bringing to life the values of the public service................................................................................................................... 238 Finland: Values to be Part of the Daily Job .......................................................... 239 Values of the Canadian Federal Public Service.................................................... 240 How are core values integrated in HRM management in the federal government of Canada? ........................................................................................ 240 Australia: Values enshrined in public service legislation ..................................... 243 Australian Public Service (APS): Get it Right: a recruitment kit for managers ... 244 Responsibilities and organisational design of the SRH ........................................ 251 The Brazilian Federal Civil Personnel Administration System (SIPEC) ............. 252
Box 4.10. The management of the French civil service, the DGAFP ................................... 256 Box 4.11. The Chilean agency for the management of the civil service............................... 257 Box 4.12. Examples of the design of central HRM bodies in OECD member countries ..... 258 Box 4.13. Delegation of HRM responsibilities to deputy ministers in Canada .................... 262 Box 4.14. The US strategic alignment system: human resources as strategic partner .......... 264 Box 4.15. The British Civil Service Capability Group and the Capability Review Programme................................................................................................. 265 Box 4.16. The Canadian Management Accountability Framework ...................................... 266 Box 4.17. Civil service governance in the United Kingdom ................................................ 270 Box 4.18. Strategic leadership programme in Norway ......................................................... 271 Box 4.19. France: National debate on the future of the public service ................................. 280 Box 4.20. Spain: The consultation process for the Basic Statute for the Public Employee .. 281
10 TABLE OF CONTENTS Box 4.21. Mexico: Building ownership of change ............................................................... 282 Box 4.22. The social partnership approach in Ireland .......................................................... 284 Box 4.23. Leadership for reform: Development strategies in selected OECD member countries ............................................................................................................... 287 Box 4.24. Public Service Renewal in Canada (2001-09) ...................................................... 289 Box 4.25. Canada: Reporting progress on public service renewal........................................ 292 Box 4.26. Characteristics associated with the success of independent and permanent organisations in sustaining reforms ...................................................................... 292
EXECUTIVE SUMMARY 11
Executive Summary
Brazil has recently delivered a remarkable performance in economic, social and financial terms. However, Brazil still faces a number of challenges if the path to growth and prosperity is to be consolidated. The Brazilian public sector has played a crucial role in promoting stability and setting up the conditions for economic and social development, even more during the two successive Lula administrations. In trying to assess the state of its public employment at the federal level of government (executive branch), Brazil shows its commitment to a modern and dynamic human resource management system that underpins national economic and social development. The OECD Review of HRM in the Federal Government of Brazil aims at contributing to the design of the future workforce management reforms by the federal government. Its conclusions are drawn from a systematic comparison of the situation in Brazil with the experience of the 31 OECD member countries, with a specific emphasis on examples that are the most relevant to Brazil considering the size, constitutional and cultural basis, and values underpinning the HR system. The review is based on concrete case studies, and experiences throughout the report can inspire Brazil on its path to reform. Total government employment in Brazil (federal, state and municipality) is rather limited in terms of size (11-12% including state-owned enterprises) compared to OECD member countries (22% on average) but it is rather costly in the economy (12% of GDP, which is just above the OECD average, and 28% of all compensation costs of employees in the Brazilian economy). In recent years, government employment has been expanding to ensure improvements in access to public services and to overcome capacity weaknesses. As a consequence it has also become more expensive. Although employment in the federal government represents only 15% of total government employment in Brazil, its size and costs have grown rapidly in recent years, and this rising trend is expected to continue in the near future. This tendency needs to be closely monitored in the future to ensure that proportional improvements in policy making and service delivery are made. Strengthening federal government capacity to plan and reallocate its workforce should also help the government to be more responsive to policy priorities in an efficient manner. As in all OECD member countries, the management of the public workforce in the federal government of Brazil is a reflection of national political and economic priorities, and administrative culture. However, the focus of past public employment policies and reforms has changed successively resulting in a series of disconnected, fragmented and incomplete reforms with little overall strategic direction, and stop and go policies regarding staff numbers and remunerations. Hence, the priority for Brazil is to define an HRM strategy based on a solid long-term vision integrated into overall public management reform efforts.
12 EXECUTIVE SUMMARY
0.1. Towards a modern and dynamic HRM system

At present, HRM practices in the federal government tend to focus more on controlling compliance with basic rules and standards with little room for strategic management based on competencies and performance. The progress made by the Brazilian federal government in ensuring merit, staff continuity, impartiality and professionalism in the public service, and for keeping tight control over the size of the workforce, now place Brazil in a position to focus more on managing the workforce according to the strategic needs of government with more attention to efficiency concerns. Strategic workforce planning should be a priority. The federal government has a good record in tracking staff numbers and costs, as well as outsourced activities, and is able to prepare good projections for the future. However, workforce planning is currently mostly input and process-driven and largely focused on responding to new policy needs by allowing new hiring. This is potentially a costly practice, especially as the upcoming large wave of staff departures on retirement could provide a unique and possibly inexpensive opportunity to adjust and reallocate workforce size and competencies across sectoral priorities. Workforce planning needs to be made part of organisations strategic documents and of managers accountability, and be supported by a continuous dialogue between sectoral ministries and the Ministry of Planning. Changes are underway that aim at strengthening workforce planning, but they should be reinforced so that workforce planning becomes mainly based on an analysis of all changes affecting government organisations, of the possibilities for staff reallocation and outsourcing, as well as of technological changes. Government should also increase its efforts in the systematic search for workforce management efficiency in terms of numbers and competencies, possibly through general policy reviews. Flexibilities in the management of government capacity could also be developed by increasing staff mobility through a thorough reform of the job category system (the career system), and the development of a more prioritised and transparent outsourcing system. Staff compensation should be rationalised. Today, decisions on staff compensation are not yet sufficiently based on a strategic view of salaries and benefits. Many improvements have been made in recent years but successive negotiations and adjustments to salaries by groups of employees with different lobbying power continue to produce unnecessary costs, opacity and complexity in the remuneration system. In addition, despite significant recent improvements in staff performance assessment, performance bonuses have for most become part of regular salaries, thus losing their original purpose of rewarding outstanding performance. The federal government would thus gain in strengthening its methodology for salary increases based on criteria of affordability, integrity, social acceptability and attractiveness. Salaries should be set through the definition of an overall envelope for the whole of government, and negotiations on a job category by job category basis with clear negotiation criteria. There is no need to continue to implement performance-related bonuses at their present level in those administrations where it has not been functioning properly as good implementation would require important management investments with uncertain results. Although the pension system has already been reformed, it will also require further adjustments in the future to ensure its financial sustainability. Improvements in the management of staff capacity require thorough changes to the career and DAS system The Brazilian job category (career) system has certainly helped ensure a transparent and merit-based HR system, but it is also
EXECUTIVE SUMMARY 13
characterised by its rigidity and high transaction costs. Staff enter the public service through a competitive selection into a specific and often narrow career and cannot change to another career without passing another entry-level competitive examination. Horizontal and vertical career opportunities are limited in Brazil, and performance requirements are minimal for staff to move up within job categories. The job category system is also complex and expensive to administer as it is subject to corporatist pressures from various groups driving salaries up and undermining attempts to reallocate the workforce across sectoral priorities. Reforming the job category system could be the opportunity to develop a strategic view of how the public service should group and organise jobs. It will be necessary to eliminate the differentiation in the way similar job categories are managed across government organisations, reduce the number of job categories by widening their scope vertically and horizontally which will create more possibilities for mobility, and build a real pyramidal career progression. In this context, career progression should be organised around the acquisition of competences and performance. Reforms to the career system should also be the opportunity to reintegrate the approximately 70 000 positions called Commissioned functions (which benefit from privileges in terms of remuneration) into the job category system (excluding the DAS system from this reform). This reform can be implemented relatively slowly by closing positions as staff leave on retirement. The DAS system (Direo e Assessoramento Superiores), which comprises about 22 000 positions including most management and senior management positions and also less senior positions, allows for a welcome degree of flexibility in the system, as entry is open to applicants coming from outside the public service (with some quotas). This practice is in line with developments in OECD member countries including in more career-based systems such as Belgium, France, Ireland, and Korea. It is, however, necessary to improve the transparency requirement for appointments to those positions which, apart maybe from the very top senior management levels, need to be systematically based on an assessment of candidates competency profiles and transparent recruitment procedures (but appointments outside of the public service can remain). Establishing new recruitment procedures for DAS positions could be used as a pilot experience to modernise the recruitment processes for the most qualified public service positions. And an emphasis on the management of competencies especially in recruitment. The federal government should continue its efforts to increase the role of competencies in staff management through the establishment of a competency framework for the whole administration that will provide for a common reference framework for recruitment, performance management and promotions. Improving recruitment methods would be an appropriate entry point for establishing competencies in the management of staff. It is strongly recommended that the federal government start moving beyond recruiting staff by testing academic skills and basic knowledge only, especially for the more qualified positions. The introduction of modern recruitment methods means focusing on measuring competencies and past experiences without undermining transparency and merit. Staff performance management can be made more effective. Performance management plays a minor role in peoples career and compensation within their job category despite improvements to the staff performance assessment system. The implementation of the recommended changes to the job category system is a prerequisite to a stronger emphasis on staff performance management, in order to allow performance assessment to play a role on staff careers and promotions and to allow broader responsibility and pay bands within certain job categories. Seniority can still be
14 EXECUTIVE SUMMARY considered as the main qualifying factor for salary progression and promotion but only in job categories without a clear career dimension and at the beginning of the career. Strengthening the management of the senior managers will help increase management capacity and trust, and build leadership for achieving better results. The management of managers and senior managers in the federal government of Brazil receives less attention compared to the situation in most OECD member countries. At present, the system hampers the necessary growth of a professional cadre of non-political managers specialised in public administration that could co-exist with discretionary appointments for the most senior and political positions. Senior managers should be managed as a cohesive group with clearly defined competencies. To achieve this, it is necessary to delineate between positions to which appointments can remain fully discretionary (mostly top-level positions) and those that require a higher level of transparency in the recruitment process based on the assessment of competencies. It would also be appropriate to establish a system which helps identify potential future managers from all types of careers, to provide them with opportunities for development, and to regularly assess the development of their leadership potential. Modernising HRM will require strengthening the capacities in HRM. It is necessary for HRM units in the central HRM body and sectoral ministries and agencies to acquire more strategic management and strategic reform management capacity to ensure the establishment of a modern HRM accountability framework. An assessment of the capacity needs of the central HRM units and of their corresponding units in line ministries and agencies would help. A cultural change needs to take place that significantly lessens the recourse to regulation for implementing HRM reforms. Instead, the Ministry of Planning should develop managerial guidelines (with common standards) and accountability frameworks, and HRM should become part of regular and documented managerial accountabilities. This will allow the level of details in HRM regulations to lessen significantly.
0.2. Towards successful and sustainable reforms

In order to move towards a modern workforce management, the experience of OECD member countries shows that core values will have to evolve to underpin changes in staff management. Values such as performance and efficiency have started to make their way into the system but not in a clear-cut fashion. They should be widely discussed by both public servants and society, and reforms should derive from those accepted changes. Reforms should not imply a major upheaval, as these would create unnecessary staff insecurity and reform transaction costs. On the contrary, it is recommended to develop a step-by-step approach to build consensus around new values; to review how management tools can be adjusted to these new values; to realistically plan what can be done in the short, medium and long run; as well as to acknowledge that reforms will have to be built gradually by taking into account the successive lessons learnt from their successes and failures. The chances of achieving sustainable reforms would be enhanced by the consolidation of a stable and mature method of engaging with unions. As the negotiation process for work conditions is being developed by the federal government, there is an opportunity to build a constructive dialogue with unions on the future of the public service.
SYNTHSE 15
Synthse
La rcente russite du Brsil est remarquable en termes conomique, financier et social. Nanmoins, le Brsil doit encore relever plusieurs dfis sil souhaite prenniser sa croissance et sa prosprit. Le secteur public a jou un rle dterminant pour favoriser la stabilit et instaurer les conditions indispensables au dveloppement conomique et social, et ce de manire encore plus marque lors des deux mandats successifs du Prsident Lula. En valuant la situation de lemploi public dans ladministration fdrale (pouvoir excutif), le Brsil montre son engagement moderniser et dynamiser son systme de gestion des ressources humaines (GRH), qui est essentiel pour asseoir les fondements du dveloppement conomique et social sur le plan national. Lexamen de lOCDE sur la gestion des ressources humaines dans ladministration fdrale brsilienne a pour objectif de contribuer llaboration des prochaines rformes de la gestion des ressources humaines. Ses conclusions sappuient sur une comparaison systmatique de la situation observe au Brsil et de celles rencontres dans les 31 pays membres de lOCDE, avec un accent particulier mis sur les examples les plus intressants pour le Brsil en termes de taille et de valeurs constitutionnelles et culturelles. Des tudes de cas et des expriences concrtes sont proposes tout au long du rapport, afin de guider le Brsil dans ses efforts de rforme. Si lemploi total dans les administrations publiques au Brsil (au niveau central, rgional et local) est relativement limit en termes de taille (11-12 %, entreprises publiques incluses) par rapport aux pays membres de lOCDE (22 % en moyenne), il reprsente un cot relativement important pour lconomie (12 % du PIB, ce qui place le Brsil juste au dessus de la moyenne des pays membres de lOCDE, et 28% des cots de rmunration dans l conomie). Ces dernires annes, lemploi dans ladministration publique sest dvelopp pour garantir une amlioration de laccs aux services publics et un renforcement des capacits. Paralllement, il est aussi devenu plus coteux. Si lemploi dans ladministration fdrale ne reprsente que 15 % de lemploi total dans ladministration publique au Brsil, sa taille et son cot ont augment rapidement ces dernires annes et cette tendance devrait se poursuivre court terme. Il conviendra de suivre avec attention lvolution de cette tendance lavenir, pour sassurer quelle saccompagne dune amlioration proportionnelle du processus dlaboration des politiques et de loffre de services publics. En renforant la capacit de ladministration fdrale planifier et redistribuer ses effectifs, le gouvernement devrait tre mieux mme de traiter efficacement les priorits de laction publique. Comme dans tous les pays membres de lOCDE, la gestion des effectifs dans ladministration fdrale au Brsil est le reflet des priorits politiques et conomiques nationales, ainsi que des traditions de ladministration. Cependant, les priorits des politiques et des rformes de lemploi public ont beaucoup chang au cours des dernires annes, ce qui a donn lieu une srie de rformes isoles et inabouties faute dune orientation stratgique globale, ainsi qu des politiques alternes de freinage et de relance en matire deffectifs et de rmunration. Dans ces conditions, la priorit pour le
16 SYNTHSE Brsil consiste dfinir une stratgie de gestion des ressources humaines fonde sur une vision solide long terme, intgre dautres rformes de la gestion publique.
0.1. Vers un systme moderne et dynamique de gestion des ressources humaines

lheure actuelle, les pratiques de gestion des ressources humaines dans ladministration fdrale sont principalement axes sur le respect de la rglementation de base et accordent peu de place la gestion stratgique fonde sur les comptences et les performances. Compte tenu des progrs accomplis par ladministration fdrale brsilienne pour prserver les principes du mrite, de la continuit, de limpartialit et du professionnalisme dans la fonction publique, ainsi que pour exercer un contrle strict sur la taille des effectifs, le Brsil est dsormais en mesure de se concentrer davantage sur la gestion des ressources humaines en fonction des besoins stratgiques de ladministration, en accordant une attention particulire aux obligations defficience. La gestion prvisionnelle stratgique des effectifs devrait tre une priorit. Ladministration fdrale a montr quelle est capable de suivre lvolution des effectifs et de leurs cots, ainsi que des activits sous-traites, ce qui lui permet dtablir des projections fiables. Toutefois, la gestion prvisionnelle des effectifs est actuellement pour sa plus grande part fonde sur lattribution de ressources et le respect des processus, et sefforce principalement de rpondre aux nouveaux besoins en autorisant de nouvelles embauches. Or cette pratique peut savrer coteuse, dautant plus que la prochaine vague massive de dparts la retraite pourrait se rvler une occasion unique et bon march pour ajuster et rorganiser les effectifs et les comptences en fonction des priorits par secteur. La gestion prvisionnelle des effectifs doit tre intgre aux documents stratgiques et aux responsabilits des cadres de la fonction publique, tout en tant taye par un dialogue permanent entre les ministres fonctionnels et le ministre de la Planification. Des rformes sont en cours pour renforcer la planification des effectifs, mais elles devraient tre tendues afin que la planification des effectifs soit dsormais principalement fonde sur lanalyse des changements subis par les organismes publics, des possibilits de redploiement des effectifs et de sous-traitance et des progrs technologiques. Ladministration devrait en outre renforcer ses efforts dans la recherche systmatique de lefficience dans la gestion des effectifs, tant en termes de taille que de comptences, peut-tre par le biais de revues des politiques. La gestion des capacits de ladministration pourrait par ailleurs tre assouplie en accroissant la mobilit des effectifs via une rforme en profondeur du systme des catgories demplois (systme de carrire ) et la mise en uvre dun systme de sous-traitance plus transparent fond sur une hirarchisation des priorits. Le systme de rmunration devrait tre simplifi. Actuellement, les dcisions relatives la rmunration du personnel ne sont pas suffisamment fondes sur une vision stratgique des traitements et avantages. Beaucoup damliorations ont t faites au systme ces dernires annes, mais les ngociations et des ajustements successifs des salaires sous leffet de pressions plus ou moins importantes se sont traduits par des cots et un niveau dopacit et de complexit dans le systme qui ne sont pas ncessaires. En dpit des progrs importants enregistrs dans lvaluation des performances, les primes ont gnralement t intgres progressivement au salaire normal, perdant ainsi leur fonction dorigine destine rcompenser des performances exceptionnelles. Ladministration fdrale aurait donc renforcer sa mthodologie pour les augmentations de salaire, fonde sur des critres de capacits budgtaires, dintgrit, dacceptabilit sur le plan social et dattrait de lemploi public. Les salaires devraient tre fixs en fonction
SYNTHSE 17
dune enveloppe globale attribue lensemble de ladministration, par le biais de ngociations par catgorie demplois reposant sur des critres prcis. Il nest pas ncessaire de poursuivre la mise en uvre des primes de performance leur niveau actuel dans les administrations dans lesquelles le systme fonctionne mal. Amliorer le systme ncessiterait en effet dimportants investissements en termes de gestion pour des rsultats incertains. Le systme de retraite a dj fait lobjet dune rforme mais de nouveaux ajustements seront ncessaires terme pour garantir sa viabilit financire. Lamlioration de la gestion des effectifs implique une vritable refonte du systme de carrires et du systme DAF Le systme de catgories demplois ( carrire ) adopt par le Brsil a trs certainement t instrumental dans la mise en place dun systme de recrutement bas sur le mrite, mais il se caractrise par sa rigidit et des cots de transaction levs. Les agents entrent dans la fonction publique aprs un concours pour occuper une catgorie demploi prcise et ne peuvent changer de carrire sans passer un autre concours dadmission. Les possibilits dvolution horizontales et verticales sont limites au Brsil. Par ailleurs, les obligations de performance sont minimales pour progresser au sein dune mme catgorie demploi. Le systme de catgories demplois est galement difficile et coteux grer, puisquil est soumis aux pressions exerces par divers groupes, qui entranent une hausse des salaires et font chouer toute tentative de redploiement des effectifs dans les activits prioritaires. La rforme du systme de catgories demplois pourrait tre loccasion dlaborer une vision stratgique de lorganisation des emplois au sein de la fonction publique. Il sera ncessaire dhomogniser les modalits de gestion des catgories demplois similaires entre les diffrents organismes publics, ainsi que de rduire le nombre de catgories existantes en les largissant la fois sur le plan vertical et sur le plan horizontal afin de favoriser la mobilit, et de mettre en place une structure pyramidale pour lavancement professionnel. Dans ce contexte, lvolution professionnelle devrait sappuyer sur lacquisition de comptences et sur les performances. La rforme du systme de carrire devrait galement permettre de rintgrer les 70 000 emplois fonds sur des commissions (qui bnficient davantages en termes de rmunration) au sein du systme de catgories demplois ( lexception du systme DAS). Cette rforme peut tre mene progressivement en supprimant les postes au fur et mesure des dparts en retraite. Le systme DAS (Direo e Assessoramento Superiores), qui compte 22 000 emplois environ dont la plupart des fonctions dencadrement mais aussi des postes moins haut placs, offre une souplesse bienvenue au systme, dans la mesure o les candidats extrieurs la fonction publique y sont accepts (dans le respect de certains quotas). Cette pratique est conforme la situation observe dans les pays membres de lOCDE, y compris dans des systmes dits de carrire comme en Belgique, en Core, en France et en Irlande. Il est toutefois ncessaire damliorer les obligations de transparence pour les nominations ces postes qui, lexception peut-tre des plus hautes fonctions publiques, doivent systmatiquement sappuyer sur une valuation du profil de comptences des candidats et des procdures de recrutement transparentes (tout en conservant la possibilit de nommer des candidats extrieurs la fonction publique). La mise en uvre de nouvelles procdures de recrutement pour les emplois du systme DAS pourrait servir de projet pilote la modernisation des procdures de recrutement pour les postes les plus qualifis dans la fonction publique. et une attention particulire la gestion des comptences, plus spcialement dans le recrutement. Ladministration fdrale devrait poursuivre les efforts engags pour renforcer le rle des comptences dans la gestion des ressources humaines en tablissant un cadre de comptences lchelle de ladministration dans son ensemble,
18 SYNTHSE afin dinstaurer un dispositif de rfrence commun pour le recrutement, la gestion des performances et les promotions. Lamlioration des mthodes de recrutement constituerait un bon point de dpart pour lintgration des comptences la gestion des ressources humaines. Il est vivement recommand ladministration fdrale daller audel du recrutement uniquement fond sur lvaluation des comptences scolaires et des connaissances de base, particulirement pour les postes ncessitant les plus hautes qualifications. Les mthodes modernes de recrutement visent mesurer les comptences et lexprience sans nuire la transparence et au mrite. La gestion de la performance du personnel peut tre amliore. La gestion de la performance joue un rle accessoire dans lvolution professionnelle et la rmunration des individus au sein de leur catgorie demploi, en dpit des amliorations apportes au systme dvaluation des performances. Il est indispensable, pour accorder plus de poids la gestion de la performance du personnel, de mettre en uvre les rformes recommandes au sein du systme de catgories demplois, de manire ce que lvaluation des performances joue un rle dans lavancement professionnel et les promotions des agents tout en largissant les responsabilits et les fourchettes de rmunration au sein de certaines catgories demploi. Lanciennet peut rester le principal critre doctroi des augmentations de salaire et des promotions, mais uniquement dans les catgories demplois sans dimension de carrire prcise et en dbut de carrire. Une gestion renforce des hauts fonctionnaires permettra damliorer les capacits dencadrement et la confiance, pour obtenir de meilleurs rsultats. La gestion des hauts fonctionnaires de ladministration fdrale du Brsil est lobjet de moins dattention au Brsil que dans les pays membres de lOCDE. lheure actuelle, le systme freine la croissance ncessaire dun cadre professionnel de dirigeants non politiques spcialiss dans ladministration publique, paralllement aux nominations discrtionnaires pour les postes les plus levs et les plus politiques. Les hauts fonctionnaires doivent tre grs comme un groupe cohrent aux comptences clairement dfinies. Pour y parvenir, il est ncessaire de dterminer les postes pour lesquels les nominations peuvent rester totalement la discrtion politique (principalement les postes les plus hauts placs) et les postes qui impliquent un processus de recrutement plus transparent fond sur lvaluation des comptences. Il conviendrait galement de mettre en place un systme permettant didentifier les futurs dirigeants potentiels dans tous les types de carrire, afin de leur offrir des perspectives dvolution et dvaluer rgulirement le dveloppement de leurs capacits dencadrement. La modernisation de la gestion des ressources humaines implique un renforcement des capacits. Il est ncessaire que les services du personnel de lorgane central de GRH et des ministres fonctionnels renforcent leurs capacits en termes de gestion stratgique et de gestion des rformes stratgiques, afin de garantir la cration dun cadre de responsabilit moderne dans le domaine de la gestion des ressources humaines. Une valuation des besoins en capacits des services de GRH centraliss et de leurs homologues dans les ministres fonctionnels serait utile ce titre. Un changement de mentalit simpose afin de diminuer sensiblement le recours la rglementation pour la mise en uvre des rformes dans le domaine de la gestion des ressources humaines. Dans cette optique, le ministre de la Planification doit laborer des lignes directrices pour la gestion (comportant des normes communes) et des cadres de responsabilit. Par ailleurs, la gestion des ressources humaines doit tre intgre aux responsabilits courantes et documentes des dirigeants. Ces rformes permettront de
SYNTHSE 19
rduire considrablement le degr de prcision de la rglementation relative la gestion des ressources humaines.
0.2. Vers des rformes efficaces et durables

Pour moderniser la gestion du personnel, lexprience des pays membres de lOCDE montre que les valeurs essentielles doivent voluer paralllement aux rformes de la gestion des ressources humaines. Les valeurs comme la performance et lefficience commencent simposer dans le systme, mais de manire relativement vague. Une vaste consultation des agents de la fonction publique et de la socit dans son ensemble devrait intervenir sur ces valeurs, afin que les rformes sappuient sur les changements accepts. Les rformes ne doivent pas engendrer un remaniement majeur qui crerait un sentiment dinscurit au sein du personnel et des cots de transaction inutiles. linverse, il est recommand dopter pour une dmarche progressive visant : dgager un consensus autour des nouvelles valeurs; examiner les possibilits dadaptation des outils de gestion aux nouvelle valeurs; planifier de manire raliste les mesures envisageables court, moyen et long terme; et prendre conscience du fait que les rformes devront tre adoptes progressivement en tenant compte des enseignements tirs au fur et mesure des succs et des checs. Ladoption de mthodes dfinies et avises pour la ngociation avec les syndicats augmenterait les probabilits daboutir des rformes viables. La procdure de ngociation sur les conditions de travail tant actuellement mise au point par ladministration fdrale, elle offre loccasion de nouer un dialogue constructif avec les organisations syndicales sur lavenir du service public.
ASSESSMENT AND RECOMMENDATIONS 21
Assessment and recommendations
Total government employment in Brazil (federal, state and municipality) is rather limited in terms of size, but is expanding and increasingly costly.
In Brazil, total government employment (federal, state and municipality) accounts for a relatively limited percentage of total employment.1 In 2008, it represented approximately 10-11% of total employment2 compared to about 20% for the OECD average.3 When taking state-owned enterprises into account, the percentage increases slightly to about 11-12%,4 compared to an OECD average of about 22%. These percentages are small in comparison to other Latin American countries such as Argentina and Chile. Government employment (excluding state-owned enterprises) has increased significantly in absolute numbers, by more than 12% in the 1990s, and by more than 15% between 1999 and 2003. Total public sector employment (including state-owned enterprises) increased by more than 15% between 2003 and 2007. Very recently, the increase in government employment (excluding public enterprises) has accelerated at least at the federal level and in municipalities (by 10% between 2005 and 2008). These rapid increases have been justified by the recognised need to improve access to public services, especially in the health and education sectors, and to overcome preexisting weaknesses in government capacity, but the situation should be monitored closely. It deserves attention for two main reasons: First, although the government workforce (including federal government, states and municipalities) is relatively small in terms of numbers of employees, it is expensive in the Brazilian economy. It represents 12% of GDP5 (excluding employees of state-owned enterprises), which is just above the OECD average, and 28% of all compensation costs of employees in the Brazilian economy.6 This does not necessarily mean that salaries in the public sector are always higher than salaries in the private sector. The situation is certainly due to a combination of factors including the structure of salaries in Brazil with very low remunerations in the private sector for certain tasks, and a much higher proportion of qualified positions in the public sector, but also to a choice that has been made that public servants in core positions be relatively well paid to motivate their commitment and to attract and retain a highly qualified workforce. Second, a large share of government resources in Brazil, representing over 14% of GDP, goes to private sector organisations7 that supply goods and services to the government and citizens.8 When compared to OECD member countries, Brazil ranks second in this respect (the OECD average is less than 10% of GDP).
In Brazil today, the combination of the costs of government employment and those of public services produced by the private sector and paid by government means that approximately 27% of GDP is dedicated to producing public services and goods that are
22 ASSESSMENT AND RECOMMENDATIONS government funded, placing Brazil fifth when compared to OECD member countries. Considering the important role attributed to government action in the economy and the society by the Lula Government, the trends regarding government employment are not surprising, but the data should encourage detailed attention to the evolution of the productivity of government actions and, as a consequence, to the efficiency of staff management. As noted in the OECD Economic Survey of Brazil (OECD, 2009b), there is much room for improvement in the efficiency of government spending in Brazil today, and improved human resource management would contribute to this.
The size and costs of federal government employment9 have grown rapidly in recent years.
The federal executive workforce represents only 15% of the government workforce in Brazil. Until recently, federal government employment had been a limiting factor in the growth of government employment in Brazil as a whole. The number of employees in the federal government declined between 1995 and 2000, stabilised between 2000 and 2003, and started to increase after 2003. Workforce costs as a percentage of GDP began to rise after 2006, owing not only to increases in staff numbers but also to reforms in career streams, a shift towards a more qualified workforce, and changes in the level of salaries and pensions. This rising trend will continue over a number of years as the federal government has locked itself into new financial commitments until 2012 and the number of retirees will grow rapidly. Employer social contributions may thus also rise. These increases have taken place after years of restrictions on staff numbers and costs that added to the existing capacity gaps in government. Under the Lula administration, most of the new posts have been created in the priority policy areas of education, health, security and infrastructure. Officials report that increases in compensation were also necessary as civil servants tended to be underpaid. Like for the rest of government employment in the country, there needs to be a clear understanding of these cost increases which must be justified in the end by improved access to, and better quality of, government services, regulation and policy making.
Managing the federal government workforce effectively will become even more important in the coming years because of the demands on public services for the further development of the economy.
Recent high levels of economic growth have made it possible to overlook increases in staff numbers, compensation costs and the overall costs of producing goods and services funded by government. In addition, federal workforce performance is all the more difficult to measure as a good part of its work is not involved in easily measurable service delivery. There is not yet any solid methodology to compare its performance to that of other countries. However, its management serves as an inspiring model for the rest of the public service in the country, and successful reforms will have spillover effects throughout states and municipal governments in Brazil. Given the financial investments made in the workforce, it is appropriate to have high expectations regarding improvements in staff performance. These will not be automatic, however, and will require progress in the management of the workforce, by improving the ability to reallocate and redeploy staff across government areas and sectors, by strengthening performance and competency management to better adapt the workforce to the needs of government organisations, and by reforming the compensation system.
The federal government should be praised for its achievements in ensuring merit, staff continuity, impartiality and professionalism in the management of public servants and for keeping tight control over the size of the workforce.
The principles of merit and morality are firmly enshrined in the Constitution and in all regulations affecting the management of the public service. Entry into most public service positions requires passing a public service competitive examination, and the management of staff careers leaves little room for patronage. Thus, academic merit assurance is robust and there are ample oversight and recourse mechanisms. Legal and constitutional provisions relating to employment in the public service, such as implicit tenure, reinforce the independence, political neutrality and continuity of the public service. The government also relies on a combination of compliance and awareness raising instruments to prevent breaches in the integrity framework, although some improvements should be envisaged. Exceptions to the requirements for full transparency in appointments and the system of job categories concern approximately 70 000 positions which include the so-called DAS positions and the commissioned functions.10 These are important areas for reforms in the job category systems (see below). Over a number of years, the government has undertaken considerable efforts to strengthen human capacity in the public service by increasing the level of qualifications at entry and emphasising continuous training, with qualification plans for employees, strengthened learning networks, and modern methods of learning and development. The government maintains good control over workforce numbers and costs. The tracking of employee numbers and costs as well as those of outsourcing is excellent and there is no real room for bypassing the policy of the Ministry of Planning regarding staff numbers and costs. Processes are also in place to ensure good accountability for future pension costs of employees and these are tracked in all documents covering employee numbers and costs.
These achievements now allow a workforce management that is less focused on input and process controls but more tied to the strategic needs of government.
Presently, human resource management in the executive branch of the federal government of Brazil mainly focuses on controlling compliance with basic rules and standards of merit and integrity and maintaining tight controls on costs. While Brazils past history of political patronage and fiscal unbalance makes this understandable, the system of staff management is now inflexible and fragmented with little room for strategic management or focus on competency and performance. There is no doubt that past reforms have tried to tackle these issues. Since the 1980s, Brazil has been through various phases of reform of the public administration. Their main emphasis has changed under successive governments: first the re-establishment of traditional values such as merit, continuity and probity; then a focus on cutting staff numbers at the beginning of the 1990s; followed by a restructuring of the public administration and the introduction of performance incentives. Owing to a lack of implementation capacity and continuity in reforms, many of these reforms have remained incomplete.
24 ASSESSMENT AND RECOMMENDATIONS The result today is a mosaic of tools for modernising the management of human resources. They are sometimes inconsistent and disconnected, and send weak messages about the priorities in staff management. In this context, the focus of recent and present changes in the management of public servants has been more on adjusting the system than on long-term strategic reforms. With traditional values now well ingrained in the public service culture, the federal government can afford to move towards methods of staff management that will require system reform with a clear value focus. Brazil is currently at a point in its political and policy planning cycles when, with solid economic growth as well as political and macroeconomic stability, there is a window of opportunity to build the case for reform and plan a set of integrated changes to modernise HRM as part of the governments new programme and the new multi-annual plan.
Strategic workforce planning should be made a priority.
At present, workforce planning in ministries is still input- and process-driven, focused mainly on tracking staff numbers and costs, but changes are underway and should be expected to bring improvements. Current strategic workforce planning does not really yet go beyond ministries indications of future hiring needs as new priorities arise, to which the Ministry of Planning reacts. The ministrys focus is on controlling the size of organisations, monitoring compliance, and providing staff in policy priority areas. In good times it allows hiring and in bad times forbids it. The dialogue between the Ministry of Planning and other ministries about choices and trade-offs regarding workforce planning is not yet sufficiently based on a strong analysis of the present and future jobs and competencies required to meet the present and future goals of the government organisations, and on the trade-offs involved. A very recent provision of a workforce planning methodology by the Ministry of Planning goes in the right direction, and should be paralleled with the strengthening of ministries and agencies accountability for workforce planning. In combination with the shortcomings regarding planning methodology, the movement of staff can only be limited, there is no process allowing for mobility across narrow job categories, and relatively restricted possibilities for outsourcing. Policy changes and the identification of new needs almost systematically involve new hirings. The conditions are thus not in place for making less costly and more effective choices in terms of workforce numbers and qualifications. The experience of OECD member countries shows that workforce planning can be a very useful part of the strategic documents of organisations (strategic and performance plans) in which present and future needs in terms of staff numbers and competencies in light of the changes affecting organisation, outsourcing possibilities and technological changes should be analysed. As part of the accountability framework for the strategic management of their organisations, managers can then be held accountable for their management of their workforce. It is the responsibility of the Ministry of Planning to provide for such a framework and to establish continuing discussions with ministries on workforce planning as part of their strategic planning and reporting obligations. Once the accountability framework is in place and the discussion process is functioning properly, the Ministry of Planning may reconsider its level of input control on staff numbers and positions. Although the relations of state-owned enterprises (SOEs) with the Ministry of Planning regarding workforce planning seem similar to those of ministries, at least some SOEs have established
processes for strategic workforce planning that could serve as a source of inspiration to ministries. At the same time, it is recommended that the government increase pressures for the search of efficiency in the management of the workforce. The measures that have so far helped to keep costs down in the federal government have been restrictive, based on stopand-go policies on staff numbers and salaries which have undermined capacity in government and have unsettled staff. The search for efficiency should systematically be part of organisations strategic framework, and directors and managers should be held accountable for the implementation of measures to increase efficiency, notably in terms of workforce numbers and competencies. In addition, the government could consider following the example of many OECD member countries and carry out general public policy reviews. These can help design policies to address long-term needs in terms of capacity and staff reallocation across sectors. They can also be used to develop a shared long-term view of the strategic management of organisations across government departments. Today, close to 40% of the federal government workforce is over 50 years old and will soon retire. The ageing of the government workforce, much more rapid than the rest of the labour force, gives Brazil a unique opportunity to adjust the size and allocation of its workforce across sectoral priorities through good long-term planning of staff needs and reallocation across long-term sectoral priorities. The federal government should also recognise that significant departures will create capacity difficulties, and every effort should be made to retain staff that are difficult to replace for a few additional years. Processes should also be in place to improve the transmission of knowledge, to accelerate training for some staff, and to improve in career planning. The pension system has already been reformed but will also require further adjustments in the future. Finally, workforce planning would be made fully effective with more flexibility in the management of the pool of workers. Increasing mobility through changes to the job category system should be a priority (see below). The issue of contracting out is more complex, and the lessons of experience are not straightforward. The practice is still highly contested in the federal government of Brazil, especially as a significant part of outsourcing involves contracting manpower firms for hiring labour outside of public service regulations rather than contracting out the delivery of goods and services to companies with the idea that some services are provided more efficiently by the private sector. Clarifications and guidance on the purposes of outsourcing should be provided by the Ministry of Planning. Non-core services can legally be provided by the private sector. However, the definition of core services or core missions is bound to evolve over time and managers could be given more flexibility to contract out other services, provided it is done for the right reasons and the necessary controls are in place. In any case, decisions for contracting out should be part of workforce planning and developed in the various accountability documents. This should allow good tracking of the costs of producing services, whether produced by government employees or outsourced.
26 ASSESSMENT AND RECOMMENDATIONS

The decision-making process on the level of staff compensation should be further rationalised to manage costs more effectively.
As currently designed, staff compensation is not yet based enough on a strategic view of what salary levels should be, and inevitably leads to salary increases that are not necessarily justified. Recent efforts to rationalise staff compensation increases should be praised. The decision-making process, however, is still fragmented by career or groups of careers and subject to pressures, resulting in an opaque and complex remuneration system in which salary levels in one job category tend to be determined by the need to catch up with salaries in another job category (although the Ministry of Planning has also used comparisons with private sector pay). They also vary according to the political strength of the various groups. In addition, despite improvements in staff performance assessment, performance bonuses that represent a very large part of compensation have in many cases simply become part of salary. Finally, the 70 000 staff (DAS and commissioned positions) who are selected through discretionary processes receive salary supplements that are not part of the regular salary structure. These supplements are probably necessary to attract and retain the right staff at mid- and senior-level management positions, but may not be justified for many of the lower positions. Although it is difficult to modify the design of compensation, it is strongly recommended that compensation should be increasingly viewed as a tool to improve the management of public servants. First, the role of Congress in establishing details of salary levels and changes to these levels by job category could be modified so that salaries become a more technical and managerial issue and are less subject to the strength of lobbies. Should a law remain necessary for setting salary levels and increases, the proposals of the Ministry of Planning should be very well grounded technically so that Congress is not involved in the detailed management of salary levels (but only on overall compensation costs). Second, the Ministry of Planning should aim to establish a solid methodology for salary increases that is based on clear criteria which include affordability, comparisons with total compensation in the private sector (including the many advantages of the public sector), an understanding of the levels of compensation acceptable to society, and compatibility with maintaining high levels of integrity. Many OECD member countries have improved their salary-setting processes in the past two decades to include parameters that are not linked solely to the macroeconomic situation and political willingness to increase the wage bill. Reviews of total real compensation such as those carried out in Canada and the United Kingdom could be a starting point for the federal government of Brazil. Third, it would be more effective to set salaries not primarily on a job category by job category (or by group of job categories) basis but by a two-phase process: a whole-ofgovernment process defining the overall envelope (with some technical criteria to define those) and the use of pay bargaining parameters for negotiations on a job category by job category basis. Finally, the poor functioning of the performance bonus system and the limitations of the staff performance management system indicate that it is probably counterproductive to make the effort necessary to implement performance-related pay in all government organisations and at present levels, especially considering the large part of remuneration supposedly linked to performance.
Focusing on competency management and reforming the job category as well as the DAS systems would improve the strategic management of staff and the governance of the HR system.
The management of competencies is at its early stages. There is a narrowly defined merit system for entry into the public service, and a rigid system of job categories (the socalled careers in the federal government) that prevents a career system based on performance and undermines mobility. In theory, a well-designed and well-implemented job category system is indispensable in a career-based system and should allow for mobility. However, the way the federal government has implemented its career system has resulted in a rather rigid system with a myriad of employment conditions for different groups of staff. Upward and horizontal mobility within the career system are limited, resulting in unnecessary barriers to the optimal allocation of human resources and unduly high transaction costs. Indeed, apart from specific positions (the DAS system and commissioned functions, most importantly, but also some positions in the education sector), all public servants are hired at entry level and move up in their job categories as they acquire more seniority. It is impossible to move across narrow-based job categories without passing the entry-level competition in the new job category with all entry level applicants and starting at entry level. Performance requirements are minimal for staff to move up within their careers. Job categories are complex not only because they are numerous but also because their design and compensation systems have been determined by the way different benefits have been allocated on an organisation by organisation or sectoral basis. They are expensive to administer because of their complexity. There is also duplication and overlap of job categories, while some categories no longer meet the operational needs of the public service. Overall, the way the job category system is managed today is an impediment to reform aimed at modernising the management of the public service to make it more professional, more performance-oriented and more flexible. It creates serious barriers to mobility, provides limited opportunities for career progression outside the DAS system, promotes corporatist attitudes, and supports a complex and expensive remuneration system. While it has limited individual favouritism, it has helped rigidify corporatist attitudes, discouraged staff mobility and undermined staff performance management. This highly centralised system has shown limitations in its capacity to prevent fragmentation and the result is a situation in which civil servants identify less with the federal administration as a whole than with their ministries and job categories. The federal government has struggled to improve the job category system by reorganising job categories and groups, reducing the emphasis on seniority in career management, increasing mobility through the establishment of job categories that cross ministries, and rationalising salary structures. Reforms have been implemented piecemeal, however, job category by job category, and have come up against the interests of various ministries and organisations. The improvements have probably not led to results that are proportional to the efforts made. The situation calls for a broad reform of the job category system. This does not imply a big bang reform but changes that are driven by a strategic view of how the public service should group and organise jobs. It should improve career opportunities so as to provide the flexibility and capability needed to respond to emerging challenges. There is a need to eliminate differentiation in the way similar job categories are managed across
28 ASSESSMENT AND RECOMMENDATIONS government organisations, significantly reduce the number of job categories, create more possibilities for mobility, develop a standard and centralised way to identify and describe positions and classify jobs, and create a real pyramidal career progression based on a system of internal competitive selection. This would improve the career structure and allow for more performance orientation and mobility within and possibly across job categories. In such a system, the procedures for mobility and promotion need to be transparent and based on competitive processes. Listings of openings should be publicly available. The implementation of such changes is difficult not only for technical reasons, but mostly because of complex and differentiated corporatist benefits, both financial and in terms of career path. The federal government might draw inspiration from similar reforms implemented over time in OECD member countries such as France and Spain which have adopted broader occupational groupings and given greater importance to the position than the group. Other countries with career-based civil services such as Ireland and Japan have grouped civil servants along service-wide grades. While no system is perfect and careerbased civil services are all striving to increase the fluidity of their systems, major improvements can be made. It is important to recognise that this means a greater role for the Ministry of Planning in managing and providing coherence across the whole job category system. Positions that are part of the DAS system allow for a degree of flexibility in the system. Appointments and promotions to these posts are discretionary and not subject to well-defined, competitive and transparent procedures although some organisations have put in place such procedures on their own. A good proportion is open to outside applicants although the majority of appointees are regular civil servants. The flexibility provided by the DAS system is necessary at present, in some cases to allow more rapid advancement for high-performing individuals, to facilitate the entry of individuals who are not civil servants into the system, to give managers the possibility of acquiring different sets of skills and competencies, and to allow some discretion in the choice of senior managers. This flexibility, however, should not come at the expense of transparency in the system, with a differentiation between posts at top levels that require discretionary appointments and those that require processes to ensure that the best staff are recruited in a transparent manner. This transparency is necessary for both internal (existing civil servants) and external candidates. This will help not only to ensure equity and trust but also to strengthen the professionalism of the senior civil service. Transparency does not mean that staff should be hired through exams that mainly test their academic skills and knowledge, as in the case of other job categories. Instead, recruitment should rely most on comparing job requirements with candidates competency profiles. Reforming recruitment for DAS positions can be a good trial exercise for the future reform of all recruitment processes in the public service to give more weight to competencies and experience than to academic skills. Keeping a proportion of DAS positions for outside applicants is in line with reforms in all careerbased systems in OECD member countries, but the DAS system also needs to be aligned with the job category system (although not integrated into it to avoid reinforcing the difficulties of the job category system) and to adopt transparent job descriptions. The question of mid-level and senior-level management positions is different and is discussed further below.
The system of commissioned functions for staff outside of DAS positions is slightly different in that it does not help bring in skills from the outside or build a senior civil service. The federal government could usefully re-examine the legitimacy of these discretionary appointments which receive preferential treatment in terms of remuneration. In line with the structural reform of the job category system, the federal government should continue its efforts to increase the role of competencies in staff management. For the moment, competencies have mostly been viewed in terms of training. Although a difficult task, modern staff administration systems involve the definition of competency frameworks for public administration that apply to the systems of recruitment, performance management, and promotion. Competencies provide a common reference framework for the whole administration. They are used to recruit the right people, better focus their training, serve as a basis for staff performance assessment, and promote the right persons. A competency framework has to be decentralised to ministries and agencies, which have to be empowered to define competencies for their staff. Implementing competency-based management requires considerable investment in time and effort. It can be developed through workforce planning as in France, through development and career planning as in the United Kingdom, or more immediately to improve recruitment as in Belgium. Improving recruitment methods would be a good entry point for establishing competencies in the management of staff. It is very strongly recommended that the federal government start moving beyond recruiting staff by testing academic skills and basic knowledge in a rather unsophisticated manner, mostly through multiple choice questions. While the present system prevents accusations of patronage, it is not the best way to select the most competent person for a job, especially for positions that require a higher level of qualifications. Recruitment methods can be based on measuring competencies and past experience without undermining transparency and merit in appointments. In OECD member countries, this has been easier in countries with more position-based systems. However, even in career-based systems such as Belgium or France, recruitment systems have evolved or are evolving quickly. Today, advanced OECD member countries have overwhelmingly ceased to use academic multiple choice questions as their principal basis for recruitment. Computer-based competency testing, written practical cases and panel interviews have become regular parts of exams for many posts and are no longer contested as reliable recruitment methods, even in countries with very legalistic HRM processes. There is no doubt, however, that it is first necessary to raise awareness and get consensus within the judiciary that multiple choice academic testing is not the only way to prevent nepotism and that it certainly works against optimal recruitment.
The management of staff performance needs to be made more consistent to be effective.
The notion of staff performance management is not new to the federal government of Brazil and many reforms have taken place in this area since the 1960s. On paper, performance evaluations exist and good performance is necessary for promotion. However, in reality, and despite recent improvements, performance management plays a minor role in most peoples careers and compensation.
30 ASSESSMENT AND RECOMMENDATIONS Some preconditions that would facilitate the appropriate functioning of these tools, however, have not yet been met. Indeed, although this is not the object of this peer review, performance management at the level of government organisations is under development but is not yet firmly established. It is difficult to envisage a formal performance management system in which staff assessments determine part of remuneration and peoples careers when the organisation does not have a strong performance management system with clear definitions of objectives and reporting on achievements, as well as a good acceptance of those by staff. Moreover, as presently structured, the job category system prevents using staff careers as an incentive for good performance. The only room for manoeuvre lies with the DAS and commissioned functions, to which appointment is mostly outside the job category system and is at the discretion of senior management and ministers. In addition to these general difficulties, specific staff performance management policy and practices have not necessarily always been co-ordinated across public administrations and capacity for their implementation has sometimes been lacking. Recent efforts at providing guidance to ministries on how to conduct staff performance assessments should be praised, but their implementation seems to remain quite rudimentary in many organisations. Performance pay is not functioning properly in many cases, and the performance element of conditions for staff promotion has been reduced to its very minimum. Staff performance management is limited and varies tremendously depending on the organisations performance management capacity, although some cases of good practices are emerging. At the same time as the job category system is being re-structured and competencies defined, the federal government should thus strengthen the performance assessment system. The revamped job category system should leave room for performance assessment to play a role in staff careers and should be based on competencies. The Ministry of Planning has the responsibility for ensuring the coherence of reforms and credible recourse mechanisms. The salary structure should be modified in line with changes in the job category structure, with wider bands between the first step in the first class and the last step in the final class. Seniority can continue to be the main qualifying factor for salary progression and promotion to a higher class, but only in job categories without a career dimension and at the beginning of a career. It is recommended that in job categories with a clear career dimension, seniority should gradually be de-emphasised as the employee progresses up through the system, with competencies and performance playing a larger role. There is no urgency to implement a performance-related pay system which requires very sophisticated staff management practices. Many OECD member countries, including some of the most advanced, have chosen not to go in this direction because of the complexity and the attendant risks.11 It is thus recommended that the federal government review its salary structure to eliminate ambiguities regarding the allocation of bonuses to staff and reduce or eliminate performance bonuses in favour of base pay in organisations that are not ready for performance-related pay. A system of performance bonuses for improvements in their management might be retained for senior managers, but this might require legal changes that may not be well accepted. In terms of incentives and rewards, changes to the job category system and management of staff careers according to performance should thus be the priority with improved possibilities for career progression through enlarged job categories.
The level of professionalism of senior managers could be enhanced by developing a solid management of their group.
Over the past two decades, OECD member countries have focused much of their reform efforts on senior managers. This has been considered a priority in view of the delegation of managerial authority, which has called for managers with increased capacity to enhance the performance management of their organisation. Despite attempts by the National School of Public Administration (ENAP Escola Nacional de Administrao Pblica) to create a common culture in the federal government, notably through training of senior managers, senior managers in the federal government of Brazil are undermanaged compared to those in many OECD member countries. The group of senior managers in the DAS system is not well defined and the management system is similar to that of non-managerial employees. The fact that discretionary appointments can be made down to mid-level and even relatively low-level positions in the DAS system and in commissioned positions blurs the interface between the political and the administrative levels. Overall, the system hampers the growth of a professional cadre of non-political managers specialised in public administration and loyal to the credo of public servants that could co-exist with discretionary appointments for more political positions at the top levels. There is no systematic system of appointments that provides a sound basis for choosing the most qualified and competent managers, and this raises suspicions that potentially undermine trust in the professionalism and objectivity of the public administration. Considering the rigidity of the employment system in the federal government of Brazil today, more rigid management of senior managers would be inappropriate. However, senior managers should be managed as a group, as they are in many OECD member countries, with clearly defined competencies, opportunities to develop cohesion, as well as induction and training opportunities. Cultural differences between civil servants and those appointed from the outside should be addressed in order to favour group cohesion and the definition of competency profiles for all. The DAS system provides for a welcome possibility to bring in different skills from outside and increase the level of competition for posts, but the delineation between political appointees (at the very top level) and staff appointed on merit only should be made clearer. The appointment system of mid- to senior level managers (possibly excluding top levels) should be more transparent, based on criteria such as experience, competencies and past records of performance for staff who are not political appointees. Managers appointed on transparent merit criteria should be a priority group for defining competencies and making efforts to improve their performance assessment and career development across government organisations. Discretionary appointment could remain for the top levels, but all positions can remain open to applicants coming from outside the public service (possibly with some quotas remaining that define a ceiling percentage of non public servants). The first steps in reforming the management of senior management should be to define the competencies needed for managerial groups and to a draw a clear boundary between positions that may remain at the complete discretion of politicians (usually the top level only, level 1 or DAS 6) and the positions that should be based on merit appointment. Appointments to the latter (perhaps managerial levels 2 to 4 or DAS 5 and 4) should require at least a shortlist of adequate candidates based on an assessment of
32 ASSESSMENT AND RECOMMENDATIONS their past experience and performance as well as their competencies through a transparent procedure (panels, recruitment agency, etc.). All other positions should be filled on the basis of a ranked shortlist established by the panel or the assessment centre. This leaves the recruiting manager significantly less discretion. In parallel, efforts should be made to start identifying potential future managers and provide them with opportunities for development. Managers and senior managers could be drawn from all types of careers which require higher level education, provided they have benefited from previous development opportunities within their careers and the DAS system to become managers. Some careers with general management functions within government will inevitably provide a good number of the managers, but it is important that possibilities remain open for other careers not only for equity purposes but also to provide for professional diversity and sectoral policy knowledge in the top levels of government. For this grooming of leadership potential to take place, leadership should be one of the competencies analysed in performance assessments, and sectoral ministries and the Ministry of Planning be jointly in charge of preparing future talent. Given the job category system, the DAS positions are the most important tool for providing growing opportunities for high-potential staff (they are already used in this way to a certain extent, but the system is opaque and informal). Australia, Canada and the United Kingdom constitute interesting examples of proactive identification of managers that may inspire Brazil.
In order to carry out the above reforms and move towards more modern workforce management, core values will have to evolve.
The evolution of core values underpins all significant changes in staff management. Successful reforms in OECD member countries have managed to make core values evolve. In recent years, although measures aimed at strengthening core values such as merit, ethics, integrity and legality have increased, the importance of new core values such as efficiency and performance has also grown in most countries. It is when traditional values are considered sufficiently solid and ingrained in the culture of organisations that governments have felt able to move towards promoting newer values such as performance orientation and citizen focus which require alleviating some input and process controls. This has inevitably created tensions between traditional and new core values. Human resource practices in the federal government of Brazil have made traditional values a part of the culture of the public service, and with some caveats regarding DAS employees and commissioned functions as well as outsourcing, there is little room for nepotism and favouritism. This is a remarkable achievement in a country with such a recent history of meritocratic entry and with large numbers of staff that have not been hired through competitive processes (a historical legacy). In addition, Brazil has taken action to promote ethics and integrity in the public service as part of its overall effort to modernise the state and reduce corruption. This is an area that will be examined in the OECD Integrity Framework Review of Brazil in 2010. Newer values such as performance and efficiency have started to make their way into the system but not in a clear-cut fashion. Successive waves of management reform which have emphasised different sets of values have created confusion as to what the core values are today. Moreover, the rules-based processes that ensure traditional values have also had negative effects and created perverse incentives that run counter to core values, such as corporatist attitudes, and the fragmentation created by the job category.
With well-established traditional core values, the federal government should feel able to move towards management methods that emphasise newer values and alleviate some ex ante controls on processes. This will require modernising recruitment and promotion practices, deregulating the job category system, and increasing the role played by performance and competencies in staff management. A core part of the reform will be to move from a control-based, centralised and fragmented system to a more decentralised but strongly integrated public service. This is a goal to be achieved through sustained reform over time. Using core values to better root reforms in the organisational culture will require a definition of the new values and their use in the design of reforms. The process by which core values are clarified and renewed is crucial in terms of building a shared ethos. These values should be debated in a forum which brings together both public servants and other actors in society. In addition to performance, customer focus and efficiency, promoting diversity in the public service is another value that calls for attention. Brazil does not have a history of legal discrimination based on race or ethnic group, but it has serious difficulties in terms of equity in access to wealth and education. This has inevitably led to a lack of social diversity in the public service as well as gender imbalances in access to senior positions and difficulties of access for handicapped persons. The federal government has a special responsibility in the area of social diversity and should lead the way, but its present diversity policy appears weak compared to that of many OECD member countries. While data about the appointment of social minorities are difficult to compare across countries, data on women in top positions show a rising trend but also continuing weaknesses. The government needs to emphasise that social diversity is important not only for equity purposes but also to promote efficiency and effectiveness. It also needs to make it understood that merit at entry, as presently defined by basic knowledge and academic skills, while it promotes equality of access to public services, does not necessarily mean equity and even less promotion of diversity. While quota policies are not possible in Brazil for constitutional reasons, funding minority groups to get training for exams, reviews of cultural biases in exams, and promotion of different skills sets in exams could help to promote diversity. Coaching and mentoring programmes, career pathway planning, and development and provision of qualifications for underrepresented categories could help in post-entry management of diversity.
and the capacity of HRM departments and staff will have to be reinforced to ensure the establishment of an HRM accountability framework.
For the system of HRM to evolve in the directions developed above, building strong HRM units should also be a priority. At present, HRM managers do not have the training or experience needed to carry out the necessary reforms. Most of their work presently focuses on negotiations regarding job categories and payroll issues. HRM decisions are very centralised by OECD standards, and the legal framework focuses on inputs, processes and controls rather than on efficiency and effectiveness. The government should carry out an assessment of capacity needs both for units in charge of various HRM responsibilities in the Ministry of Planning (SRH and SEGES) and for their corresponding units in line ministries in view of the strategic changes to be made in relation to HRM in government.
34 ASSESSMENT AND RECOMMENDATIONS One priority should be for units in charge of HRM responsibilities in the Ministry of Planning to acquire more HR strategic management and strategic reform management capacity. This will require redefining HRM responsibilities in the Ministry of Planning to ensure that those in charge of HRM look beyond daily operational issues to strategic reforms, on the one hand, and to monitoring, evaluation and reporting progress on HRM in the various ministries, on the other. It is also important that in building HR capacity, special attention be paid to the necessity to isolate internal strategic management processes from corporatist influences. It may require, in the short run, keeping an organisational separation of HR units. A cultural change needs to take place that significantly lessens the administrations recourse to regulation for implementing HRM reforms. Instead, central HRM departments should concentrate their efforts in the development of HRM policies through managerial guidelines and accountability frameworks, while the level of details in HRM laws and regulations should be decreased significantly. This should also help reduce the level of judicialisation of labour grievances and disputes. Another priority should be to remove HRM regulations that are not working, are not functioning properly or constrain the dynamics of HRM processes while maintaining core values. This should apply in priority to workforce planning, recruitment and the management of the job category system. It would give managers and HR units in ministries and organisations greater flexibility to define staff profiles and their recruitment, training and promotion strategies. In parallel, the Ministry of Planning should ensure that systems are in place in other ministries to manage the workforce strategically. Past experience has shown that delegating the HRM function will succeed only if accompanied by greater accountability for managing HRM. This will not make the work of the Ministry of Planning easier. On the contrary, mechanisms for ensuring accountability and transparency in the field of HRM will require the definition of common standards and shared systems, on the one hand, and vertical accountability mechanisms for the individual performance of the unit, on the other. This involves not only well-integrated and mutually reinforcing government-wide HRM tools, but also an accountability framework for sectoral managers that puts the management of their workforce in the context of the strategic management of their organisations. Such management accountability frameworks are used in OECD member countries such as Canada and the United States as part of the planning and reporting requirements of government organisations and can serve as inspiration to Brazil. As HR professionals take on a new role, they should have the opportunity to develop an HR career path. They may prefer to stay in their position, move laterally to get broader experience, accept a bigger role in a different ministry, or even temporarily leave the civil service. This, however, should not mean the creation of another career in a system where the number and fragmentation of careers are already a problem. It is also important that HRM professionals are not stuck in an HR career and may move to other management positions. It is thus recommended that special development opportunities be provided to individuals within general public management careers or careers from which future managers are often drawn in order to build future capacity in HRM. Ideally, future capacity should also draw from those organisations of state-owned enterprises and the private sector where HRM capacity is already strong and which can provide a wealth of
ideas for HRM within direct administration. ENAP has already developed courses in HRM, which is an excellent start and all managers should also be trained in HRM, but preferably when the accountability framework for HRM has been designed.
The history of past reforms calls for a serious effort to develop a vision for the civil service, a step-by-step reform approach, and special attention to building ownership of the reform.
Past reforms have essentially been top-down with successive changes in direction. The result has been an accumulation of disconnected reforms, several of which have remained incomplete. The present government has focused on case by case adjustments to address a number of specific issues. This approach is probably due to the legacy of past reforms and a wish to rebuild confidence and capacity, as well as to maintain stability. However, this means that current changes lack a strategic focus and this will undoubtedly weaken their impact on the overall performance and effectiveness of the public service. Contradictions and unclear messages abound, for example: staff performance management is not linked to organisational performance; bonuses for performance have become meaningless in terms of performance management; outsourcing is encouraged in some circles and discouraged in others; careers are constantly being reorganised to improve mobility and horizontality but salary adjustments have in many cases rigidified the system; and, the government has promoted increased qualifications for entry and professionalism in the career structure, but at the same time has provided special incentives for commissioned functions without any clear strategic reason. The priority for Brazil should thus be to define an HRM strategy based on a solid long-term vision of how core values should evolve. The HR reform should be integrated with other management reforms. To build the case for reform, it is recommended that the government involve various stakeholders in the conception and planning phase. The longterm strategy should also identify potential winners and losers and consider compensation for losers, as well as establish processes and institutions to follow reforms over time to ensure their sustainability. This does not imply a major upheaval. On the contrary, what is recommended is a step-by-step approach to build consensus around new values, a review of how management tools can be adjusted to these new values, and an effort to plan realistically what can be done in the short, medium and long run, as well as an acknowledgement that reforms will have to be built gradually by taking account of successes and failures. The scale and pace of reform will depend on factors relating to human resources management but also to political priorities and the economic situation. In all cases, however, it is recommended that the government avoid a piecemeal reform in which elements of reforms are unrelated to each other and not strategised, and move forward on the basis of a clear vision underpinned by core values that have evolved and have gained consensus. Priority actions should target issues such as changes to the career system to create more motivating career paths, a well-founded compensation system, the establishment of a professional system for recruiting and managing middle-level and senior-level managers, and the introduction of competencies in the management of civil servants, especially in recruitment. The minimum would be to improve alignment and convergence in reforms across the areas, and make sure that consistent actions are carried out over time.

In the long run, to support a move to more modern management of human resources, the federal government would certainly gain from continuing to strengthen its framework for industrial relations.
The chances of achieving sustainable reforms would be enhanced by the consolidation of a stable and mature method of engaging with unions. Until 2003, there were no systematic negotiations with unions. In 2003, the federal government established the permanent negotiation table, and 77 agreements have since been signed. Negotiations have mainly concerned base salary and social benefits, although some are taking place on additional remuneration, work conditions, the employment framework, and the introduction of new management tools. Negotiations are centralised and the results are not legally binding (but they are presently politically binding). This negotiation process is still being developed. It is fragile as its continuation depends on the good will of the government. As more than 400 unions represent the federal public service, any departure from a stable negotiation system would inevitably result in a situation in which different unions pursue different interests. To a certain extent, this is already the case in the negotiations on individual job categories. This weakens any whole-of-government approach, tends to drive costs up and further differentiates salaries and benefits for the different job categories. The federal government would gain from discussions between the executive government and unions on general matters and on the future of the civil service. It is even possible to envisage, as in some OECD member countries, negotiations on the agenda for modernising the civil service. This means, however, that the government has to devise transparent processes for selecting a representative core of unions to negotiate with, as it is impossible to negotiate on whole-of-government issues with 400 stakeholders. Unions would naturally gain by joining efforts on whole-of-government issues. Negotiations job category by job category could then take place on the basis of a general agreement on the modernisation agenda and on principles for determining levels of compensation. At present the negotiation process with unions is rather open and not very confrontational. There is thus an opportunity to build a constructive dialogue through the establishment of a healthy framework for negotiations.
Notes
1.
In Brazil, retirees and pensioners are often counted as part of the public sector workforce. They are not included in the data here, which, according to the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estratstica IBGE), follow international methodologies and the classification of the System of National Accounts. The data are thus comparable with those of OECD member countries. This is an estimate due to the unavailability of some data after 2005. This average is for 2005. Averages for subsequent years cannot yet be calculated but there is evidence that the average has not changed significantly. Data for 2005 indicate approximately 11% for 2005. Data for 2008 are estimated between 11% and 12%. In the System of National Accounts (SNA), the compensation of employees (always active employees) includes salaries and wages paid in cash or in kind (including the values of any social contributions, income taxes, etc., payable by the employee even if they are actually withheld by the employer for administrative convenience or other reasons and paid directly to social insurance schemes, tax authorities, etc., on behalf of the employee) and employers social contributions. Like in other countries, part of government compensation costs is constituted by imputation for social contributions (pension benefits from unfunded pension schemes). In Brazil, retirees and pensioners are often counted as part of the public sector workforce. However, according to IBGE, pensions and other transfers for inactive employees and pensioners are not included in these data that follow international methodologies of the SNA. Doubts remain regarding how data are compiled in reality, especially concerning in which category the benefits of retirees and pensioners have been included. Clarifications and further work by IBGE would help refine analysis in the future, and full consistency of the data with the number of employees in general government will have to be ensured. The situation is similar when taking only wages and salaries into account and excluding employers social contributions. Both the private sector and state-owned enterprises, but the private sector accounts for the larger part. See Figure 1.7. In Brazil, the federal government is divided into different branches which are administered differently, including the executive branch which is the subject of this review, the judiciary, the legislative branch, and the military. This review only addresses the federal executive workforce, which includes the direct administration (ministries and secretariats) and indirect administration (autarchies, public enterprises, mixed economy societies and foundations).
2. 3. 4. 5.
6. 7. 8. 9.
10.
The 22 000 DAS positions include the most senior positions in ministries and agencies and include management and supervisory functions down to relatively lowlevel positions. Mandatory quotas for public servants exist except for the most senior levels. Appointments are left to the discretion of the recruiting authority. The approximately 50 000 positions include mostly relative low-level positions that have to be filled by civil servants only, but the appointment to these positions is left to the discretion of the recruiting authority. Both types of positions receive compensations outside the regular salary scales. In 2006, central governments of Austria, Iceland, Luxembourg, Mexico, Poland, Portugal, the Slovak Republic, and Sweden, reported not having performance-related pay for their employees. Canada, France, Ireland, Italy, the Netherlands, and Norway only had performance-related pay for senior management levels.
11.
INTRODUCTION 39
Introduction
Brazil is South Americas most influential country, an emerging economic giant, and one of Latin Americas biggest democracies. Although Brazil has not been able to avoid the global financial and economic crisis, it has weathered its effects reasonably well owing to continuing macroeconomic consolidation, an improved external liability position and an adequate short-term policy response (OECD, 2009b). The improvement in fiscal stability since the economic stabilisation of the mid-1990s has made it possible to use the budget and financial management system as an instrument of managerial control.
I.1. The federal government general characteristics

The Federative Republic of Brazil, commonly called Brazil, is made up of 26 states, the Federal District in which the capital Brasilia is located, and over 5 500 municipalities (the smallest unit of political division). In 2008, Brazil had a population of approximately 191.9 million. Brazils 1988 Constitution provides for three independent governing branches: the executive, the legislature and the judiciary. Like most Latin American countries, Brazil has a presidential political system. The President performs the functions of head of state and head of the federal government. The President and Vice-president are popularly elected to no more than two consecutive four-year terms. The President is assisted by the state ministries with the subordination of the government bureaus, autarchies, foundations, public companies and other directly and indirectly controlled bodies. Brazils bicameral National Congress (Congresso Nacional) consists of the Federal Senate (Senado Federal) with 81 members (three for each state and Federal District) popularly elected to eight-year terms, and the Chamber of Deputies (Camara dos Deputados) with 513 members popularly elected to four-year terms. The Congress uses a committee system: there are six Senate committees and 20 House committees.1 The judicial branch is composed of federal and state courts. Only appointments to the superior courts are political and subject to approval by the legislature. The minimum and maximum ages for appointment to the superior courts are 35 and 65 years; mandatory retirement is at age 70. The federal courts have no chief justice or judge. The two-year presidency of each court is by rotation. The president of the court is elected among the members who are in line to the presidency considering their time of service. Since the end of military rule in 1985, unionisation, collective bargaining and strikes have become commonplace among federal employees in all three branches. The 1988 Constitution granted job stability to all civil servants at all levels of government with more than five years of service, including those who were hired without public examination. All new hiring must be done through civil service examinations, and job stability comes after three years of probation. Mandatory retirement for all public servants, except for those elected to political office, is at age 70.
40 INTRODUCTION The level of public spending is particularly high in relation to GDP for a country of Brazils income level and in comparison with its emerging-market peers. Government outlays on education and health care alone account for nearly 9% of GDP, the second largest item of spending after social protection (OECD, 2009b). But, as the OECD Economic Survey of Brazil (OECD, 2009b) notes, outcome indicators are not always commensurate with the countrys high level of government-financed spending, suggesting that service delivery might be underfunded, with ample scope for efficiency gains in government operations. For the execution of programmes, the federal government establishes priorities for the use of public resources, with planning over a four-year period. These priorities are described in the Pluriannual Plan (PPA), which is submitted by the President to the Congress. The PPA establishes the liaison between the long-term programmes and the Annual Budgetary Law. It is not clear how Brazils political system affects the capacity of civil servants and ministries to work without deferring excessively to particularistic pressures. Fragmented parties, a coalition government and the strong constitutional role of Congress and state governors might be expected to add to these pressures. It appears that political pressures affect financial resource allocations, yet it seems that the Brazilian administration may not face the same level of day-to-day politicisation experienced by some other countries in the area.
I.2. Structure of the executive federal government

In Brazil, the federal government is divided into different branches which are administered differently, including the executive branch which is the subject of this review, the judiciary, the legislative branch, and the military.2 The executive branch is headed by the President of the Republic, supported by the ministers of state. The Brazilian public administration in the executive branch of government is divided, according to Decree-Law No. 200 of 1967 into: a) Direct public administration: the services located in the administrative structure of the Presidency and the ministries. In the Presidency structure, organisations are legally classified as essential, of immediate guidance to the President, consultative and integrating. For example, the Presidential Staff Office (Casa Civil) is recognised as essential and works on the co-ordination and integration of governmental actions. Since the 1950s the federal public administration has adopted the practice of councils (conselhos) as organised and institutionalised spaces for the comanagement of policy-making decisions. A wide range of councils, such as the Council of the Republic, the Government Council and the Council for Economic and Social Development, provide assistance or advice to the President. In the current administration, there are about 90 councils or permanent committees in the federal administration with some participation from non-governmental members that participate in the formulation of public policies with deliberative or consultative powers. Most of them have a sectoral function and many operate in the welfare and economic areas. Among the organisations of immediate guidance are the Government Council, the General Attorney of the Union (Advocacia Geral da Unio AGU) and the Office of the General Comptroller. The National
INTRODUCTION 41
Defence Council and Council of the Republic are consultation entities. The Commission for Public Ethics of the Presidency of the Republic is in charge of reviewing standards of ethical conduct in the federal public administration and of elaborating the institutions proposals for the Code of Conduct to Senior Government Officers. The Secretary of Social Communication is an essential body of the presidency as it provides information on the different governmental policies being implemented.
Table I.1. Staffing levels in the federal government of Brazil (August 2009)
Branch in the public administration Executive branch Civil service Direct administration Autarchies Foundations Central Bank Public prosecution of the Union Office State-owned enterprises (SOEs) Mixed economy societies Military Legislative Judiciary Federal District Staffing levels 1 021 160 544 671 220 101 217 093 107 477 5 015 8 384 22 218 12 147 428 725 24 608 93 882 99 139
Note: Numbers include only active public servants. The number of employees in SOEs and mixed economy enterprises (MEE) refers only to those paid by the Treasury. The total number of employees in SOEs and MMEs is 460 866. Source: Ministerio do Planejamento, Oramento e Gesto (2009c), Boletim Estatstico de Pessoal, Vol. 14, No. 161, September.
In the federal government the 37 ministries and secretariats (secretaries with ministerial status) develop standards, establish strategies, directions and priorities for the use of public resources. These ministries are part of the direct public administration as they depend on and report to the President.3 b) Indirect public administration: entities with legal personality, such as agencies (autarchies), public enterprises, mixed economy societies, and public foundations. In general, these units or bodies are federal entities implementing policies on the instruction of their parent ministries. The agencies (autarchies) are responsible for delivering essential public services to the population.4 Ten special autarchies (regulatory agencies) were created between 1996 and 2005 but do not all conduct control activities. They were created to: i) control public services delivered by private firms in areas such as electricity, telecommunications, transportation and health; ii) control the quality of public services; and iii) establish rules for each sector to provide security to investors. In addition to regulatory agencies, there are 155 autarchies for statistics, pensions, property rights, regional development, research, etc.5 Nine banking institutions linked to the federal government compose the national financial system. They include the Central Bank of Brazil which is an autarchy, and the Bank of Brazil and the National Bank for Economic and Social Development which are state-owned enterprises.
42 INTRODUCTION Public enterprises are agents of the federal government that are part of the indirect administration and most are linked to ministries. Although they are under private law, they are submitted in some cases to the ceiling of compensation and employees are hired through a public selection, which are rules that apply for the civil service. Each of these enterprises is part of a specific productive sector, for example: airport administration, communications, mining, regional development. The federal government also participates, indirectly, in industrial production in certain sectors through public enterprises or mixed economy societies such as Petrleo Brasileiro (Petrobras) which is active in different areas of the energy sector, from exploration and extraction to distribution. These enterprises are managed by fiscal and administration councils whose members are appointed by the President following recommendation of the ministry of the sector. Public foundations are non-profit organisations and perform activities that do not require the intervention of entities of public law. Although they have administrative autonomy a large number of them are funded by the Treasury.
Table I.2. Ministries and secretariats (with secretaries of ministerial status) in the Brazilian federal government
Agrarian Development Agriculture Livestock and Supplies Cities Communications Culture Defence Development, Trade and Foreign Trade Education Environment Finance Fisheries and Aquaculture Foreign Affairs Chief of Staff Ministry (Casa Civil) General Attorney office General Controller office General Secretariat of the Presidency Institutional Security Office National Economic Development Council Health Justice Mines and Energy National Integration Planning, Budgeting and Management Science and Technology Social Development and Hunger Reduction Social Security Sports Tourism Transport Work and Employment Secretariat of Communications Secretariat of Human Rights Secretariat of Institutional Relations and Federal Affairs Secretariat of Ports Secretariat of Racial Integration Secretariat of Strategic Affairs Secretariat of Women Affairs
Source: Brazilian government web portal www.brasil.gov.br/governo_federal/estrutura/ministerios and mission notes.
INTRODUCTION 43
I.3. General economic situation

Brazil is currently one of the worlds strongest emerging economies. The Brazilian economy has a good record of strong stock markets, decreasing unemployment, low lending rates and a proactive government. Brazil also has strong gross domestic product (GDP) figures. Over the last five years, GDP grew by 4.7% on average; agriculture represents 6.7% of GDP, industry, including construction, 28% and services 65.3%. Historically, Brazil holds high international reserves (USD 192 844 million in 2008). The Brazilian export industry has been growing; exports represented 12.6% of GDP in 2008 against imports of 11%. However, domestic financial conditions tightened considerably as the global financial and economic outlook deteriorated from mid-September 2008. The supply of foreign credit to Brazilian enterprises, including exporters, was abundant before the crisis but dried up rapidly. The cost of domestic borrowing rose sharply, and the real depreciated by 40% from the highs of mid-2008 through year-end. Industrial activity plummeted, dragged down by a collapse in industrial production, notably in the motor industry, and a rundown in inventories. However, pressures have been much lower than those experienced by other large emerging market economies. The significant improvements in Brazils fiscal performance, expansionary fiscal policy, strong monetary easing, the expansion of credit supply from public banks and financial stability over the last decade have underpinned the economys resilience. The fiscal measures introduced by Brazilian authorities macroeconomic consolidation based on a sound policy framework that includes inflation targeting, a flexible exchange rate and rules-based fiscal management have resulted in strong fiscal performance. The policy framework has delivered gradually falling inflation and public indebtedness and has reduced external vulnerabilities. These factors have been crucial for increasing resilience to external shocks and have laid the groundwork for raising the economys growth potential. Another positive factor is, as mentioned before, a strong banking sector, and the fact that the non-financial corporate and households sectors do not suffer from the balance-sheet weaknesses that are at the heart of financial distress elsewhere. The shortterm policy response to the global financial and economic crisis has been appropriate. Fiscal policy has been relaxed on cyclical and discretionary grounds without compromising longer term debt sustainability. The OECD Economic Survey of Brazil (OECD, 2009b) concluded that despite considerable progress in many areas, there remains substantial scope for making government operations more cost-effective. Indeed, Brazil spends a high share of GDP on selected government-financed programmes in comparison with many OECD member countries and its emerging-market peers, but outcome indicators are often comparatively poor. As a result, in the absence of efficiency gains, further increases in spending would need to be financed through additional tax hikes and, most importantly, would likely fail to deliver proportional improvements in outcomes. Incentives to enhance the efficiency of government operations are therefore necessary and call for concerted action in many policy areas. For example, much has been done in education to raise enrolment rates to equalise spending capacity among the sub-national jurisdictions and introduce systematic performance assessments for students and innovations. These initiatives have been highly successful, particularly in terms of delivering near-full enrolment at the primary and lower secondary levels. However, the performance of Brazilian students remains comparatively low when judged on the basis of standardised international tests, such as
44 INTRODUCTION PISA. Thus, policy action is needed to improve the quality of services for those levels of education where full or nearly full coverage has been assured. As in other federal countries, mechanisms for financing decentralised provision often rely on intergovernmental transfers. The bulk of federal transfers to states and municipalities are in the form of block grants related to the sharing of revenue collected by the federal government. Sub-national governments have full autonomy to use these resources, a prerogative awarded to them by the 1988 Constitution. Voluntary grants, which may be conditional, account for a small share of intergovernmental transfers. The OECD 2009 Economic Survey concluded that, on the face of it, the Brazilian federal government could strengthen incentives to enhance efficiency by making more extensive use of conditionality in voluntary transfers and by introducing rewards for performance. Brazils budget institutions have been strengthened since the mid-1990s as an integral part of structural reforms in the macroeconomic area. Years of chronic inflation had favoured short-term financial management to the detriment of long-term planning and performance orientation in budgeting. A number of budget instruments are now available, including the four-year budget envelope or Pluriannual Plan (PPA), which lays out the governments longer term policy priorities, and a three-year budget guidelines law (LDO),6 which sets fiscal targets and government priorities for the annual budget law. However, as the OECD stated in its 2003 budget review of Brazil and the recent Economic Survey, the flexibility required for performance-oriented budgeting is constrained by a number of institutional rigidities. Thus, one of Brazils challenges is to make budgeting more flexible by gradually eliminating revenue earmarking and aggregate spending floors. This would allow budget making and planning to be guided more by efficiency considerations and the governments policy priorities, rather than historical costing and short-term revenue trends. According to the latest OECD Economic Survey of Brazil (OECD, 2009b), the discovery of large oil and gas fields in deep waters off Brazils south-eastern coast may well double the countrys proven reserves. Options are being considered for developing these fields. The current exploratory regime is based on concessions and the transfer of property rights for hydrocarbon reserves to concessionaries. Authorities are considering the introduction of production-sharing arrangements to develop these new fields, because production costs are high and exploration risks relatively low, while maintaining the concessionary regime for the blocks that have already been auctioned.7 Hence, the OECD survey concluded that for Brazilian authorities, the definition of the regulatory framework for the new fields is important to ensure that their development is not delayed by regulatory uncertainty. A further challenge for the Brazilian authorities, according to the OECD Economic Survey of Brazil (2009b), is to prepare better arrangements for sharing the revenue arising from the exploitation of the new offshore oil and gas reserves among different levels of government. Currently, the bulk of revenue from royalties and other levies accrues to the coastal municipalities and states with proprietary rights over the offshore fields. Only a limited proportion of the revenue is shared with non-producing jurisdictions. Maintenance of the current regime would likely exacerbate this concentration of revenue in a handful of municipalities. In addition, the recipient localities tend to use hydrocarbon revenue predominantly to finance operating expenditure with little long-run return. Thus, the OECD Economic Survey came to the conclusion that Brazil needs to introduce a new mechanism for sharing the revenue associated with the new oil fields among the different
INTRODUCTION 45
layers of government to ensure that it is saved or spent on programmes that could generate returns for future generations.
I.4. An overview of Brazils public management reforms

During the military regime (1964-1985) there was a process of concentration of powers and resources at the federal level, but a delegation of authority to lower administrative levels. The military regime deepened state intervention in the economy through the expansion of the indirect administration through Law Decree 200/1967, which is still partly in force today. Since the re-establishment of democracy in 1985, Brazil has made tremendous progress in the economic area, and governments have implemented numerous reforms, some of which have not resulted in the expected changes in part due to the lack of continuity. Successive governments have adopted different approaches to public management reforms that can be classified in five distinctive phases: The 1988 constitutional reform aimed at re-introducing discipline in the federal public sector. President Collors efforts (1990-92) to cut back the size of the federal government, in particular public employment. During the first Cardoso Administration (1995-99) there was a programme to make service delivery more effective by changing incentives and structures along managerialist lines. Under the second Cardoso Administration (2000-03) there was an ambitious attempt to use a planning mechanism to introduce programme budgeting and associated managerial reforms. The focus on improving institutional capacity and transparency as well as the democratisation of labour relations under the Lula Administrations (2003-07, and 2007-10).
The 1988 Constitution

The new Constitution, enacted in 1988, attempted to address the legacy of the military regime. Four main changes can be highlighted. First, the democratisation through the establishment of external controls on the public administration gave a new role to the Ministrio Pblico (Public Prosecutors Office). Second, after 20 years of political, financial and administrative centralism, a process of decentralisation offered new possibilities for broader citizen participation in public discussions and decision making. Third, a unique legal regime for civil servants, with a common salary scale and equal costs of living adjustments between military personnel in government and civil servants was established, in parallel with the constitutionalisation of the requirement of merit selection and competitive examination in the recruitment of all public servants.8 Finally, the Constitution has required organisational accountability for any single assignment of resources originating in the budget, and the inclusion of all agencies detailed budgets in the federal budget. The creation of the National School of Public Administration in 1986 to reinforce the training of senior officials and of a Public Policy and Government Management Specialists Career was in line with these efforts. However, the public service was soon under pressure from corporatist attitudes, real salaries decreased significantly, and gratifications based more on political considerations than on good performance increased.
46 INTRODUCTION The provisions of the 1988 Constitution, including strong fiscal decentralisation, contributed to the federal governments chronic deficit. Fiscal decentralisation to states and municipalities went very far under the new Constitution. However, it was not properly linked with decentralisation of responsibilities and this contributed to the governments fiscal imbalance.
The Collor Administration

President Fernando Collor (1990-92) was the first directly elected President since the 1964 military coup. His work programme aimed significantly at controlling inflation. The civil service reform plan under President Collor was very simple and aimed at privatising state-owned enterprises and reducing by 360 000 the number of federal employees; this meant cutting 30% of the staff of each ministry. Since ministries did not meet the target, the government froze the salaries of public employees to encourage them to leave. In a highly inflationary environment, the constitutional protection against salary reductions meant little and by the end of 1990 salaries had lost a large part of their value. The measures adopted to eradicate patrimonialist and nepotistic practices led to the implementation of the Regime Jurdico nico (Single Judicial Regime) under Law No. 8.112/1990, which established a unified hiring procedure for all civil servants in the direct and indirect public administrations. This law also included a section that allowed more than 500 000 civil servants from the old regime who had been hired without passing a competitive examination to become regular civil servants. One of the consequences of this measure was that all those new civil servants were granted full retirement benefits creating pressures for public finances. Another was that the measure started the separation of the public service into multiple groups by first creating two groups those that had passed the competitive examination and those that had not. Moreover, the salary policy of the Collor Administration had a negative impact on the morale of public employees and led many of the most experienced and skilled civil servants to resign their posts. By the time President Collor was forced from office by impeachment more than 100 000 civil servants had left the direct administration, autonomous agencies, and state-owned enterprises, although part of this was due to the changes to the civil service retirement policy.9 The capability of the civil service was seriously damaged. In September 1992, Vice-president Itamar Franco assumed the powers of the presidency following the impeachment of President Collor on corruption charges. President Franco created a special commission to investigate the dismissals of the Collor period and sent a bill to Congress offering amnesty to all public employees who had been fired. Brazils Congress approved this law (Law 8.878 of 1994) and ordered reinstallation in their previous jobs or an equivalent position for all former employees that were dismissed with violation of constitutional or legal provisions, or against any regulatory rules or clauses of agreements, conventions or normative decisions of the courts, or dismissed by political motivation, plainly characterised, or as a result of a strike.
The Cardoso Administrations

With the election of President Fernando Henrique Cardoso in 1994, political debates concerning civil service reform were renewed. The stabilisation policy (the Plano Real) was very effective and the policy agenda was no longer monopolised by the fiscal crisis. During this administration, one of the most notable transformations of the state reform was the continuation of the privatisation process that began in 1990 with the Ordinary
INTRODUCTION 47
Law 8.031/1990; this was later replaced by Law No. 9.491/1997 establishing the National Programme for Privatisation. The privatisation process for major infrastructure was characterised by the granting of concessions rather than a permanent transfer of assets. The administration of concession contracts was entrusted to special regulatory institutions (or line ministries in a few cases), modifying the institutional setting and the culture of public sector management in the country. In the administrative reform area, the Guiding Plan to the Reform the State Apparatus (Plano Diretor da Reforma do Aparelho do Estado) produced by the newly created Ministry of Federal Administration and State Reform (MARE Ministrio da Administrao e Reforma do Estado) specified the objectives and guidelines for redefining Brazils public administration. The Plan identified a series of bottlenecks like the increasing costs of bureaucracy and of bureaucratic and legal controls over public administration, and the reduced capacity of ministries to formulate policies and to control the central units of the administration. The Bresser Reform, as the reform was commonly known,10 was marked by a tendency to draw lessons from international experience and New Public Management (NPM) ideas. The creation of MARE was instrumental in placing public management issues on the executives reform agenda. The original reform proposal included dividing the public sector into areas that should remain under state control, those that should be transformed into public but not state-owned organisations, and those that should be privatised. The Guiding Plan proposed a reorganisation of the states responsibilities: separation between policy formulation, regulation and control and service delivery. The Plan also anticipated setting up executive agencies in charge of the operation services, and regulatory agencies for the control of the markets. However, this proposal was not fully implemented as the Brazilian Supreme Court (ADI No 2.135) declared the introduction of different labour regimes in the direct administration, autarchies and public foundations to be unconstitutional. Constitutional Amendment 19 from 1998 came into force and ended the single legal regime for public servants, which opened the possibility of having different alternatives of reorganisation of civil servants in the three levels of government. In the area of human resource management, this administration did not seek to shrink the overall size of the federal government per se, although by not allowing the opening of competitive examinations, it ended up doing so. The main focus of reforms was to improve the professionalisation of civil servants, increase the managerial room for manoeuvre of public-sector managers, and facilitate the sectoral and regional distribution of civil servants. Reform proposals also included the removal of tenure; the adoption of mechanisms for dismissal owing to poor performance and redundancy situations; a limit to public wages in the three powers; a review of distortions in the human resource legislation; the creation of new forms of public organisations such as executive agencies, social organisations and others. To translate these ideas into practice required constitutional amendments to eliminate constraints that blocked the adoption of an agile form of administration with a greater degree of autonomy. Some of the main achievements of MARE were the generation and publication of data about the federal payroll; the use of information technology systems to manage the payroll, which played a positive role in the fight against corruption and in the generation of savings; the establishment of annual public examinations for strategic careers such as public managers; and the alignment of the National School of Public Administration (ENAP) with MARE for the provision of training based on new public management ideas. At the end of President Cardosos first term in office, Congress approved reforms that included the creation of new forms of public sector organisations and the mitigation
48 INTRODUCTION of tenure constraints to government employees. Nonetheless, changes to the different forms of employment relationships within the public sector did not reach the number of votes required. In 2007, the Supreme Court ruled that changes to Article 39 of the Constitution were invalid and thus re-established the unified regime for civil servants. Also, MARE did not find enough political support for establishing limits to the remuneration of the judiciary and Congress, which were removed from the reform agenda. At the beginning of the new Cardoso Administration, MARE was abolished and its functions were absorbed by the Ministry of Planning and Budget, thereby creating the Ministry of Planning, Budget and Management. This ministry had two new areas: the Secretariat of State for Public Administration and Public Property (SAP) and the Secretariat of Management (SEGES). The rationale was to link planning and budgeting with public management. Although the 1995-99 experiment did not move as far as hoped towards creating a results-oriented culture, the governments efforts succeeded in putting performance-based management reform on the agenda. The second Cardoso Administration (1999-2003) was characterised by continuing efforts to achieve performance-based administrative reform, but with a substantial change in thrust. The 2000-03 Pluriannual Plan, Advance Brazil, intended to drive a fairly ambitious public sector management reform with a gradualist approach to implementation. It sought to reorganise the way government business is done around clearly defined programmes, rather than restructuring organisations per se. Despite its achievements, during the Cardoso Administration there was a reluctance to hire civil servants for line ministries, resulting in increasing resort to UN organisations such as UNESCO, UNDP, FAO and WHO to take care of its manpower needs, and to procurement transactions creating distortions in the practice of international co-operation. Moreover, there was a large use of outsourcing including sometimes always using the same service providers, which was very much criticised for depriving government of intelligence and know-how in certain areas (such as ICT). Officials often report that capacities were lacking after the Cardoso years to carry out good policy making and service delivery.
The Lula Administrations and the challenges ahead

The administrations of President Lula da Silva (2003-06, 2007- ) have prioritised macroeconomic stabilisation, the promotion of social inclusion, recovery of growth, investment in infrastructure projects, and the fight against corruption. Public management reforms to improve the public sectors performance, however, have not been at the top of the governments agenda due, very likely, to extensive reform fatigue regarding public management policy inside and outside Brazilian government (Gaetani, 2008). Nonetheless, this government has made efforts to strengthen public administrations in a different manner, with a very strong positive emphasis on capacity and transparency. First, it has aimed to strengthen the General Comptrollership of the Union (Controladoria Geral da Unio, CGU) as an important element in the fight against corruption and inefficiency. During President Lulas first term in office there was a vigorous recruitment policy based on merit principles to empower the CGU. Moreover, the Secretariat for Transparency and Corruption Prevention was created which joined the international debate on corruption and established co-operation relationships with international organisations dealing with this issue. One of the main priorities of this administration has also been the democratisation of labour relations in the public service, in order to reinforce the democratic state and the
INTRODUCTION 49
value of the role of civil servants in public service. The emphasis on negotiation is reflected in the establishment of a permanent negotiation table. Relations with unions are based on an ongoing dialogue that aims to promote better understanding between political leaders, public servants, unions and society. Since the establishment of the negotiation table in 2003, 77 agreements have been reached that cover 1.3 million civil servants. In 2008 alone, 33 agreements were signed and it is expected that for 2010 the results of these negotiations will have an annualised financial impact of BRL 29.1 billion. The permanent negotiation table is considered a fundamental tool for redefining the role of the state. Another priority has been the strengthening of government capacity by increasing staffing levels in priority areas such as education, health, security and infrastructure sectors, and attracting and retaining a highly qualified workforce by offering competitive wages. Government has favoured the employment of public servants through regular and transparent hiring procedures in order to provide long-term government capacity, and has significantly increased the level of qualifications of new employees. Indeed, in the area of social development, for example, President Lulas Administration created the Career for Social Policies Development with 2 400 positions to be filled by line ministries: Education, Health, Social Development, Agrarian Development, Human Rights, Women, Racial Integration and Employment. Public servants who belong to this career are in charge of implementing the social agenda which, among other things, includes the operation of the Family Cash Transfer Programme aimed to reduce poverty and inequality. Education development has been another strategic objective of this administration which aims to extend the coverage and quality of education at all levels. To enable the implementation of the Education Development Plan, more than 28 000 public servants have been hired of which almost 18 000 are teachers, which represents an increase of over 8% since 2002. Moreover, government created new careers and posts in the areas of transport, energy and mineral production as part of the efforts to reorganise the infrastructure services increasing the labour force in this area by more than 60% (7 862 public servants in 2009).11 To attract and retain highly qualified staff in all priority areas, government has negotiated new pay levels with trade unions and national associations that have led to sometimes large increases in remunerations. Moreover, the current administration established the System for Institutional Organisation and Innovation of the Federal Government (Sistema de Organizao e Inovao Institucional do Governo Federal SIORG) to organise the activities for the organisational development of the organisms and entities of the federal public administration. The aim is to build collaborative networks to improve public management, develop quality standards, reduce operational costs and secure the continuity of the processes of institutional organisation and innovation. The Ministry of Planning is the central body with direct responsibility for the definition and co-ordination of methodologies for the planning, execution, and control of the activities for institutional organisation and innovation. Two other important initiatives of this administration are: the National Programme to Support the Management and Planning of Modernisation in States and Federal District, and the Programme to Modernise the External Control of Brazilian States and Municipalities. These two programmes aim to modernise public administration in subnational government, particularly at the local level, in the areas of planning, human resources and communication with citizens. The major achievement here is that these programmes were designed with broad participation and discussion with the different
50 INTRODUCTION states and count tribunals. This more inter-institutional and intergovernmental model works as a network in marked contrast to the old centralised tradition. Several measures were also adopted to increase transparency and integrity, such as the portal of Transparency, which makes all the expenses of the executive branch on line on the internet, and the Bill of Law sent to Congress in May 2009 that aims at introducing a comprehensive Law of Access to Information in Brazil. A Programme for Strengthening the Institutional Capacity for Regulatory Management (PRO-REG) was established by the President of the Republic in order to implement measures aimed to increase transparency, efficiency and professionalism in the regulatory process; foster the implementation of regulatory impact analysis; and to get better quality of regulation (see OECD, 2008f). Careers have been created to strengthen regulatory agencies and public selections have been introduced for those positions. Finally, a Group of Notable Jurists has been commissioned to make proposals to reshape the administrative legislation of the Brazilian public sector, which is made of layers of sometimes inconsistent legislation and, at the same time, quite rigid frameworks that treat all forms of public sector organisations (line ministries, autarchies, foundations, agencies, SOEs, social organisations, autonomous social services, etc.) in a relatively similar manner. Their report with proposals has been sent to the Presidency to be analysed and discussed.
INTRODUCTION 51
Notes
1. 2. 3.
For further information see www2.camara.gov.br/comissoes/permanentes/index.html. The military is part of the Executive Branch but does not belong to the civil service. By law, the Central Bank is an autarchy but its president has ministerial status (he is the only minister of state that has to be approved by the Senate before taking on his position). In 1998 Congress enacted Law No. 9.649 which authorised the President to decree the transformation of an autarchy into an executive agency. The first executive agencies established under this statute were regulatory bodies such as the National Telecommunications Agency (ANATEL) and the National Electric Energy Agency (ANEEL). For a full discussion of these regulatory agencies, please see OECD (2008f), p. 210. The LDO must be approved and enacted by Congress annually. On 31 August 2009 four bills were sent to Congress to introduce partition-sharing agreements in Brazil and to create a new SOE to manage those agreements and a new sovereign fund to deal with the future revenues of oil and gas. In 1987 there were 750 000 civil servants and public employees of which only 120 000 had been hired after passing a competitive examination. Law 8112/1990. It was named after Luiz Carlos Bresser Pereira, Minister of Federal Administration and State Reform during the Cardoso Administration. In order to improve the states capacity in infrastructure, the Brazilian government created the careers of Infrastructure Analyst and Senior Infrastructure Specialist with initially 300 positions for both in 2007. In 2008, this figure increased to 884 positions.
4.
5. 6. 7.
8. 9. 10. 11.
1. WORKFORCE PLANNING AND MANAGEMENT 53
Chapter 1 Workforce planning and management
Good workforce planning is a characteristic of modern and dynamic human resource management. This chapter analyses the main strengths and windows of opportunity of workforce planning in the Brazilian federal government, in the light of the experience of OECD countries. The discussion includes: the size and costs of the workforce in the federal government; the accounting methodology of public employees and their costs; the challenges for proper strategic workforce planning; the promotion of a whole-ofgovernment approach for increasing efficiency and reducing the costs of the public workforce; the pay-setting process as part of the cost management strategy; the role of the unions in setting employment conditions; the need to adjust the public service to an ageing society and workforce; the modernisation of the public service pension system; and the promotion of diversity as a strategy to ensure the right competences and skills in the public service.
54 1. WORKFORCE PLANNING AND MANAGEMENT The government workforce is in constant flux: employees flow into, out of and across government organisations, and the competencies and qualifications of the workforce change. The government workforce is affected by changes in the general labour market, which may, in turn and by its size, also affect labour supply, both qualitatively and quantitatively. Good workforce planning is indispensable if governments are to maintain a structured and representative workforce of appropriate size, which is able to meet the changing needs of government organisations in a cost-efficient manner. Good workforce planning requires high-quality information and discussion that are linked to organisational strategies and efficiency concerns, and organisational arrangements that support workforce decisions efficiently. The goals of strategic management of the workforce are to: strengthen departments and ministries' capacities for strategic workforce management and make managers accountable for the strategic management of their workforce; ensure the adequacy of the workforce with the mission of the organisations; promote whole-of-government goals in terms of workforce planning, especially in terms of numbers and costs; promote whole-of-government goals in terms of diversity, competences and level of education.
Workforce planning requires good tracking of employee numbers, costs and competencies; alignment of workforce planning strategies with the strategy of each government organization; flexibility in the management of the workforce; a whole-ofgovernment perspective on allocations across sectors and on the size and costs of the workforce; and managers accountability in terms of workforce planning.
1.1. The size and cost of the workforce in the federal government of Brazil A relatively small total government workforce (all levels of government, including federal government, states and municipalities)
Employment in general government and public corporations (the public sector in the System of National Accounts1) has been quite stable in Brazil. Between 1995 and 2005, it represented approximately 10% of employment in the economy (see Figure 1.1) Although relevant data are not available for the state level, the evidence indicates that this percentage has probably increased since 2005: data for the federal level and municipalities indicate more rapid increases in general government employment than in the rest of the economy (an increase of over 10% between 2005 and 2008 against an increase of over 4% in employment in total economy). In total, government employment can be estimated at approximately 10-11% of total employment in Brazil in 2008, and, when taking into account public enterprises, at approximately 11-12%, compared to an average of about 22% for OECD member countries.2
Figure 1.1. Share of public sector employment in total employment in Brazil over time
G eneral G overnment 14% 12% 10% 8% 6% 4% 2% 0% 1990 1995 1996 1997 1998 1999 2002 2003 2005* P ublic C orporations
* Data for 2005 are drawn from Pessoa, Eneuton et al. (2009), Emprego pblico no Brasil: comparao internacional e evoluo recente, Comunicado da presidncia, Instituto de Pesquisa Econmica Aplicada (IPEA), No. 19, 30 March. Data are for employment in both general government and public corporations, and are not differentiated. Source: ILO Labourstat, UN UNSD Demographic Statistics, IBGE.
Compared to OECD member countries, the proportion of the public sector workforce in total employment is rather small (see Figure 1.2).
Figure 1.2. Public sector employment as a share of total employment, the labour force and population in selected countries
2005
Total E mployment 40% 35% 30% 25% 20% 15% 10% 5% 0% S lovak T urkey New A rgentina Italy Denmark S weden United C anada Mex ic o C z ec h G reec e *B raz il J apan Ireland United S witz erland Netherlands O E C D (27) A us tralia S pain F inland P oland F ranc e B elgium G ermany Norway Hungary C hile Total L abour F orc e Total P opulation
Note: Data for Brazil on employment in the public sector are drawn from Pessoa, Eneuton et al. (2009), Emprego pblico no Brasil: comparao internacional e evoluo recente, Comunicado da presidncia, Instituto de Pesquisa Econmica Aplicada (IPEA), No. 19, 30 March. Source: OECD Labour Force Survey, ILO Labourstat.
56 1. WORKFORCE PLANNING AND MANAGEMENT However, headcount numbers for public-sector employment tend to give an erroneous picture of governments room for manoeuvre in Brazil compared to OECD member countries, for the following reasons: First, the stability of general government employment as a percentage of total employment hides the fact that general government employment has actually increased in absolute numbers, by 12% from 1990 to 1999, by over 15% between 1999 and 2003, and by 10% between 2005 and 2008 at the federal level and in municipalities.3 Some argue that as employment and population increase, the number of government employees should increase accordingly. However, unless there are quantity or quality improvements in service delivery, there is no need for the number of public employees to increase at the same rate as employment in the economy because government affairs and public service delivery benefit from economies of scale. In Brazil, the increase in general government employment may be legitimate in the context of past history regarding capacity building in government and with the aim to improve access to services, in particular in the health and education sectors, but these increases need to be monitored very closely.4 Second, with the increases in employment in the public sector (including employment in general government and public enterprises), employment in government strictly speaking has increased significantly more, as employment in government enterprises has decreased, probably mainly owing to extensive privatisation since the early 1990s.
A relatively costly government workforce for the economy

In addition, although government employees represent a relatively small share of total employment, the government workforce is expensive. Compensation costs approach 12% of GDP (public enterprises excluded),5 a rather high figure compared to OECD member countries (see Figures 1.3 and 1.4). However, since 2000 the cost of the government workforce has increased only moderately in absolute terms,6 and this is probably mostly due to the increase in the number of employees. Even when considering wages and salaries only, and excluding employers social contributions (including to pensions), the situation remains relatively similar, showing that it is not only the level of Brazilian government contributions to social security and pensions that makes a difference in the compensation costs of government employees compared to OECD member countries (see Figure 1.5).
Figure 1.3. Compensation of general government employees as a percentage of GDP

2006
Compensation of employees 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
France Iceland Italy Finland Poland Spain United Kingdom New Zealand Belgium Ireland Slovak Republic Denmark Portugal Hungary Greece Austria Czech Republic Netherlands Germany Germany Norway Japan Japan Brazil OECD Average OECD Average United States Luxembourg Luxembourg Sweden Korea Korea
Sources: OECD, IBGE.
Figure 1.4. Compensation of general government employees as a percentage of GDP (2006) and share of general government employment in total employment (2005)
Compensation of employees 40% 35% 30% 25% 20% 15% 10% 5% 0%
Finland Belgium Iceland Ireland France Brazil Italy United Kingdom Slovak Republic Hungary Poland Austria Spain Czech Republic Norway New Zealand Denmark Portugal Greece United States Netherlands Sweden
Employees
58 1. WORKFORCE PLANNING AND MANAGEMENT

Figure 1.5. Share of compensation of general government employees as a percentage of GDP divided between social employers contributions and wages and salaries
2006
Wages and salaries 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Employers' social contributions
France
Italy
*Iceland
Finland
Poland
Spain
Belgium
United Kingdom
*New Zealand
*Ireland
Switzerland
Slovak Republic
Denmark
Portugal
Hungary
*Chile
Brazil
*Greece
Austria
Netherlands
Czech Republic
*Canada
* Includes employers social contributions. Sources: OECD, IBGE.
Today, 28% of compensation costs in the Brazilian economy as a whole are paid to government employees (excluding public enterprises), again a high share compared to OECD member countries. Yet government output7 represents only 11% of total economic output, and only approximately 10% of the population are general government employees (public enterprises excluded) (see Figure 1.6). This situation is mainly due to differences in average salaries between the public and private sectors,8 that result from a combination of factors that include the particular structure of salaries with some very low remunerations in the private sector for certain tasks, a much higher proportion of qualified positions in the public sector, but also a mostly recent choice that has been made that public servants in core positions be relatively well paid to attract the best suited candidates, motivate their commitment and reduce turnover. However, the share of compensation costs in general government output is quite similar to that of OECD member countries (see Figure 1.6); this indicates that other types of government spending are relatively high. The cost of producing government-funded services as a percentage of GDP9 is also high in Brazil compared to OECD member countries. In addition to the high compensation costs of general government employees, the cost of the goods and services produced by non-general government organisations and companies (mostly private sector) but funded by government as a share of GDP is also high (see Figures 1.7 and 1.8).10
*United States
Luxembourg
*Germany
*Norway
Sweden
*Korea
*Japan
Figure 1.6. Compensation of employees and output at basic prices between general government and total economy in selected countries
2005
Compensation of employees 35% 30% 25% 20% 15% 10% 5% 0% Value of output
Poland
France
Italy
Finland
Belgium
Ireland
Spain
Slovak Republic
Source: OECD, UN National Accounts Official Country Data.
The cost of producing goods and services funded by government has also increased since 2000 as a percentage of GDP and in volume, mostly owing to the increased costs of goods and services funded by government and produced by the private sector and public companies.
Figure 1.7. General government production costs as a percentage of GDP
2000 and 2006
Intermediate c ons umption 35% C ompens ation of employees S oc ial trans fers in kind G ros s c apital formation
30%
25%
20%
15%
10%
5%
0% 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 S W E IS L NL D DNK B R A HUN F IN F R A C ZE G B R B E L P R T NZL NOR P O L E S P ITA US A DE U A UT IR L S V K J P N L UX G R C K O RO E C D
Czech Republic
Netherlands
Switzerland
Denmark
Portugal
Hungary
Austria
Germany
Norway
Sweden
Japan
Brazil

Figure 1.8. Costs of goods and services produced by non general government organisations (mostly private sector) and funded by government (general government intermediate consumption and social transfers in kind) as a share of GDP
2000 and 2006
Intermediate consumption 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 Social transfers in kind
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
2000
NLD BRA SWE CZE GBR DEU FIN NZL ISL FRA HUN BEL DNK SVK AUT JPN USA POL ITA NOR LUX PRT ESP IRL KOR GRC OECD
In Brazil therefore, the management of the workforce and in particular the allocation of staff across policy sectors and priorities are important structurally as the cost of the workforce and the overall costs of producing goods and services funded by government weigh heavily on the economy. This places a great responsibility on governments at all levels in Brazil to manage the size, composition, and allocation of the workforce effectively by what is commonly called strategic workforce planning. Considering the overall productivity gains in the economy, increases in the costs and size of the government workforce should be matched by more than proportional improvements in access to and quality of public services, in regulation, and policy making.
The size and cost of employment in the federal government

Brazil has a share of public sector employees employed at the federal level that is quite similar to that of other federal countries (see Figure 1.9). This share decreased from about 20% to about 15% between 1990 and 2003 (including state companies) and has since probably remained the same. Data are missing beyond 2003. Moraes et al. (2008) found that in late 2008, federal employees represented approximately 15% of public sector employees (Moraes, M., T. Silva, and P. Costa, 2008).
2000
Figure 1.9. Share of public sector employees at different levels of government in selected federal countries
2003
C entral 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% A us tralia C anada Mex ic o United S tates B raz il S pain S tate L oc al
Source: OECD LFS, ILO Labourstat.
The number of federal government employees in the executive branch of government decreased significantly between 1995 and 2003 and has increased steadily since then (see Figure 1.10).
Figure 1.10. Number of federal government employees in the executive branch of government
1995-2008
580.000 560.000 540.000 520.000 500.000 480.000 460.000 440.000
19 99 20 00 20 01 19 95 20 02 19 98 19 96 20 03 19 97 20 04 20 05 20 06 20 07
Source: Moraes, M. et al (2008), O mito do inchao da fora de trabalho do Executivo Federal (The Myth of the Expansion of the Federal Executive Workforce), Revista Res Publica, Vol. 7, No. 2, JulyDecember.
62 1. WORKFORCE PLANNING AND MANAGEMENT At the same time, expenditure on personnel (including pensions) has increased steadily since 2004, after a contraction in the early years of the Lula Administration due to a rise in inflation coupled with nominal wage restraint in support of fiscal consolidation (OECD, 2009b: 54) (see Figure 1.11).
Figure 1.11. Selected federal expenditures1,2 including personnel
8 % GDP, 12-month flows
Personnel Private-sector pensions Non-mandatory programmes
2003
2004
2005
2006
2007
2008
1. For reference, total primary spending is calculated as tax revenue minus the general-government primary budget surplus. 2. For reference, total spending is calculated as tax revenue plus the general-government overall (nominal) budget balance. 3. Includes pensions to retired civil servants. 4. Refers to Other OCCs in Brazilian budget documentation and also includes selected mandatory spending on means tested social assistance transfers to the elderly and the disabled (RMV and LOAS). Source: IPEA (IPEADATA), OECD (2009b) OECD Economic Surveys: Brazil, p. 55.
The recent increase in federal government personnel expenditures has been due to various factors, including increases in workforce numbers in priority policy areas, changes in the level of staff qualifications, salary negotiations and increases in pension payments. Since 2008, in line with reforms that have affected career streams and increases in compensation, compensation costs have increased remarkably and will continue to do so as changes announced are implemented through 2012. Overall, the number and cost of government employees in Brazil (at all levels of government) have been relatively stable over the years, and until recently, the federal government was a stabilising factor in overall government employment (at all levels of government). However, as mentioned, the costs of government employees (at all levels of government) are high, especially in view of the fact that a relatively large proportion of government-funded goods and services are provided by the private sector. High economic growth in recent years has obscured this issue. In the future, however, as the government locks in new commitments about compensation and as pension payments increase, the cost of the federal workforce may be a growing burden, especially if economic growth slows. This is not to say that increases in costs in the federal government have not been legitimate. A large part of the increases in staff numbers have taken place in the education, health, security and infrastructure sectors and may be entirely legitimate considering better access to and possible improvements in service delivery. They also follow decades-long history of under-investments in capacity either because of the
2009
regularisation of large numbers of employees through non competitive procedures (after the establishment of the unique regime for civil servants in 1987 and later decision in 1990), and who may not all have had the necessary qualifications, and through successive firing and hiring freezes policies. Officials report that salary increases were also necessary as civil servants tended to be underpaid. Like for the rest of the government employment in the country, however, there needs to be a clear understanding of these increases in costs that have to be justified in the end by improved access to and better quality of government services, regulation and policy making.
1.2. Accounting for public employees and their costs The experience of OECD member countries
Workforce planning starts with good accounting in terms of numbers and costs. For most of the advanced OECD member countries, and unlike a number of transition economies, accounting for the size of the employment workforce is not a significant challenge. Most national governments know how many employees they have and many employees other levels of governments may have. Data are centralised by the labour ministries and often also by the national statistical agency, although often with different methodologies and thus different numbers. Remaining challenges regarding these data across OECD member countries include: Few countries have data in full-time equivalent. This means that data do not account for differences in the level of part-time employment. In some countries, there are methodological problems with the compliance with the definition of general government for employee numbers, making data sometimes difficult to compare across countries and statistical analysis of the size of government employment very complex (see Pilichowski, E. and E. Turkisch, 2008).
Today, one of the challenges for central organisations is to control staff numbers in the context of increased use of contracted out services, and short-term employees. With increased use of the private sector for the production of goods and services funded by government, the numbers and costs of government employees should decrease (considering similar levels and quality of goods produced). Ideally, government organisations should track production costs of goods and services over time, including staff costs and costs of goods and services produced by the private sector and funded by government. Changes to the workforce should take this information into account. A number of countries are making efforts to count all their short-term consultants, but there is as yet no good example of a country that has tracked the production costs of government-funded goods and services for strategic workforce planning. There is an agreement among OECD member countries, however, that countries should be moving in this direction in order to avoid unplanned increases in the cost of service production.
The situation in Brazil Data about the federal government

Brazils federal government has impressive public service data sets at the federal level, which show a clear picture of staff numbers and total compensation costs. Detailed
64 1. WORKFORCE PLANNING AND MANAGEMENT data are available on the Internet, including data on public enterprises. Data are not in full-time equivalent, but this may be less important in Brazil than in other countries as the percentage of staff with part-time employment is very limited. The Integrated System of Human Resource Administration (SIAPE) was created in 1989, and is used by human resource managers of federal government institutions. It works in a decentralised manner under central control and has been constantly improved to enhance transparency, access by public servants and efficiency. Although the system is not compatible with the payment system of the Ministry of Finance and with the integrated system of budget data as it is in many OECD member countries, the system works very well for tracking information on the federal civil service and accounting for the size and cost of the federal public service and for payroll. Workforce planning also seems quite transparent, as workforce projections are included in a specific part of the Annual Budget Bill (Annex II of the Budget), which is discussed and approved by the National Congress. The Secretariat of the National Treasury of the Department of Treasury is the central body of the federal financial management system and of the federal accounting system. It makes available online staff numbers in each body of the federal administration, including bodies of the federal judiciary, the Chamber of Deputies and the federal Senate. In addition, compared to many OECD member countries, the federal government tracks contracted out services very well. Ministries, and even public enterprises, seem to know relatively well the extent of services contracted out. This is also the object of numerous controls including by the Court of Accounts. Costs and historical data can thus be integrated into strategic workforce planning processes in order to track the overall costs of producing services. The federal government systematically counts retired employees and pension beneficiaries with its present workforce. In fact, they are included in the payroll and personnel expenses (as the Fiscal Responsibility Law establishes a ceiling of payroll costs and demands that their remuneration be accounted in the same way as active personnel compensation). While many other countries are striving to make the public employer more responsible and accountable for future pension costs, Brazil is exceptional in that public-sector pension holders and pensions are managed by individual departments and ministries. While this certainly helps improve managerial accountability for future pension costs, it also probably dilutes managerial responsibility for workforce planning to the extent that a large part of workforce costs is fixed. It is also a source of confusion regarding workforce numbers and costs in general. Finally, the federal government is putting a lot of resources into auditing and controlling the regularity of payments. While the computerised systems are now quite sophisticated, different organisations are in charge of controlling the regularity of payments, including the Secretariat of Human Resources (SHR) of the Ministry of Planning, which carries out monthly audits, and the Court of Accounts, which controls 110 000 personnel actions a year (out of which 60 000 are computer-controlled). This is still a rigid control process which the government may want to make more flexible in order to increasingly move towards more efficient and risk-based audits to increase efficiency and allow more focus on strategic issues. Efforts have been made in this area and should be further developed.
Box 1.1. The integrated database for personnel administration in Brazil

The Integrated System of Human Resource Administration (Sistema Integrado de Administrao de Recursos Humanos, SIAPE) is an on-line database and is the main tool for the management of the civil personnel of the federal administration. Today, it contains information about 1.3 million active personnel, retired personnel (aposentados) and dependants of deceased personnel (pensionistas) in 231 organisations, including the federal administration, federal educational organisations, ex-federal territories, agencies (autarquias), foundations, public enterprises and mixed economy societies (sociedades de economia mista). It does not include the Public Prosecutors Office (MPU Ministerio Pblico da Unio), the Banco Central, the public enterprises and mixed economy societies that do not receive money from Treasury for the payment of their staff, or embassy staff. Data from SIAPE are published each month by the SHR in the Boletim Estatstico de Pessoal. Both the latest numbers and previous numbers can be downloaded from www.servidor.gov.br/publicacao/index.htm. The publication is organised in sections with data on payroll expenditure, number of persons on the payroll, remuneration levels for each cadre, competitions, and retired personnel. There is also a section with data on positions of trust (Cargos e Funes de Confiana e Gratificaes), which involves 78 269 persons. Among these are the 20 664 persons in the special management cadre (Grupo-Direo e Assessoramento, DAS). In addition 22 787 are listed as trainees (estagirios). Table 2.22 in this publication contains the number of persons on the federal payroll broken down into the different cadres and sub-cadres, and into active personnel, retired personnel and surviving dependants for each cadre. Table 3.4 contains information on the pay structure in the federal administration, with initial and final pay levels for each cadre (cargo/carreira).
Source: Mission discussions.
Data on other levels of government

The size and cost of the federal public service are only meaningful when compared to the federal governments responsibilities. In addition, the federal government has a special responsibility for maintaining the fluidity of the labour market across the country, and thus has a strong interest in tracking public employment in the country as a whole (OECD, 2008g). In terms of the control of employment levels in Brazilian states and municipalities, caps on workforce costs have been established to avoid excessive long-term growth in government employment. While reporting of numbers seems weak, a recent communication from the Instituto de Pesquisa Econmica Aplicada (IPEA) is a counterexample as it gives a rather detailed analysis of changes in total public employment (IPEA, 2009).
Suggestions for future reforms

As mentioned earlier, the federal government efficiently tracks the size and cost of public employment in the federal government. The government also has good data on contracted-out services which can help track the overall costs of production of its goods and services, including by the private sector, and link public employment numbers with changes in the allocation of responsibilities for the delivery of government-funded services to the private sector.
66 1. WORKFORCE PLANNING AND MANAGEMENT The issue for the federal government will be to continue keeping a detailed account of staff numbers and costs in the context of the modernisation of government processes, especially as Brazil moves towards increased delegation of authority for human resources to managers and directors of ministries and agencies. In particular, governments such as Canada report that since salary and non-salary budgets have been managed together, it has become more difficult to track the number of persons employed.11 Another challenge for the government is to put the accounting of public sector employees in a more strategic perspective. This is not only an issue of control and regularity. These are data that have to be used by decision makers when deciding on how to deliver services and how to manage their workforce. One possibility would be to create a public service observatory like that of France, which follows general trends in terms of public employment, public service demographics and the allocation of the workforce across sectors. It is an important actor in efforts to modernise government and has developed many initiatives in the field of workforce planning (see Box 1.2). Such an observatory is credible if it reports not only to its immediate minister and director, but also to a board with a wider range of actors that represent the whole of government. It should also be involved in most government public management reforms that affect personnel management. In addition, as mentioned earlier, Brazil could develop state-of-the-art tracking of the cost of producing goods and services funded by government, which would include compensation costs of government employees and the cost of producing services by the private sector. This initiative can be made part of the ongoing efforts under the auspices of the Ministry of Finance to produce an overall accounting system for the Brazilian public administration (including personnel). Ideally, it could also play a role in tracking the number of government employees in the country as a whole with a view to assessing the weight of government employment in the labour market. OECD member countries such as Belgium, Denmark, France, and Spain are carrying out whole-of-government assessment and analysis of the number of government employees. The purpose is to keep track of overall numbers and thus be in a position to assess the impact on the wider labour market, as well as develop a dialogue on human resource management across levels of government.
Box 1.2. The Public Service Observatory in France

The Observatory was created in 2000 to collect, analyse and disseminate information about Frances public service for the national government, but also for hospitals, regions and local government. It is considered a forum for dialogue and exchange among decision makers and is composed of:
an orientation council presided by the Minister for the Public Service and including parliamentarians, directors of various ministries, elected officials from local governments, and various organisms and unions; a technical committee, co-presided by the director general in charge of the public service and the head of the national statistical agency and the different technical administrations.
The general secretariat of the observatory is administratively below the director general of the public service. Its main functions have been:
to ensure a higher degree of transparency and understanding of public service numbers and trends through the design of new ways of counting public employees and by linking these numbers to changes in the economy, in competency requirements, etc. The Observatory also has a proactive publication policy, with an annual publication on the state of the public service, which has become a reference for decision makers engaged in government reforms. to put in place the new workforce planning for positions, number of employees and competences.
In addition, the Observatory participates in many networks and working groups on the modernisation of the public service as part of the initiatives to modernise government in France.
Source: www.fonction-publique.gouv.fr, accessed August 2009.
1.3. Strategic workforce planning The experience of OECD member countries Linking workforce planning to the strategies of organisations
In the past two decades, most OECD member countries have moved towards measuring the performance of their organisations, including through performance budgeting. This is not an easy process, as establishing objectives and measuring progress require great managerial skills and processes in place to maintain coherence. Performance management also requires increasing managerial flexibility, without which performance indicators may become just another layer of control and further restrict managerial freedom. If not implemented properly, ministries and agencies may in fact search for opportunities to set their own targets at the expense of whole-of-government strategies and seek to decrease their accountability for the use of government resources. Where in place, performance results are used both internally by ministries and agencies to set programme priorities, allocate resources (including personnel) and change
68 1. WORKFORCE PLANNING AND MANAGEMENT work processes, but also for outward-oriented accountability to the whole of government and to society. Human resources, and in particular workforce planning, have been made an integral part of the performance management framework of organisations. This has been easier in position-based systems and in countries with traditionally decentralised human resource management systems, such as Canada, New Zealand, Nordic countries of the European continent and the United States, than in traditionally more centralised countries, such as Belgium and France, where it has slowly taken place only recently. Many countries have been establishing procedures and processes that link workforce planning to the strategic planning of organisations, including accountability mechanisms for managers to report on their workforce planning. Strategic planning devices include strategic plans that describe human resource management strategies and personnel plans. Ministries and agencies also report on human resource achievements in terms of numbers, competencies and costs, and their allocation to the different targets and achievements of their organisations in various performance documents. Finally, workforce planning is part of the reporting on their human resource strategy for which managers are accountable. The tendency has been to decentralise workforce planning, although central guidelines on how to conduct workforce planning are often established and whole-ofgovernment priorities clearly stated. These establish the objectives of departments workforce planning. Strategic workforce planning thus requires empowering heads of departments and agencies with the design of their human resource management strategy and establishing a dialogue between them and central reporting departments (Ministry of Finance, Ministry of Home Affairs or Personnel). Managers are thus held fully responsible for the results of their workforce planning, as it is part of their accountability framework. Strategic workforce planning, like most management tools, should not be overly sophisticated. Its purpose is to avoid rough back-of-the-envelope calculations about future staff needs and encourage more professional linking of human resource management to strategic management of the organisation. Frameworks for workforce planning help increase managerial accountability for human resource management, allow the establishment of government-wide analysis and targets in terms of workforce size, competences, and allocation across sectors. This is especially important in career-based systems, in which employees are usually employed for their entire working life in specific career groups. Good workforce planning, however, does not necessarily involve detailed long-term forecasts.
Strategic competency management

Strategic competency management is an important part of strategic workforce planning. As described in Chapter 2, most OECD member countries have made efforts in this field in order to better adapt their workforce to the needs of organisations. Good competency management has allowed for more subtle strategic workforce planning than simply numbers and costs.
Managerial flexibility
The outcome of the process of workforce planning also depends, to a certain extent, on the governments flexibility for hiring new types of employees, decreasing the workforce, and reallocating it across sectors. Tight ex ante controls on and regulation of
the management of the workforce tend to inhibit workforce planning and lessen the role of human resource management in government reform strategies. It is not easy to dismiss staff on employment contracts in any country, even if it is legally possible. Moreover, the percentage of staff on short-term contracts or who are casual employees (i.e. outside of the general employment framework) is limited in OECD member countries (see Figures 1.12 and 1.13).
Figure 1.12. Casual employees in the central government of selected OECD member countries (2005) and in Brazil (2009)
S pain Aus tria United K ingdom Italy United S tates P ortugal J apan B elgium F inland
B raz il (2005) B raz il (2008) 0 10 20 30 40 50 60 70 80 % C ontractual or cas ual s taff under different employment rules E mployees under general employment framework for government 90 100
Source: OECD (2008b), The State of the Public Service, OECD Publishing, Paris, p. 24.
It is important to note that while difficult, it is often easier to hire, dismiss and reallocate employees in position-based systems with common law legislation for public employees than in career-based systems to which administrative law applies. The reasons are that the latter tend to protect better against dismissals, and employees tend to belong to groups that make staff reallocation difficult. This is one of the reasons why, over the years, a number of countries have moved towards more position-based systems. In recent years, for example, Italy has done so in order to increase flexibility. The flexibility of position-based systems in workforce planning, however, should not be overestimated. For various reasons, including industrial relations, it is often more difficult to dismiss or reallocate government staff than staff in private-sector companies.

Figure 1.13. Short-term employees in the central government of selected OECD member countries and Brazil
2005
Netherlands Spain United Kingdom Ireland United States New Zealand Australia Portugal Belgium Finland Luxembourg
Brazil (2005) Brazil (2008) 0 10 20 30 40 50 60 70 80 90 100
FTC (fixed-term contract)
OTC (open-term contract) or lifelong guaranteed
Source: OECD (2008b), The State of the Public Service, OECD Publishing, Paris, p. 24.
In more traditional career-based systems Belgium, France, Ireland, Japan and Korea the governments flexibility often comes down to mobility tools, which tend to be well developed in some countries, especially at times of downsizing and reallocation of staff across sectors. Overall, however, OECD member countries also recognise that flexibility is not an end in itself, as too much flexibility may undermine cohesiveness and ethical standards (see OECD, 2008b). However, it is recognised that decreased managerial flexibility in career-based systems makes it more difficult to link workforce planning to the strategic management of the organisation. On the other hand, career-based systems tend to protect the neutrality of the civil service and increase the governments return on investment in training and job experience, as employees usually remain longer than in position-based systems. Flexibility can also be found through the use of casual staff and contracting out/outsourcing (not in the sense of leased labour as described in the next section on the situation in Brazil, but in the sense of firms being contracted for the delivery of goods and services). Contrary to some beliefs, there is no evidence that the number of staff employed under rules that are different from general public service labour laws, or the number of staff with short-term contracts, has increased in OECD member countries in recent years. In order to increase flexibility, a number of countries have made all or some of their public sector staff subject to general labour laws and recruited them for specific positions rather than specific job categories.
Box 1.3. Staff reductions and workforce reallocations in Japan

In Japan, workforce reduction has been achieved through natural attrition. However, owing to recent fiscal constraints, the Japanese government has had to reduce the number of personnel more drastically. Thus, between the fiscal years 2006 and 2011 the central government, which currently employs around 332 000 people, expects to reduce the number of staff by 5.7% (approximately 18 900 people). Since natural attrition is not enough to reach this target, the Japanese government intends to reallocate staff across sectors, for instance from staple food control and agriculture, forestry and fisheries statistics to other sectors. The Japanese government set up the Headquarters for Redeployment of National Civil Servants under the Cabinet chaired by the chief cabinet secretary (Minister of State) and composed of the Minister of Administrative Reform, the Minister of Public Service System Reform, the Minister of Internal Affairs and Communications, and the deputy chief cabinet secretaries and deputy ministers of all office and ministries. The headquarters secretariat provides services such as providing information for target staff, collecting their wishes, matching staff and new employer ministries, providing training for redeployed staff as well as human resource managers in the new employer ministries.
Source: Information provided by Bunzo Hirai, peer reviewer from Japan.
Many OECD member countries have increased outsourcing, as this is sometimes considered more efficient than public sector labour for certain activities, and more flexible. In fact, experience shows that decisions about outsourcing should be taken strategically, both because private sector prices may not make it worthwhile to outsource and because outsourcing requires significant in-house investments in monitoring contracts. This also implies that service delivery must be readable to monitoring ministries and departments, which may have to closely monitor many contracts of different types with different private sector partners. Outsourcing requires strategy in order to avoid increased production costs when outsourcing is not accompanied by changes in the level of public employment. Outsourcing in this case may only become shadow public employment and may be the source of increased production costs rather than efficiency gains.
The situation in Brazil Linking workforce planning to organisational strategies

Like other countries, Brazil has started to establish forward-looking and performancebased budget processes and institutions. Brazil now has a Pluriannual Plan that sets out the priorities, goals and programmes for a four-year period, a budget guidelines law that sets out government priorities for the next year to be observed in the formulation of the budget law, and the annual budget law details the expenses and revenues for the period. The SIGPLAN, a management information system, provides a consolidated picture of budget allocations and performance targets. In addition, over 90% of government spending is subject to performance targets.12 Practitioners seem to agree that a performance culture is taking root in the federal government, with comprehensive performance assessments for most programmes. However, the sequestering of budget appropriations for discretionary programmes has created uncertainties in programming, and earmarking and mandatory allocations of budgetary resources have created a sense of managerial rigidity for the whole of
72 1. WORKFORCE PLANNING AND MANAGEMENT government (OECD, 2009b: 110). In addition, research carried out by the European Commission emphasises the lack of connection between the planning and budget processes, the weak information basis of performance management, and an excessive number of programmes (Almeida Fortis, 2007). Because Brazil is currently in the process of consolidating performance management, it is understandable that strategic workforce planning is not yet fully developed. Strategic workforce planning is particularly important, however, as a significant proportion of staff are not directly involved in service delivery. There is a natural tendency in non-servicedelivery areas to grow beyond what is needed. Also, as output and outcome tend to be more difficult to measure, strategic allocation and reallocation of staff is very difficult. The government should certainly be praised for having significantly improved its capacity to forecast the need for new priorities. The Ministry of Planning has made significant improvements in its planning of increases in competitive examinations and number of posts. This has been an important step even if all ministries and organisations do not have the same level of planning capacity and strategic orientation. As the budget documents include the details of changes in recruitments, pensions and wage adjustments, comprehensive forecasting of new needs and their budget implications is possible. A dialogue between ministries/agencies and the Ministry of Planning is taking place on workforce numbers and grades, but it focuses mostly on new needs based on a definition of new activities and products according to new priorities. There is no indication that ministries/agencies have an overall strategic view of their workforce that would involve hard choices based on an analysis of trade-offs involving:13 jobs and competencies critical to the mission of organisations, and critical for the achievement of targets; future changes in staff numbers and competencies depending on future changes in priorities or organisations; present and future in-house or outsourced activities; reflections on technological changes and their impact on the government workforce; strategies to increase efficiency and savings on workforce numbers and costs.
Workforce planning, although it is discussed between the ministries (administrative units) and the Ministry of Planning, is very centralised. In theory, foundations and independent agencies (sectional bodies) are supposed to be more autonomous. In fact, the workforce planning processes are the same, and their autonomy is similarly limited. This essentially involves departments and agencies discussing with the Ministry of Planning their wish to open competitive examinations and opening of posts. Guidance is now issued by the central HR body, following Decree 6.944 passed in 2009 which has outlined workforce planning features that the Ministry of Planning is responsible for implementing including: organising government action by programme, avoiding duplication and fragmentation, increasing the efficiency and effectiveness of administrative action, reinforcing the results orientation, rationalising hierarchical levels, focusing on government priorities, and aligning proposals with the mission of organisations and the results they are to achieve. These changes are interesting developments that need to be confirmed and reinforced over time so that all criteria affecting choices regarding the workforce numbers and allocation of competencies are systematically taken into account through strong and well accepted methodology. Discussions are indeed still affected by a
sense of urgency, and by the corporatist requests and demands by ministries. In the end, reporting on workforce planning as it relates to the strategic documents of organisations is still weak. The Ministry of Planning (Management Secretariat, SEGES) assesses all requests made to the Ministry of Planning. Some ministries have started to establish indicators; the education and health sectors have indicators on numbers of teachers and health professionals, but most do not. As a consequence, managers are not formally held accountable for workforce planning. Some units and departments are more advanced than others, but there are no incentives for units to improve workforce planning.
Competency management
Strategic workforce planning suffers from weaknesses in competency management (discussed in Chapter 2). Competency management is in the early stages in Brazil and has been thought of as a way to develop staff rather than to help organisations plan their workforce needs. It is thus too early for competency management to guide workforce planning, although this is clearly a priority in the future. The absence of strategic workforce planning is evident in how the government accounts for staff numbers to the legislature. The legislature authorises a maximum opening of positions, over a few years, but the government rarely authorises the full number, which is very high. The implementation of performance management suffers from the absence of workforce planning in organisations strategic planning as managers are not held responsible for how they manage staff numbers, costs and competencies in light of their organisations priorities. The situation is significantly different in some public enterprises, however. In Petrobras, for example, the so-called HR strategic map is fully aligned with the companys strategy and values, and it is a good basis for workforce planning (see Figure 1.14). While the management of public employees in Petrobras is fundamentally different from that of core ministries, it may provide an example of the direction in which core ministries might want to move towards that is culturally feasible in Brazil. Like with sectoral ministries, the discussions with the Ministry of Planning, however, are not focused on the overall strategy, but are similar to those with sectoral line ministries and agencies and focused on control.
Managerial flexibility in hiring and reallocating

The labour contract for regular government employees imposes a public law contract that is open-term and guarantees against dismissals. In theory, the Constitution allows the dismissal of employees for poor performance, but, in the absence of clear complementary regulation, this rarely happens, as in many OECD member countries. Government reorganisation is not a case for dismissal either. Today, it is virtually impossible to dismiss federal government civil servants except for serious misconduct. When an organisation needs to reduce its staff, staff are put in a pool at disposition and then reassigned according to their competency profile.

Figure 1.14. Mapping human resource management strategic management in Petrobras
Source: Presentation by Petrobras to OECD team, July 2009.
In addition, the employment framework is quite rigid and does not allow for much mobility. Civil servants are hired in one job category and must sit competitive examinations to change job category. Many job categories, even for similar functions, are ministry-specific, and sectoral pressures have resulted in differentiated work conditions across different bodies even for similar functions (see Chapter 2). Mobility has thus been made impossible across those job categories, and seems also to be very difficult in some horizontal job categories. Overall, this means that most new needs have to be filled by new openings, competitive tests, and, sometimes, the design of new job categories, and reallocation has been made extremely difficult. However, within job categories, the ministries and agencies can in theory reallocate the workforce. This would imply that they have developed strategic workforce planning. Job categories are more flexible in some public enterprises. There is no doubt that this is easier in a business in a given sector with a few products than for the whole of government. Nevertheless it points to what might be accepted in Brazils culture. Today, with only one entry point for recruitment in Banco do Brasil (there is only one level of entry into the workforce) and a sophisticated talent bank, Banco do Brasil can inspire the federal government, although of course, the challenges of HRM in a bank are very different from those of a government. Staff move around mostly by moving up, but almost all moves are allowed. The monitoring of individuals competencies and potential is impressive in an organisation with some 100 000 employees. Having a single entry point would not be possible for the direct administration (mainly core ministries) of the federal government, as a number of positions require special qualifications. However, Banco do Brasil can be a powerful example of how to
manage competencies and allow for real careers to take place within enlarged job categories (see Chapter 2). In addition, possibilities for hiring manpower outside the rigid employment framework of careers are limited and the government has not shown any willingness to move in this direction: The proportion of short-term staff is very small in the federal government today, as well as that of private law employees whose employment regime is considered a legacy of history in some sectors. Together they amounted to around 6% of the federal government workforce (excluding SOEs) in 2008, up from around 3% in 200014 (see Figures 1.12 and 1.13). There is an upwards trend in the use of casual employees, but reports note that they do not fill long-term positions. Some note increased hiring of staff from international organisations. Government, unions and staff are concerned that this proportion should not continue to increase. The level of outsourcing by the federal government is difficult to measure. As mentioned earlier, the level of government-funded goods and services, as a percentage of total production costs of government, is high in Brazil compared to OECD member countries. It has also increased in recent years. A decree of 1997 established that only material and accessory services can be outsourced.15 Civil servants report a rise in outsourced services to compensate for the nonreplacement of a public servant especially during the Cardoso years or to increase manpower flexibility. Activities related to the core purpose of the organisation must be carried out by public servants and the National Court of Accounts, Public Prosecutors and the Ministry of Transparency and Control have issued formal guidelines and rules on the areas in which the use of contracted out services is allowed. A 2008 survey concluded that 12 000 positions in direct administration (a third of which are in the hospital sector) and 30 000 in indirect administration16 were irregular outsourced positions. It is unclear however, how irregular these positions are considering that oral reports from public servants point to positions such as drivers, cleaners, security staff, caretakers, etc. It seems however, that those are related to the hiring of employees through manpower firms (or similarly through contracts with firms whose only aim is to provide labour rather than goods and services) rather than through contracting out of services. These employees come under the hierarchy of the ministry in reality, when employees in really contracted out firms for the delivery of services remain under the hierarchy of their firms. In the case of employees through manpower firms or hidden in contracts, this seems to be used mainly for bypassing employment regulations, as many are not hired for temporary purposes only. In other cases, outsourcing seems to be used to put pressure on the Ministry of Planning to authorise additional hiring for replacing staff working for private firms under ministerial hierarchy.
Overall, ministries flexibility for managing workforce numbers is very limited compared to OECD member countries, owing to a rigid employment framework by job category, no process to allow for systemic mobility across job categories and across organisations with similar job categories, and an unclear framework for outsourcing. DAS (Direo e Assessoramento Superiores) positions17 and horizontal job categories allow for mobility but are not used in a proactive systemic manner by the centre of government. Moreover, it is difficult to gain a clear picture of the consequences of this poor strategic workforce planning, since financial constraints on the government have been limited,
76 1. WORKFORCE PLANNING AND MANAGEMENT both because of past human resource management policies and because of the good economic situation. Some officials report significant capacity gaps in the federal government. The growth acceleration plan and the policies in the education sector, for example, are reported to lack implementation capacity in the context of them having been prioritised during Lulas presidency. Others note that careers are not adapted to the strategic orientation of some ministries. There is little doubt also that more strategic workforce planning would help to improve the management of organisations performance.

In terms of planning future increases in posts, achievements have been made. Strategic workforce planning, however, is in the early stages. More emphasis needs to be put on integrating workforce planning in the strategic documents of ministries and other government organisations. Realistic workforce planning could help strengthen the overall planning and budgetary cycle, which suffers from a lack of strategic management. The Ministry of Planning has a responsibility to develop a framework for holding ministries and agencies accountable for strategic workforce planning. The federal government could certainly profit from examples of workforce planning in some OECD member countries. For example, the United States has made an effort to align workforce planning with the strategic management of organisations. Human capital strategies are integrated into strategic plans, performance plans and budgets. The Office for Personnel Management (OPM) has identified criteria for the effectiveness of human capital strategic and workforce planning. Workforce planning is one of the four pillars of the human capital and accountability framework, which is assessed every year by OPM, which then provides guidance, options, good practices and a forum for exchange of practices among practitioners in US agencies. Ministry and agency heads should be held responsible for how they plan for the workforce, including the design and implementation of strategies to fill competency gaps in line with changes in missions and targets; their process for deciding what should be implemented by public servants and what should be outsourced or covered by short-term employment; and also for their analysis of the consequences of changes in the use of technology on human resources. Workforce planning in France, although a quite lengthy and difficult process, is a good example of centralised workforce planning, and may be better adapted to the situation in Brazil today, even though in the longer run a model like that of the United States might be more flexible. Centralisation of workforce planning has two advantages: It helps gain a better view of internal mobility and can plan for presently nonexistent functions, whereas the agency system has an incentive to perpetuate functions unnecessarily and does not offer a perspective on new functions to be performed by government. It would allow linking workforce planning the necessary changes in the job category system (see Chapter 2).
Box 1.4. United States: The strategic alignment system and workforce planning
Workforce planning is part of the strategic alignment system which focuses on a human capital strategy aligned with mission, goals and organisational objectives of federal departments and agencies. It is implemented by the senior management, and in particular the chief human capital officer (CHCO), through analysis, planning, investment, measurement and management of human capital programmes. Human capital management strategies are integrated into strategic plans, performance plans and budgets and are organised around: human capital planning, workforce planning, human capital best practices, knowledge sharing, and human resources as strategic partner. Each has several key elements that indicate effectiveness and is linked to suggested indicators that identify how well the agency is doing relative to key elements. Activities and outcomes of this system are assessed through documented evidence of a Strategic Human Capital Plan which includes human capital goals, objectives and strategies; a workforce plan; and performance measures and milestones. Agencies are required under OPM regulations implementing the CHCO Act to submit the Strategic Human Capital Plan described by this system to OPM on an annual basis.
Effectiveness results of workforce planning

The agency approaches workforce planning strategically and in an explicit, documented manner. The workforce plan links directly to the agency's strategic and annual performance plans and is used to make decisions about structuring and deploying the workforce. Mission-critical occupations and competencies are identified and documented, providing a baseline of information for the agency to develop strategies to recruit, develop and retain talent needed for programme performance. The agencys documented workforce plan identifies current and future workforce competencies and the agency is closing identified competency gaps through implementation of gap reduction strategies such as:
restructuring; recruitment; competitive sourcing; redeployment; retraining; retention (e.g. compensation, quality of work life); technology solutions.
A business forecasting process identifies probable workforce changes, enabling agency leadership to anticipate changes to human capital which require action to ensure programme performance. Based on functional analyses, the agency is structured to achieve the right mix and distribution of the workforce to best support the agencys mission. Based on analysis of customer needs and workload distribution, the agency has the right balance of supervisory and non-supervisory positions to support the agency mission.
Source: www.opm.gov/hcaaf_resource_center/7-1.asp#item1.
78 1. WORKFORCE PLANNING AND MANAGEMENT In France, the implementation of a workforce planning strategy has taken place at the same time as that of the LOLF (Loi organique relative aux lois de finances the implementation of performance-based budgeting). This helped give more coherence to the strategic management of organisations and later to the implementation of the large programme and policy review. The role of the GPEEC (Gestion Prvisionnelle des Effectifs, des Emplois et des Comptences Employment, Workforce and Competency Planning) (see Box 1.5) has been to analyse the governments current staffing and future needs by functions and categories through the use of a common cross-ministry methodology. Ministries have been responsible for implementing the GPEEC in their ministries and have had to report on their progress. This has reinforced discussions between the Ministry of Public Service and sector ministries on human resource management issues. Data for the whole of government have been centralised. In addition, a major effort has been made in parallel to create a cross-ministry competency dictionary for the different jobs and functions to which all ministries are supposed to refer. Box 1.5. Workforce and competency planning arrangements in France
Snapshot of current challenges
Workforce planning arrangements are changing for two reasons: 1. An ageing civil service: like a large majority of OECD member countries, France faces a demographic shift which creates a window of opportunity to increase public sector productivity. Consequences on workforce planning require adjustments in three directions: i) to manage a large flow of civil servant departures in a very condensed period of time (45% of current state civil servants will have retired by 2012) by reforming the current public sector retirement laws and pension benefits and by adjusting human resource management policies to retain older workers longer; ii) to redesign human resource management strategies with a view to maintaining capacity while ensuring an appropriate use of competencies based on functional needs and while reallocating resources across departments or sectors; and iii) to implement costcontainment policies to face long-term financial needs, including potential workforce downsizing and pension liability reforms. 2. Institutional changes: strategic state missions will be restructured on the basis of changed needs of the population, on innovative technologies, on the consequences of the devolution process and on what is expected of civil servants.
A new integrated approach

A holistic approach to workforce planning was adopted in recent years to face these challenges. This approach includes a significant change in hiring policies, the adjustment of medium-term recruitment strategies, and the use of new workforce planning instruments. The first key instrument is the GPEEC (Gestion Prvisionnelle des Effectifs, des Emplois et des Comptences). Introduced in the early 1990s and restructured in 2001, the GPEEC is an ambitious government-wide strategy which analyses the current staffing picture by functions and categories (corps and job families). It aims at forecasting adjustments of staffing needs in order to improve the efficiency of the public service, adapt recruitment to the demographic context, increase governments accountability to citizens concerning changes in public workforce numbers, and finally to nurture social dialogue by opening discussions with the unions.
Box 1.5. Workforce and competency planning arrangements in France (contd)

The GPEEC is a cross-departmental methodology which has established a common framework across government, although each ministerial department is responsible for its own GPEEC plans, under the supervision of the central human resource management body. In the state civil service, the GPEEC has become a key lever of the human resource management reform agenda and a key ministerial strategy. The evaluation of current GPEEC plans shows that all ministries have made progress in aligning staff with missions and integrating human resource management strategies in their GPEEC plans. In 2006, the GPEEC process was strengthened by the addition of annual conferences on HR workforce planning (CGPRH) which aim at establishing a dialogue between the human resource management central body and each department on specific GPEEC plans. Discussions focus on long-term workforce planning strategies and on management priorities for the year. They result in a road map which sets mutual commitments on workforce planning. Thematic working groups are being established to identify good practices that could be used in all ministries. A third workforce planning instrument the RIME (Rpertoire interministriel des mtiers de ltat) was launched in November 2006 to provide a catalogue of competencies to be used by all departments. The RIME reviews the different job types and functions within the state administration in order to reinforce linkages with the competency needs analysis and to increase cross-departmental staff mobility. The RIME creates a clear picture of the public-sector labour market and may be an important added value in a context of increasing competition for skills with the private sector.
Source: OECD (2007a), OECD Reviews of Human Resource Management in Government: Belgium, OECD Publishing, Paris.
The French model was originally quite cumbersome from a bureaucratic point of view because of the size of the centrally managed civil service and because of simultaneous reforms in performance budgeting. There is no doubt that the GPEEC has since become more streamlined in government organisations. Canada is another example of the integration of workforce planning into the broader government planning and reporting cycle, which aims to align an organisations workforce with the governments priorities and the organisations missions, strategic plan and budgetary resources (Box 1.6.).
Box 1.6. Workforce planning in Canada

The foundation for shaping the public service workforce in Canada is a clear understanding of the skills and knowledge needed to meet departments business objectives, both now and in the future. Thus the Canadian public service is moving towards using integrated human resources and business planning as the foundation for assessing and understanding current and future needs of departments, agencies and the public service as a whole. Integrated planning is one of the core pillars of the Public Service Renewal in Canada, which maintains that good planning allows for a better sense of organisational strengths and of the gaps that need to be filled, whether through recruitment or development or by bringing in specialised skills at midcareer. Integrated planning aligns an organisations workforce with the governments priorities, and the organisations mission, strategic plan and budgetary resources. It forms the basis for assessing and understanding current and future needs of departments and agencies and supports the achievement of business excellence by promoting initiatives to attract and retain an engaged, sustainable, competent and diverse workforce. All departments and agencies are expected to establish integrated human resources and business plans to guide their activities and resource requirements. There are five key steps to integrated planning at the departmental level:
determining organisational business goals; analysing the organisational environment to see if there is the right mix of skills and people to meet current and future needs of the organisation; assessing the gaps or surplus in the organisations workforce what is missing or what is no longer required from an HR perspective in order for the organisation to achieve its goals; setting priorities and taking action initiating strategies to close the gap and help get quantity and quality of the resources required; and reviewing, monitoring and measuring whether efforts were successful.
Integrated planning is an essential component of the broader government planning and reporting cycle, which consists of the following core parts:
Annual departmental Reports on Plans and Priorities (RPPs) are individual expenditure and business plans for each department and agency. They elaborate on a departments or agencys priorities, strategic outcomes and planned activities to achieve those outcomes. Reports also contain information on priorities and planned results including links to related resource requirements, such as human resource requirements, major capital projects, and financial resources over a three-year horizon. They provide increased levels of detail regarding planned spending, on a strategic outcome and activity basis, and describe planned priorities and expected results, and the match between their required resources and the business results of government. These documents are normally tabled in Parliament in the spring. Annual departmental performance reports are individual department and agency accounts of results achieved against planned performance expectations, as set out in respective reports on plans and priorities. They provide information on how the department or agency is progressing towards its strategic outcomes and how the resources were spent. The departmental performance reports cover the most recently completed fiscal year and are normally tabled in Parliament in the autumn.
Box 1.6. Workforce planning in Canada (contd)

In addition, several workforce planning efforts are taking place at the central level:
Through the analysis of the data in the central compensation system, the Office of the Chief Human Resources Officer located within the Treasury Board Secretariat generates demographic assessments of the current and future workforce needs for the public service, on an as needed basis, including identification of system-wide gaps, which may pose a risk for the delivery on the government-wide objectives. These data feed various stakeholders, including the Clerk of the Privy Council (head of the Canadian public service), and central agency policy centres (e.g. those responsible for HR, finance or policy analysis), as a basis for future analysis of demographic needs across various occupational groups in the public service. Based on this and other information, in the areas which appear to pose a risk to the sustainability of the system, the Clerk, central agencies or other players (such as groups of deputy ministers) may take a range of actions to build the required workforce capacity at the system-wide level, such as:
collective recruitment to fill the current and potential workforce gaps; capacity building initiatives, including leadership and skills development
programmes;
talent management programmes.

In some cases, the Clerk of the Privy Council includes some priorities in his annual Public Service Renewal Action Plan. This plan is government-wide and establishes core priorities for human resources management in the public service, including targeted recruitment in certain areas to fill strategic government capacity gaps. For instance, in 2008-09 and 2009-10, the public service was required to hire about 8 000 recent university graduates to address the anticipated demographic crisis created by the ageing of the Canadian population and public service workforce. Where specific targets are set by the central policy centres or the Clerk of the Privy Council, the extent to which these targets have been met is included in the annual assessment indicators of departmental performance. Moreover, efforts are currently underway to design a horizontal human resource plan for the public service, which would identify areas of human resources requiring attention and include action to help close the gap.
Source: Information provided by Tatyana Teplova, peer reviewer from Canada.
For workforce planning to be effective in Brazil, however, there is a very strong need to provide for flexibility in the management of the pool of workers. As discussed in Chapter 2, the way the job category and career system has been implemented with the creation of differentiated conditions of work for staff across organisations and the large multiplicity of careers, is extraordinarily rigid and disempowers directors and managers. Decisions made in recruitment today for a specific job category create a very inflexible situation in terms not only of the total number of employees but also of their allocation across and within the different sectors of government. A job category system with a reduced number of job categories and a larger scope for performance-based promotions could help improve managerial flexibility, provided managers show sufficient capacity in their use of these new flexibilities.
82 1. WORKFORCE PLANNING AND MANAGEMENT The main flexibility measures that could be taken to help improve workforce planning include: The number of short-term and temporary staff could be increased to provide managers with some flexibility regarding staff numbers and competencies, but only for urgent and temporary necessities. OECD member countries with relatively rigid career systems make greater use of short-term staff with similar legal constraints on the use of short-term staff. However, this should be done very carefully to avoid the well-known tendency in the federal government of Brazil to employ short-term staff on long-term positions. In addition to the reform of the job category system, with broader and lesser job categories that are not tied to specific organisations, mobility within government could be systematically encouraged by decoupling job categories from specific positions in a ministry and by providing possible bridges across job categories based on work experience, although it is important that this remains within constitutional boundaries. Once this has been done, mobility opportunities could be advertised and managed centrally through some kind of talent bank. Staff could be encouraged to apply for those positions. Another way to improve mobility would be to broaden entry categories, which are very narrow by international standards. Job categories in Brazil are basically narrowly defined occupational groups or even types of positions (see Chapter 2). Considering that employees spend their entire careers in government, it would be worth opening mobility opportunities to SOEs, although care has to be taken to avoid conflicts of interest. In the same vein, specific programmes for staff exchanges with private sector companies could be established, again provided that this does not create conflicts of interest. Mobility presently takes place within commissioned functions and should be encouraged within this framework. It would also be worth exploring how to further develop the existing system that allows a few government employees at one level of government to work at another, like with the DAS system.
The issue of contracting out is complex and politically charged in Brazil today. Generally speaking, the level of outsourcing and contracting out varies tremendously in OECD member countries. However, in the past 20 years, as in Brazil, countries have generally agreed that non-core services can be provided more efficiently by the private sector as long as the contract is properly managed in the long run. What is non-core is generally understood to be, at a minimum, low-skilled work not immediately related to the organisations mission (for example canteen, drivers, cleaning). There seems to be some confusion around what contracting out or outsourcing should bring to public administrations. There is a need for the Ministry of Planning to differentiate between: i) contracting out for labour, in case of temporary shortages, which may be through firms, but should be strictly limited in time (the Constitution only allows temporary employment contracts rather than contracting out to firms in such cases); ii) contracting out to firms for the delivery of goods and services with the idea that such goods and services, because of their nature and the capacity in government, are delivered more efficiently by private firms.
While there is no indication that the federal government of Brazil would like to go beyond the minimum outsourcing described above (for non-core services), policy regarding outsourcing should be clarified, and a minimum of outsourcing should be used for non-core services unrelated to organisations missions. This will require changes in the legal interpretations of existing texts. Decisions about outsourcing should be made part of workforce planning and described in the various accountability documents. In The Workforce Scorecard: Managing Human Capital to Execute Strategy (Huselid, Becker, and Richard, 2009: 22), the authors suggest categorising jobs as A positions, B positions and C positions based on their importance to the business strategy. The A positions are strategically important and warrant policies intended to attract and retain high calibre talent. The B positions are basic; incumbent performance is important but developmental investments are not high priority. The C positions are those in which performance is not an issue and only minimal training is warranted; these are candidates for outsourcing.
1.4. Promoting whole-of-government goals regarding efficiency and costs The experience of OECD member countries
Promoting a cost-effective government in terms of staff costs is the responsibility of the central ministries for budget and personnel, and central human resource management bodies such as Brazils Ministry of Planning are thus at least partially directly or indirectly responsible for the overall numbers and costs of public employees. In all OECD member countries, central budgetary ministries place spending limits on ministries and agencies, and in many countries the number and costs of public employees remain centrally controlled. As part of the general tendency to increasingly delegate human resource management to managers and directors of ministries and agencies, they have been accorded more room for manoeuvre and, in a few countries, are free to choose the number and grades of their employees, either within a general recurrent spending envelope or an envelope for the overall payroll. In addition to these managerial accountability rules and the limits imposed on ministries and agencies, many countries have implemented whole-of-government policies aimed at decreasing the size of the public service and increasing the efficiency of service delivery, including adjusting manpower through policy reviews and automatic productivity cuts. These instruments, if used properly, not only help think more strategically about human resource management, but also provide an avenue for good workforce planning and can help government be more efficient by using fewer personnel resources or by reallocating them to more strategic priorities. This is particularly important at the central and federal levels of government, which have vast numbers of policy staff and control agents who are easier to move around than those in service delivery bodies (notably health and education).
Productivity operations and policy reviews18

Many OECD member countries have carried out ad hoc productivity operations in times of fiscal stress. Some (e.g. Australia, the Netherlands, the United Kingdom, the United States) have also set up policy review procedures or programmes to monitor productivity in a more institutionalised setting or to review what savings could be made through restructuring and government reorganisation (e.g. Canada, France, New
84 1. WORKFORCE PLANNING AND MANAGEMENT Zealand). The procedures differ from sector policy evaluation, in that: i) they focus on savings; ii) they not only review, they also develop reform proposals; and iii) they take place under the responsibility of a co-ordinating ministry or body (e.g. Ministry of Finance, Ministry of Public Administration, Treasury, State Services Commission), rather than the sector minister. Decisions on personnel cuts should be taken from a strategic viewpoint and very carefully. As in Canada and France, they should be accompanied by other changes in personnel policy to enhance the attractiveness of the public employer, improve skills and competencies, and make mobility much more dynamic. Too often, cutbacks in staff numbers based on across-the-board targets and in the absence of policy reviews have resulted, a few years later, in increases in the number of staff and productivity losses due to the human costs of reforms and the loss of well-trained personnel, often in the most sensitive areas.
Automatic productivity cuts in the longer run

Other countries have used so-called automatic productivity cuts (APCs), which assume that the public sector can deliver the same output with fewer inputs each year, including personnel. When properly focused, APCs not only reduce public expenditures, they also tend to force ministries and sub-units to think more strategically about their workforce allocation and to plan for the future (OECD, 2009g). APCs use this rationale to cut operating budgets of agencies and/or ministries by the amount of the targeted/estimated productivity gains. The rate of productivity gains can be a forward-looking target (usually political) that is generally related to the estimated rate of growth of productivity in the private services sector or it can be re-calculated each year based on estimates and measures of past productivity gains, as in Sweden. Denmark changed from a flat 2% rate to an estimation-based system, but found that targets were the object of lengthy discussions and negotiations, resulting in a final rate very close to 2%; in the end, it re-established the flat 2% rate. APCs are usually applied across the board on operating expenses, but in Finland, rates may differ from one ministry or agency to another. Estimation of past productivity increases allows more room for differentiated rates according to sectors or organisations. Departments and agencies can always re-negotiate the scope of their tasks to avoid APCs and exceptions are granted through political negotiations. In Denmark, for example, APCs do not apply to multi-annual agreements, such as those concerning the police, defence, education, etc., so that 80% of total operating expenses are not subject to APCs.
The situation in Brazil

As mentioned, Brazils federal government is very centralised in terms of staff numbers and costs and has managed to maintain tight control on costs as a percentage of the budget and GDP over time. This has been achieved first through fiscal adjustment, which has maintained budget surpluses in recent years, although, as noted in the OECD Economic Review of Brazil (OECD, 2009d), this has been due more to increases in tax revenues than to decreases in expenditures. The study also argues that the contraction in personnel costs at the beginning of the first Lula presidency owes much to a rise in inflation following a sizeable exchange-rate depreciation in the run-up to the 2002 presidential election, coupled with nominal wage restraint in support of fiscal
consolidation (OECD, 2009d: 54). In addition, after the first competitive examinations for selection into the public service at the beginning of President Lulas first term, a good number of newly appointed staff left the public service right away because of low wages. The government has nonetheless established measures to control and limit increases in employment costs. These have included (Dias, 2002: 69): Registration by SIAPE of all civil servants and personnel in foundations and agencies, monitoring of holders of more than one job and of undue advantages, and implementation of an identification system which blocks payments over the wage ceiling. The fiscal responsibility law of May 2000 established principles and rules regarding public revenue, expenses, debt and properties, for the three levels of government. It imposes limits on personnel expenses as a percentage of net income (including pensions to retirees and dependants of deceased retirees) at 60% for all three branches of government and a specific ceiling of 49% for the federal executive. In addition, the rigid pay grids based on seniority in the centralised career system maintain strong ex ante control on expenses. A project to cap yearly increases in payroll spending at no more than 1.5 percentage points above inflation in the previous year awaits congressional approval (OECD, 2009b see Chapter 1).
Although the fiscal accountability law has had concrete effects mainly on states and municipalities which have not yet achieved what has been achieved at the federal level,19 the evidence points to an overall level of internalisation of the fiscal constraint in government that is very positive and will help alleviate some central controls. These caps and other employment level controls, while certainly necessary, are not strategic workforce planning tools. The cap aside, central controls do not have a very strategic view of workforce numbers and there are no processes for systematically seeking efficiency. Recent Brazilian history has shown, however, that when the government has decided to cut personnel costs, it has been able to do so through cuts in staff numbers and salary freezes. Under the Cardoso Administration, the policy was to decrease staff numbers, and these declined from 1995 to 2003, mostly through the non-replacement of retiring staff. Previously, the Collor Administration (1990-92) had carried out a large-scale decrease of public sector employees, with government-wide targets for staff decreases, dismissal of non-tenured personnel, reduction of commissioned jobs and people placed in availability positions with proportional compensation, and a salary policy that resulted in major losses of income for those remaining in the public service. Most public officials dismissed by the Collor Administration were later readmitted into the civil service.20 Since 2005, the number of civil servants has increased steadily, notably in education but also in the federal police, social security, tax inspectors, and public attorneys. Given recent strong economic growth, it is understandable that there has been little pressure for strategic thinking about efficiency in the workforce. Overall, although the government has managed over time to maintain the growth of personnel costs within limits, this has been done in a stop-and-go manner in the absence of a managerial approach to strategic workforce planning. Past blunt cuts have also left a
86 1. WORKFORCE PLANNING AND MANAGEMENT sense of anxiety and have probably made future attempts at decreasing staff numbers more difficult. It is also remarkable that the government has not taken a strategic approach to using casual staff and outsourcing to save costs21 (see Section 1.3). However, since the percentages have slowly increased over time, it can be assumed that bodies have used outsourcing in their own ways to follow individual necessities. Some use outsourcing as a way to put pressure on the Ministry of Planning to eventually replace those hired through outsourcing by regular staff and thus authorise new hiring.

Efficiency and cost effectiveness are not yet integrated as long-term priorities in Brazils workforce planning. The danger is that the federal government may continue its stop-and-go hiring policy although this is a blunt and non-strategic way to manage workforce numbers and costs. Such policies create a climate of insecurity in which staff focus on their immediate future rather than their work and result in cuts that may not be necessary in certain sectors. Moreover, they often lead to new hiring a few years later. Policy reviews are more appropriate instruments than such blunt policies, although they require careful attention and strategic capacity. The choice of implementing such reviews is not the object of the OECD Review of Human Resource Management. The way the job category system in the federal government has been implemented is such, however, that present decisions about staff hiring and allocation have long-term consequences beyond the most rigid practices in OECD member countries. Policy reviews could help put pressure on vested interests and soften the rigidities of the job category system. Following decentralisation of responsibilities to states and municipalities, policy reviews could certainly help determine human resource needs per policy and level of government and useful efficiency measures. Canadas experience (see Box 1.7) is helpful in this regard. The result in Brazil would not necessarily be a reduction in personnel numbers, but a strategic view of the allocation of the workforce across government priorities and a better understanding of future needs in terms of overall numbers and allocations. The governance arrangements and the accountability framework for managers in Canada could be a source of inspiration for Brazil, as well as the recent experience of general policy reviews in France. For its general review of public policies (see Box 1.8) France emphasises mobility of staff and career moves. A new mobility framework, new compensatory tools, the establishment of career management tools and career advisors, training tools, interministerial public employment exchanges (launched on 5 June 2008) and regional exchanges have been established. Regional platforms are being designed to encourage mobility within a single employment pool and to put personalised human resources management on a professional footing. To put such tools in place, Brazil, which, like France has a rigid career system, also needs measures to favour mobility across government bodies within a restructured job category system.
Box 1.7. Expenditure and Workforce Reduction in the Canadian Public Service in the 1990s
In February 1995, the Minister of Finance announced that the programme review would result in CAD 17 billion in reduced expenditures over three years. Many departments saw their spending levels cut by 20% or more. It was also announced that the review would result in structural changes to the public service, such as the commercialisation of air navigation services, the privatisation of the Canada Communication Group, the creation of new agencies such as the Canadian Food Inspection Agency, and the abolition or restructuring of some 120 government agencies. In the 1996 budget, the Minister of Finance estimated that second part of the programme review would result in further expenditure reductions of some CAD 2 billion by 1998-99. To facilitate departments implementation of the result of the programme review and other expenditure reduction decisions, the government approved two special departure incentive programmes for parts of its workforce for a three-year period to end in 1998, one for early retirement and one for early departure. The goal of these programmes was to minimise layoffs. The number of employees was reduced by 60 723, or 15.5% of the workforce. Based on a cost of CAD 4.2 billion and 60 000 recipients, the average cost per participant of the departure incentive programmes in the federal public sector was CAD 69 828 (EUR 48 000). This was relatively expensive compared to the private sector average of CAD 54 000 (-20%). The evidence shows that the incentive measures, as planned and designed, ensured that layoffs were kept to minimum of about 970 employees. A number of tools and mechanisms were put in place. The Treasury Board Secretariat developed an accountability framework for the management of workforce adjustments as well as a number of measures and tools. The tools included a managers guide and an audit guide on workforce adjustments. The proposed framework required an audit of the administration of the programme in midcourse and the provision of accurate, accessible, timely and reliable information, as well as a monitoring framework aimed at ensuring that incentive programmes were contributing to departments progress toward targets set out in their business plans. Committees were created, including union-management committees. Among the committees created were the National Joint Adjustment Steering Committee, the Committee of Departmental Workforce Adjustment Co-ordinators, and joint adjustment committees composed of management and union representatives.
Weaknesses general risks

The incentives had a negative impact on natural attrition in the Executive group and the Computer Systems Administration group but not in the Audit group, although the total departure rate for that group was relatively high. The management of workforce reductions for critical occupational groups such as Computer Systems or Executive, where there are shortages in some departments and surpluses in others, may require a more global approach than is used for core occupational groups in departments. Special interdepartmental mechanisms may have to be created to manage the process for critical occupational groups. Joint adjustment committees facilitated the placement of surplus employees among departments in the regions, but this mechanism was less effective in the National Capital Region.
Box 1.7. Expenditure and Workforce Reduction in the Canadian Public Service in the 1990s (contd)
The age structure of the public service has also been affected considerably, although the average age has remained substantially unchanged. As a group, the public service is now more middle-aged, the result of many older and more experienced employees having opted to retire or to leave the public service at the same time as many younger employees. The change in the age profile represents a significant challenge for the future and will require work on succession planning and recruitment. The employment profile of the public service, that is, the ratio of indeterminate staff to other forms of staff employment, has also changed, but it is not clear whether this will be temporary or lasting. For example, after an initial reduction, the number of casual and short-term employees increased. From 1994-95 to 1996-97, costs for contracting or consulting services increased relative to costs of salary and wages. Contracting and consulting services increased by some 14%, while salary and wages decreased by 9%. Some CAD 2.2 billion was spent on contracting and consulting services in 1996-97. Present efforts: Canada is currently undertaking another wave of reviews of programme spending over a four-year cycle to assess whether programmes are achieving intended results, are managed efficiently and are aligned with the governments priorities. These reviews assess all existing programmes and spending to ensure alignment with overall priorities and results, relevance, effectiveness, efficiency and economy, and decision-making based on objective evidence-based information.
Source: Scott-Douglas, Roger (2009), presentation given to the 5th Regional Meeting of the Working Group on Civil Service and Integrity, OECD-MENA Initiative, Rabat 16 June 2009; and contribution by Tatyana Teplova, peer reviewer from Canada.
Considering Brazils difficulties in terms of strategic workforce planning, APCs should probably not yet be implemented. Once more strategic workforce planning has been implemented and the government is sufficiently confident that its workforce is optimally allocated, APCs might be put in place to force productivity improvements and diminish the costs of its workforce.
1.5. Salary setting and careers The experience of OECD member countries
Pay is of course an important part of workforce planning and an important part of cost reduction strategies. A good pay-setting process should make possible: pay levels that reflect different levels of skills, competences and performance; pay levels that make public service jobs attractive to well trained and motivated staff; pay levels that are economically sustainable.
Box 1.8. Frances General Review of Public Policies (RGPP): consequences for human resource management
The role of the RGPP is to review what the government is doing (what services for what purposes and what beneficiaries), what the needs and collective expectations are, whether the same things should continue to be produced, who should do so, who should pay and whether they can be done more cheaply, and finally what scenarios for change can be envisaged. Chaired by the French President, the Public Policy Modernisation Council (Conseil de modernisation des politiques publiques CMPP) brings together the government and the members of the monitoring committee. It is the body that approves the decisions made by the monitoring committee (and sub-ministerial groups and auditing committees). It sets guidelines and defines the stages in the process. The Minister for the Budget, Public Accounts and the Civil Service is its general rapporteur. The CMPP has met three times: 12 December 2007, 4 April 2008 and 11 June 2008. All RGPP measures adopted by the Public Policy Modernisation Council are mentioned in the 200911 Multiannual Sectoral Estimates Act. Many CMPP decisions have an impact on human resources: changing the scope of missions (e.g. MEEDDAT: development of activities concerning sustainable development and withdrawal from competitive public engineering), removing structures (e.g. contraction of central administrations), streamlining organisations (e.g. reform of decentralisation), streamlining organisations operations, and streamlining procedures. Each ministry defines and implements an HR action plan within the framework of the social dialogue to follow up decisions made by the CMPP, and optimises career management within the corps in the ministry, taking account of the challenges posed by the new territorial organisation. Each departmental prefect defines and implements a new organisation chart for state departmental services within the framework of the social dialogue, optimises the organisation of human resources management through pooling, and keeps staff and trade unions informed about RGPP actions. Each regional prefect supports the implementation of the General Review of Public Policies, implements initiatives to pool human resources management, encourages the local mobility of staff, and keeps staff and trade unions informed about RGPP actions. The government-wide unit in charge of personnel management in the Ministry of Economy and Finance (DGAFP) contributes to the necessary changes in human resources management, provides support and tools to those responsible for RGPP measures, and prepared the 200811 action plan. The action plan for implementing the CMPPs decisions must be prepared by each ministry with a specific framework and with the involvement of trade unions and staff, while seeking to reconcile the interests of the services and the wishes of staff in terms of career paths and attempting to find the most acceptable solutions in terms of employment relations (new mobility tools). The RGPP effort has been accompanied by wider human resource management reforms including a new mobility framework, new compensatory tools, the establishment of career management tools and career advisors, training tools, inter-ministerial public employment exchanges (launched on 5 June 2008) and regional exchanges. Regional platforms are being designed to encourage the development of mobility within a single employment pool and to put personalised human resources management on a professional footing.
Source: Clergot, Philippe (2008), presentation given at the Annual Meeting of the Public Employment and Management Working Party, OECD, 4 December, Paris. OECD (forthcoming), OECD Public Management Review Greece.
90 1. WORKFORCE PLANNING AND MANAGEMENT Pay setting in OECD member countries varies tremendously. In some countries it is totally decentralised to ministries and agencies, which decide the pay scales for each position; in others it is entirely centralised at least for base pay. While decentralising base pay is an attractive option, it is very difficult to implement and requires, to be effective, that the gains from decentralisation exceed the increased transaction costs and the difficulties engendered by differences in pay across ministries. In any case, the decentralisation of pay is hard to envisage in a career-based system as it would undermine mobility across government organisations. The situation regarding maximum increases or set increases for all government employees varies depending on the country and on the economic, social and political atmosphere. In addition, over the years, the percentage of base pay in overall pay has decreased, thus effectively allowing more differentiation per organisation and per career. Most countries undertake annual pay reviews, although Germany, Ireland and Sweden have varying multi-annual pay reviews and Italy has them twice a year. In, Japan, Korea, Mexico, Switzerland, and the United States, pay is not negotiated, but elsewhere it is at least partially negotiated for the whole of government (except in Australia, New Zealand). Only in a few countries is pay indexed to inflation. Criteria for pay increases have generally become more flexible and include the economic situation and private sector pay, among others. Countries mechanisms for large pay reviews are sometimes implemented by outside consultants. They compare public sector pay with similar groups in the private sector. It is important to keep in mind that in most countries less-skilled workers tend to be better paid in government than in the private sector, while senior management is underpaid compared to the private sector. However, a number of advantages in public-sector employment are considered to make up for a degree of pay difference. These usually include a higher level of job security (in legal terms or in reality), possibilities of training and competency development, horizontal careers, and, for senior management, a gratifying sense of serving citizens and being close to the centre of power. The United Kingdoms experience with total rewards (see Box 1.9) shows governments increasing willingness to underscore the package of advantages that government employees receive and to try to cost these benefits. Countries such as Ireland have managed to tie pay increases to the implementation of reforms in the public service.
The situation in Brazil Pay-setting process

In Brazil, pay setting in the federal government revolves around two main factors: A strong commitment not to affect the main macroeconomic indicators, including debt and inflation, owing to the countrys recent hyperinflation and deficits. This is a self-imposed restriction. The Constitution mentions, however, that an annual review of salaries should take place to adjust salaries on the basis of inflation rates. This has not been implemented.
A career-by-career pay-setting process that examines each career closely, and a willingness to decrease pay compression, i.e. to increase the difference between higher and lower wages within a career, because during the second half of the 1990s, compression had increased to the point where the word career was losing its meaning (Dias, 2002). The government has made very clear that they have increased pay for many job categories because many of them, due to the management in previous government, were lagging behind others and lagging behind increases for similar positions in the private sector.
Today federal government base pay represents approximately 40% to 60% of public servants remuneration, with the rest due to a myriad of differentiated benefits. Performance-related pay is mentioned as representing the largest part of the remaining remuneration, although, in spite of real achievements in the conduct of performance evaluations in some areas of government, in reality it appears in many cases not to be performance-related but guaranteed additional pay (although there are reports of some public servants not getting the full benefit because of insufficient performance). This is not an uncommon experience as performance-related pay is extremely difficult to implement even in countries with solid performance management systems, and many of the latter have even decided not to implement performance-related pay yet.22 A recent change in the pay structure has also decreased performance-related pay when base pay was lower than some benefits. Like the rest of workforce planning, pay setting is centralised by the Ministry of Planning and the presidency, although increasingly based on a dialogue between different units in the Ministry of Planning and with sectoral ministries. The first part of the process is carried out by the SOF (Budget Secretariat) which determines, based on economic and budgetary projections, what can be allocated to public servants. Line ministries are then involved, with some only at the margin, and others powerful enough to impose their views. By doing so, they also undermine attempts to establish a coherent salary setting process for the whole of government. Recent years have seen only two general increases in pay, one in 2001 of 3.5% and another in 2003 of 1%. Since the Cardoso Administration, the Ministry of Planning has been assessing whether pay in a job category is adequate by using as comparators mostly other categories in the same branches, other categories, similar categories at other levels of government, and a degree of comparison with the private sector. These are improvements worth underlining, even if the road to full rationalisation of salary setting is still long. The government mentions that certain careers have not had salary increases for a number of years and are falling behind other careers. Some call the pay-setting process a patchwork exercise. Unfortunately, despite these significant improvements in the governance of salary setting, salary levels in one job category still seem to be disproportionately guided by the need to catch up with salaries in another job category, and to vary according to the political strength of the various groups. With a centralised job category by job category pay-setting process, in which job categories are used by individual organisations to attribute advantages to different types of staff, Brazil accumulates the disadvantages of a decentralised system, i.e. the absence of a whole-of-government perspective, and not always legitimate differentiated levels of remuneration across job categories and ministries without the advantages of a decentralised system, i.e. the delegation of managerial responsibility to managers and directors of ministries and agencies. Even for ministries, departments and agencies, there are reports of similar positions with different pay scales.
92 1. WORKFORCE PLANNING AND MANAGEMENT Apart from the perspective of equity, there are also reports of broken salary hierarchies, with an unclear correlation between salaries paid and organisational responsibilities and hierarchy (Marconi, Carrillo and Cavalieri, 2004). This has led to an excessive number of components in the salary structure and the increased use of fringe benefits to compensate for the deficiencies of the pay-setting process. There are, in addition, around 170 different plans for performance bonuses, which as described above, would require an extraordinarily sophisticated management system that many OECD member countries with strong public service systems do not have, and extraordinary efforts and attention that may in any case be better used for other purposes. In too many settings, these bonuses have become part of regular pay although organisations differ widely in their attribution of performance pay according to good performance assessment processes. This reward system overall increases the opacity of the pay system that remains based too much on additions of layers of benefits and comparisons than on a fundamentally rational level of pay that is commensurate with the needs of the public service in terms of its quality, its attractiveness and the motivation of public servants.
Attractiveness
Regarding the attractiveness of the public service, Brazil does not seem different from some OECD member countries with career-based systems. An analysis carried out in the early 2000s shows that public sector salaries, especially in the federal government, are very favourable compared to pay conditions in the private sector (this is less clear for the state level and even less so for municipalities). When taking sectors into account, and thus levels of education, the public-private-sector wage gap still exists, although to a lesser degree (Foguel et al., 2000; Marconi, 2004). Data and analysis are lacking for the end of the 2000s, notably after the late Cardoso and the early Lula years during which civil servants at the federal level experienced a net loss of pay. In Brazil, pay disparities in the larger economy between higher and lower pay and across professions vary more than the average in OECD member countries. As a result, for certain professions, the government has difficulty recruiting. The Ministry of Education, for example, reports that whereas 168 new recruitments were authorised in 2008-09, only 81 positions could be filled because of difficulties in recruiting staff such as engineers or computer scientists. It is difficult to conclude whether salaries are the heart of the problem or whether the lack of career opportunities for such staff, who, in a less rigid career system, might reach the top managerial levels of their organisations, most discourages them from entering public service. The situation is said to be critical for senior civil servants, although this is the assessment of senior civil servants themselves and should be treated with caution. There is no clear evidence that lower salaries have created difficulties for hiring high potential staff who can become senior civil servants, and no evidence that they have undermined motivation at the highest level of government. Recent pay increases in certain elite careers have made salaries very competitive in such categories of public servants. As in most countries, senior managers respond to a complex array of incentives, including career opportunities and proximity to politicians. Considering the inequities in Brazil between low and average salaries and the salaries of the best paid workers, closing this gap is quite inconceivable, and not necessarily socially acceptable. It is also possible that it may not even be necessary if government is able to attract the right skills at senior management levels.
Unless there are proven difficulties for attracting good personnel and promoting good managers, the experience of OECD member countries has often shown that managers are attracted to public sector jobs for career opportunities, lifelong benefits (pension, leave) and prestige. A good analysis of these factors is needed before setting pay for each employment category.

The federal government pay-setting process suffers from two structural weaknesses: Despite recent impressive attempts at rationalising pay increases that should be praised, salary levels still lack in practice a solid strategic basis based on a systematic analysis of what salary levels should be, considering various parameters (attractiveness of pay, social acceptance of high salaries in the public service, other benefits of government employment, including prestige). Salary setting is still subject to lobbying pressures from various groups that further increases the fragmentation of the job category system.
The federal government could first attempt to establish the total real compensation of employees as compared to similar groups in the private sector, as is done in Canada or the United Kingdom. The Canadian 2006 review of the federal public sector compensation policy and comparability intended to give ministers and senior officials, as well as other stakeholders an accessible, integrated and coherent presentation of the federal public sector compensation field in all its complexity. It covered 351 000 staff (of which onequarter were Canadian military forces) out of about 500 000 employees. It included components such as salaries and wages, performance pay, recruitment and retention allowances, all allowances and premiums, overtime, retroactive payments, pensions, employer life and disability insurance premiums, employer payments for health and dental plans, severance pay, all leave usage and cash-outs of unused leave entitlements. The review concludes on the comparability of salaries and other benefits, and calls for many changes in the governance and management of employee compensation. In the United Kingdom, financial constraints in the wake of the financial crisis mean that the government has had to focus on other elements of the reward package. The total rewards strategy is a response to this challenge. In the past decade or so, pay policy has been concerned primarily by the influence on the macroeconomic situation (inflation and deficit) or by the balance across job categories. It would now be worth furthering present efforts to develop a view of pay that is also based on human resource concerns. The government should take into account not only macroeconomic issues but also attractiveness, transparency and changes in society that will affect pay policy (ageing of the public service, changes in the labour market). This would help build a long-term view of pay levels and help develop a strategy. Rather than focusing on performance pay, the government should focus its efforts on comparability with private sector employment, social acceptance, and a level of pay that is compatible with high integrity.

Figure 1.15. Total rewards in the United Kingdom
Source: McDonald, Paula (2009), presentation given at 5th Regional Meeting of the Working Group on Civil Service and Integrity, OECD-MENA Initiative, 16 June 2009, Rabat, Morocco.
The second priority for the federal government will be to improve its pay-setting process to avoid the costly job category by job category approach, which, as mentioned, combines the negative aspects of a centralised and a decentralised pay-setting process. While it is not desirable to recommend a fully centralised whole-of-government pay process, Brazil could probably implement a two-level process, with separate timing for the two parts: First, the government would determine an envelope for pay increases for the entire public service based on budget predictions, and, importantly, on the conclusions of total rewards studies. Depending on the results, it could, or could not, set a whole-of-government increase. At the same time, the Ministry of Planning could establish a pay negotiations framework for ministries and agencies to follow, although the remuneration for exactly similar positions across government organisations would have to be negotiated in a horizontal or coordinated manner. Bargaining parameters can be much more detailed in a country like Brazil which may wish to limit ministries and departments room for manoeuvre. The parameters should be used to increase transparency in the paysetting process, to establish priorities for the whole of government and, also, to a certain extent, to provide a framework for negotiations with unions and other representatives of the workforce. Second, negotiations could take place between sectoral ministries and the Ministry of Planning on decisions about increases by job category. Extreme care should be taken to avoid sectoral fragmentation and base these negotiations on job categories that involve all concerned ministries and organisations. These decisions should be based on sound studies of pay levels in each job category and a sound methodology. In the much longer run, when the job category system has been reorganised, negotiations could follow bargaining parameters to be established by the Ministry of Planning. Examples of bargaining parameters in Australia and New Zealand are described in Boxes 1.9 and 1.10.
Box 1.9. Australian bargaining parameters

1. Agreements are to be consistent with the governments workplace relations policies. These include: i) compliance with the Workplace Relations Act; ii) direct relations between employers and employees; iii) protecting freedom of association; iv) simple, principles-based agreements; v) making Australian Workplace Agreements available to all staff; and vi) giving employer and employees primary responsibility for resolving workplace disputes (including industrial action). 2. Improvements in pay and conditions are to be linked to improvements in organisational productivity and performance. Other than in exceptional circumstances, pay increases are to apply prospectively. 3. Improvements in pay and conditions are to be funded from within agency budgets. 4. Agreements are to include compulsory redeployment, reduction and retrenchment provisions, with any changes not to enhance existing redundancy arrangements. An agency minister may, in consultation with the minister assisting the Prime Minister for the public service, approve separate financial incentives to resolve major organisational change. Such incentives are to be cost-neutral to the agency in the context of the major organisational change. 5. Agreements are to facilitate mobility across the public service by: i) maintaining structures that are consistent with the Classification Rules, with salary advancement to be guided by performance; and ii) retaining portability of accrued paid leave entitlements. 6. Agreements are to include leave policies and employment practices that support the release of defence reservists for peacetime training and deployment.
Source: Slightly edited version of the original document Workplace Relations Policy Parameters for Agreement Making in the Australian Public Service, cited in Rexed, K. et al. (2007), Governance of Decentralised Pay Setting in Selected OECD Member Countries, OECD Working Papers on Public Governance, 2007/3, OECD Publishing, Paris.
Box 1.10. New Zealand bargaining parameters

General government policy on remuneration is: Departments remuneration systems should be focused on contributing to achieving outcomes and maintaining/improving output performance by: i) developing and maintaining the organisational capability to achieve the outcomes set out in their statements of intent; ii) providing incentives and opportunities for employees to develop the required skills/expertise, and/or to improve performance. The government should pay levels of remuneration that are fair (to employees) but not extravagant (in fairness to the taxpayer). Remuneration systems must be fair and transparent and linked to a transparent and fair system for adjusting salaries to reflect increases in skills/competence (whether generated through experience or training), and/or improved performance. Remuneration principles should be agreed with employees and unions. In general, the government expects that minimum pay rates will be a matter for negotiation and that, unless there is a good reason not to, these will be included in the collective agreement.
Box 1.10. New Zealand bargaining parameters (contd)

The government does not generally favour remuneration systems which allow salary progression solely for time spent in the job in general, it is expected that progression beyond the minimum rate be based on merit. Departments should set remuneration levels taking into account:
market demand for the relevant skills/capabilities, experience, and responsibilities; recruitment and retention factors; ability to pay within approved baselines; comparisons with other groups within the department; any government policies, from time to time, aimed at achieving wider outcomes for
employees generally or for particular groups of employees, for example policies and processes relating to pay and employment equity;
other factors relevant to the particular department.

Employment agreements should contain provisions setting out what happens in restructuring and redundancy situations. This should include a technical redundancy clause so that staff who are offered positions in a new agency (and their terms and conditions of employment remain largely unchanged) will not be entitled to redundancy payments. Departments must get State Services Commission approval before developing proposals to relax current sick leave provisions through the introduction of open-ended sick leave. Departments must consult with the State Services Commission prior to developing any significant proposals:
to significantly improve annual, parental or other leave entitlements; to significantly improve benefits or employee entitlements under the State Sector
Retirement Savings Scheme or to otherwise provide for (or alter arrangements for) other superannuation or retirement-related payments;
regarding allowances or pay differentials for employees in particular localities/regions; regarding pay and employment equity initiatives
Source: Edited excerpt from The Governments Bargaining Parameters, cited in Rexed, K. et al. (2007), Governance of Decentralised Pay Setting in Selected OECD Member Countries, OECD Working Papers on Public Governance, 2007/3, OECD Publishing, Paris.
1.6. The role of unions The experience of OECD member countries23

In recent years, there has been an extension of collective bargaining in the public sector, following the alignment of employment conditions in government with those of the public sector and the changing role of government. The unilateral setting of employment conditions by the public employer is being replaced little by little by more collective bargaining (Ministre du budget, des comptes publics et de la fonction publique, 2008b; OECD, 2006b). In addition, in relatively flexible public employment systems, the tendency in recent years has been to delegate collective bargaining to
directorates or units. This is not a simple issue as decentralisation of pay setting brings a new array of challenges for maintaining coherence in salaries and cost restraints. For example, in the Netherlands, the public sector has 12 or 13 bargaining sectors, in the United Kingdom, there are 90, of which four major ones, while in Finland, there can be up to 57. In many countries, however, centralised and delegated systems now co-exist, and in career-based systems, collective bargaining tends to be less extensive and not necessarily legally binding. Even in delegated systems, there is some whole-of-government coordination, either through the human resource ministry or a special body such as the Swedish Agency for Government Employers (SAGE). In addition, in Australia and New Zealand, coherence is ensured by a set of common bargaining parameters and a remit process, while in countries such as Denmark, Finland and Sweden, a central agreement is followed by a second level of agreements (OECD, 2006b). In terms of the institutional strength of unions, most OECD member countries have allowed the largest part of their public service to unionise, although Korea and Mexico have important restrictions. However, the right to strike is more limited, with exceptions in many countries for the judicial service and security forces or civil servants involved in state security or some senior civil servants, and minimum rules of service in a number of sectors. In countries, such as Hungary, Ireland, Italy, Korea, Japan, Mexico, Poland and the United States, the right to strike is very limited or forbidden (OECD, 2006b). The rates of unionisation vary between 30% and over 90% in OECD or EU countries; in a number of countries, unions are partially or totally funded with public funds. Collective negotiations on working conditions and wages and remuneration take place in most cases, whether mandatory (as in Finland, Hungary, the Netherlands, Norway, Spain) or not (Austria, Belgium, France, Ireland, Japan). Some agreements are binding collective agreements, others have to be implemented by law, others are political commitments, and still others are voluntary collective agreements.

As elsewhere, labour relations in Brazil are the result of a complex history and most importantly of a relatively recent return to democracy. The rate of unionisation in the federal government (excluding public enterprises) is relatively high, at around 55% (including retirees). The Constitution guarantees every public servant (excluding the military) the right to unionise and the right to strike,24 with minimum service rules in the sectors of security, health and transport. While the Constitution provides for the right to negotiate in the private sector, there is no mention of it for the public sector. Until 2003, there were no systematic negotiations with unions in the public service. Since 2003, when the government established the permanent negotiation table, 77 agreements have been signed, including 33 in 2008 alone. The 2007-08 agreements resulted in annualised financial impacts of BRL 7.6 billion in 2008 (EUR 2.8 billion), BRL 21 billion in 2009 (EUR 7.8 billion) and BRL 29.1 billion in 2010 (EUR 11.4 billion), covering 1.3 million civil servants.
98 1. WORKFORCE PLANNING AND MANAGEMENT Negotiations are reported to mainly concern base salary and social benefits, but some discussions take place on additional remuneration, work conditions, the employment framework and the introduction of new management tools. There are also discussions of how collective negotiations can lead to improvements in society. Negotiations are completely centralised, the results are not legally binding, and have to be voted into law to be implemented. Compared to other countries, and especially compared to countries with more traditional career-based systems, the collective negotiation process is rather open and relatively less confrontational. It certainly offers an opportunity to build a constructive dialogue. Because pay is managed on a career by career basis, the situation in Brazil is relatively unbalanced. Negotiation processes for the whole of government are weak and there is no decentralised process. The process is in fact so centralised that the ministry in charge of managing the specific career is not necessarily invited to the negotiation table. This is probably one of the reasons behind the proliferation of unions: there are more than 300 today for the federal public service. The result is probably continuing long-term upward pressure on salary costs owing to competition among unions on salary and compensation increases and to a strengthening of the trend of differentiated payments for careers. Drawing on lessons from OECD member countries, and considering the centralised division of responsibilities in the government, it is likely that the federal government would gain by developing a wholeof-government negotiation process on general matters and a vision of the future public service. The job category by job category negotiation process could then take place according to these principles and general agreements.

The Irish partnership approach (see Chapter 4), with first a collective agreement that sets out the basis for an institutional framework for labour relations in the public sector and agreements on a modernisation agenda that includes pay increases (to be attributed when the conditions of reforms have been met) is certainly an approach that could usefully be considered by Brazil. This approach has helped modernise the Irish public service, while reinforcing the role of unions. Indeed, with relatively new labour relations in the public service, it would be interesting to establish a framework for collective negotiations agreed by all stakeholders. It is also an opportunity to establish a framework that puts pay negotiations and increases in the context of other possible reforms. Linking pay increases to the achievement of reforms is an idea that could be negotiated in subsequent rounds of reforms (see Chapter 4). In addition, the government has to choose the kind of system it wants to use for pay increases. Centralised job category pay setting, as mentioned earlier, is probably a rather unsustainable solution.
1.7. Adjusting an ageing public service to an ageing society The experience of OECD member countries25
In the longer term, the public sector must respond to the changing demands of an ageing society. At the same time, civil servants are themselves ageing and the retirement of a large number of experienced staff in the relatively near future must be managed.
Significant staff departures are an opportunity to bring staff with new skills into government, decrease staff numbers and staff costs (entry level salaries are lower), and change the allocation of staff across sectors. However, they are also a challenge, because they mean the loss of key capacity and the need to postpone the retirement of some key staff.
Figure 1.16. Percentage of workers aged 50 years or over in the central/federal government in OECD member countries (2005 and 1995) and in Brazil (2005 and 2008)
Iceland Sw eden United States Norw ay Spain Portugal Finland Canada France United Kingdom Netherlands Japan Austria Germany Australia Korea Ireland Turkey
Brazil 0 5 10 15 1995 20 2005 25 30 35 40 45
%
2008 (Brazil)
Source: Data for Brazil and OECD member countries are from the OECD 2006 Survey on Strategic Human Resource Management. Data for OECD member countries published in OECD (2009c), Government at a Glance 2009, OECD Publishing, Paris.
OECD member countries experience shows that only a few countries have devised strategies that take advantage of the opportunities created by an ageing civil service. The OECD strongly recommends that countries with rapidly ageing public services adopt such strategies quickly so as not to waste the opportunity created by large departures and be faced with major institutional memory losses and major pension costs. Such strategies should address the challenges of maintaining capacity in government without creating tensions on the labour market, while reducing costs and reallocating resources and staff across priorities areas (i.e. adapting public services to the ageing of society).

Like that of many OECD member countries, Brazils public service is ageing rapidly and much more rapidly than the wider labour market, although the general population is ageing less rapidly than in most OECD member countries (however, as in Ireland, this is
100 1. WORKFORCE PLANNING AND MANAGEMENT changing fast). This situation provides Brazil with a unique historical opportunity to adjust its workforce using lessons learnt from OECD member countries. The challenges and difficulties are widely ackowledged by the Brazilian government, although an ageing society is a new phenomenon in Brazil and has not received as much attention as it has in many OECD member countries.
Figure 1.17. Percentage of workers aged 50 years or over in central/federal government and the wider labour force
2005
Belgium Iceland Italy Sw eden Greece United States Hungary Norw ay Spain Portugal Finland Canada Sw itzerland France United Kingdom Netherlands Japan Austria Germany Mexico Luxembourg Australia Korea Ireland Turkey
Brazil (2005) Brazil (2008)
10
15
20
25
30
35
40
45
50 %
Total labour force
Central government
Source: OECD (2008b), The State of the Public Service; OECD (2009), Government at a Glance 2009; data for Brazil come from the OECD 2006 Survey on Strategic Human Resource Management.

Like many OECD member countries, Brazil has not yet addressed the issues raised by an ageing public service. The level of future recruitments makes it especially important to modernise the recruitment and career systems, as the government will be hiring large numbers of staff who will probably remain in government throughout their career. Improved workforce planning will be necessary. Specific measures for retaining senior staff and preparing for a good transition between departing staff and incoming staff will also be necessary.
Figure 1.18. Proportion of workers at the national/federal level aged between 40 and 50 years and over 50 years
%
45 40 35 30 25 20 15 10 5 0 40-50 40-50 40-50 40-50 40-50 40-50 40-50 40-50 40-50 40-50 40-50 40-50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 above 50 40-50 above 50 2008 (B razil) 2005 1995
J apan
Norway
S weden
F inland
UK
US A
K orea
Australia P ortugal
Ireland Netherlands Aus tria
B razil
Source: OECD (2008b), The State of the Public Service; OECD (2009c), Government at a Glance 2009; data for Brazil come from the OECD 2006 Survey on Strategic Human Resource Management.
Lessons from OECD member countries show that human resource policies to address ageing should include a complex array of tools for retaining older workers beyond retirement age, improving recruitment especially in areas where there will be skills gaps, attracting good young graduates, developing fast-track careers to fill in gaps in management and senior management positions, and of course adapting the pension system to the new ageing challenges. An ageing public service is not only a challenge but also a good opportunity to restructure the workforce. OECD member countries are well aware of this, and it is understandable that some workforce planning and competency management initiatives have been pushed ahead in light of the coming opportunity to adjust the workforce to the future needs of society. The federal government in Brazil has a unique opportunity to change the composition of its workforce and make reallocations across sectors through good workforce planning.
1.8. The Brazilian public services pension system The experience of OECD member countries
A particular problem for an ageing civil service is the fact that public service pension schemes have traditionally been more generous and less well-funded than private-sector
102 1. WORKFORCE PLANNING AND MANAGEMENT schemes (OECD, 2007c). Moreover, an ageing public service tends to be more costly as it includes more senior staff on average. At present, over half of OECD member countries have special pension schemes for public servants. They generally tend to be more generous than schemes for private-sector workers. However, public-sector pension schemes are being reformed largely to address concerns about affordability in the face of ageing populations. Financial issues and changes in public-sector employment are at the heart of the reforms in a number of OECD member countries. The measures adopted by countries have not generally sought to overhaul old-age pension schemes completely but to ensure the long-term survival and thus the financial viability of pay-as-you-go schemes. Reforms aim to limit the rise in compulsory levies and to make schemes more contributory. One of the trends in public-sector pension scheme reforms is to do away with the special status of public-sector employees in favour of equal treatment for all workers. This has been done by extending ordinary law to civil servants and therefore giving public and private sector employees the same status. Pension scheme reforms have also meant reassessing the welfare benefits of public employees. The generosity of the pensions is being contested as public sector pension schemes are generally based on final salary rather than contribution, provisions for early retirement, and generous recognition of non-contributory periods such as childcare and education. In many OECD member countries the social welfare protection afforded to public-sector employees is generally considered more advantageous than that of the general population. This is the case in Belgium, Denmark, Germany, France, Japan and the Netherlands.
Reforms
OECD member countries use a wide variety of methods to reform pension schemes but the underlying objectives are often the same. Some of these methods are described below. Revision of the formulae for calculating old age pensions. Contribution periods have been extended to 40 years in a large majority of OECD member countries. Reforms are generally implemented gradually, with a preference for long transition periods involving the co-existence of different systems of calculation, therefore complicating the determination of retired workers pension entitlements. Extensions of contribution periods have often been accompanied by cuts in pension benefits and the calculation formulae have been changed to align them with rules applying in the private sector. As a result, final salary is increasingly being replaced by average salary, or even by average lifetime earnings so as to encourage people to remain in formal employment. Raising the retirement age. Changes to how pensions are calculated have in many cases been accompanied by changes to the rules for eligibility. The age at which pensions may be drawn has been raised in most OECD member countries. In the Netherlands, the age has been raised from 62 to 65; in Austria and Portugal from 60 to 65; and in Finland from 63 to 65. Most countries have harmonised retirement ages for men and women. Normal retirement age is also increasingly being replaced by a minimum age. For instance, in Sweden it will be possible to draw a pension at age 61 if the individual has made the requisite number of contributions for entitlement to full pension.
Reduced compensatory entitlements. Women are in many cases entitled to particular benefits to compensate for their low labour market participation and modest earnings compared to those of men. The purpose is to ensure that older women have an adequate standard of living. However, a number of countries are cutting those benefits, arguing that womens participation in the labour market has increased. In Sweden, for example, survivors pensions were gradually abolished. In Austria, a womans individualised survivor entitlements are suppressed if her other income is sufficient; previously, a woman was entitled to 60% of her late spouses pension. In the Netherlands, survivors benefits have been cut in half. These provisions aim to encourage women to enter the labour market. Limiting early retirement. OECD member countries such as the Czech Republic, Denmark, Finland and the United Kingdom have taken steps to restrict eligibility and limit access to benefits such as disability or sickness in pension schemes due to increases in the number of beneficiaries. The institutional structure of pension systems and other benefit schemes has often encouraged individuals to withdraw from the labour market prematurely. In many OECD member countries, early retirement is possible but strictly regulated, if not sanctioned. The intention is to discourage workers from retiring early by reducing their pensions by a percentage proportional to the missing years of service. This is the case in Finland, France, Germany, Hungary, Italy and the Netherlands. Encouraging deferred retirement. In response to the challenges posed by an ageing population and civil service, many OECD member countries have altered their policies on early retirement and now seek to retain older workers. Governments are introducing financial measures, such as bonuses, to encourage public sector employees to remain on the job longer. The generosity of the bonuses varies, and they do not always enable a maximum replacement rate. The Austrian government, for instance, has instituted financial incentives for deferring retirement beyond the normal age. Government employees can collect 2% more for each additional year they work, although pensions are capped at 90% of the final salary. At the same time, the pension annuity can vary according to the contributors age. Rates have been set in a number of countries in such a way as to keep government employees on the job, as early retirement can bring about a reduction in these rates. Development of funded schemes and contributions by civil servants to their pension schemes. In a number of OECD member countries, the state seems to be partially withdrawing from participation in mandatory schemes through the development of occupational schemes or supplemental pension plans as a way to limit government funding of pensions and benefit-related expenses but also to compensate for the declining level of worker pensions, in the public sector in particular. In some OECD member countries, the high replacement rates that public employees obtain from their basic pension do not justify the institution of supplemental schemes. At present, the replacement rate varies between 60% and 100% of final salary in Belgium, Finland, France, Greece, and Luxembourg. Thus, basic pensions account for the bulk of retirees incomes. In fact, in France, the statutes governing civil service pay explicitly preclude payment of contributions to a supplemental scheme.
Challenges
In OECD member countries, like Belgium, France, Japan and New Zealand, the majority of pension reforms are adopted within the framework of policies linked to active ageing as they attach importance to employee retention.
104 1. WORKFORCE PLANNING AND MANAGEMENT In many OECD member countries the composition of the public sector is changing. Some countries are moving away from the notion that the public service provides a job for life. Lateral hiring is increasing at all stages of careers, and the use of part-time, temporary or casual employees is growing, as in Australia. This reflects the desire to make public employment more flexible. Recourse to temporary work is also sometimes justified by the need to recruit skilled labour to perform certain tasks in the civil service, as in Japan. However, pension reforms have not generally targeted atypical staff in particular. This is because some countries make no distinction between permanent and other workers. Mobility between the private and public sectors, depending on the direction, may be facilitated or hindered by the pension system. Mobility is encouraged as a way of enabling private sector workers to join the public sector easily, and their experience may be sought for specialised tasks in the public sector, as in Australia and Belgium. The situation is different for public employees wishing to join the private sector either temporarily or permanently. In Austria, Finland, France, the Netherlands, Norway and Sweden, there are special rules for public employees, and mobility between the two sectors is facilitated by bringing the relevant legislation closer together or even harmonising it to facilitate the transition from the public to the private sector. In the case of mobility within government, pension rights are generally maintained, as the official remains employed by the civil service. A problem arises when an official leaves the public sector to work permanently in the private sector. This is because in countries where public employees contribute to a special scheme, the benefits paid are more generous than those paid in the private sector. Thus, basic pension rights are often not transferable because the schemes are incompatible. In Norway, for instance, there are no regulations at present providing for the transfer of rights between the private and public sectors. In Belgium, the different pension schemes are in theory completely independent, and if a person has had a mixture of careers, pensions are calculated separately by the various schemes. Pension reform has not, as yet, fully addressed the issues raised by workers who would join the public sector if they could work flexibly. Such employees, often those with care responsibilities, typically seek contract or part-time work and may need extended periods of leave. In countries with special schemes for public servants, the schemes are generally not well suited to employment flexibility. The desire for increased employment flexibility means that it should not be assumed that once such workers are recruited, government will wish to retain them for the rest of their working lives. Public pension schemes generally penalise mobile workers through long vesting periods and reduced pension entitlements for those who leave the scheme early. Thus, defined contribution schemes, widely used in the private sector, have the advantage of more easily accommodating employment flexibility and mobility.
The situation in Brazil Social security in Brazil the current structure

In Brazil, there are four main social security regimes: the general regime, the social security regime for civil servants, that for the army, and the complementary pension funds.
The general regime (social security regime for private sector workers, RGPS) is a mandatory pay-as-you-go pension system financed by payroll contributions of workers and employers in the private sector and administered by the National Institute for Social Security (Instituto Nacional do Seguro Social, INSS). Pensions are paid to workers aged 65 (men) and 60 (women) in urban areas, and to those aged 60 (men) and 55 (women) in rural areas, after a minimum period of 15 years of contribution. The length of contribution is 35 years for men and 30 for women. Those that achieve this length of contribution can retire early, but full pension is attributed only when the retirement factor of 1.0 is reached. In general, for someone that contributed for 35 years after entering the labour market at age 18, the retirement factor of 1.0 is only reached at age 59.26 Employee contributions range from 8% to 11% of payroll and employers contribute a flat 20% of payroll. The mandatory social security scheme for civil servants (RPPS) is managed by federal, state and municipal governments, and that of the armed forces and the military police by the federal government (armed forces) and by state governments (military police). It does not cover employees in state-owned enterprises, political agents, temporary workers or workers under the general regime. Retirement is compulsory at 70 years of age for both men and women, and retirement for length of contribution is 35 years for men and 30 for women. Until the 1993 reform, civil servants contributed 4% of their wages to finance pensions. The 1993 reform required civil servants to pay 11% of their salaries to be enrolled in the system. Moreover, after the 2003 reform retired civil servants are also required to pay contributions (although at a lower rate than active civil servants) on the value of pensions over the ceilings of the general regime. After the constitutional reform No. 41/2003, the entrants after 1998 have to fill an age rule to eligibility (60 years for men and 55 years for women). The complementary pension funds are optional, privately managed, mostly centred on capitalisation and monitored by the Ministries of Social Security and Finance. The benefits complement pay-as-you-go pensions to a predefined ceiling based on the rules for each pension fund. This complementary pension fund system is operated by closed and open pension funds. Closed pension operators (Entidades Fechadas de Previdncia Complementar, EFPC) are non-profit organisations established by single employers, multiple-employers, trade unions, or professional associations and financed by employers and/or employees contributions on occupational or associative basis.27 Open pension plans are operated by financial institutions (Entidades Abertas de Previdncia Complementar, EAPC), generally insurance companies and banks. Contributions are made on a personal, voluntary basis.28 The constitutional reform No. 20/2003, 41/2003 established the possibility to implement a complementary pension funds to civil servants after the approval of a complimentary law, and to pay full pensions by the special regime of civil servants only below the ceiling of pensions observed in the general regime.
An overview of the Brazilian civil servant pension scheme

The public services pension scheme in Brazil is a complex chain of national and local systems that includes many federal employee categories (executive, legislative, judiciary, military police, armed forces) at different levels of government; 27 state pension systems (including the Federal District) with the same level of complexity as the federal level,
106 1. WORKFORCE PLANNING AND MANAGEMENT with the armed forces replaced by military state police; and employees of 1 900 municipalities.29 The schemes differ slightly in terms of contribution rates, but in almost all cases they are considerably more generous than the general scheme that applies to workers in the private sector. The pension systems are regulated by the Constitution and various laws. As Table 1.1 shows, over 9 million civil servants are protected by this regime, which includes: active civil servants, retirees and pensioners30 in the three levels of government. In addition, the table shows that at federal level the number of active employees is small relative to retirees and pensioners; this compromises the sustainability of the system.
Table 1.1. Employees, retirees, and pensioners in the civil servant pension scheme
2008
Government level Union (federal) (1) States (2) Municipalities (3) Total Active civil servants 1 118 360 2 793 050 2 156 676 6 068 086 Retirees 529 563 1 144 698 401 793 2 076 054 Pensioners 448 376 384 509 151 111 983 996 Total 2 096 299 4 322 257 2 709 580 9 128 136
1. June 2008; does not include public servants from SOEs or mixed economy societies. 2. Data from the states. 3. Refers to 1 900 municipalities with their own social security regime. Source: Ministrio da Previdncia Social (2008), Panorama de la Previsin Social Brasilea, Ministrio da Previdncia Social.
In Brazil most pensions are pay-as-you-go (PAYGO) systems. Brazil has a large, socially inclusive, contributory system that requires large fiscal resources to finance expected benefits. The main advantages for civil servants are that: i) since 2003, entrants after 1998 receive the average earnings received since 1994; entrants before 2003 receive pensions equivalent to the last salary received if they meet specific criteria,31 while private employees, since 1999, receive pensions calculated as an average of contributions paid since 1994, after calculation of the retirement factor;32 ii) entrants to the civil service after 1998 have to prove that they have worked a minimum of ten years as public employees to achieve a pension equivalent to the last salary. Another feature of the pension system for civil servants is the high heterogeneity of benefits across professional categories. Civil servants who spend their entire career in the civil service receive benefits which are several times more than those received by civil servants whose career also include the PAYGO system, but that depends on the type of job in the civil service and the career trajectory.33 The federal pension scheme is the most imbalanced among the three levels of government (Mdici, 2004). Its dependency ratio is less than 1, which seriously undermines its financial sustainability, and the system cannot be sustained by payroll contributions. In addition, with a rapidly ageing civil service, the number of retirees is expected to increase dramatically.
Box 1.11. Past reforms to civil servants pension schemes (prior to 2003)
In 1998 the Brazilian government implemented reforms to increase the financial sustainability of its pension schemes, seeking to contain pension deficits without affecting acquired rights. Reforms approved by Congress fell significantly short of original proposals made by the executive. Although some tightening of eligibility requirements was approved and the worst abuses curtailed, most of the measures adopted apply only to civil servants joining the system after the implementation of the reforms. Thus, there is no immediate benefit for the sustainability of the pension system. Moreover, entitlements did not change significantly, with the result that little progress was made towards the financial and actuarial balance of the various public sector pension schemes. Some of the main pension reform measures in Brazil previous to the 2003 reform were:
Institution of a minimum retirement age, starting at 53 years for men and 48 years for women. Through a transitional formula linked to the years of contribution prior to the approval of reform, this minimum retirement age will increase to 60 and 55 years respectively. New entrants are automatically subject to the higher minimum retirement age. A requirement that workers contribute for at least ten years to a public sector pension scheme before drawing retirement benefits. The scope for early retirement before having contributed for 35 years for men and 30 for women (including previous contributions to the general scheme), has been limited for current workers and abolished for new entrants. Abolition of favourable special regimes for certain categories of civil servants, such as university teachers, judges, financial controllers and members of Congress. Elimination of the possibility of adding bonus time to the length of contribution which used to considerably bring forward the average age of transition to retirement. Requirement that a worker remain five years in a post before drawing a pension equivalent to the salary of that post. This eliminates the practice of fictitious promotions close to retirement age. Institution of a ceiling on pension benefits, equal to the civil servants last salary. This measure eliminated loopholes that allowed some civil servants to incorporate non-wage advantages in their pension benefits, which in practice meant that their pensions could be higher than their last salary.
Source: Bonturi, M. (2002), The Brazilian Pension System: Recent Reforms and Challenges Ahead, OECD Economics Department Working Papers, N. 340, OECD Publishing, Paris.
The 2003 reform of the pension regime for civil servants

A growing number of countries with separate civil service pension schemes are considering different reform options largely motivated by fiscal pressures. Pay-as-you-go civil service schemes are maturing, resulting in an increase in the ratio of pensioners to workers. OECD member countries currently spend an average of nearly 2% of GDP on pensions for civil servants and other public sector workers (Palacios and Whitehouse, 2006). In 2008, Brazil spent 7.25% of GDP in pensions for the RGPS and 4% for the special regime of public servants including military. The growing pressure of civil servants pensions on payroll expenditures led the Brazilian government to reform the pension system to reduce the huge deficits, standardise entitlements for entrants, introduce parametric changes for workers currently in active service, and bring pensions for government employees into line with those in the private sector.34 The introduction of standard rules for pensions is expected to improve flexibility and efficiency in the labour market. In December 2003, the Brazilian Congress approved constitutional reform No. 41/2003 regarding civil servants pensions. The reform was two-pronged. It adjusted the current PAYGO system for the civil servants currently in active service and created a separate regime for entrants after the reform. The three main goals of the reform were to: i) achieve a better balance in the system and guarantee its long-term stability; ii) reduce social imbalances in the use of public funds by providing larger income transfers to the poorest families; and iii) reduce pressures to cover system deficits and free public resources to support economic growth. The reform sought to respect already acquired rights and to create a new system aligned on the general social security system for new entrants to the civil service. The main points of the 2003 reform are: Current retirees and pensioners (including those who have the right to claim benefits) contribute the same payroll tax of 11%, except for those under the ceiling for income tax exemption. For civil servants currently in active service the new rules for benefits are the following: the minimum age for retirement changed from 53 to 60 for men and from 48 to 55 for women. The minimum length of service remained 35 years for men and 30 for women. To count the length of service period as 35 years of contributions in private or public pension schemes, at least 20 years of contributions must be in public schemes, ten years in the same job, and five years in the last civil servant position. Men and women can still retire below the regular retirement age of 53 (men) and 48 (women) with 35 years and 30 years of service, respectively but in this case the pension is an average of the contributions since 1994 not the last compensation. However, in both cases a reduction will be applied to the benefit equivalent to no more than 5% for each year until 60 (men) and 55 (women). That means that the benefit for those retiring at 53 (men) and 48 (women) will be equivalent to 65% of the last salary received before retirement. The idea behind these rules is to encourage later retirement.35 There is also a possibility to retire at 65 (men) or 60 (women), with less than 35 years of contribution, but the pension is proportional of the contribution period. The entrants before December 2003 have to fill several requirements to obtain full pensions at 35/30 years of total contribution, as a minimum period of service in the special regime (20 years of contribution, ten years in the same career and five years in the same job).
For future civil servants, the reform has been more comprehensive. They will have their benefits calculated according to the contributions effectively made, including in the PAYGO system. When retired or pensioners, future civil servants will contribute the same payroll tax as active civil servants, except for those under the ceiling for income tax exemption. Moreover, future civil servants will be subject to the ceilings and sub-ceilings established by law, including for accumulated received benefits. The reform contemplates that future civil servants will lose the right of parity between pensions and salaries of active civil servants. Thus, it is crucial for federal, state and municipal governments to create complementary pension funds for civil servants so that they can increase their benefits.

It is hard to assess the 2003 civil service pension reform since the expected results will be seen in the long term and the reform is still relatively recent. The reforms implemented in 1998 and 2003 reveal considerable convergence with practices in many OECD member countries. For example, by extending the general pension law to civil servants, Brazil gives public and private employees the same status in order to make the pension systems more homogeneous. The adoption of measures to discourage early retirement and make eligibility rules stricter are also practices adopted by OECD member countries. Furthermore, the bridge between the general regime and the social security scheme for civil servants helps to enhance mobility. The new civil service pension arrangements adopted in the 2003 reform make them more in line with those of Finland and the Netherlands as both have separate civil service arrangements but the same benefits as those at the national level. However, the experience of OECD member countries may offer some suggestions to complement the measures already taken. The need to reduce privileges and to encourage working longer. Brazilian authorities have acknowledged the existence of inequities in the civil servants pension regime. The 2003 reform was designed to reduce these inequities by fostering a gradual convergence of public sector pension schemes with the rules applying in the general regime. This seems reasonable, but since measures apply only to new entrants, they will not significantly reduce the systems financing requirements in the short or medium term. Moreover, if current demographic trends continue (population ageing) it is likely that the future retirement age (60 for men and 55 for women) for new recruits and the minimum contribution periods will not be enough to maintain fiscal balance. One possibility for more room of manoeuvre is to tighten eligibility requirements a little more. For example, most OECD member countries have a standard retirement age of 65 for men. Pension eligibility ages for women are lower in Belgium, Hungary and the United Kingdom, for example, but will gradually reach those of men. Iceland, Norway and the United States have a standard pension age of 67. At the other extreme, only France and Turkey allow normal retirement at age 60, the same age as for men in Brazil (see OECD, 2005a). Brazilian authorities might consider increasing the minimum age for retirement of staff in the near future. Brazilian pension authorities may also contemplate designing measures to encourage civil servants to work longer. Another case worth examining is the Japanese age limits for retirement; these set different age limits for national public service personnel depending on their tasks. For example, non-fieldwork general personnel retire at 60; medical staff at 65; self defence officials from 53 to 62; members of the science council at 70; and ministers, ambassadors and members of committees have no age limit. It should be mentioned, however, that in Brazil the rules for compulsory retirement are
110 1. WORKFORCE PLANNING AND MANAGEMENT only applied to career civil servants or military not for those in political positions or in free appointment jobs. Box 1.12. Belgiums experience with age-based supplements
Belgium has introduced age-based supplements for employment and pensions for the federal public service.
With regard to employment

Beginning at age 55, a public sector employee may request half-time early retirement. In this case, apart from a salary for half-time work, the official receives an employer-paid allowance. This has been set up not as a pension, and thus not as an early retirement payment, but as compensation for pre-retirement leave or availability. During their periods of absence, officials at the end of their careers retain a statutory link to their employers, who may opt to call them back to work. At the same time, the officials retain their employment status and continue to accumulate pension entitlements. Prior to 1 January 2002, such periods of pre-retirement leave were fully counted for pension purposes and even for calculating the volume of authorised sabbaticals and unpaid leave counted as active service.
With regard to pensions

Without altering the current basic principles for pension entitlements and calculations (including the limitations imposed by the relative maximum and the absolute maximum), provisions for granting an age-based pension supplement were intended to encourage officials to keep working beyond the minimum retirement age (60). In respect of services rendered as from 1 January 2001, the nominal rate of pension resulting from the method of calculation has been increased by a pension supplement for each month of effective service beyond the age of 60. This supplement is equal to:
0.125% of the annual rate of pension for each month of effective service between the officials 60th and 62nd birthdays (with a minimum of EUR 15); 0.167% of the annual rate of pension for each month of effective service after the officials 62nd birthday (with a minimum of EUR 20).
In all, the age-related supplement can be as much as 9% of the basic pension, as shown by the following table: Age 60-61: at least 1.5%; Age 61-62: between 1.5% and 3%; Age 62-63 between 2% and 5%; Age 63-64: between 2% and 7%; Age 64-65: between 2% and 9%. Supplements are granted only in respect of service effectively rendered, inclusive of periods of paid leave. It should be noted that to strengthen the incentive there are plans to amend the law so that the age-related pension supplement can cause the total pension to exceed the relative maximum (three-quarters of reference salary), although it could not exceed the absolute maximum value.
Source: OECD (2007c), Public Sector Pensions and the Challenge of an Ageing Public Service, OECD Working Papers on Public Governance, 2007/2, OECD Publishing, Paris.
However, it is necessary to bear in mind that eligibility requirements and contribution rates alone are unlikely to eliminate the systems financial and actuarial imbalances. These derive from the generosity of the entitlement system. For example, at the same income level, the pension of a male worker retiring at 55 today amounts to around 70% of his final salary (Ministrio da Previdncia Social, 2008) under the general regime and 100% under the public sector special regime. The 2003 reform changed the rules for new entrants but did not address this issue in full. Previous OECD studies and information from Brazil show that the Brazilian public sector scheme is among the most generous in the world (further information can be found in Bonturi, 2002; and OECD, 2005a, 2007c). It is true that in many OECD member countries civil servants have special regimes which are generally more generous than private sector schemes. However, OECD civil servant pensions typically do not represent 100% of the final salary with such loose entitlement requirements. The replacement formulae generally consist of a share of the final salary (generally between 1.75% and 2%) per year served up to a maximum of between 35 and 40 years, so the most a retired public worker receives is 70% or 80% of his/her last salary. The PAYGO systems in OECD member countries are less generous than the Brazilian system but many are still under pressure as they have become very hard to sustain financially. As a result, countries such as Canada, Mexico, the Netherlands and the United States have started to move away from them, and civil servants already derive the majority of their pension earnings from a founded component. The experience of OECD member countries may be of value to Brazilian authorities. Reinforce the financing of the social security system. For PAYGO systems to work, they must be independent, have transparent accounts and clear mechanisms to finance benefits and identify benefits trends. Improvements can be made to ensure the sustainability of the pension system in Brazil. Develop a wider complementary pension scheme. Compared to OECD member countries, the Brazilian complementary system is relatively small. In OECD member countries as a whole, fund assets are generally in excess of 100% of GDP and coverage rates above 50% of total labour force (Bonturi, 2002). This is only partly related to the fact that in Brazil only about a sixth of higher income workers contribute to complementary pension regimes. The information provided by Brazilian authorities suggests that there is an ongoing debate regarding the development of the complementary pension scheme. Brazil may make better use of the potential of these funds by improving the regulatory framework and the supervisory structures. The creation of a complementary regime for civil servants, associated with capping of pension contributions and benefits for new entrants would go a long way towards removing the barriers to the development of a wider complementary pension scheme. Alternatively, Brazil might explore the possibility of adapting the UK Partnership Pension Sscheme to the Brazilian context as an option for civil servants pensions. The main advantage of this scheme is that it involves private providers, is low-cost and flexible, which is helpful for short-term and temporary employees. Supplemental schemes may cover public sector employees separately and Brazil may benefit from the experience of different OECD member countries in this respect. One plan may be set up for national government employees and another for local government staff like in Finland, Ireland and Sweden. A supplemental scheme may also cover different segments of the public service or certain types of employees such as teachers, fire fighters and health-care professionals as in the United Kingdom. In addition, a variety of supplemental schemes may top up income from basic pensions, which may be low
112 1. WORKFORCE PLANNING AND MANAGEMENT because the intended purpose is to provide only a minimum pension; such is the case in Sweden, the United Kingdom and the United States. Some supplemental schemes are set up by geographic areas, such as the ones for the autonomous communities of Spain. Box 1.13. The UK Partnership Pension Scheme for civil servants
UK civil servants have two options in terms of pension arrangements. The first, Nuvos, is a defined pension scheme to which the civil servant and the employer contribute. The annual pension amounts increase with the retail price index. The second is a partnership pension account, a stakeholder pension with an employer contribution. Civil servants do not have to contribute but the employer pays into the pension fund whether or not the employee contributes. These contributions are invested on behalf of the employee by a pension provider of his/her choice. Over the years, the pension fund should grow (the money earned by the invested pension contributions). The employee uses the resulting pot to buy a pension when he/she retires or to leave to someone when he/she dies. The choice of scheme depends on the personal circumstances of the civil servant and how long he/she sees his/her career progressing. It should be noted, however, that civil servants can only chose one scheme at a time; they can change schemes but cannot belong to both at the same time. The benefits of the partnership scheme are that the employer contributes, whether or not the employee does. The employer pays an age-related contribution of between 3% and 12.5% and a matching contribution, payable if the employee contributes, of up to an extra 3% of the pensionable earnings. There is tax relief on any contributions made to the fund. Employees receive a redundancy cover and access to a retirement lump sum for ill health. The pension can be taken at any age between 55 (from 2010) and 75, and employees can choose the type of pension they want. Each provider (Scottish Windows, Standard Life, TUC/Prudential) offers an extensive range of investment funds. When the employee draws the pension, he/she may be able to take up to 25% of the pension fund as a tax-free lump sum but the remainder must be used to buy a pension. The size of the pension will depend on the amount of money contributed by the employer and employee, the investment returns of the selected fund (or funds), the amount of lump sum taken by the employee, the type of pension chosen, and the rate used to convert the pension fund into an annual income for retirement.
Source: Civil Service Pensions (2007), Pension Choices Nuvos or Partnership; and Civil Service Pensions (2008), Partnership An Overview, www.civilservice-pensions.gov.uk.
In discussing the complementary schemes for civil servants, Brazil may emulate the actions of some OECD member countries which introduced schemes for special cases like persons under contract to the civil service and schemes that add to basic pensions but are not considered supplemental schemes by member countries like Finland, Japan and Spain. In some countries, supplemental schemes have been set up for persons under contract to the civil service (Austria, France, and Germany, for example). The institution of such schemes has been motivated by a desire to narrow the gap between the (lower) pensions of these workers and the pensions paid to civil servants. In addition, these schemes also seek to compensate for the entitlements available to civil servants, such as job security. Thus the government of Brazil may draw from the experience of France where IRCANTEC (Institution de retraite complmentaire des agents non titulaires de ltat et des collectivits publiques) was initially created to provide people working under contract for the state or a sub-national entity with a pension similar to the plan available to civil servants. This scheme is compulsory and works on a point system. IRCANTEC was set up prior to the supplemental regime introduced for civil servants in 2005. Alternatively, Brazil may look at the German experience. In this country the
supplemental scheme for contract workers was instituted to give non-civil servants a pension equal to that of civil servants. Based on collective bargaining agreements, it is compulsory and provides benefits virtually identical to those paid out by the pension funds for federal and state government employees. In Austria, supplemental pensions are provided for contract workers only. These schemes are comparable to the ones in the private sector pension system in which employers and employees make joint contributions.
1.9. Promoting governments goals regarding diversity The experience of OECD member countries
OECD member countries experience with promoting diversity in the public service is mixed. Long-term policies and priorities have been put in place in many OECD member countries, with uneven results. In recent years, many countries have recognised the need to supplement traditional recruitment and promotion mechanisms with specific measures to make up for social inequities at entry which are due to inequalities in social backgrounds and the cultural biases that are inevitable in all recruitment and promotion procedures. It is now recognised that employers tend to recruit and promote staff who are similar to them or at least to their value system. Diversity programmes usually target women, persons with different social, cultural or ethnic backgrounds, and disabled persons. The emphasis on diversity is not only an issue of equity but also of efficiency and effectiveness. Recognising the value of diversity is the first step towards a sound diversity policy which does not oppose diversity and merit. Countries are striving to mainstream diversity policies into daily human resource management processes and to change the culture from seeing diversity as a problem to considering it an opportunity and a value. Apart from programmes aimed at employing disabled workers, quota systems and affirmative action programmes are rare. In addition to legislative and regulatory measures, countries are emphasising better understanding of diversity issues (surveys, exit interviews), equal access to training to prepare for public service examinations, mentoring programmes to favour careers of minority groups, and changes to recruitment systems. Most countries are also putting some emphasis on improving diversity at senior management levels, where the weaknesses are the most visible. This can help improve diversity in the public service.

Brazil is structurally a very heterogeneous country with important challenges regarding equal opportunities among different social minorities, and the largest part of difficulties come from differences in levels of income, education, socio-economic levels and origins (urban, rural, popular or aristrocratic). Special secretariats attached to the Brazilian presidency are in charge of diversity issues, including human rights, women, and ethnic and racial equality. The proportion of women in top-level positions (21.9% in DAS 5 and 6 positions) is not high compared to OECD member countries, but has been increasing since 2000. In addition, the number of women at the level immediately below has also increased steadily since 2000.

Figure 1.19. Percentage of women in senior positions in OECD member countries in 2005 and in Brazil
% 40
35
30
25
20
15
10
2005 (or closest year available)
2008 (Brazil)
Source: OECD (2008b), State of the Public Service; OECD (2009c), Government at a Glance, 2009; and data for Brazil come from the OECD 2006 Survey on Strategic Human Resource Management.
Regarding other minorities, and as in a number of OECD member countries, statistics on social and ethnic minorities or disabled staff or socio-economic backgrounds are not available. The government has a quota for disabled staff, with 2% to 5% of positions at the disposal of handicapped people for entry exams into the public service, a target that is said to have been achieved. There is some indication that diversity is slowly becoming a management concern in the governments human resource management policy. In August 2009, the Ministry of Planning coordinated the first Forum on Discrimination and Prejudice within public administration. ENAP has established a round table of action-research on diversity and training in governmental schools, from which proposals for educational programmes for diversity within governmental schools have been made (the work was targeted to be ready by February 2010). These initiatives, however, remain limited. Government officials underline that public examinations, by focusing on an objective measurement of candidates skills and knowledge, hire staff on objective merit, and that this should provide as diverse a labour force as feasible given the level of education of different parts of the population. Many officials point to the fact that the relatively high percentage of entry-level exams open to non-university graduates helps foster diversity, especially in the more rural states. It is indeed a specificity of Brazil to have maintained a high percentage of entry points for people without advanced education, which allows for a level of diversity in the poorer parts of Brazil where competition is more limited. This is the case in government but also in state-owned enterprises. For example, in the Banco do Brazil, all recruitment for entry-level positions only requires a high school diploma. Today, 32% of entrants only have a high school diploma. The federal government policy that aims at decreasing
the number of applicants with high school diplomas, although probably necessary, should thus have a negative impact on diversity.

Brazils diversity policy is relatively minimal compared to those of OECD member countries. The general argument is that there is no discrimination in recruitment as competitive merit examinations provide for equal access to the public service and should be the main tool for enhancing diversity. In many OECD member countries, however, it is now generally considered that equal access and transparency do not provide equity in the workplace. In fact, few OECD member countries use quotas, but most have equal opportunity policies in place. As a country with serious difficulties in the heterogeneous access to wealth and education, Brazil inevitably has diversity challenges in the public service, in addition to imbalances in gender access to senior positions and difficulties of access to the public service by handicapped persons. Building on the experience of OECD member countries, Brazil first needs to establish the value added of diversity (in terms of gender, social backgrounds) not only in terms of equity but also in terms of the governments role in maintaining and strengthening social cohesion and setting an example as an employer for the rest of the country. The government should stress that diversity measures are to be temporary until diversity practices are a standard part of the daily functioning of public organisations. Second, the value of diversity in terms of the efficiency and effectiveness of policy making and service delivery needs to be recognised. Diversity campaigns will be important to raise awareness of these issues both in government and in settings such as universities. Then of course, there is a need to understand in depth the impediments to diversity through diversity audits and voluntary surveys. Progress has to be monitored and accountability developed through managerial reporting. The second issue for Brazil, as for OECD member countries with equal access to the public service through transparent, mostly written recruitment processes, is to state that equality as promoted in such entry exams does not necessarily promote diversity. Funding for minority groups to obtain training for exams, as in France and New Zealand, through a system of scholarships, reviews of exams, promotion of different skills in exams (different languages, special knowledge of an area or of an issue, life experiences) could be the first concrete steps towards increasing diversity. Belgiums recruitment agency, SELOR, has launched neutral and adapted tests to make sure that tests for selection do not contain any form of biases that could reduce the chances of certain groups of candidates. France has also recently created the PACTE (path to the civil service career at national and regional levels and in hospitals) for young people aged 16-25 who leave the educational system without a degree or professional qualifications and get on-the-job training prior to possible appointment to a permanent post in the public service. The City of Vienna is another example of a government that is offering apprenticeship to students from different national origins. Ireland has developed a Traveller Internship Programme to provide quality temporary employment opportunities in the civil service for nomadic or itinerant people of Irish origin so that they develop new skills and are prepared for participation in the civil service open selection process. Like some OECD member countries, Brazil could develop coaching and mentoring programmes, career path planning, and development of qualifications focused on underrepresented categories. Some countries have also created networks of staff from minority groups.
116 1. WORKFORCE PLANNING AND MANAGEMENT In order to face discrimination during staff careers, an Ombudsman to deal with discrimination could be created, as in Sweden. There are also larger offices concerned with discrimination in society such as the special commissions in the United Kingdom or the Haute autorit de lutte contre les discriminations (HALDE) in France. The case of women is somewhat different as the issue in career-based systems is usually less about recruitment (especially if recruitment is mostly through written tests), than about careers and promotion. Most countries use a mix of coaching, training, flexible working hours, panel recruitment training and selection tests for promotion, communication tools around vacancy announcements, etc. Given the flexibility in recruitment at the DAS level, there is no doubt that DAS positions could constitute fertile ground for a diversity policy, especially for women. The government could give itself targets for recruitment of minority groups and women at each DAS level, report on such targets, show good practices, promote recruitment methods that are not biased against these groups, and promote coaching of those groups and women.
1.10. Conclusion
Owing to recent high levels of economic growth, pressures for efficient workforce planning have been limited, and it is understandable that ministries have few incentives to focus on strategic workforce planning. Compared to OECD member countries, the proportion of Brazilians working in government throughout the country is relatively low, but the cost of this workforce weighs heavily in the economy. Moreover, the cost of services paid for by government and produced by the private sector also represents a high share of GDP. This means that governments at all levels in Brazil need to manage the size, composition and allocation of the workforce effectively. Brazil has made important steps towards ensuring the fiscal sustainability and fairness of the pension system for civil servants. Although the effects will only be apparent in the long term, Brazilian authorities may need to monitor the financial situation of the country and demographic issues in order to better adapt social security programmes to evolving lifecycle and labour market risks and changing demographic realities. For example, Brazil is currently discussing how better to organise complementary pension schemes. To this end, the Ministry of Planning and the Ministry of Social Security may need to consider the design, administration and financing of such programmes and the policy outcomes they seek to achieve. A further important question is how to co-ordinate such programmes with the existing social security programmes. Brazil should consider adopting a more dynamic than reactive approach. The effective management of the size, composition and allocation of the workforce is all the more important as the federal workforce is ageing rapidly and special workforce planning strategies will be needed to ensure continuity. The coming retirements from the federal public service offer a unique opportunity to restructure the workforce and adjust it to the future needs of society. At the federal level, workforce planning in most ministries and agencies is still inputdriven and focused on tracking staff numbers and costs. Brazil has a very good record in this respect, and is now able to make very good projections of numbers and costs in the future. However, workforce planning is still not yet enough based on analysing trade-offs
in staff numbers and allocations, in the view of government priorities, outsourcing possibilities, and technological changes. It is still too focused on the recruiting organisations pointing future needs and the centres focus on controlling the size of the establishment and compliance monitoring. Recent positive changes on this matter should be encouraged and strengthened. Managers accountability for workforce planning is very weak. Workforce planning needs to be made part of strategic documents and managers need to focus on plans that take an overall strategic view of their workforce (jobs, competencies, future changes) in light of the changes affecting their organisations, outsourcing possibilities (understood in the sense of firms being contracted for delivering goods and services rather than leased labour) and technological changes. The experience of OECD member countries, but also good examples in Brazilian state-owned enterprises, could serve as inspiration. The way the job category system has been implemented, as well as the proportion of short-term staff and unclear rules regarding the level of authorised outsourcing give directors and managers extraordinarily little flexibility for workforce planning and the allocation of their workforce. To a certain extent these limitations have allowed for impartial recruitment and management of civil servants and ensured healthy ethical standards in the public service. These achievements allow Brazil to move towards a more flexible and competency- and performance-based model with greater delegation of managerial responsibility as it embarks on the modernisation of its administration. In parallel, it would probably be healthy for central ministries to increase pressures for more efficient management of the workforce. The measures that have helped maintain costs are good restrictive measures but are not strategic measures for workforce planning. In addition, Brazil has carried out stop-and-go policies for personnel and salaries which have created a lot of resistance and difficulties with capacity in the past. To exert pressure to increase efficiency, Brazil could follow the example of many countries and adopt policy reviews. In addition, instead of piecemeal career by career management of compensation costs, the federal government would gain by continuing its present efforts to devise a salarysetting approach that takes into account the total real compensation of employees (benefits, status, etc.) and provides clear criteria and parameters for salary increases that take into account affordability but also attractiveness (this requires a comparison with the private sector), and considerations such as increases in productivity, changes in competences, social acceptance, etc. Performance as such should not be the main focus of salary setting at this stage in Brazil (see Chapter 3). Workforce planning also raises issues regarding relations with unions. Brazils negotiation process with unions is still in its beginnings and is relatively nonconfrontational. There is an opportunity to establish a constructive dialogue that may eventually be a good vector for reforms. Finally, in a diverse country such as Brazil, the federal government should be an example of good practice in promoting diversity. While equality and transparency are relatively well ensured by strict rules about recruitment and careers, they are not necessarily conducive to increased diversity. Policies that have rightly aimed to increase the level of competencies in government will only increase the importance of this issue in the future. Brazil could follow the example of many OECD member countries by establishing equal opportunity policies for disadvantaged groups and women. Special policies for disabled people are already in place.
Notes
1.
According to the definition of the System of National Accounts, general government includes core ministries, departments and agencies, non-market publicly owned hospitals, public schools, social security organisations, etc. It includes units at all levels of government, including regions, provinces and municipalities. It does not include retired employees or other pensioners. In Brazil, retirees and pensioners are often counted as part of the public sector workforce. According to IBGE, they are not included in the data below that follow the international methodologies and classification of the System of National Accounts. This is for 28 countries. Data for the state level are not available, but, as mentioned, the evidence indicates a relatively stable percentage of total employment since 2002. In particular, the programmes for universal access to elementary education and the opening of new institutions in the higher education sector have involved the hiring of large number of staff (at the municipal level for elementary education and at the federal level for higher education). Changes in the allocation of responsibilities in the health sector from federal government to lower levels of government were, for a while, not entirely compensated in staff numbers, and states and municipalities have been catching up. Pressures for more police surveillance have also involved increases in workforce numbers in the military and civil police (state level). In the System of National Accounts, the compensation of employees (always active employees) includes salaries and wages paid in cash or in kind (including the values of any social contributions, income taxes, etc., payable by the employee even if they are actually withheld by the employer for administrative convenience or other reasons and paid directly to social insurance schemes, tax authorities, etc., on behalf of the employee) and employers social contributions. Like in other countries, part of government compensation costs is constituted by imputation for social contributions (pension benefits from unfunded pension schemes). In Brazil, retirees and pensioners are often counted as part of the public sector workforce. However, according to IBGE, pensions and other transfers for inactive employees and pensioners are not included in these data that follow international methodologies of the System of National Accounts (SNA). Doubts remain regarding how data are compiled in reality, especially concerning in which category the benefits of retirees and pensioners have been included. Clarifications and further work by IBGE would help refine the analysis in the future, and full consistency of the data with the number of employees in general government will have to be ensured. This shows that even when GDP growth is not taken into account compensation costs have moderately increased in volume. General government output represents the value of goods and services produced by government and equals the cost of production. Produced goods may be consumed by
2. 3. 4.
5.
6. 7.
other sectors (e.g. market goods), may be used as investments and consumed by general government, or consumed as final consumption (e.g. as health-care services, individual consumption, defence, or collective consumption). 8. The difference in average salaries between the government and the private sector is likely to be even bigger because of the size of the informal economy (and likely over reporting of private wages), but per definition, this is not possible to measure. The approach and methodology that explain fully the notion of the costs of production of government-funded services are developed in Pilichowski, E. and E. Turkisch (2008), Employment in Government in the Perspective of the Production Costs of Goods and Services in the Public Domain, OECD Working Papers on Public Governance, No. 8, OECD Publishing, Paris. The cost of producing governmentfunded services is approximated by adding the costs of general government intermediate consumption (goods and services produced by non-general government organisations and companies and consumed by government), the cost of contracting out goods and produced for citizens and funded by government directly or indirectly, and the compensation costs of general government employees. This does not indicate that services are costly in themselves as it does not measure the quality or the quantity of the services produced. Presentation by Canada at the annual meeting of the civil service group of the OECDMENA initiative, Rabat, 2009. Although the 90% do not include recurring expenses such as payroll, private pensions that do not lend themselves to performance targets. Based on the guidelines on workforce planning designed by the US Office of Personnel Management, www.opm.gov/hcaaf_resource_center/assets/sa_wp_kepi.pdf. Ministry of Planning, response to the Strategic Survey on Human Resource Management. Restrictions have been established in the law since 1967 and were not implemented, with successive condemnations by the federal Court of Accounts (TCU, Tribunal de Contas da Unio). Direct administration is composed mainly of services located in the administrative structure of the presidency and ministries. Indirect administration is composed mainly of entities with legal personality such as agencies, banks, public enterprises, mixed economy societies, public companies and public foundations. DAS positions involve about 22 000 positions at lower and higher administrative levels, with discretionary appointment to those positions although some quotas define the minimum percentage of DAS positions that have to be filled by civil servants (see Chapter 2 for a full description). This part draws from OECD (forthcoming), OECD Public Management Review Greece. In 1995, most states and municipalities had personnel expenses beyond the 60% limit, but in a few years most had adjusted to this new requirement. All dismissed were not simply readmitted. What the courts decided was that tenured civil servants whose jobs were declared extinct or unnecessary had the right to full
9.
10. 11. 12. 13. 14. 15.
16.
17.
18. 19. 20.
remuneration (instead of remuneration proportional to time in service), until they were adequately placed in another office. Those that did not have tenure and were dismissed by the Collor Administration benefited from a law approved in 1994 that established conditions for their readmission. The implementation of this law created administrative disputes and (following a presidential decree by Fernando Henrique Cardoso) a revision process nullified almost every readmissions previously accepted. Unions demanded a revision of this process which President Lula committed to. A benevolent interpretation of the law permitted the reintegration of good number of staff. 21. 22. The Constitution does not allow outsourcing to save costs but to fulfil the needs that do not have to be filled by career civil servants. In 2006, central governments of Austria, Iceland, Luxembourg, Mexico, Poland, Portugal, the Slovak Republic, and Sweden, reported not having performance-related pay for their employees and those of Canada, France, Ireland, Italy, the Netherlands, Norway only having performance-related pay in place for senior management levels. Country data in this section are drawn from the EU study by the Ministre du budget, des comptes publics et de la fonction publique, (2008b), Comparative Analysis of the Social Dialogue in Central Public Administrations of the European Union Member States, tudes et Perspectives, and from the results of the OECD 2006 Survey on Strategic Human Resource Management. The right to strike still requires a specific law to be implemented. In the meantime, the Supreme Court has ruled that the rules that apply to the right to strikes in the private sector also apply to the civil service, with some adaptations. Draws from OECD (forthcoming), OECD Public Management Review Greece. The retirement factor is the result of a mathematic formula that considers time on contribution, age and life expectancy. It can be accessed at www1.previdencia.gov.br/docs/excel/fatorprevidenciario_2008.xls. The existing 360 operators (over 2 100 sponsors) had accumulated nearly 20% of GDP in assets in 2003. But coverage remains low, with only 2% of the labour force enrolled. At end-2003, there were 43 EAPC providers, with nearly 2.5% of GDP in assets and 6.5 million plans sold. This represents 34% of the total number of municipalities in Brazil. The others are linked to the general regime applicable to private sector workers (Ministerio da Previdncia Social, 2008). The Portuguese term pensionistas has been translated as pensioners which means the dependants of civil servants (partner and/or children below 21 years of age) who receive the pension benefits in case of the civil servants death. For public servants to have the right to obtain pensions equivalent to the last salary, it is necessary that they are protected by the rule of the acquired right (direito adquirido) as expressed in Art. 3 of the Constitutional Amendment 41 of 2003. For further details see also Constitutional Amendments 20/1998, 41/2003, 43/2003 and 47/2005.
23.
24.
25. 26.
27.
28. 29.
30.
31.
32.
The average retirement factor is the arithmetic average of the contribution remunerations, using 80% of the contributing period composed by the highest remunerations. For further information see Law 9.876/99. A low paid civil servant, for instance a teacher, who worked his entire career in a public school, obtains quite the same benefit of a private sector teacher. In contrast, many Latin American countries have instead emulated the Chilean model of privatisation of social security, and/or put in place some form of mandatory, fully funded social security scheme. Chile pioneered the structural reform process in 1981, replacing the pay-as-you-go system by privately run individual saving accounts. During the 1990s, Peru (1992-94), Colombia (1993-94), Bolivia (1997), and Mexico (1995-97) implemented comparable reforms. However, the public system was not phased out for those currently in the civil service. Reforms in Argentina (1994) and Uruguay (1995-96) consisted of setting up mixed systems including a reformed payas-you-go system and private individual saving accounts (OECD, 2005d). These rules are not applicable to civil servants hired before December 1998.
33. 34.
35.
2. STRENGTHENING GOVERNMENT CAPACITY 123
Chapter 2 Strengthening government capacity
Governments from OECD member and non-member countries need to improve the capacity, competency and efficiency of the public administration and public services if citizens expectations of good service and value for money are to be met. This chapter reviews the strategy of the Brazilian federal government to strengthen capacity. In the light of the experience of OECD countries, the chapter focuses on the management of competencies as a basis for integrating human resource management policies and practices into the governments goals and performance. It also examines the structure and management of job categories and career paths and their implications for workforce flexibility and cost effectiveness, the employment arrangements to acquire human capacity and talent, and the training and development of staff strategies.
124 2. STRENGTHENING GOVERNMENT CAPACITY Governments play larger roles in the societies and economies of OECD member countries than they did half a century ago. A larger share of the national product is used for public consumption, public investments and public transfers to households, and public administrations are in charge of increasingly complex activities. Citizens expectations of good service and of value for tax money have increased. Governments thus need to improve the capacity, competency and efficiency of public administrations and public services. Efforts to achieve this cover a broad range of issues including how to organise and govern the public administration, how to budget, how to use modern information technologies, how to involve citizens and how to co-operate with private enterprises and organisations. The results of public activities are ultimately due to the efforts and the engagement of public servants in and for the public administration. At the end of the day, it is they who deliver the results. Consequently, the performance, effectiveness and efficiency of public servants have become key concerns for governments. Appropriate human resource management practices are increasingly seen as an essential aspect of the quest for enhanced performance. OECD member countries have a broad spectrum of human resource management arrangements owing to differences in cultural, historical, political and administrative contexts. Reforms debated or enacted broadly reflect a countrys current phase. One common thread running through reforms in all OECD member countries is, however, a greater focus on the competences of public servants. Countries that play a leading role in this respect develop and implement systematic competency management, linking recruitment, training and staff development to competency frameworks and competence profiles. Efforts have also been made to modernise recruitment processes and enhance the development of public servants throughout their careers. To achieve this goal, countries have often found it necessary to profoundly restructure their job categories and career paths.
2.1. Managing competencies The experience of OECD member countries

Competency management is used in the public sector in many OECD member countries. Some, such as Canada, the United Kingdom and the United States have used it for several decades, and it is widely used and well embedded. Others, such as Belgium, Finland, the Netherlands, Sweden and Estonia, have introduced it more recently. In France and Germany it is limited and still at the experimental stage.1 Competency management has spread in both the private and public sector because it has proved to be an effective way of: defining the abilities and behaviours needed for people to do their jobs well; linking a number of key human resource management activities to ensure that an organisation is staffed by competent people who perform effectively.
Competencies can be a basis for focusing and integrating human resource management policies and practices around an organisations goals and performance. This is called strategic competency management.
What are competencies?

Competencies are generally defined as the combination of knowledge, skills and behaviours that result in good performance in a job. These are usually identified and validated through observation and analysis of what it takes to perform well. The behavioural aspect is a crucial part of competencies: it is not only the knowledge and technical or specialist skills that people bring to their work that counts. Employers understand that behaviours, such as communication, teamwork, flexibility and interpersonal skills, play a crucial part in how people perform (Armstrong, 2001; Chartered Institute of Personnel and Development, 2008).
Competency frameworks
In order to use competencies as a strategic management tool, they need to be integrated into a framework and linked to other elements of human resource management. The links that most organisations tend to make are with recruitment and selection of staff, training and development, and succession planning or career planning, so that these activities are well aligned with the organisations needs and well integrated with one another. Competencies may also be used as an element of performance management. There has been increasing focus on this, as behavioural aspects of performance have come to be better understood: performance is not only a question of what people do, but also of how they do it in interaction with other people. Organisations may also use their competency framework to reward management, although competency-based pay systems are relatively rare and remain quite controversial (Hondeghem, 2002: 190). It is these linkages with other elements of human resource management (HRM) that enable organisations to use competency management to shape the organisational culture and create a strong performance orientation. Competency frameworks vary enormously in terms of how they are developed and structured. Some organisations use competencies to drive integration around core values and capabilities that are considered crucial to the organisations success by defining a few generic competencies that all employees are expected to demonstrate. Others focus on competencies for those in leadership and management positions. Competencies may also be defined along the lines of different job families or occupational groups. These approaches may also be combined, with both generic and job-specific competencies. However, as noted in the OECD Review of Human Resource Management in Government Belgium, the key aspect of competency frameworks is not their structural design, but the fact that they enable the government to work more systematically and in a more goal-oriented way on workforce planning and on investments in human resources (OECD, 2007a: 60).
Competencies and job profiling

Job profiling is a valuable tool for applying competencies, particularly for purposes of recruitment, and for ensuring a clear link between competencies and outputs. A job profile is a way of combining a statement about what is expected from a job with a view of the competencies that the person doing the job must have in order to deliver the expected results (OECD, 2008c).
126 2. STRENGTHENING GOVERNMENT CAPACITY Many OECD member countries now use job profiles rather than job descriptions in order to focus attention on the outputs or results to be attained rather than on the tasks to be done. This signals a move away from rigid, mechanistic definitions of jobs to a more flexible, performance-oriented approach. The competencies required are determined by the job profile: for example, behavioural competencies may include aspects such as the ability to work in teams or build networks; if there are managerial responsibilities, competencies would typically include interpersonal skills and leadership abilities. Depending on the type of job, both generic competencies and job-specific competencies may be included in a job profile.
Factors driving the use of competencies in the public service

There have been several factors behind the spread of competency management in the public service: One has been the wish to inculcate managerial values and skills, especially among senior public servants, by using competency frameworks which define the generic leadership and management competencies senior managers should have. This was, for example, one of the reasons for introducing competency management in the UK civil service in the 1980s (Farnham and Horton, 2002). Such frameworks are generally used as a basis for selecting and training senior managers and in some countries for purposes of performance management. Competencies are often used as a tool to manage change for example to create a common understanding of issues such as a focus on results and customerorientation and to introduce more flexible ways of working into the public service. An example is the reform of the Belgian federal government, in which competency management has been accorded a pivotal role. This is discussed in more detail later in this section. Another important factor has been the use of competencies to improve workforce planning and recruitment and selection processes, so that these critical activities are based on an analysis of the competencies needed by public services. For example, the GPEEC (Gestion prvisionnelle des emplois, des effectifs et des comptences) (Employment, Workforce and Competency Planning) initiative in the French civil service introduces the notion of competencies for the first time. This has raised the issue of how recruitment methods might be adapted to incorporate consideration of competencies without abandoning the basic principle of selection through competitive examinations. Competency management has also spread as public services have placed greater emphasis on upskilling their workforce, ongoing professional development and lifelong learning. Indeed, one of the most common uses is for staff development. Competency frameworks are used to ensure that training and development focus on the organisations business needs and to establish a culture of ongoing learning and development. Another factor has been the spread of performance management in the public sector. Competencies can be used as a way of defining what excellent performance looks like and what competencies employees need to have in order to perform well, although there can be problems for using competencies effectively in this way, as discussed later in this section.
Not all efforts to use competencies in the public sector (or indeed in the private sector) have met with immediate success. A review of competency management in the public sector in Europe carried out by the European Group of Public Administration (EGPA) notes a number of problems: competency frameworks can become too static; measuring competencies for purposes of performance management can be difficult and may lead to excessive focus on inputs rather than results; implementation can be difficult unless all stakeholders top managers, line managers, staff and trade unions are involved and supportive; and, finally, competency frameworks can become overly bureaucratic and run the risk of becoming ends in themselves (Hondeghem, 2002). The experience of public services that have been using competencies the longest is that frameworks need to be reviewed and revised regularly to ensure that they remain effective.

The Brazilian federal administration has recently begun to introduce competency management as part of a strategy to strengthen the capacity of the public service. This is an important step in improving the ability of the administration to deliver on government priorities in key areas such as education, social policy and environmental protection. A government decree of 2006 (Decree 5.707, 2 February 2006), following a decree of 1998, outlines guidelines for the federal executive management development institutes and introduces the notion of a competency-based administration (Gesto por competncias). It defines it as the management of training oriented to the development of knowledge, skills and attitudes for public servants to perform well and fulfil the objectives of their organisations. It stresses the need for the definition of competencies to be related to the goals of organisations within the Pluriannual Plan, and underlines that competency management should use different sorts of learning methodologies such as e-learning, workshops, exchanges and internship activities, seminars and coaching. A National Policy for Civil Servant Development has been established and a Steering Committee formed, comprising the Secretaries of the Human Resources and Management Departments, Ministry of Planning, Budget and Management, and the President of the National School of Public Administration (ENAP). This steering Committee has met 24 times resulting in the establishment of a programme on human resource management at ENAP and of distance learning courses on social dialogue, as well as training activities and workshops aimed at preparing ministries for competency management. Competency management is being approached initially as a way of reorienting and strengthening training and development to upskill the public service and to instil a culture of ongoing development. The competency-based approach is being used to modernise training and development and target it to priorities identified through analysis of the competencies needed by individual public sector organisations. Given the need to raise skills and bring them into line with current and anticipated future needs and improve the cost-effectiveness of training, concentrating competency management in this area, as a first step, makes sense. However, from the outset the federal administration in Brazil has a broader, strategic goal. In the longer term, competency management is now generally considered as one of the pillars of strategic human resource management. Some authors (for example: Amaral, 2006) consider that it changes the focus from the formal attribution of a position to the consideration of work as a combination of accumulated knowledge, know-how, experience and behaviour in specific contexts. The aim is, therefore, to use competencies to radically change the way people are managed and to extend the use of competencies to
128 2. STRENGTHENING GOVERNMENT CAPACITY the entire personnel management cycle: selection, assignment of staff, training and development, and assessment of performance.
Developing competency management

Approached in this strategic way, competency management has the potential to help the Brazilian administration improve its HRM in several key areas: by better defining training and development priorities, thereby making the investment in this area more cost-effective; by improving recruitment and selection methods through the use of competency profiling in the recruitment process; by helping to develop strategic workforce planning by defining competency needs, planning how to fill in competency gaps, and using competency frameworks to establish clear links between the business needs of each part of the administration and recruitment planning; by facilitating the introduction of more staff mobility by profiling positions and identifying opportunities for horizontal and vertical mobility based on a competency framework; by strengthening performance management through a link to competencies; by developing managers and inculcating common management skills and values on the basis of a set of management competencies applied across the public service.
Because it is such a potentially powerful tool for the strategic integration of different areas of HRM, competency management should be regarded as a priority for the Brazilian administration. It is most important that competencies do not become an end in themselves, as can happen unless a clear strategic focus is maintained on how competencies contribute to the performance of the public service. To avoid this potential pitfall, it is essential to plan from the outset how competencies will gradually be integrated into different priority areas of HRM such as workforce planning and recruitment and performance management, in addition to the current focus on training. This should help to keep the implementation of competency management on track. However, a number of obstacles will have to be overcome in order to properly develop an integrated system of competency management, as discussed below.
Challenges of scale and capacity

In Brazil, issues of scale and of capacity to carry out human resource management need to be considered when deciding how to approach the implementation of competencies. At present, this is proceeding on an organisation by organisation basis in what is essentially a bottom-up approach. As a first step, every public institution is expected to map its competencies and to use this map to develop an annual training plan. This approach seems realistic, given the size and geographical dispersion of the public administration and the novelty of competencies in many parts of the public service. While this will inevitably lead to variations in the rate of implementation, it permits flexibility and provides opportunities for institutions to learn from one another. However, it runs the risk that implementation will be patchy and that competencies will come to be seen purely as a training instrument; both would severely limit the chances of developing
competency management as an effective instrument for workforce planning and HR management. The challenge for the government will be to move beyond this early phase and provide a framework for all ministries that is flexible enough but also supports competency management as a core element of human resource processes. The capacity of HRM units in most ministries and agencies to support the implementation of competencies is probably very limited, as they have so far dealt primarily with payroll and administration. It is likely that line managers also lack the necessary know-how and ability given their limited HRM responsibilities at present. The obvious next step is to link competencies to workforce planning and recruitment. However, workforce planning is not well developed. Managers and HR staff will need to develop the necessary skills and there appear to be both legal and cultural obstacles to reforming the recruitment and career systems. Integrating competencies into performance management and promotion systems or career management also creates challenges. Performance management is still at an early stage in most parts of the public sector. This may be an advantage, as it offers the opportunity to integrate competencies into performance management from the outset. However, this will require an integrated approach to implementation, which does not seem to be the case at the moment, as well as building up the necessary capability in HRM within ministries and agencies to manage such relatively sophisticated systems. The central HRM agency will need to guide, support and monitor implementation to ensure that competency management is adopted in a coherent manner across the administration. It is interesting to note that the UK government, which initially adopted a piecemeal approach, later introduced a standard framework for the whole civil service. Most progress in implementing competencies has been made in organisations that are exposed to the market state-owned enterprises (SOEs) and banks, that have more flexible work conditions, professionalised HR units, and are exposed continuously to other practices in the private sector. In central ministries, competency management is still in its infancy, although some appear to have made good progress. Thirteen of the 24 ministries in the direct administration have made a start on mapping competencies. There are some centres of excellence or promising practices which could serve as examples (see Box 2.1).
Need for shared concepts

Competencies are new to the Brazilian public service and it is important, therefore, to develop shared concepts so that there is a common understanding of the basic ideas and methods across different parts of the administration. ENAP is supporting the development of expertise in mapping competencies and competency-based training. One key initiative is to develop a common vocabulary of competencies so that shared concepts can serve to underpin a consistent methodology. ENAP is also developing training for ministries in competency-based management. ENAP is working with its partners in the network of public administration schools around Brazil to develop skills in competency-based training. Making the shift to competencybased training is regarded as a considerable challenge. ENAP is also, with the help of external experts, developing know-how in mapping competencies; this should be shared widely across the public service. ENAP has developed strong co-operating arrangements with foreign countries such as Canada, France, Ireland and Spain to develop competency management.
130 2. STRENGTHENING GOVERNMENT CAPACITY
Box 2.1. Examples of competency management systems in PETROBRAS and BNDES and the Ministry for Finance
PETROBRAS, the Brazilian state energy company, has a sophisticated human resource management system that is shaped by the strategy, values and goals of the organisation, with the HR unit reporting directly to the CEO. HRM is well integrated with the companys other business management systems and there is internal integration of the different elements of HRM, such as recruitment, employee development, performance management and compensation. Competency management is a key HRM system. PETROBRAS has defined eight organisational competencies, such as market orientation, technological innovation and managing personnel, and has linked these to nine individual competencies, such as creativity and innovation, teamwork, learning and sharing know-how, and the ability to make decisions. Staff are trained at the PETROBRAS university in both technical skills and competencies. Competencies are used in recruitment and career management as well as for performance management and compensation. BNDES (Banco Nacional de Desenvolvimento Econmico e Social) is at an earlier stage than PETROBRAS. The company has recently created a human resource unit and drawn up a strategic HR plan. Competency management is being approached as a central element of HRM, linked to HR planning, staffing, training and development, assessment and career development. The competency framework is still at the planning stage. Work has started on assessing competency needs and what is available in the company. The results will be integrated into the banks corporate plan and balanced scorecard, thereby ensuring strategic positioning of competency management. One of the challenges envisaged is to introduce competencies into staff selection arrangements. The Ministry for Finance started to develop management by competencies in 2007. There are some common competencies for the ministry as a whole, while each secretariat can also define its particular competencies. The ministry is analysing functions according to core competencies. The ministry considers that management by competencies has enabled it to attract better qualified people. When staff transfer from other ministries or agencies, their competencies are assessed. The ministry is developing a performance evaluation instrument to assess competencies. The ministry has a Talent Bank for management and professional development and the aim is to integrate competency management with talent management.
Source: Presentations to OECD mission, July 2009.
Executive competencies
The issue of executive competencies will have to be addressed if competency management is to be developed as a strategic tool for HRM. While ENAP has defined a set of executive competencies which are used in training, there are no plans so far to develop a set of common leadership or executive competencies for the public service. Nor is there a requirement for people in executive roles to go through a specified training pathway. This is a main weakness in the Brazilian approach to competency management.
Institutional obstacles
The implementation of competency management faces difficulties arising from the strong legalistic framework and culture of the Brazilian public service. Personnel management is at an early stage of transition from a system based on detailed administrative regulations and procedures to results-based management. HRM is still highly centralised and line managers have very little control over recruitment, selection or promotion and therefore little incentive to engage with competency management. Another
institutional obstacle is the current way the system of job categories and associated recruitment rules have been used, which create severe barriers to movement of staff and the establishment of career paths, thereby limiting the extent to which organisations can match the assignment of personnel with the competency requirements of the job (see Section 2.2.). However, the approaches in PETROBRAS and the Ministry of Finance point to ways of making this link. One of the acknowledged problems with implementing competency management in Brazil is how to introduce competencies into the recruitment process for the public service so as to achieve a better fit between the needs of the organisation and the skills and capabilities of the people recruited. Presently, the Constitution does not allow recruitment on examination of experience only as it may allow the use of discretion in recruitment. It has been interpreted quite narrowly and entrance examinations mainly test candidates knowledge and are viewed as a legalistic exercise designed to protect merit and ensure transparency in recruitment rather than as a way to get the best person for the job. To deal with the fact that such recruitment methods are not suitable for meeting competency needs, some public service organisations use the probation period to assess competencies and close any gaps through induction training. A problem here is that recruitment covers only the entry-level grade in job categories, and it can be difficult to assess competencies when people are hired straight from school or university. Nevertheless, some OECD member countries have found ways to incorporate some general competencies, such as communication skills and interpersonal skills, at this stage. Moreover, as established civil servants compete in public competitions in order to move to another job category in the Brazilian administration, competency assessment would certainly add value to the selection process. In addition, Section 2.3. also points to the possibility of opening up some mid-level positions to external recruitment outside of the civil service, although this would have to be carried out outside of the job category system.2 To be effective, such recruitments would have to be carried out by testing competencies. The Brazilian government could look to the experience of OECD member countries such as Australia, Belgium, Canada, Ireland, the United States and others which successfully use competencies as a key part of the recruitment process for these types of recruitments. In the meantime, competencies could also be used to recruitment staff into DAS (Grupo-Direo e Assessoramento Superiores)3 positions, which need to be professionalised, especially for management. While merit must continue to be the cornerstone of recruitment to the public service, the issue of how to modernise methods of testing and assessment of candidates and how to incorporate competencies will have to be addressed. The recommendations regarding recruitment made in Section 2.3 suggest how this could be done; job profiling is discussed below as a possible way forward.

The Brazilian government has already begun to develop competency management in the public service and its approach shows promise. Further developing competency management should be a priority for improving HRM in the Brazilian public service as it can serve as an integrating mechanism and a lever of change for other areas of HRM. Competencies can help to build skills and change behaviours, achieve a better fit between
132 2. STRENGTHENING GOVERNMENT CAPACITY recruitment and the needs of government organisations, contribute to inculcating a culture of management and performance, and increase mobility. To achieve these outcomes, competency management and performance management will have to be developed in a co-ordinated manner and changes will be needed in recruitment, workforce planning, and the grouping and classification of jobs, as discussed elsewhere in this report. The challenge is to develop competency management as an integrated, core part of HRM and to avoid the risk of its becoming an isolated tool or an end in itself. DAS positions, and more particularly, senior management positions, are a priority for the implementation of strategic competency management. Competency management is by no means an easy process and will require a cultural change on the part of the federal government and all major stakeholders. Measuring competencies is complex, both in the recruitment and the performance assessment process; they are less precisely measured than academic credentials or skills. Decisions can nonetheless be taken if processes are transparent and it is understood that competencies are more relevant for selecting and promoting staff than academic skills.
Link competencies to other areas of HRM

Currently, the focus in Brazil is primarily on linking competencies to training. If competency management is to become a lever for developing HRM and managing change, decisions will be needed on when and how to link it to other key areas. This should be done gradually, taking account of the capacity of managers and HR staff. Belgiums experience with developing competency management as a central element in reforms of the public service is a useful example for the Brazilian government. There are some parallels with the issues that Brazil will face in implementing competency management: the Belgian federal administration also has a strong legalistic aspect, a tradition of a closed career system, and relatively short experience with results-based management methods (Hondeghem and Parys, 2002: 71). The competency management system developed in Belgium is a central element in the new federal HRM policy and is intended to integrate HRM processes. It is linked to workforce planning, recruitment, performance management, remuneration, career development and training. A key aspect of the Belgian system is a common competency framework across the federal public service. Another relevant feature is the fact that competencies are being phased in, with recruitment and training as the first steps, but there is an overall strategic plan for linking competencies to other elements of HRM. The methodology for making these linkages may provide some useful pointers for Brazil.4 For example, recruitment of civil servants is usually based on a combination of tests which measure for the competencies required and interviews, carried out by an external recruitment agency. The competencies required for particular positions are determined using a dictionary of competencies which has been developed for the public service. Linking competencies to pay and promotion is done via certified training courses aimed at developing specified competencies, with participants undergoing evaluation to determine that the competencies have been acquired. This results in payment of an annual bonus and there is also a link between acquisition of certified competencies and periodic promotions up the salary scale. The Belgian experience (see Box 2.2) also illustrates the importance of keeping a balance between competencies and other aspects of a performance-based approach to HRM. It is essential for managers and staff to focus on performance and the results to be achieved and to view competencies as a means and not an end (OECD, 2007a: 60).
Box 2.2. Competency management in Belgium

Federal government
Competency management is a central element of the Copernic Plan, launched by the Belgian federal administration in 2000 to drive a more integrated and strategic approach to HRM. Competency management has been used to fundamentally change employee resourcing through the introduction of workforce planning linked to organisational objectives and a radical change in recruitment and selection procedures. Human resource development has been another focal point, with competency management used to reposition training and development as strategic activities linked to organisational needs. The competency framework is described as a 5+1 model: it consists of five groups of generic competencies considered necessary for all functions (information management, task management, management, interpersonal relationships and personal qualities) plus one group of technical competencies which are specific to a type of work. Added to this model in a matrix structure are five key competencies that reflect the values of the federal government: service, co-operation, loyalty, results-orientation and self-development. For A-level staff (university-qualified) the competency framework has been developed around 17 groups of functions, each of which constitutes a career structure. For staff in Levels B and C there are 25 job families, each with its own competency profile. A competency dictionary has also been developed as a tool for managers. One of the first steps in implementing competency management was to make major changes to the recruitment system. The emphasis in entrance examinations shifted from testing knowledge to testing for competencies and new procedures were put in place using a professional recruitment agency. Line managers are responsible for providing a job description and a competency profile. At the time of the OECD Review of Human Resource Management in Government Belgium in 2007, some 70% of selections were specific to a certain experience and level of competencies. Improving the recruitment of managers has been a priority of the Copernic reform. A set of 12 generic competencies is used for recruiting senior managers (mandataires), to which competencies specific to the position can be added. The competencies are: thinking (analysis, flexibility and innovation, vision and capacity for integration); human resource management (coaching, motivation and development of personnel, team management); interaction with the environment (collaboration and development of networks; orientation to citizens, internal clients and society); objectives (sense of responsibility, achievement of objectives, persuasion and negotiation); other (oral and written communication, loyalty and integrity). The other key area in which competency management has been implemented is training and development. Performance appraisal includes a discussion of competencies and leads to staff development plans; training has been reoriented around these. The OECD review noted, however, that this approach may have led to too little attention to performance outcomes. This is, however, a question of getting the appropriate balance rather than an inevitable result of linking competencies to performance management. Competencies are also linked to pay and promotion. Successful completion of certified training, which is subject to a rigorous evaluation that specified competencies have been acquired, results in payment of a bonus. Promotion also depends on having successfully passed through certified training.
Box 2.2. Competency management in Belgium (contd)

Flemish government
The experience in the Flemish administration offers some valuable insights into sequencing the introduction of competency management. Priority in HRM reform was given to performance management, and a new performance appraisal system (PLOEG Planning, Leadership, Followup, Evaluation and Reward) set up an integrated HR management cycle. Within this framework, families of functions were defined and job descriptions and corresponding competency profiles developed. This has helped remove barriers to mobility. Job descriptions and competency profiles were used as the starting point for the performance appraisal system, which contained both results objectives and development objectives. The PLOEG system is considered to have provided important leverage for establishing competency management.
Source: OECD (2007a), OECD Reviews of Human Resource Management in Government: Belgium, OECD, Paris; Belgian federal governments personnel website, www.fedweb.belgium.be/fr, accessed September 2009; and Hondeghem and Parys (2002).
Competencies in workforce planning

As recommended in Chapter 1, the Brazilian government needs to develop a system of workforce planning. The French experience with this, although still being developed, shows how competency management can improve workforce planning, be a tool for improving recruitment methods and open up better perspectives for mobility. The GPEEC system, introduced in the early 1990s and revised in 2001, and the RIME system (Rpertoire interministriel des mtiers de ltat), launched in 2006, are described in Chapter 1.
Use of competencies and job profiling for recruitment

The recruitment process for the Brazilian public service would be improved by developing standard job profiles which set out accountability, results and required competencies for jobs. The core of a job profile is a statement of the jobs purpose and expected outputs or key result areas. This is the essential starting point for defining what the organisation wants from the person who will do the job. The job profile should contain information about the requisite skills, knowledge and other requirements. A job profile can be developed for an individual position or for a job category. Annex 2A.1 gives an example of a job profile template. Job profiles can also add value to other areas of HRM, including training, identification of career paths and workforce planning. A set of generic job profiles for different positions could help the Brazilian administration increase staff mobility. Job profiles can also help support performance management by setting out the key results expected and helping employees understand what competencies are required to perform well.
Competencies and performance management

Competencies should also be linked to performance management and the two systems should be developed in tandem. This calls for a competency framework. Care is needed so that this does not lead to a focus on inputs rather than achievement of results or to an overly cumbersome approach. A well-designed performance management system should incorporate both results (the what of performance) and behavioural competencies (the how of performance). The skills of managers and HR staff and their willingness to engage with the system are critical for it to work well. This takes time and effort. A competency framework, such as the one as suggested below, would help.
Competencies and job categories

In the longer term, competencies should also be linked with the reorganisation of the system of job categories and improvement of career paths. This is a major undertaking. The section of the report dealing with career structures suggests possible approaches to restructuring the career system. In this context, competencies could be a lever for identifying how jobs could be regrouped, for example by defining competencies by mtiers (the French approach) or by forming professional groupings for the civil service (as in the United Kingdom). Job profiling could be a way to approach this by developing generic profiles for key job categories. This can open up opportunities for mobility and career development.
Competencies and remuneration

Linking competencies to remuneration or rewards is not recommended. It is difficult to use competencies for pay purposes because it is difficult to measure competencies. It tends to lead either to a mechanistic approach that is of doubtful value and/or to lack of trust in the system which can undermine other aspects of competency management. Moreover, competency-related pay tends to lead to a focus on inputs in terms of competencies achieved rather than results and actual performance.
Develop a competency framework for the public service

Developing a competency framework is important if competency management is to become a key element of HRM. While flexibility is necessary, consistency, based on common concepts and approaches, is also important. Without a common framework, there is a danger that the different government organisations determine an unlimited number of different competencies that are inconsistent and undermine mobility. ENAPs work on developing a common language around competencies is an important step towards a common approach. The next step should be to work with ministries and agencies to develop a framework for leadership and management competencies, as well as core competencies that are considered important and common to the public service as a whole. A consistent framework will facilitate implementation and should, in time, help to promote mobility by highlighting competencies that are common to different areas of work, particularly if staff are given opportunities to develop their competencies. The aim should be to keep the framework as simple as possible and limited to a few core competencies. Such a framework can also provide scope for professional or technical competencies, which would give individual organisations sufficient flexibility to tailor it to their needs. The framework should be supported by tools and guidelines developed by the Ministry of Planning.
Box 2.3. The Professional Skills for Government framework in the United Kingdom
The Professional Skills for Government (PSG) competency framework is a structured way of thinking about jobs and careers for civil service staff at all grades. It sets out the skills people need to do their jobs well, no matter their grade or where they work. For managers and senior civil servants, the framework sets out common skills requirements. For other grades, a common framework was launched in July 2008 and will be embedded in departmental frameworks by 2012. This is intended to ensure consistent professional standards across government and to aid transferability of skills both within the civil service and across the wider economy. The framework comprises four elements:
Leadership competencies are at the centre of the framework and include providing direction, delivering results, building organisational capacity and acting with integrity. Core skills are the generic, transferable skills required to work effectively in government, such as leadership, financial management and communications. Core skills are centrally defined by the PSG competency framework. Departments and agencies are responsible for ensuring that their employees develop these skills. Professional skills are the skills required for a particular role or group of roles, e.g. legal skills for lawyers or customer service and processing skills for contact centre staff. Professional standards are the skills standards appropriate to a particular role or level of seniority within a professional grouping.
An important step in setting up the framework has been to segment the workforce to ensure that the standards set are relevant for individual job roles. There are currently 25 recognised professions in the civil service and the vast majority of staff can be considered to belong to one of them; 75% of staff belong to the operational delivery or policy delivery professions, including over 200 000 staff working in administrative roles. It is in these two professions that the major implementation challenges are to be found. One is to review whether the 25 professions already in existence which came into existence over many decades and in an ad hoc manner do indeed segment todays workforce in the most appropriate way. Staff are encouraged to use the framework to take responsibility for their own development and career planning to find out what competencies they should have in their current job and what they might need to gain to change jobs or seek promotion. They are encouraged to do this in line with the performance appraisal cycle.
Source: UK Civil Service, www.civilservice.gov.uk/people/psg/index.aspx, accessed in August 2009.
The experience of the United Kingdom is useful in this regard. When competencies were first introduced in the 1980s and through the 1990s, the approach was not consistent across the civil service. As there was no central policy or standard framework, practice developed in an ad hoc and incremental way. The main lessons learned from this approach was that while it provided opportunities for organisations to learn from one another, it led to both successful and unsuccessful competency systems and some organisations did not adopt competencies at all. As the United Kingdom government embarked on major reforms of the civil service, a standard approach to competencies for senior servants was deemed necessary to inculcate cultural change across the senior ranks and to develop new leadership skills that were deemed essential to modernising government. In 2001 a common competency framework was introduced for the Senior Civil Service.5 The framework includes leadership competencies and core generic
competencies that are common to the whole public service, as well as professional competencies that may be specific to a particular type of work.
Align professional development with competencies

The UK example illustrates how professional development can be aligned with competencies. Progress has already been made in this area in Brazil through the requirement that all public service organisations develop their training plans on the basis of competencies. The next step is to ensure that all ministries and agencies actually establish competency-based training plans and to support those that may be struggling. Training needs to be linked to performance via competencies. To achieve this, discussion of competencies and development planning should be incorporated into the embryonic performance management system. This is a challenge in terms of the capacity of managers and HR staff to formulate and carry out training and development plans aimed at improving performance. It is also a challenge in terms of the capacity of government training schools to deliver competency-based training. There would appear to be scope for the Brazilian administration to develop partnerships with universities as a way of increasing the capacity to train staff, particularly for management development, as long as the government develops clear objectives and maintains some control over the methods used.
Prioritise management and leadership competencies

Equipping managers and leaders with the right competencies is critical for managing change in the public service. Competency frameworks for senior management have been used successfully to drive modernisation and reform in government in a number of OECD member countries. These frameworks provide a common approach to management and leadership by identifying core competencies, defining the expected standard and providing the basis for leadership development. This helps build a cohesive culture and a whole-of-government perspective among senior managers; these are considered critical for effective delivery of government policies. In putting in place a competency framework in the Brazilian public service, priority should be given to defining a simple, well-focused set of core management and leadership competencies. ENAP has already made a start in this regard, working in partnership with the Canadian government. The leadership competencies used in the Canadian public service provide a useful guide (see Box 2.4). Australia offers another way to use management and leadership competency frameworks to develop the skills of senior managers and to integrate a range of HRM activities, from selection and development of managers to career planning, strategic HR planning and performance management (see Box 2.5).
Box 2.4. Leadership competencies in the Canadian public service

In the Canadian public service, competencies are defined as the skills, abilities and characteristics which an employee draws on to perform his/her work and which are observable as behaviours or actions. The key leadership competencies are the competencies required of leaders at all levels and consist of the following core competencies:
values and ethics serving through integrity and respect; strategic thinking innovating through analysis and ideas; engagement mobilising people, organisations and partners; excellence delivering results through:
action management: design and execution; people management: individuals and workforce; financial management: budgets and assets.
The competencies are tailored to each level of leadership and identify the specific behaviours required for each level in the profile. The detailed description of the associated behaviours for each competency for all levels can be found at: www.tbs-sct.gc.ca/tal/kcl/intro-eng.asp. The key leadership competencies profile serves as a tool for executive appointments in the public service and for the executive performance management programme, as well as the basis for executive qualification standards. Departments and agencies also use the profile in broader HR management activities, including departmental talent management and leadership development programmes, the development of competency profiles for departmental and functional community positions, learning and career planning, and establishing performance expectations. The key leadership competencies profile has been integrated into recruitment, staffing and promotion criteria. Departments can implement the profile as is, or adapt it and supplement the leadership competencies to reflect the particular requirements of their organisations. Key leadership competencies are relevant to the work of all employees. Staff are encouraged to use the framework to take responsibility for their own development and career planning to find out what competencies they should have in their current job and what they might need to gain to change jobs or seek promotion. They are encouraged to do this in line with the performance appraisal cycle.
Source: Treasury Board of Canada Secretariat, Office of the Chief Human Resources Officer, www.tbssct.gc.ca/tal/kcl/intro-eng.asp, accessed in August 2009.
These types of competency frameworks comprise not only the capability profile or competencies for leadership, but also a set of leadership development programmes, tools and resources that are linked to the framework and accessed in a variety of ways, including through highly visible dedicated Internet sites for public servants that make it clear how the different elements join up and are to be used. Encouragement of networks is also an important element of the frameworks.
Box 2.5. Australias Integrated Leadership System

Since 1999 the Senior Executive Leadership Capability (SELC) Framework has become the standard for senior executive selection and development in the Australian Public Service (APS). Building on this framework, the Integrated Leadership System (ILS) has been developed to support a whole-of-government perspective and a foundation for leadership development. The framework applies to leadership at all levels from supervisors up to senior managers, with some distinctions as to what is expected at different levels. As well as setting expectations as to the capabilities and behaviours expected at each level of management, the framework provides a pathway for leadership development. The ILS is based on five core capability clusters: shapes strategic thinking, achieves results, cultivates productive working relationships, exemplifies personal drive and integrity; communicates with influence. It is used to integrate a range of HRM activities, including selection of managers, leadership development, performance management, planning for the Senior Executive Service and broader organisational development initiatives. An important aspect of the framework is a set of guides and tools to assist in professional development, capability planning and succession management. These include:
APS leadership model: The APS leadership model assists agencies and individuals to address their particular requirements for leadership, management and technical expertise. Leadership pathway: The leadership pathway identifies and describes leadership capabilities at executive and senior levels. It illustrates the levels of complexity in which the APS operates and identifies new behavioural elements for leaders at each stage of their career path. Support tools: Practical tools have been developed to assist individuals, leaders and HR practitioners. Agencies and individuals will select those tools that suit their requirements and particular contexts. Programmes: Outlines information on leadership, learning and development programmes.
Source: Australian Public Service Commission, www.apsc.gov.au/ses/index.html, accessed in August 2009.
Generally, a central department or agency is responsible for co-ordination and oversight. The key point to underline about central agencies is that they play a strategic role and do not get involved in micromanagement. For example, the United Kingdoms Civil Service Capability Group in the Cabinet Office is responsible for the corporate development of senior leaders. In New Zealand, the State Services Commission has the lead role. In Australia this is done by the Public Service Commission, in Canada by the Office of the Chief Human Resources Officer, and in the United States, the Office of Personnel Management is the lead agency. Individual departments and agencies and public servants themselves are expected to play an active role in developing leadership capabilities. One of the challenges for the Brazilian government will be to put in place the type of senior management system in which such a competency-based approach can be applied. As discussed in Chapter 4, there are various ways to do this, without losing the flexibility that the DAS system affords. Whatever approach is chosen, competency-based management for the senior public service presupposes some form of open, competencybased selection system for professional managers (except maybe, at the very top of the hierarchy), a consistent approach to developing core competencies among senior
140 2. STRENGTHENING GOVERNMENT CAPACITY managers, and a link between competencies and performance management. This can, however, be balanced with the need to maintain some level of discretionary appointments for some senior civil servants. A framework of management and leadership competencies is also a valuable tool for identifying and developing people with potential and for strategic planning for leadership positions, provided the necessary support structures are in place.
Create ownership and a roadmap

Creating ownership of competency-based management across the public service is essential. One of the main reasons why competency management fails to achieve its aims is that managers and staff do not support it and top management does not make it a strategic priority. In such cases, a great deal of effort can be expended for little result. Involvement is the key to building ownership. The process of developing a competency framework is extremely important and, if done well, is itself a key step in building a leadership culture. Involving managers, staff and other key stakeholders (external clients of government services, unions, politicians and others) is critical. Box 2.6 illustrates how stakeholders were involved in developing competencies in the Canadian and New Zealand public services. Box 2.6. Development of competencies in the public service in Canada and New Zealand
In Canada in spring 2008, consultations were held with a wide range of stakeholders and potential users. Valuable input was received from representatives of over 30 departments and agencies. Focus group sessions were held with a cross-section of employees at various levels, including employees without supervisory or managerial responsibilities. Employee-level effective behaviours were then finalised and added to the key leadership competencies profile.
Development of competencies for chief executives in the New Zealand public service
The competencies definitions for New Zealand Public Service chief executives have emerged from an exhaustive and comprehensive process of interviews, focus group discussion and analysis. This involved gathering a wealth of data on a range of behaviours across a range of chief executives. The information was then analysed to identify key behaviours. It was taken to a higher level of abstraction by the consultants. As such, the competency definitions are far more than a simple listing or verbatim summary of the raw data gathered, reflecting rather the conceptual constructs overlaying the behaviours described in those data. Furthermore, they represent the combined view of a large range of people, including politicians, public service chief executives and senior managers in the public and private sectors.
Sources: Treasury Board of Canada Secretariat, www.tbs-sct.gc.ca/oro-bgc/im/im-stand-norm-eng.asp accessed in December 2009; New Zealand State Services Commission, New Zealand Public Service Chief Executive Competencies Profile, www.ssc.govt.nz/display/document.asp?docid=7477, accessed in December 2009.
As a first step in building ownership of competencies in the Brazilian administration, it is recommended to involve senior managers from a cross-section of ministries and agencies in some of the meetings of the Steering Committee. The Steering Committee should draw up a roadmap for implementation which identifies critical linkages with other HRM reforms, such as recruitment, and sets out the key milestones. The roadmap should be developed in consultation with stakeholders and disseminated widely as a way
of building understanding and ownership. Heads of ministries and agencies, line managers and senior HR staff in ministries and agencies should be given well-defined responsibilities for implementation. The Steering Committee should also take on the role of monitoring implementation, and reporting, identifying and addressing the problems that inevitably arise in implementation.
Build capacity for competency management

While the goal in Brazil should be to use competency management as an integrating mechanism for developing HRM, there is a real risk of its becoming unwieldy and overly bureaucratic. There are numerous examples of organisations in both the public and private sectors with large competency handbooks that are not particularly useful to managers or staff. Ways to avoid this situation include: involving managers and staff in defining competencies; reviewing competencies periodically to ensure they are still relevant; focusing competencies on things that affect outcomes for users of public services; keeping it simple not too many competencies; investing a lot in training mangers to work with competencies and in developing staff on the basis of competencies. Implementation in Brazil will need to be consistent with the administrations capacity to deal with the changes, and the roadmap suggested above should make a realistic assessment of the sequencing of implementation. The skills of managers and HR staff will need to be built up. A start has been made in this domain with the courses in competency management offered by ENAP and other government training institutes. Sharing of experience within the Brazilian administration should be encouraged, for example through conferences, learning events, study trips for managers and short-term developmental placement of HR staff in organisations that are considered to be examples of best practice.
2.2. Job categories and career paths

The structure and management of job categories and career paths have important implications for workforce flexibility and for the cost-efficient organisation of staffing. An effective system should enable the government to structure employment and deploy staff optimally to meet operational needs and to adapt to changing requirements. It should provide sufficient flexibility, in terms of staff mobility within ministries and between different parts of the public service, to meet the employers needs and to enhance career opportunities for staff. Fluid movement into and out of the public service is another important aspect of flexibility. A good system should also ensure that the public service can recruit and retain the talent it needs by offering sufficiently interesting and attractive jobs and career opportunities. Whatever approach is taken should also enable public service employers to manage their pay costs, for example by avoiding the undue fragmentation of job categories that leads to fragmented pay negotiations. The requirements for an effective system can be satisfied in a variety of ways. One useful way of thinking about possible approaches is to look at four inter-related dimensions:6 how jobs are defined, classified and grouped together for example in grades, corps or occupational groups and the extent to which these are more open or more compartmentalised;
142 2. STRENGTHENING GOVERNMENT CAPACITY how career development is organised points of entry via external recruitment, rules about career progression and the extent to which more senior jobs are filled through internal promotion; job security the extent to which employees can expect to make a longer term career in the organisation; how pay is determined how jobs are classified for pay purposes, method of pay progression (salary scales, whether there is a link to performance).
Each of these dimensions influences the others. For example, if job categories are narrowly defined, this tends to limit opportunities for career development through lateral mobility. To take another example, if there are multiple points of entry at different levels of seniority, this affects opportunities for internal promotion. Approaches to career management will differ depending on the extent to which there is a relatively closed, long-term career structure or a position-based system. In the former, career progression tends to be organised through internal promotion. In the latter, career management tends to take the form of counselling, grooming and training people to prepare them to compete for new job opportunities. This section of the report focuses primarily on the first two aspects: job categories and career paths. The other two aspects are dealt with in other parts of the report.
Two main models in public administrations

Different types of organisations need to find the right means of structuring jobs and career paths to meet their needs. Devising a suitable system should be a key element of an organisations human resource strategy. Public administrations will find it both necessary and rational to reduce transaction costs by dealing (as far as possible) with collectives rather than individuals. This means structuring the workforce in a number of sub-groups. This can be done on the basis of the job to be done by the employees (occupational groupings) or according to the professions to which employees belong (professional corps). Although the two are sometimes the same, this is not the norm. Also, a job category may sometimes be subdivided in terms of the ministry or department. This might be done to protect individual sub-organisations against competition for good staff from other sub-organisations and thus to enhance the stability of each sub-organisations workforce. However, the price may be reduced flexibility and possibly a non-optimal allocation of scarce skills and competencies. In terms of the two main models occupational groupings and professional corps there would typically be a central procedure for selecting and admitting new candidates, a procedure often called a competition. As a result, the public administration workforce would consist of a number of groups or categories. Some employment conditions and arrangements would be the same for all employees, while others could vary across the groups or categories.
Vertical structuring of job categories

To this horizontal structuring must be added vertical structuring based on the required levels of qualification. A typical approach uses the level of education required; for example, secondary school diploma, first university degree or post-graduate university degree. Professional qualifications and/or levels of competencies might also be used to differentiate among the levels of qualification required.
Job categories requiring only a basic education would normally not provide much opportunity for substantial functional promotion within the category. The main reason is that the jobs themselves are typically very homogeneous. Such jobs are becoming rarer in public administrations in OECD member countries as basic functions such as cleaning and maintenance tend to be outsourced and the knowledge content of much of the work has increased. Still, it would be rational for the organisation to set up a salary scale and reward employees that stay on with salary increases as they gain experience. There may also be opportunities for minor functional promotions. It would, however, be misleading to talk of these arrangements as careers. Categories requiring a university degree or jobs typically filled by people with university degrees open up a wider range of possible designs. In these cases, it is possible to set up an internal vertical hierarchy within the category and to allow for functional promotions within it. Such promotions should preferably be based on internal competitions, although there are also examples of systems in which seniority plays a central role. Ultimately, these hierarchies may reach up to the top and enable internal promotions to senior management positions. In these cases, the term career is of course appropriate. However, a public administration might instead use vertical layers of job categories and require a new examination or competition which is also open to external candidates for a functional promotion from the ordinary to the senior level, from the senior to the management level, and from the management to the senior management level. In these cases it would be misleading to talk of the arrangements as careers. In fact, as soon as open competition for promotion to a higher level is introduced, the job category is de facto divided into two. This reflects the fact that it is the procedure for entrance into a category that defines the category.
The experience of OECD member countries

The organisation of job categories and careers has evolved in many OECD member countries in recent years, as governments seek increased flexibility (ability to redeploy staff, reorganise how work is done, increase mobility) and more efficiency (reduce transaction costs associated with managing employees in different groups, introduce results-based management, improve performance incentives) (for an overview of trends see OECD, 2005b). Efforts to increase the flexibility of the workforce have led, for example, to the creation of broader occupational groups or the merging of professional corps and to the redesign of jobs to provide for more functional flexibility. In careerbased systems, there has tended to be an opening to external recruitment at more senior levels, with performance, rather than seniority, more important for career advancement. Lifetime employment systems have been eroded by changes in the rules applying to tenure of civil servants. Examples of changes made to pay and grading systems in various countries include the replacement of incremental pay scales by broad salary bands, restructuring along the lines of job families, the introduction of performance-related pay or rationalisation of job classification systems. Other examples of the search for increased flexibility and efficiency would be the delegation of responsibility for pay and grading to individual ministries and agencies. Box 2.7 gives some examples of different ways of organising job categories, problems encountered and types of reforms introduced.
Box 2.7. Organisation of job categories in some OECD member countries

France provides an example of recruitment and careers organised on the basis of a professional corps. Each corps has its own employment statutes regulating pay and promotion. Corps are usually subdivided into grades and a persons grade is linked to their corps rather than their job. Corps may be based on professional or functional groupings and may be specific to one ministry or department, or they may be inter-ministerial. Recruitment generally occurs at base grade within the corps. These types of systems have tended to produce rigidities in terms of barriers to mobility, the multiplication of narrowly defined corps and the growth of corporatist interests that defend the advantages of the corps. The separation between the grade a person holds in their corps and the position to which they are assigned provides a degree of mobility although this has proved insufficient. Recent reforms therefore aim at increasing mobility by introducing an occupational element (lapproche mtier) as well as merging corps. Spain has moved to a mixed system in which the position as opposed to the corps has become a key element of human resource management. Canada and the Netherlands are examples of systems in which job categories are structured according to occupations. Employment in this type of system tends to be position-based, with recruitment occurring at any level. A problem which has arisen in these systems is the fact that a large number of different occupational categories can create barriers to mobility and flexible work practices and lead to fragmented pay and industrial relations structures. Changes have aimed at reducing the number of occupational groups, as in Canada, creating new career pathways that cross occupational groups and integrating the senior management levels across the service as a whole, for example through the creation of a senior executive service as both Canada and the Netherlands have done. Ireland and Japan are examples of career-based systems in which most jobs are grouped into service-wide grades which form a career and pay ladder. Recruitment tends to be mainly or exclusively at entry level, with promotion linked to a series of grades. A clear distinction needs to be made in these systems between salary progression within the grade, which is not promotion in the real sense of the term, and functional promotion to a post with higher responsibilities. In Ireland specialist and departmental grades have tended to grow over time, leading to fragmentation and inflexibility, and careers have in practice tended to be managed on a departmental basis, thus reducing mobility. Changes have aimed at increasing flexibility and mobility, for example by integrating some specialist grades and opening up competition for promotion to higher grades. In Japan, careers tended to be managed on a departmental basis, but in April 2009, the career system based on grading was changed to a career system based on standard competencies for standard positions of job categories. Promotions are now mainly based on competency assessment (in addition to performance assessment) using standard competencies as criteria. Service-wide pay grades are now only used for pay. Australia, New Zealand and Sweden have decentralised, individualised systems, in which individual ministries or agencies have the flexibility to define their own structures. Incremental pay scales and career ladders based on grades have been replaced by more flexible, performance-based systems. In these systems, new approaches to career development have emerged, with employees developing their competencies, employers investing in learning and coaching for their staff, and identification of flexible career pathways that individuals may follow, subject to their capability and aptitude. Agencies may find it in their interest not to individualise and differentiate. In Sweden a number of government agencies that provide functions or services across the country have set up internally defined job categories and sometimes even careers. Among these are taxation, customs, social security administration, and labour market services. The same picture has emerged in Australia and New Zealand. One driver is the need to ensure equal service standards across the country and thus to set equivalent standards for skills, competencies and selection criteria when recruiting, rewarding and promoting. Another driver is the desire to create an esprit de corps, a shared feeling of belonging to a group with a shared mission, a shared commitment and shared values. It should also be noted that in these systems some careers may be governed by statutes, such as diplomats, police officers, military officers and judges (in Sweden).
Entry and promotion arrangements and career development

Entry and promotion arrangements in the public service can be analysed in terms of the extent to which they are relatively closed or open and the extent to which career progression is more or less structured. In some public services, civil servants are hired at the beginning of their career at the lowest hierarchical level corresponding to their level of education and may expect to be promoted up through a series of levels of increasing responsibility provided they are reasonably competent. There are defined promotion structures, such as grades, although promotion opportunities are limited by the existence of a pyramidal structure, with fewer positions higher up in the hierarchy. Internal selection procedures ensure merit, although there is often a strong element of seniority in promotion arrangements. This sort of system is characterised by limited possibilities for entering the civil service at mid-career and a strong emphasis on career development. Examples include France, Greece, Ireland, Japan and Spain (OECD, 2005b). In another type of system all positions are open to competition, whether by external recruitment or internal appointment. External recruitment to higher levels of the hierarchy is relatively common. While individual positions may have grades for pay purposes, there is usually not a series of defined promotion grades or steps from lower to higher level positions. Examples include Finland, New Zealand, Sweden, Switzerland and the United Kingdom (OECD, 2005b). Both types of system are evolving as public services seek to achieve more fluidity and more internal mobility. The emphasis on performance and competency development is also changing the approach to career development: Public services that had closed career structures, such as Ireland, have opened up opportunities for external recruitment to more senior levels as well as internal promotion opportunities through the establishment of competitive, interdepartmental selection procedures. There is an increasing focus on talent management in a number of public services as a way to enrich the pool from which people are selected for more senior positions and to retain talented people. Australia and Canada have systems linked to leadership competency frameworks to identify people with the potential to progress to more senior levels and provide them with mentoring and development opportunities. This type of talent management is becoming increasingly important as public services seek to retain the best people. There is increasing emphasis on self-managed career development, with a move away from the notion of an assured or predictable career path. Competency frameworks provide a structure for people to learn and develop and they are encouraged to plan their own careers and apply for jobs that meet their career development aims. This presupposes a relatively sophisticated annual development dialogue within the performance assessment system, during which the employee and his/her supervisor discuss development needs and agree on a personal development plan. Lateral job moves, to a different job at the same level, are encouraged as a way of expanding competencies and gaining experience. Possible career paths may be identified in order to help people with their career planning. In the United Kingdom, the Professional Skills for Government competency framework provides the backbone of the system.
The situation in Brazil Job categories

The organisation of job categories in the Brazilian federal government has been implemented in a complex and fragmented way by different ministries, making for an extremely rigid system compared to OECD member countries, and subject to lobbying and pressures from different groups to create differentiated employment conditions. Successive attempts at reform and solutions intended to address the changing needs of individual institutions have led to a wide variety of arrangements. This further contributes to complexity and rigidity. The federal government workforce is organised into the following job categories: The largest part of the workforce is grouped into 129 careers (carreira). While a few of these appear to be similar to the diplomatic or juridical careers that exist in most countries, and to provide for promotion to a succession of posts of increasing responsibility, the majority are not really careers in the proper sense of the term. Most consist of a narrowly defined occupational or professional job category, although some may contain more than one category for historical reasons. The only form of progression possible in most of these job categories is movement up the salary scale based on seniority or a combination of seniority and performance. Many careers appear to be specific to a ministry or agency. Each has its own salary scale and allowances. A number of groups of jobs (plano de cargos) are inter-ministerial job classification schemes developed in an attempt to rationalise the employment system and facilitate mobility between institutions. Around a quarter of the active workforce belongs to these job classification schemes. The largest group (around 81 000 public servants) covers the Ministries of Social Security (except the National Institute of Social Security), Health and Labour. The other large group is the PGPE (General Group of Jobs of the Executive Branch) (around 43 000 public servants) which is related to administrative, manual operational, and technical and professional jobs in almost all public bodies. It was created in 2006 as a successor to a similar group, the PCC, created in the 1970s in an attempt to organise public service jobs into a general classification scheme (following another category that was created in the 1960s). The earlier attempt failed, as the most powerful groups started to exit this job system to create their own careers. There are 22 special groups of jobs (plano especial de cargos) attached to individual institutions. These were developed as ad hoc solutions to new demands on the public service and differentiated salaries for some groups. They have their own salary scales which are usually higher than those for similar jobs elsewhere. A few job description plans (quadro de pessoal) are attached to individual institutions. These are like establishment plans, again with their own salary scales. A few isolated positions.
This system is complex and expensive to administer given the many different job categories. There is duplication and overlap and a number of job categories no longer meet the operational needs of the public service. Some groups preferential arrangements tend to give rise to competing claims from other groups, creating pressures for further ad hoc changes rather than systematic reform.
In the interest of clarity, the term job category rather than career will be used for the remainder of the discussion to describe the Brazilian arrangements. The term career will only be used in the generally understood sense of the word to discuss the HR policies and practices that determine how employees progress within the organisation and how management jobs are filled.
Corporatist attitudes
In theory, a well designed and well implemented job category system is indispensable in a career-based system and should allow mobility. In practice, the way it has been used in the federal government has rigidified the system by providing a myriad of different employment conditions that depend not only on the functional attributions of careers, but also on how they are adapted by each government organisation to adapt their organisation and favour their own employees. This has created a negative circle in which individual groups are favoured through the tailoring of employment conditions in their own groupings, and the differentiated employment conditions foster corporatist attitudes, with each group defending its interests and resisting changes which might disadvantage them. This hinders strategic management of the workforce and vests too much power in strong occupational or professional groups. As a result, much HRM attention appears to focus on restructuring salary scales for individual groups rather than rationalising the overall structure.
Exceptions to the job category system

In the Brazilian system, there is a separate system for a number of junior and management positions that is not linked to the job categories outlined above. The DAS system and other management categories are discussed in Chapter 4. Entry to and reappointments to such positions are discretionary and appointments are not subject to welldefined, competitive, transparent procedures, although some parts of the administration have established such procedures. Employees position on the salary scale for their job category in many cases bears no relation to their position in the management structure. There is no mandatory process for the selection process for appointments to supervisory and management roles, which are part of the DAS system and management roles in other categories and functions of confidence (Cargos e Funes de Confiana e Gratificaes), and it is left to the discretion of the recruiting supervisor. Some of them use some transparent competitive processes. The more senior appointments are at the discretion of the minister, while at lower levels appointments tend to be made by senior managers. There is therefore no formal system of career progression or career management for public servants in the true sense, although many are appointed to DAS positions. Moreover, as the DAS system extends down to junior supervisory and middle management roles, this means that most job categories do not contain a structure of higher level positions into which employees can be promoted. Recent regulatory changes that have made the filling of positions by a minimum of public servants mandatory, however, have improved the perception of public servants that DAS positions are part of possible career paths. DAS positions are not only for management and supervisory positions. The DAS also has positions that are used to provide mobility within the public service and lateral entry from outside the public service. While increasing flexibility and mobility are welcome, it is unfortunate that the processes for appointments are left entirely to the discretion of
148 2. STRENGTHENING GOVERNMENT CAPACITY recruiting supervisor without any requirement for transparency and competency-based process. In addition to the DAS positions, the so-called Commissioned functions (about 50 000 posts) also involve discretionary recruitment procedures but those have to be made entirely within the group of existing civil servants. The Commissioned functions are outside of the regular pay scales for regular job categories and have been used mainly for boosting salaries of some positions that include few if any managerial or supervisory functions.
Barriers to mobility
Apart from the DAS, the current system results in an inflexible public service with high transaction costs attached to managing so many different groups of employees with different terms and conditions of employment. In general, opportunities for lateral mobility appear to be very limited, while arrangements for vertical career progression appear, for the most part, to be unstructured and lacking in transparency. Although there are isolated instances where people have been borrowed by central government from state-owned enterprises (though the formal employment link remains with the original employer), research indicates that there is little rotation of federal officials around the administration (Beltro et al., 2005). Mobility is limited by the fact that many categories are narrowly defined and are specific to individual ministries or agencies, even for similar functions, without any general classification system that would allow determining equivalent positions across ministries. Constitutional provisions relating to recruitment into a job category are also an important brake on mobility. The 1988 Constitution does not allow a public servant to move from one job category to another without passing through a new public competitive examination, a provision probably aimed at preventing patronage in the management of the public service. Before the 1988 Constitution, it was possible to move from one job category to another within the same group by internal promotion; that possibility no longer exists, even though some groups contain more than one job category. When moving to a new job category as a result of passing a new public competitive examination, a public servant enters at the starting point of the salary scale for the new job category, regardless of his/her former position. This means that experience is not recognised as a factor for promotion to different categories, and the system counts on the un-transparent appointment to DAS positions to provide a level of recognition to those who cannot change careers through knowledge-based competitive examinations.7 As an additional barrier to mobility, the functions and attributes of each job category are defined by legislation and tend to be interpreted narrowly. The result is that public servants effectively have tenure in an individual position and it is virtually impossible to redeploy unwilling staff to another ministry. The creation of a number of inter-ministerial job classification schemes (plano de cargos) provides for mobility for the functions or professions concerned, although it has not been possible to determine how much movement of staff actually occurs. Moreover, these arrangements only concern around 25% of the workforce. This makes it extremely difficult to reallocate staff, with the result that new needs tend to be met by hiring more people rather than by redeployment or by creating special groups of jobs with more favourable pay and conditions (plano especial de cargos).
The DAS system enables mobility among staff at supervisory and management levels, as these staff can be appointed and removed from their positions at will. However, it is unclear to what extent mobility actually occurs, especially between ministries. Moreover, as discussed below, this approach to filling management jobs is fraught with disadvantages, although progress has been made in recent years. Mobility between central government and state-owned enterprises appears to happen, but only rarely through a borrowing procedure. The formal employment link is still with the home office. Efforts are being made to reduce the level of specialisation of job categories in order to increase flexibility. However, as it has proved very difficult to revise the legislation describing the attributes of existing job categories, this is primarily done by defining the functions of newly created categories as broadly as possible. Over time, some interministerial job categories have also been created; for example, the Specialist in Public Policy and Government Management Career (EPPGG) and the Science and Technology group.
Limited opportunities for career progression

For vertical career progression, most job categories appear to offer few opportunities for a real career. Exceptions may include the Revenue Service, the Treasury, the Diplomatic Service and some state-owned enterprises, which appear to have career management systems in place. The only form of progression available in most job categories is movement up the salary scale. This is not career progression in the correct sense of the term. The job categories are generally divided into a number of classes. Within a class, progression up the scale is based on length of service as well as performance evaluation results and in some cases training hours. Progression between classes is generally related to the performance evaluation results and the time spent in the last pay step of the last class, usually 12 or 18 months. Promotion within ones job category therefore merely means progression up the salary scale over time. Everyone can reach the top of the scale, usually in 13 to 20 years. For staff in this situation, who also face barriers to lateral mobility and the lack of transparency in the appointment process for the DAS, the lack of career opportunities must be demotivating. Many are at the top of their salary scale, with no prospect of promotion or transfer to another job category. From the point of view of the employer, this creates pressures to raise salary scales with pressure from staff and unions to restructure careers. DAS appointments may be made from within or outside the public service, although for less senior levels, there are ceilings on the proportion which may be filled from outside: 75% of the people in supervisory and junior management positions (Levels 1-3) and 50% of those in middle management positions (Level 4) must be permanent public servants (from federal government, states and municipalities, as well as retired public servants and employees of state-owned enterprises). Efforts are being made to increase the proportion of positions reserved for public servants and a draft bill to this effect is currently with the Congress. There is no ceiling on the number of persons who are not public servants who may hold positions at the most senior levels of the DAS (Levels 5 and 6). Currently, around 39% of the positions are currently filled by such persons. While the DAS system facilitates lateral entry into the public service at more senior levels as well as internal mobility, the lack of transparency in the selection process means
150 2. STRENGTHENING GOVERNMENT CAPACITY that staff have no clear career perspective. It also means there is little incentive for the employer to engage in formal career management or succession planning to ensure that talented staff remain in the public service and have the opportunity to compete for more senior roles. The recent regulation that has required a minimum percentage of public servants in most DAS positions (except top levels) has improved the situation and public servants now consider these positions increasingly as potential development opportunities. There is thus scope for improvement.
Opaque and complex remuneration arrangements

The fragmented system of job categories combined with the weaknesses in the rationale for determining relative salary levels has led to an opaque and complex remuneration system (Chapter 1). Although the government has made important efforts in rationalising the pay determination system, the historical legacy and the remaining difficulties with lobby groups have resulted in salary scales that vary the group staff belong to with different rationales applying to these salary scales. This is an additional obstacle to mobility. Operational and administrative jobs with the same tasks may have different salary scales in different institutions if they belong to different job groups or if a special job group or plan has been created for the institution in which they work. While efforts are being made to bring salary scales for similar jobs into line with one another, there are still many disparities. Differences in the treatment of different groups are not only inequitable; they can also distort recruitment and retention of staff. Some ministries have difficulties as their jobs are viewed as less advantageous. Staff who are recruited often subsequently prepare for another public examination which will allow them to enter a better job.

The current system of organising job categories and career progression has a number of serious drawbacks which need to be addressed as part of the overall strategic HR planning. The range of difficulties encountered as a result of the current arrangements points to the need for a comprehensive reform of job categories, changes to the way people progress within their job categories and more transparency in how appointments to management positions are made. A comprehensive approach is needed. The core issue is the fragmentation resulting from the grouping of jobs on the basis of narrowly defined occupations or individual institutions, and the resulting barriers to the optimal allocation of human resources and unduly high transaction costs. In discussions with the Brazilian administration during the course of the peer review, the desire to achieve changes in a number of areas was mentioned: reorganise job categories and groups; improve incentive structures and career structures, with more mechanisms to encourage performance; reduce the emphasis on seniority as the basis of moving up within job categories; increase mobility; rationalise salary structures.
There is no doubt that reforms in these areas would greatly contribute to improving HRM in the Brazilian public service. It is crucial not to approach reforms in a piecemeal
way and a restricted further restructuring of individual job categories should be avoided at all costs. Changes should be driven by a strategic view of how the public service should group and organise jobs and improve real career opportunities in order to provide the flexibility and capability needed to respond to emerging challenges. It is most important that reforms in this area are consistent with the efforts being made to introduce performance management and competency-based management and with the renewed emphasis on training and development. The Ministry of Planning should take the lead in developing a view of what needs to be done in terms of a well-integrated set of reforms. This is by no means simply a matter of developing a technical design for a new system. Making such changes requires careful management as many interests are involved, including those of trade unions and professional organisations. Existing arrangements will inevitably influence strategic options about reforms, and the Brazilian government will face some difficult choices in terms of dealing with the interests of different job categories and ministries. Two particular aspects of the existing arrangements are likely to create obstacles to change. One is the existence of different pay scales or bonuses for similar types of work in different ministries or agencies. This is likely to result in resistance on the part of those on higher pay scales to any attempt to merge job groups. Second, payments to pensioners are linked to their former career group and pensioners are a strong pressure group with both politicians and unions. An essential step will be to make a strong political case for what will be a challenging reform by setting out the changes needed in order to equip the public service to deliver the governments policies effectively and to reduce the inefficiencies associated with the current system. The advantages for employees need to be well defined and well communicated in order to win support for change. Major advantages of a more integrated system would include improved career structures and the creation of a fairer, more transparent pay and grading system.
Reduce the number of job categories and create more fluidity in the system
Rationalising job categories should be a priority. The number of different job categories and different situations in individual ministries and agencies should be reduced. In the interests of greater fluidity, as many job categories as possible should be inter-ministerial. Jobs could be grouped into a smaller number of categories by merging similar jobs in different ministries into one inter-ministerial category, as has already been done for some functions. It would be advisable to reduce the number of special job categories attached to individual institutions with a view to eliminating such arrangements over time.
152 2. STRENGTHENING GOVERNMENT CAPACITY An issue that will need to be addressed to reduce fragmentation is the ownership of job categories by specific ministries. An important step would be to create centralised ownership of job categories, as already exists for the inter-ministerial job categories which are managed by the Ministry of Planning, or at least shared custody. A very interesting development lies in the creation of four careers: infra-structure,8 social analysts,9 executive analysts,10 and information technology analysts.11 These careers will be handled provisionally by the Ministry of Planning, Budget and Management. In deciding how to approach rationalisation, it may be helpful for the Brazilian government to look at the experience of Canada, France and Spain. In France there has been an ongoing process of reducing the number of separate corps in the public service by abolishing corps or merging them with similar functions across different ministries. Between 2005 and 2010, the number of corps will have been almost halved. Over 80% of the mergers have concerned Category C corps operational jobs. The French system prior to these reforms has some parallels with the Brazilian situation in that many of the corps were highly specific categories. A new occupational group structure introduced in the Canadian public service in 1999 greatly reduced the number of groups by integrating those that perform similar or related functions. Here again there are some parallels with the Brazilian situation as the pre-1999 structure contained a large number of narrowly defined groups and the union structure was also fragmented. The reform has streamlined the collective bargaining process and provided employees with more opportunities for career mobility and professional development. The central HRM agency, the Office of the Chief Human Resources Officer in the Treasury Board Secretariat, has led the initiative and continues to play a key role in supporting public service organisations in working with the new structure (see Box 2.8). Merging job categories and creating more inter-ministerial categories should facilitate mobility within a job category as employees could move to another post in a different ministry or agency while remaining in the same job category. However, to manage the workforce in a more integrated way, with greater possibility to reassign people within and between organisations, the Brazilian government should consider developing tools that would make it possible to move away from the current very rigid approach to defining the properties of a job category.
Develop a standard way to identify and describe positions

The Brazilian administration does not currently appear to have a standard way to identify and describe positions. An important step would be to develop an integrated inventory of positions so as to identify equivalent positions in different ministries. A framework of standard job definitions, against which all the positions in the public service could be identified and matched, would be of considerable help. There should be as few reference jobs as possible to avoid a proliferation of job definitions. Job definitions could be used for a range of purposes, including matching jobs in ministries to reference profiles in order to grade them, competency mapping and recruitment. This approach would be compatible with the efforts being made to move to competency-based HRM in the Brazilian administration, as the competencies could be attached to standard job definitions. Job profiles could also be developed on this basis, as outlined in Section 2.1.
Box 2.8. Canada: Occupational group structure in the core public administration
In the core public administration classification system, the organisation of work and employees is based on an occupational group structure. In 1999, the government approved an occupational group structure with updated definitions. The new structure contains a smaller number of groups (29 instead of 78 under the old structure) some of which serve to consolidate older occupational groups that share certain common traits. As an example, one new group, called Programme and Administrative Services, was created out of 11 previous groups, including administrative services, communications, data processing, office equipment, secretarial, programme administration and a number of other functions. As part of the reform, the job classification system was reviewed and updated. The Office of the Chief Human Resources Officer in the Treasury Board Secretariat is leading the modernisation by:
defining the occupational group structure; reviewing job classification standards and qualification standards for all occupational groups; working with public service organisations on classification monitoring to give Deputy Heads the information they need to exercise their delegated classification authority; implementing a renewed suite of classification policies and guidelines; creating a competency profile, learning curriculum and recognition programme for organisation and classification advisers.
Source: Treasury Board of Canada Secretariat, Office of the Chief Human Resources Officer, www.tbssct.gc.ca/chro-dprh/cla-eng.asp, accessed August 2009.
In this context, it is worth looking at the experience of Spain, which, in addition to merging a number of corps, also moved from a corps system to a mixed system based on positions and corps in 1984. The main goal of the reform was to render the system more open and flexible by reducing the power of corps. This was done by making the position a key element of personnel management. This open system coexists with the previous career system organised by corps, especially because recruitment, by competitive examinations, is still organised for corps, as previously. The 1984 system allows for external recruitment based in corps and internal promotion open to the different corps (with some limitations and exceptions). The Basic Statute of the Public Employee (EBEP), enacted in 2007, does not introduce radical changes in the structuring of the civil service, but it allows public administrations to recruit alternatively for positions and not necessarily for corps. An important element of the system is the requirement for developing inventories of positions in order to provide a common framework for internal recruitment and mobility (see Box 2.9).
Box 2.9. Spain: Main elements of the reform of the corps system in 1984
In general, posts are no longer assigned to a particular corps. In principle, members of any corps can apply for any job if they possess the required educational level (and in some cases the specific degree needed to exercise a profession, such as a doctor or an architect). The corps is no longer the basis for payment, which is mainly related to the position. Base salary is the same for corps of the same entry educational level. Corps influences entry into the public administration, but no single corps can self-manage the recruitment examinations, as it previously could. Corps that performed similar functions have been merged; for instance, several corps of tax comptrollers have become one corps. Some have disappeared, although the more than 200 corps in the central administration are still too numerous. Corps are considered either general interministerial corps, assigned to the Ministry of Public Administration or special, when related to a specific profession and assigned to the relevant ministry. The administrative career is now based on positions. Civil servants can apply internally for higher positions. After two years in the same position, the level of the position becomes the grade. A civil servant cannot be assigned to a position lower by two levels than his/her consolidated grade. When occupying a position of lower level than his/her grade, he/she will be paid the salary supplement corresponding to the consolidated grade.
Real power and real career of corps

Although legislation has attempted to restrict the power of corps, they still have some influence over the career and salaries of their members. There are three major aspects:
Corps are still able to obtain favourable (high-level) initial posts for their members. Members of corps which need a university degree normally enter at level 20, but in influential corps, such as civil administrators, diplomats and finance comptrollers, entry at level 26 or 28 is common. Corps may try to restrict the entrance of members of other corps into their positions, especially by reserving positions for certain corps through the approved Relacin de Puestos de Trabajo (inventory of positions). Strong corps lobby effectively to create posts for their members with the highest possible position supplement. Although posting allowance is linked to special features of a particular post, in practical terms more influential corps have the highest position supplements.
In some ways, the search for positions with better levels and position supplements constitutes the real career of civil servants, reflecting a hierarchical perspective.
Position-based organisations
The Basic Statute for the Public Employee (EBEP) (2007) requires the public administration to structure its organisation through Relaciones de Puestos de Trabajo (inventories of positions) or other similar instruments. These inventories should include for each position:
name of the position; group or groups of civil servants who can apply for the position (groups defined by the educational level needed to access the civil service);
Box 2.9. Spain: Main elements of the reform of the corps system in 1984 (contd)
in specific cases, the corps which can apply for the position; system of internal selection (competition or free designation); level of the position (in the 30-level scale); accordingly a level supplement is to be added to salary; position supplement to be added to salary.
Through positions, organisations try to avoid rigidities by suing a legal provision which allows public administrations to assign civil servants functions, tasks and responsibilities different from those corresponding to their positions.
Double process to enter civil service and to fill a position

1. External recruitment, by corps (for entry-level positions): External access to the civil service takes place through competitive examinations which are different for each corps. Civil servants can compete to join a different corps in a closed process with some posts reserved for career civil servants (a process called internal promotion). Position filling (internal recruitment among civil servants after entry level): Positions to be filled are internally advertised and a competition based on merit is held to choose among the candidates. For top civil service positions (level 30) and for other very specific positions it is possible to choose freely among civil servants. The selection criteria and the system to be used are set out in the Relacin de Puestos de Trabajo (inventory of positions).
2.
Source: Information provided by Xavier SISTERNAS, peer reviewer from Spain.
The national French public service offers another useful example for Brazil.12 In France, in parallel with the rationalisation of the corps, the notion of mtier or occupation has been introduced as the basis for managing the principal elements of the career so as to provide for more fluidity within the system. Key aspects of HRM such as assignment, performance evaluation, promotion and remuneration are to be less linked to the statute of the corps and more to the mtier. Although it is too early to assess the results of the reform, professionals agree it is a crucial step in the modernisation of government (see Box 2.10). The French and Spanish examples show how existing systems which did not provide much scope for active management of human resources can evolve to include new elements which improve mobility and open up career structures. They also illustrate a pragmatic approach to reform in a sphere which is technically and politically very complex to change. The approach in both countries has been to modify and add new elements to the existing systems in order to gain flexibility, rather than attempting to introduce a completely different system.
Box 2.10. France: Rpertoire interministriel des mtiers de ltat (RIME)

The RIME was launched in 2006. This is an inter-ministerial index of state occupations. All jobs are indexed, including those occupied by contractual staff. This is a way of bringing together function and occupation and setting up a common nomenclature. It identifies 23 common functions divided into strategic, operational and support. Attached to these functions are 236 reference jobs which are described in the RIME. Individual ministries can use the reference job descriptions to identify and classify the jobs within their own structures. The reference jobs also help to prepare job profiles and job descriptions which can be used as a basis for performance assessment. The RIME has been well received and ministries are implementing it. It has permitted a shift from personnel administration to HRM based on analysis of needs and required competencies. The RIME reinforces staffing based on competency needs analysis and increases crossdepartmental mobility of staff by making it possible to identify potential recruitment pools. There is better targeting of recruitment and matching of jobs and people based on ministries operational needs. Training can also be organised around the competencies needed for the reference jobs. Two examples of how the RIME has been applied are outlined below.
Professionalisation of the job category: field of finance

A cross-ministry working group on the management of HRM wanted to professionalise such job categories by using initial and continuous training, recruitment, career paths and mobility. For this purpose, it has identified competency needs and updated financial job categories in the Rpertoire interministriel des mtiers de ltat (RIME). In June 2008, the Budget Directorate launched work aimed at:
identifying all the jobs and mapping the profiles of the financial functions; clarifying the needs of such jobs in terms of changes of the scope of activities; creating an index of about 20 financial jobs in concert with all ministries to be included in the RIME as of 2009; designing and implementing a short-term and medium-term action plan to improve recruitment and training and diversify career paths within government.
This work is piloted by a committee including directors of financial affairs, a budget controller and accountant, and representatives of the Directorate for Public Finances, the Directorate for Personnel and Adaptation to the Professional Environment, and the Directorate for Administration and the Public Service.
Job categories in the Ministry for Agriculture and Fishery: the role of the Observatory for Missions and Job Categories
To develop its work on job categories, the ministry relies on work led by the Observatory for Missions and Job Categories (Observatoire des missions et mtiers OMM) created in 2000. The OMM is responsible for following developments in government missions in the fields of the ministry and their impact on job categories. For example, the OMM produces prospective studies on large job categories with the involvement of a study steering committee composed of relevant personnel. The OMM also produces horizontal studies on changes in job categories and competences or studies on mobility and career paths. All studies conclude with recommendations aimed at accompanying changes in missions or organisations with changes in HRM.
Box 2.10. France: Rpertoire interministriel des mtiers de ltat (RIME) (contd)
The work of the OMM is used by the ministry to better assess future needs in terms of workforce numbers and competencies and in its strategies to improve HRM especially in the areas of recruitment, initial and continuous training, and career paths. First, the descriptions of present and future jobs helps make jobs better known outside of the ministry. They are also used as a reference grid for hiring interviews and annual performance appraisal meetings. Second, the work of the OMM is used for lifelong training purposes by training institutes under the responsibility of the ministry and for designing overall lifelong training policies. Third, this work is used for mobility purposes and for job profiling purposes especially for jobs open to internal mobility. More generally, the Secretary General of the ministry has ensured that there is some followup to the OMM recommendations through the establishment of working groups in charge of concrete action plans, most importantly in the fields of recruitment, lifelong training and career paths.
Source: Ministre du budget, des comptes publics et de la fonction publique (2008a), Rapport annuel sur ltat de la fonction publique, Politiques et pratiques 2007-2008, Vol. 2, pp. 65-68, Paris.
Develop a job classification system

The Brazilian public service also needs a standard means of evaluating positions for pay and grading purposes so as to introduce more transparency into the remuneration system and move towards more efficient management of relative pay levels. A key organising principle should be to fit all or most jobs into a common classification system for grading and pay purposes and a common competency framework for purposes of recruitment, selection and staff development. The basic principle of job classification is that similar positions with equivalent responsibilities, challenges and working conditions should have equivalent pay (a constitutional requirement Article 39 1). A job classification system would help to shift the focus away from individual jobs and break down demarcations. While specialised technical, professional and scientific jobs will naturally be specific to certain ministries or agencies, they should still be classified within the common structure. OECD member countries offer numerous examples of job classification methods and standards used in the public service. For example, Sweden uses a job classification scheme to enable pay comparisons across a wide range of state agencies that set pay independently. Each job is classified for content with a three-digit code (family, class, type) and a one-digit code for functional level. Job classification is always a sensitive matter. The establishment of an interministerial commission to supervise the process, with independent external technical assistance, is strongly advised. Central custody of the system is needed to maintain its integrity. This function is usually carried out by the central HRM agency. For example, in the United States, the federal Office of Personnel Management is responsible for classification standards and guidance to federal government agencies on the application of the classification methodology.
158 2. STRENGTHENING GOVERNMENT CAPACITY The job classifications should be integrated into a common remuneration table, which should be as simple and short as possible. Table 2.1 gives an example from the Spanish public service.
Table 2.1. Integrated view of corps, positions and salaries in the Spanish civil service after the 1984 reform (simplified). Example with corps and positions belonging to group A1
External recruitment Internal career Range of levels1 Typical positions available 30th: Deputy general director, Senior Adviser,... 20th-30th 29th:... 27th:... 21st:...
Corps and positions
Group according to educational level required
Corps
Position requirements (stated in RPT)

Open to all civil servants from group A1 Open to diplomats and civil administrators, with law degree Open to...
- Lawyers - Diplomats A12 - Civil administrators - Tax inspectors - ... Salary of the positions Base salary A1, same for all corps of group A1: EUR 13 893 Base salaries, related to group, are the same in all public administrations From EUR 5 537 (level 20) to EUR 12 200 (level 30) a year Level supplements: the same in all public administrations From EUR 9 000 to 41 000 a year, approximately Position supplement: decided by each public administration; in central administration, authorised by a commission presided by Ministry of Finance3
Note: Annual salaries 2009, without two annual extra payments, and without seniority (trienios) and variable pay (productividad). 1. Theoretically, each new civil servant should be assigned to a position at the initial level of their group, i.e. civil servants from group A1 should start at level 20. In practice, the situation is quite different. 2. There are five groups, according to the educational degree needed to enter: A1, A2, B, C1, C2. 3. Comision Interministerial de Retribuciones (Interministerial Commission on Salaries). Source: Provided by Xavier Sisternas, peer reviewer from Spain.
Open up opportunities for career progression

The changes already suggested should go a considerable way towards opening up opportunities for mobility and career progression in the Brazilian public service. In addition, professional career opportunities should be improved. Real career possibilities should be created, as far as possible, along with a system of internal competitive selection for promotion. This would improve incentive structures and provide mechanisms to encourage performance. Two key principles to be adopted in this context are a career pyramid not everyone can move up and correspondingly less emphasis on seniority as the basis for moving up the career ladder as better career structures are introduced.
As noted earlier, various arrangements for career progression exist in OECD member countries. Many, in particular career-based systems, differentiate seniority increases in pay (corresponding to different pay levels for the same position or grade) and changes in positions, i.e. changes in the level of responsibility. This principle should guide reforms in Brazil today. More strongly career-based systems, as in Ireland and Japan, have a series of promotion grades, with entry to the public service mainly at base grade and promotion based on competitive internal selection (although the transparency of the competitive internal selection process can sometimes be improved). Unlike the current system of pay grades in Brazils job categories, promotion grades imply increasing levels of responsibility and a pyramidal structure, with fewer positions available the further up the hierarchy. Such systems provide a clear career perspective and are compatible with performance management and competency management provided that promotion is linked to these. However, such systems can reduce the flexibility to recruit from outside the public service at higher levels. To overcome this potential downside Ireland has opened recruitment to external candidates at certain key senior levels in the career structure. The Brazilian administration already has considerable flexibility to bring people into senior management positions from outside the public service. This possibility should be retained within an improved career system and with more transparent recruitment procedures. A different option for strengthening the career dimension is to emphasise positions as the basis of managing employment and careers, as in Australia, the Netherlands and the Nordic countries. Instead of promotion grades or ladders, people progress by competing for a suitable position at a higher level. They can also advance their careers by applying for a different position at the same level in order to expand their competencies. Positionbased systems can have structures that facilitate career progression. For example, most occupational groups in the Canadian public service have a number of levels, requiring different degrees of experience and knowledge. Career progression in Canada primarily takes place laterally through deployment, or upwards through either an advertised or nonadvertised appointment (see Box 2.11). Whatever approach is taken, the Brazilian administration should introduce an internal appointments process that allows public servants to compete for certain jobs without having to undergo a public examination testing basic academic skills. The example of Spain (see Box 2.9) illustrates a possible combination of external competitions for certain positions and internal competitions for others. Such processes, which exist in many OECD member countries, are merit-based, with transparent and objective selection procedures. They are usually overseen by a public service appointments commission of some sort and there is usually an avenue of appeal in case of dissatisfaction with the process. The career system in the Canadian public service shows how a combination of external and internal merit-based appointments is managed by an independent agency in order to safeguard merit and non-partisanship (see Box 2.11). Before moving in this direction, it is necessary that all control processes for full transparency be in place.
Box 2.11. Career System in the Canadian public service

All appointments to (external) or within (internal) the public service are made by the Public Service Commission (PSC), an independent agency whose mandate is to safeguard merit and non-partisanship in the public service. Authority to make appointments has been widely delegated by the PSC to deputy ministers. An external appointment process is open to all persons, irrespective of whether or not they are employed in the public service. An internal appointment process is open only to persons employed in the public service. In making an appointment, the PSC or a deputy minister may use an advertised or non-advertised appointment process. An advertised appointment process, where more than one person is considered, is the standard practice in the Canadian public service. Non-advertised appointments may be used only when appropriate, and should be supported by a rigorous demonstration of how the choice of a nonadvertised process respects the staffing values of fairness, transparency, access and representativeness. Some of the situations that may lead to a non-advertised appointment include short-term acting appointments, appointment of an incumbent to his/her reclassified position, organisational professional development programmes, specialisation of a person to be appointed, appointment to a professional group where there is a shortage, and appointment of a person who is a member of an under-represented employment equity group. The choice of an appointment process must also be consistent with the organisations human resources plan. Appointment to or within the public service is made to a particular position, within a specified occupational group at a certain level. Most occupational groups in the Canadian public service have a number of levels, requiring different degrees of experience and knowledge. Every level has a salary range. The pay increment period may vary by occupation; the most common one is 12 months. Career progression primarily takes place laterally through deployment, or upwards through either an advertised or non-advertised appointment. Deputy heads must respect PSC appointment policies in exercising their delegated appointment authorities, and they are held accountable to the PSC for the appointment decisions they make, through mechanisms such as monitoring, reporting, studies, audits, investigations and corrective actions. For example, the PSC may limit or remove delegated authority from a deputy head. In turn, the PSC is accountable to Parliament for the health and integrity of the appointment system in the public service.
Source: Public Service Commission of Canada (n.d.), Careers in the Federal Public Service, http://jobsemplois.gc.ca/centres/experience-eng.htm, accessed in December 2009.
Some changes should be made to the DAS system in order to improve career opportunities, as recommended in Chapter 4. Reintegrating the administrative and technical levels in the DAS system into the normal job category structure would make it possible to develop the type of career structure outlined above. Also, opportunities for civil servants to be promoted to senior management levels should be improved by introducing a more transparent selection system that is not dependent on political approval and setting up a special job category for senior managers. Finally, the present rationale for the existence of about 50 000 Commissioned functions to which appointments are discretionary is not really acceptable from a good governance point of view. It is possible that some categories of functions may have requested increases in salaries, but these should be done within the job category system and appointment to these positions should be implemented through regular processes. It is thus necessary that Commissioned functions be reintegrated into the renewed job
category system. For political reasons, this may have to be implemented through a nonrenewal of departures to retirement.
2.3.
Acquiring human capacity and talent The experience of OECD member countries
Working for the government differs in one important aspect from other employment. The primary loyalty of the public employee is to democracy and to legality. The public employee serves the state and the citizens, as represented by the duly elected government, but is obliged to serve any duly elected government equally well, and to implement any legally adopted policy and statute equally loyally. This specificity is reflected in the special employment arrangements for public servants existing in all OECD member countries, including recruitment arrangements that tend to be relatively more protective of merit and transparency. To this protection of transparency and merit, however, the growing diversity of public activities and the increased performance requirements have put new pressures on the recruitment system, to which countries have adjusted differently. Moreover, even if the recruitment arrangements in OECD member countries share a number of underlying values and central goals, they vary substantially depending on a countrys specific historical, political and social context, and especially how centralised or decentralised public human resource management is. These arrangements are considered as being adequate and appropriate by the country that has adopted it.
Merit-based recruitment and promotion

All democratic countries have rules normally in their constitutional documents which are intended to ensure that public employees are selected on fair and objective grounds, and to prevent all forms of patronage; personal as well as political. The processes used for achieving these goals have changed substantially over time. Formal examinations have been complemented with tests of skills and aptitudes, and the focus has shifted from formal diplomas to actual competences. Sweden can be used as an example. In 1634, it was one of the first countries to adopt the principle of merit-based appointments and promotions in an attempt to prevent royal patronage. The merit principle used to be formulated as skills and merits, and this principle became deeply internalised both in the core values of public service and in the understanding of the Swedish public. The system became very formalised over time. Skills came to be identified with formal education diplomas, and merits with years in the national governments service. In 1974, a constitutional amendment changed the wording to objective grounds, such as skills and merits. This made it possible to take previous performance and non-public experiences into account, and to use professionally recognised testing methods. Furthermore, it was explicitly stated in the preparatory texts that seniority should only be taken into account if two candidates were considered equally skilled.
Recruiting for public employment

The arrangements and procedures for recruiting for public employment are normally more formal and bureaucratic than in the private sector.13 The main reasons are, as in
162 2. STRENGTHENING GOVERNMENT CAPACITY Brazil, a desire to prevent personal and political patronage and to guarantee that the selection for recruitment is based on fair and objective grounds. Public administrations in OECD member countries have moved or are moving away from simply looking at formal merits and towards using written tests of knowledge skills and competencies. The main reasons are the stronger focus on better performance and quality services and thus the need to become better at finding people with the right skills and competences for the jobs to be done. Today, they face the same need as private enterprises to find and recruit the best possible persons for different positions, and have the same need to re-orient their recruitment when the need for capacities and competencies change.
Organising the recruitment process

Even if the recruitment policies in OECD member countries share a number of central goals and values, their recruitment arrangements vary widely. One important area is the degree of decentralisation of recruitment, which ranges from strictly centralised to extensively decentralised. However, most countries with tenured civil servants tend to have a centralised or relatively centralised system. In Belgium, all administrations are obliged to use the federal selection office (Bureau de slction de ladministration fdrale, SELOR) as their recruitment agency when recruiting tenured civil servants. Most use SELOR as a recruitment agency for other employees as well. Ireland also has a career-based system but a more decentralised recruitment system. Recruitment of tenured civil servants in the government administration is managed by the Public Appointment Service (PAS). PAS also carries out competitive examinations for senior levels in the local government sector, the health sector (including specialist doctors, managers, nurses and clerks), police and other agencies of the state. It also carries out more executive searches, with tailored recruitment. Ireland differs from Belgium in having a framework for decentralisation. Departments and government bodies can handle their own recruitment, provided that PAS finds them sufficiently competent, and provided that they observe the governments Code of Practice for recruitment. This is expected to be a learning process and lead to handling a growing share of recruitment at a decentralised level. The advantage of this system is that it separates the standard-setting function from actual service provision. This makes it possible to combine the safeguarding of an appropriate recruitment process with a competitive environment for recruitment services. A recurring criticism in countries with centralised recruitment functions such as Belgium and Ireland is the length of the recruitment process. The time needed seems, to judge by OECD reviews of the Belgian and Irish public administrations (OECD, 2007a; OECD, 2008a), to depend on three factors. First, the internal process in the recruiting organisation takes time (authorising recruitment, specifying competency profiles). Second, assessing a relatively large group of candidates through a process based on fair and equal treatment requires a substantial amount of time. Third, the scale of the examinations means that they cannot be held too often, and recruiters may have to rely on recruitment reserves (that is the ranking from the last examination). Many of these candidates may, however, have taken up another employment in the meantime. The time needed for preparation can be shortened by improved workforce planning and by systematic competency management. Pre-screening before the most resourceOECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010
demanding part of the process can shorten the time needed for processing the applicants, as is the case for recruitment for the foreign service in Sweden. The first screening is based on the application and its statement of educational achievements and experiences. Only 10% of the applicants move to the next stage in the selection process. Examinations more clearly targeted on specific competency profiles can also reduce the scale of the examinations. A recurring criticism of decentralised recruitment functions is that they may entail higher transaction costs. They are also more opaque, since it is more difficult for interested persons to find out which bodies are recruiting and when. Norway has dealt with this problem through a website on which all public bodies must publish recruitment announcements with recruitment criteria.
Using employees other than tenured civil servants

Most OECD member countries have comprehensive statutes that regulate the content of civil servants employment contracts. The statutes may prescribe tenure (i.e. employment for life with dismissal only in cases of misbehaviour) or employment for an unspecified duration. These statutes were originally designed to suit core government functions and the exercise of public authority. The growth of service production and the increased focus on performance during the last half-century have challenged these arrangements, and different OECD member countries have chosen to meet the challenge in different ways. Some have found it expedient to have a secondary form of employment that is more similar to private employment. For example, in Germany the public workforce consists of tenured civil servants (Beamte), with a statutory regulation of employment conditions, and of public employees (Angestellte), with normal labour contracts. There is no clear demarcation between these two groups, and they can to a certain degree be used for the same tasks. The core government functions and all forms of exercise of public authority are, however, reserved for civil servants. One-third of the German public workforce is civil servants, while the others are public employees. Other OECD member countries have instead tried to make their public service statutes more flexible or to limit their scope. These reforms have been extensive in New Zealand and the Nordic countries, where employment conditions for almost the entire public workforce are regulated by individual contracts and/or collective agreements. All OECD member countries allow temporary employment for different needs, such as a temporarily increased workload, a specific project or a replacement for a public servant on leave. The exact rules surrounding temporary employment vary. It is not possible to discern any trends towards increased or decreased amounts of temporary employment. The recruitment of temporary labour is normally less formalised and more decentralised than recruitment for life or for unspecified lengths of time. There is thus a clear risk that it may become a way to bypass competitive examinations for public service, and many OECD member countries are trying to improve the recruitment arrangements and management of this part of the public workforce. The Belgian public administration provides a set of examples. There is no statutory regulation of the procedure for selecting temporary staff. The federal administration uses the same recruitment organisation (SELOR) as for tenured public servants. The Flemish administration has established its own recruitment agency which works much in the same
164 2. STRENGTHENING GOVERNMENT CAPACITY way as SELOR. The Brussels Region advertises all temporary positions and has an open recruitment procedure. The French Community also has an open recruitment procedure with juries that propose selections. In all Belgian administrations recruitment criteria for casual staff have evolved significantly towards the increased use of competency criteria.
Using external service providers

Recruitment of new staff is not the only way in which a public administration can acquire new capacities and competences. For large parts of its activities it can choose between recruiting its own staff and contracting an external service provider. The main drivers are the need to get access to specialised management and specialised skills and competencies and to benefit from the scale advantages that a specialised service provider can offer, especially with regard to human resource management. In fact, no organisations are today able to undertake all production functions themselves, and have to rely to some extent on external services, and public administrations are no exceptions (Chapter 1 also develops this aspect). OECD member countries experience indicates that all public administrations can gain from co-operating with non-profit organisations and private enterprises. Outsourcing (not in terms of leased labour but firms contracted out for the provision of goods and services, see Chapter 1) can contribute to a more efficient public administration and to more flexible and higher-quality public services. All OECD member countries thus use outsourcing of input services, although to varying degrees, and many also rely on nonpublic organisations for the provision of public services to the public. Using external service providers entails a different type of relation from employment and creates the risk of cost-increasing dependencies. Managing the choice between organising an internal service and relying on an external service provider requires an appropriate sourcing policy, and managing relations with external service providers requires new management competencies. Outsourcing should therefore not be seen as a general remedy to efficiency and quality problems. OECD member countries experience also reveals a number of elements that may complicate or limit outsourcing. The administrations need to retain sufficient internal competence to be able to procure services efficiently. Outsourcing should never become so extensive that it encroaches on administrations adherence to due procedures and legality in their exercise of public authority and use of public resources. Differences in employment arrangements and conditions between public administrations and private enterprises, and different unions for public and private employees, may generate resistance to using external service providers instead of hiring more employees.

In Brazil the recruitment arrangements organise the federal workforce according to different job or employee categories. These categories are very diverse. Most are linked to a specific organisation, while others are transversal and give access to jobs in a range of organisations. Some are fairly broad and provide opportunities for functional careers, while others are intended for specific functions and only provide for salary progression. The present set of job categories is described more thoroughly in Section 2.2.
Merit-based selection for public employment

Brazil started implementing merit-based recruitment to the federal administration as early as the 1930s, but for a limited number of positions until it became widespread in the 1990s. The principle seems to have been internalised by Brazilians. There are also clear indications that Brazil needs to maintain this concept in order to prevent the spread of personal and/or political patronage. The present interpretation favoured by the courts of the concerned constitutional clause with narrowly defined testing of academic knowledge seems, however, unnecessary restrictive.

Selection for public employment in Brazil is normally made through formal competitions open to all persons who fulfil the basic requirements for employment in the category in question. There is a specific competition for entry into each category. A public employee who has passed the competition for a specific category has to enter a new competition if he/she wants to move to position in another category. The competitions seem to be relatively unsophisticated in most cases owing to the restrictive interpretation of the relevant constitutional clause. Each category has a specific knowledge base required of those who have the corresponding jobs. Whenever a public entity is allowed to fill a position, it has to refer to the knowledge profile required for that specific category. The assessment of whether a candidate has the required skills and aptitudes has as far as possible to be done through a written test, that is in many cases restricted to multiple choice questions assessing academic knowledge. These tests normally mean that candidates have to prove that their knowledge satisfies the profile for the specific category they have applied for. Competitions for more qualified categories may, however, also involve testing for competences. In the case of competitions for the category Public Policy and Management Specialists for example, candidates are required to make a written analysis of a case study or write an essay. However, Brazil seems to use modern methods for testing for skills and aptitudes less frequently than OECD member countries or the private sector. Previous experience is not taken into account, unless it is part of the basic requirements for entry into a specific category. A full assessment of the adequacy and appropriateness of this system of competitions for entry into public employment has to address Brazils very complex set of job categories. It is evident that the present system meets the primary requirement of preventing patronage and ensuring an objective and transparent process for access to public employment. It is at the same time reasonable to conclude that the system is less adequate for ensuring that the federal administration gets access to the best possible staff for fulfilling its public duties and functions. The approximately 22 000 DAS positions, of which more than 4 000 are considered management and senior management positions (see Chapter 4), are an important exception to the transparency of the federal government recruitment process. Appointment to a DAS position and apparently to other senior management categories is at the governments pleasure, although in some parts of government efforts have been made to professionalise recruitment in the DAS positions. It is mostly made among existing government employees but also outside of government (see Chapter 3). The management of senior managers is discussed more extensively in Chapter 4.
166 2. STRENGTHENING GOVERNMENT CAPACITY DAS positions allow some flexibility in a rather rigid system of job categories and career paths, by allowing talent to move up quickly and by opening up positions to lateral entry in the public service for staff outside of the public service for a certain percentage of positions. This flexibility, however, should not come at the expense of transparent recruitment procedures. Staff in DAS positions should be recruited following transparent and competitive recruitment processes. These processes should be different from those allowing entry in the public service and be mostly competency-based. In order to maintain flexibility in the system, the recruiting body could provide a list of candidates with acceptable aptitudes on which the government could draw.
The organisation of competitions and rankings

There are no fixed schedules for the organisation of competitions for entry into the various job categories. Instead, the organisation responsible for the management of a category has to request permission to organise a competition when it considers that it needs to hire more staff. While a safe control mechanism, centralised establishment control entails the risk of delays in meeting labour shortages and of temporary labour hoarding. The state of strategic manpower planning in Brazils federal administration is discussed further in Chapter 1. The organisation calling a competition will normally use an external service provider to organise and carry out the competition. These providers are chosen through a public procurement process. There is no central mechanism for vetting and certifying providers of competition services, and each contracting organisation can make its own selection. Most organisations providing competition services are public universities or semi-public foundations. The quality and adequacy of Brazils public procurement processes are not covered by this review.
Probationary employment
All employment in Brazils federal administration is subject to a three-year probationary period before the employee gains tenure (i.e. the right to employment for life). Termination of employment before the end of this probationary period or nonconfirmation of employees at the end of the probationary period is possible, but not easy. The employers decision can be challenged in court as unconstitutional, and the employer can therefore be assumed to need to have documented objective grounds for the decision. Some organisations also use an initial probationary period of a few months (which conforms more closely to what is normally meant by probationary employment). It is, however, probably equally difficult to terminate employment during or at the end of this period, since an easily used termination right might be construed as a way to bypass the strict selection rules.

It was noted earlier in this chapter that procuring input services from external organisations (i.e. outsourcing not in terms of leased labour but as firms contracted out to deliver goods and services) gave better access to specialised competences and increased the flexibility of the public service. During the Cardoso presidency (19952002), outsourcing of public production functions was a major element of the reform agenda. There are no data to enable an assessment of the quality and appropriateness of those policies, but it seems reasonable, given the timeframes, to assume that they were
relatively rapidly introduced in organisations with limited experience of and competency for service procurements. Considering the relatively high level of outsourcing in the government today (see Chapter 1), it is likely that recent waves of outsourcing have concerned services other than the low-skilled input services that are easier to monitor than more complex tasks. Some mention contracting out is used to circumvent public employment legislations and authorisations to hire, and eventually put pressure on the Ministry of Interior to authorise recruitment to replace staff hired on a provisional basis by regular staff. Similar actions in OECD member countries have resulted in less than favourable outcomes. Although some report continued increase in outsourcing (see Chapter 1), there has been a recent shift towards more restrictive policies and recuperation of previously outsourced functions during the Lula da Silva presidency (see Chapter 1). This more restrictive attitude must also be seen in the light of Brazils emphasis on formal competitions as the only method of selecting candidates for public employment. Using labour provided by non-public service providers can easily be interpreted as a way of bypassing the strict selection rules, especially if the procurement processes are less formal than the recruitment processes.

The main weaknesses in Brazils present arrangements for the federal administrations acquisition of capacity and talent are: the lack of a coherent competency framework and of competence in and experience with competency profiling (see Section 2.1); the fragmented structure of job categories leading to overlapping and to a weakening of the coherence of the employment arrangements (see Section 2.2); the unnecessarily restrictive interpretation of the constitutional requirement for merit-based recruitment and for using external service providers.
Competencies and the concept of strategic competency management are discussed in Section 2.1. When these management arrangements are fully developed, they link an organisations recruitment policies, its selections for employment, and its policies and programmes for staff training and enhancement to a strategic assessment of the organisations competency needs over time. Brazils federal administration will not be able to implement this type of advanced human resource management without also adopting more sophisticated methods for selection for entry into public employment. The present structure of job categories has evolved over time as a result of consecutive partial reforms. It is complex and un-systematic. The present structure is analysed in Section 2.2, which also contains a proposal to reorganise the job categories so that they reflect the competency and skills structure of Brazils federal administration.
Merit-based selection for public employment

Merit-based recruitment is, as noted earlier, a necessary cornerstone of a modern public administration in a democratic country. The important element is the prevention of personal and political patronage in relation to entry into the public administration. All Brazilian citizens must therefore be able to compete for public employment on even terms and on their objective merits. Future reforms of the process for entry into public employment in Brazil should build on and safeguard this principle.
168 2. STRENGTHENING GOVERNMENT CAPACITY Although quite recent, the implementation of the merit principle in Brazils federal administration seems robust, with a great deal of scrutiny and oversight and recourse mechanisms. There also seems to be strong public sensitivity to the slightest suggestion that merit principles have not been respected. The issue is more about the quality and sophistication of its implementation than transparency or the principle itself. There is, as demonstrated by practices in OECD member countries presented above in this section, scope for a more sophisticated interpretation and application of the concept of merit without the need to amend the Constitution. Recruitment and promotion should continue to be based on objective and documented grounds, but there is scope for a broader interpretation and a stronger focus on skills and competencies. Box 2.12. Recruitment in the Belgian government
Belgium offers an example of a country with relatively sophisticated recruitment arrangements. The employment system is career-based, and public employees are either tenured civil servants or contract employees. Recruitment for tenured employment shall, according to the Constitution, be merit-based. The basic form of recruitment of tenured civil servants in Belgium is open and competitive examinations. These are based on job descriptions and competency requirements drawn up by the recruiting organisations. Over time, the recruitment process has moved away from large generalist examinations towards recruitment based on specific competency profiles. Presently, selection is based on generic competency profiles in only 10% of cases and on specific competency profiles in 90%. Possession of a diploma may be a pre-requisite for participation in an examination. The breadth and quality of the educational background affects the assessment of a candidate. Applicants who meet the formal requirements take part in different tests of skills, competences and aptitudes. The content of these tests depends on the type of post and recruitment criteria and may include a psychological test. In 90% of cases, recruitments are based on ranked selections. Most administrations follow the rankings, but the combined Flemish and Dutch administrations makes the final selection themselves. The administrations are allowed to draw up a reserve list of candidates for possible future recruitment.
Source: OECD (2007a), OECD Reviews of Human Resource Management in Government: Belgium, OECD Publishing, Paris.
A number of proposals are brought forward in this and in preceding sections for more systematic competency management, including competency profiling and competency assessments. It is reasonable to assume, however, that implementing these proposals and ensuring that the federal administration gets access to the best possible staff would be difficult under the present recruitment arrangements.

There are two compelling reasons why Brazil should enhance its selection methods instead of merely testing for knowledge. The first is that merely testing for knowledge does not take the full range of candidates merits into account. Candidates with superior experience, skills and aptitudes may be bypassed by candidates with nothing but an aptitude for good results in written
tests under controlled conditions. One might even question whether this is compatible with a fair and equitable assessment of candidates merits. The second is that Brazil's federal administration needs to target and compare skills, aptitudes and experience in order to develop strategic competency management and to enhance the quality of the administrations manpower. The present unsophisticated methods create an unnecessarily high risk of recruitment errors, and it is likely that each organisation has some employees who are not suited for the tasks for which they were recruited. The key issue in comparing the relative merits of different candidates is that all comparisons should be based on objective grounds, that is, on aspects that are generally acknowledged as being relevant for the positions or careers in question. Furthermore, all aspects taken into account need to be adequately documented in order to enable ex post audits of the selection process. These two requirements can be met with the use of established methods for testing candidates skills and aptitudes provided that the methods used are based on sound science and generally accepted by the relevant professional community. OECD member countries experience shows that they can also be met through the use of selection boards, provided that these are composed of disinterested persons with acknowledged integrity and an appropriate professional background. It is therefore recommended that the Brazilian government review the present arrangements for competitions for entry into the federal administration and take action to amend these as needed to enable recruiting organisations to test for skills and aptitudes in addition to knowledge and to allow relevant experiences of candidates to affect rankings in the hiring process. In addition, transparent and modern recruitment procedures should be put in place for DAS positions, with competitive selection based on an assessment of experience and competencies. This does not necessarily mean written tests, but at least open procedures with recruitment panels and ranked candidates for lower level DAS positions and a list of candidates judged qualified for the job.
Recruitment quality
The goals of federal recruitment activities are to ensure that the administration has the employees it needs, and that they are recruited appropriately. It is equally important to ensure that the persons recruited have the competencies, skills and aptitudes required by the different parts of the federal administration, and that recruitment is carried out in a timely manner so that the employees are available when needed. Adequate outcomes of recruitment activities also depend on the appropriateness of the organisation of the workforce in job categories. The fragmentation of this structure is one of the main weaknesses of the Brazilian system. A reorganisation of job categories, replacing organisation-oriented categories with competency-oriented categories, would improve the outcome of recruitment activities. These questions are discussed in Section 2.2, which also contains conclusions and recommendations concerning job categories. Competency-oriented job categories and examinations that place more weight on competencies, skills and aptitudes will make new demands on the recruiting organisations. Substantial work will be needed on a competency framework that can be used across the administration and on identifying the competency needs of each organisation. More transversal job categories will entail more inter-organisational coOECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010
170 2. STRENGTHENING GOVERNMENT CAPACITY operation in determining recruitment needs and developing adequate competency profiles. The use of rankings for the outcomes of examinations for public employment makes it possible to complement selections with reserve lists of persons who may be offered employment later. A reserve list is not an ideal solution, since those on the list may not remain available. It may still facilitate timely recruitment and it should therefore be possible to use them more generally. The reserve lists should, however, only be available during a limited period and should never be more than a reasonable percentage of the number of persons directly selected.
The organisation of competitions and rankings

The fragmented structure of job categories affects the organisation of competitions and rankings of candidates. The recruitment parameters are often regulated in organisation-specific statutes, and there seems to be no comprehensive legislation (aside from the Constitution). The previously recommended broader and more sophisticated interpretation of the concept of merit would enable recruiting organisations to take skills, aptitudes and previous experience into account. This will require new competences and capacity building in the recruiting organisations. Organisation-specific categories should also be replaced by competency-oriented categories to permit more transversal categories. More inter-organisational co-operation will be needed to develop a shared competency framework and competency profiles for transversal categories. If Brazil accepts and implements these recommendations, it also needs to strengthen the central human resource management node. It is therefore also recommended that the Brazilian government create a central body charged with developing guidelines for more sophisticated selection processes and with monitoring and supporting their implementation by Brazils federal administration. It should also be responsible for the shared competency framework and able to support the other organisations work on competency profiles. The Public Appointments Board in Ireland and the federal selection office in Belgium might serve as models for such a body, as these countries have relatively centralised career-based systems (see Box 2.13) An equivalent body in Brazil could be formally mandated to manage all recruitment for the federal administration. At the same time, it should be able to delegate responsibility for recruitment of staff to non-transversal job categories if and when it finds that an organisation has the necessary competency and capacity to handle its own recruitment. It should monitor and assess the quality and appropriateness of delegated recruitment and be able to rescind a delegation if and when necessary. It should work together with the School of Public Administration (Escola Nacional de Administrao Publica, ENAP) to support stronger competency orientation. The present practice of using external service providers for the organisation and implementation of competitions can be continued. The transition to more sophisticated selection methods makes it essential to ensure that such service providers are sufficiently competent and reliable. It is therefore recommended that the central body mentioned above also be mandated to authorise the service providers allowed to compete for public selection contracts. An upgrade of those recruiting services will be necessary.
Box 2.13. Recruiting organisation and processes in Belgium and Ireland

In Belgium, recruitment criteria are agreed between SELOR (the federal selection office) and the recruiting organisation, and specify the skills and types of employees the organisation wants to recruit. SELOR advertises the selection, receives applications, vets the applicants for formal requirements, conducts the different tests and examinations, and draws up a ranked list of applicants who have passed the selection process and are eligible for tenured public service. SELORs main advantages are its professionalism and its independence from the recruiting organisations. It is a modern recruitment agency using state-of-the art methods. It has developed competence in competency and methodology certification. It has invested in modern facilities and equipment, is actively developing its use of the Internet, and seems to be leading in developing and using e-supported recruitment processes. It is funded by the federal budget and has been able to expand its activities without increased funding. Ireland has a career-based system with a more decentralised recruitment system. Recruitment of tenured civil servants in the government administration is managed by the Public Appointment Service (PAS). The process is similar to Belgiums. Testing has shifted from abstract tests to more job-simulation tests, strategic exercises, competency tests, and to a lesser extent, the examination of achievements. The process generates a ranked list of approved candidates. These are then offered employment as vacancies become available. Employers have limited possibilities to choose whom to pick, or applicants to choose where to go. PAS also carries out competitive examinations for senior levels in the local government sector, the health sector (including specialist doctors, managers, nurses and clerks), police and other agencies of the state. It also carries out executive searches, with tailored recruitment. Ireland differs from Belgium in having a framework for decentralisation. Departments and government bodies can handle their own recruitment, provided that PAS has found them sufficiently competent, and provided that they observe the governments Code of Practice for recruitment. This is expected to be a learning process, leading to a growing amount of recruitment handled at a decentralised level.
Source: OECD (2007a), OECD Reviews of Human Resource Management in Government: Belgium, OECD Publishing, Paris; and OECD (2008a), Ireland: Towards an Integrated Public Service. OECD Public Management Review, OECD Publishing, Paris.
Reliance on authorisations from the Ministry of Planning to organise competitions for recruitment has serious drawbacks. It makes it more difficult for federal organisations to handle their manpower planning and to ensure that they are adequately staffed. It is therefore recommended that the Brazilian government split the processes of central establishment control from that of planning of competitions, so that competitions can be organised on a different schedule from that of authorisations for opening positions. It is also recommended that the government consider means of making recruitment a more continuous process, for example through more transversal categories and improved crossorganisational co-operation.
Probationary employment
Combining formal merit-based selection methods with probationary employment requires strict and reliable processes for terminating employment during or at the end of the probationary period. These processes have to be sufficiently manageable to make termination a realistic option. Furthermore, all decisions to terminate probationary employment should be based on objective grounds and documented. The Constitution presently requires that as a condition for tenure, the evaluation of performance be conducted by a Commission created for this purpose (art. 41, 4). This is awaiting regulation, but would be worth considering. The Brazilian government may otherwise consider establishing a special board charged with trying appeals against the termination of a probationary employment. Each federal organisation should thus continue to be able to terminate a probationary employment, provided that there is sufficient and relevant cause for termination.

The policy of Brazils federal administration concerning outsourcing is at present relatively restrictive, and it is likely to be one of the reasons why it is being bypassed with irregular outsourced activities (see Chapter 1). In the present situation, Brazil is combining a highly centralised HRM system with a decentralised outsourcing policy. As noted in Chapter 1, Brazils federal administration would gain from a less restrictive policy regarding the use of external service providers, but with transparent planning of activities to be outsourced and a clear rationale exposed. It is therefore recommended that the Brazilian government amend current rules and policies concerning the use of external service providers to allow federal organisations to make rational choices between in-house and outsourced provision of a broader range of input services. The issue for the federal government is to make a clear distinction between the use of leased labour for short-term purposes only through manpower companies if needed (but this should be very limited), and the contracting out of private sector companies for the provision of goods and services because it is thought to be more cost efficient for some projects and services. Good tracking of outsourced activities should continue in order to avoid the unwanted increase in the cost of producing government activities that would arise from an increase in contracted-out services without a corresponding decrease in government employment and a similar quantity and quality of services produced (see Chapter 1). Outsourcing should not, however, be seen as a policy goal in itself and there should be no targets in this respect. Instead, federal organisations should be encouraged and helped to develop organisation-specific policies for greater use of external service providers. One way to do this would be to set up a peer network for outsourcing issues within the federal administration. Through such a peer network, the different federal organisations could exchange experiences and provide mutual support. There are groups of staff working for external service providers that are called irregular outsourced workers. It seems reasonable to assume that for some posts, the main driver has not been cost advantages or patronage, but the need for access to specialised competences that cannot be acquired through the present system of job categories and competitions. In that case, more sophisticated solutions need to be established to have access to those skills as simply forbidding such contracting out will deprive administrations of needed skills.
Previously it was noted that using external service providers might be seen as a way of bypassing the constitutional requirements for merit-based recruitment for public service. It was also noted that the essence of merit-based recruitment is selection for public employment based on objective grounds. A pre-requisite for expanding the use of external service providers should therefore be statutes governing public procurement which ensure that procurement selections are also based on objective grounds. The policies, statutes and arrangements for managing public procurement are, however, not covered by this review.
Change management
A change from organisation-specific to transversal job categories will increase the potential for internal mobility between ministries and organisations. This can benefit the administration as a whole by contributing to a shared identity and to better allocation of scarce skills. It will be welcomed by employees who see opportunities in mobility, but may be resented by others who see it merely as increased competition for promotion. Some public employers may also resent increased opportunities for mobility that entail greater competition for skills and competencies between different public organisations. Increased mobility will also sharpen the need for a coherent remuneration structure across the different public organisations. One challenge for public administrations concerns the introduction of external recruitment at intermediary or top levels in a job category that was previously a closed career. This increases competition for higher positions and is likely to be resented by insiders who aspire to promotion to these levels. In Brazils federal administration, however, the situation has been the opposite. The main top management category, the DAS, has been open to external recruitment and only recently have quotas been reserved for internal appointments at the four lower DAS levels.14 A challenge also arises when trying to move from a fragmented or decentralised system, in which each ministry or organisation handles its own recruitment, to a more centralised system. This involves realignment of mandates and influences, and is normally resented or opposed by those who perceive that their mandate is thus restricted, even if the change is intended to support and facilitate their recruitment activities. How serious the opposition is depends on perceptions of the earlier arrangements. The change is easier to handle if previous arrangements are generally perceived as inefficient and problematic than if it is seen as driven by the ambitions of other actors. This issue is likely to arise if Brazil follows the recommendation to replace organisation-specific with transversal categories based on competency profiles. Ministries and organisations will go from managing proprietary categories to participating in a collaborative effort. Resentment can be reduced by ensuring a co-operative culture and by providing increased support for organisations competency profiling.
2.4. From training to learning The experience of OECD member countries15

In recent years, the training and development of staff have received renewed impetus and focus in the public services of OECD member countries. Entry-level training allows competency profiles to be adapted; continuous training enables acquisition of new qualifications and allows the functional competencies of the workforce to be adapted to changes in the strategic missions of government organisations.
174 2. STRENGTHENING GOVERNMENT CAPACITY One major reason for the increased emphasis on training and ongoing learning is that they are a crucial management tool in a knowledge economy. Another key driver has been the need to better integrate training and development policies into performance management systems. There has been a shift in emphasis from a top-down approach to training delivered through formal courses to developing employees capabilities through continuous learning and development, much of which takes place in the workplace. This is not to say that formal training should be eliminated completely. The increasing knowledge content of work makes ongoing skill development indispensable. However, as adaptability, problem solving and innovation become increasingly important for organisations, training in the skills needed for a particular job is being complemented by other forms of learning to develop a range of technical and behavioural competencies. The notion of training is being replaced by the broader perspective of learning and development. In line with this evolution, the development of employees is viewed as a strategic issue for organisations. Training and learning are approached as part of the development of the organisations human capital and are designed as an integral element of the business plan. Governments are making a significant investment in skills and human capital and are emphasising the need for lifelong learning. More self-directed learning and development by employees are being encouraged, supported by competency frameworks and the inclusion of development in performance management and career progression. Taught courses are being complemented by a variety of other methods of learning, such as developmental assignments, coaching, mentoring, knowledge sharing and team-based learning. Advances in e-learning have also facilitated this approach. While training policy is generally determined by the central HRM body, the tendency is to set the strategy and broad framework rather than to involve central government agencies in delivery of training. Increasingly, staff development is being left to line departments or even individual units. In this approach it is crucial for accountability for development to remain with line managers and the employees themselves and be reflected in performance management requirements, competency frameworks and arrangements for recording learning. Also essential is a supportive set of HR tools such as coaching, mentoring, self-assessment and access to formal and informal development opportunities. An exception to the pattern of decentralisation is the training and development of senior civil servants. Particularly in countries with a senior executive service, training and development are key elements and tend to be organised centrally in order to ensure consistency. Even in countries that lack a separate senior cadre, senior public servants are given more specialised training. Trends in OECD member countries are summarised in Box 2.14.
Box 2.14. Training and learning in governments of selected OECD member countries
Traditionally, in career-based systems, training affects civil servants career paths indirectly: it aims to broaden competencies with a view to functional promotion and/or preparation for competitive examinations required for promotion to higher grades or levels. In position-based systems with more individualised HRM practices, training is used more to strengthen the public service culture among public servants and as an opportunity to increase technical skills as new public service issues arise. Training programmes have been re-engineered in many OECD member countries, especially to introduce lifelong learning programmes. In countries such as Australia, lifelong learning has been developed within the staff performance management system; in others (as in Sweden or the United Kingdom) it is part of the establishment of business plans and views on required competencies and skills. Training policy is designed at the level of central HRM bodies in a large majority of OECD member countries. Implementation is left to line departments or even lower management levels in many countries. For instance in Norway, the United Kingdom and the United States there is no co-ordinated framework for initial training.
Initial training
Most OECD member countries have established initial training at entry into the civil service. However, countries such as Norway or the United States do not have a framework for such training; it is left to the discretion of the local units. Most countries differentiate initial training by seniority level or by category/type of public servants. The length of initial training at entry in the civil service varies considerably across countries and also within countries. For some categories of public servants it can last for one year or more (the Czech Republic, France, Luxembourg, Portugal, the United States). In some cases, it is also considered as a probationary period prior to becoming a civil servant. Initial training can take less than three months in countries such as Hungary, Japan, and Norway. Initial training is provided at least partly by government-specific training organisations in almost all countries with such programmes, with the notable exception of Australia. However, some countries also use private-sector firms for the initial training of some employees (Australia, Italy, the Netherlands and the United States).
Continuous and lifelong training

Many OECD member countries invest considerably in continuous/lifelong training. For instance in Austria, Japan, Korea, Norway and Portugal, the average length of continuous training is between ten and 15 days a year per employee, while in Australia, Luxembourg, Mexico, the Netherlands and Spain employees benefit from between five and ten days on average for continuous training. Countries investing the least in continued training (three to five days a year per employee) are Finland, Germany, Hungary, Italy and Switzerland.
Box 2.14. Training and learning in governments of selected OECD member countries (contd)
Management development
Development of senior managers is receiving increasing attention in many OECD member countries. A survey carried out on behalf of the Office for the Senior Public Service in the Netherlands in a selection of OECD member countries found that recurring themes are leadership reflecting an expectation that senior officials will manage change, not just cope with it and networking especially to encourage sharing of experience and ideas (EIPA/ Berenschot, 1998). In line with this, there is less emphasis on traditional classroom-based training for senior managers and more use of active learning methods such as workshops interactive learning events and exchanges.
Source: OECD (2007a), OECD Reviews of Human Resource Management in Government: Belgium, OECD Publishing, Paris; and OECD (2009f), Sustainability of Civil Service Reforms in Central and Eastern Europe Five Years after EU Accession, SIGMA Paper No. 44, OECD, Paris.
Knowledge management
Knowledge management (KM) refers to a broad collection of organisational practices related to generating, capturing and disseminating know-how and promoting knowledge sharing within an organisation and with the outside world, including: organisational arrangements (e.g. decentralisation of authority, breaking down bureaucratic divisions, use of information and communication technologies); personnel development (e.g. mentoring, training, mobility) and management of skills; transfer of competencies (e.g. teamwork, guides to good work practices); managerial changes and incentives for staff to share knowledge (e.g. knowledge sharing as an element of performance assessment and promotion selections, evolution of the role of managers).
KM in government has ranked high on the management agenda for some years in many OECD member countries for several reasons. Knowledge is a critical determinant of competitiveness of OECD economies, and is created and destroyed faster and faster. Perhaps more than anything, KM is being driven by efforts to make the public service more efficient, productive and innovative. In addition, the need for better integration of government activities to address complex cross-sectoral problems makes it necessary for people in different organisations to share information and know-how and work together. Ageing public service workforces in many OECD member countries also make it imperative to transmit knowledge to ensure organisational continuity. Central government organisations are making efforts to improve their KM practices using: traditional knowledge-sharing methods (training for internal knowledge sharing and meetings for external knowledge sharing); tools such as networking and communities of practice;
establishment of central KM units and development of ICT tools; collaboration with organisations outside government in problem solving and developing policies; more interchange with academic, community and privatesector organisations; and more exchange of knowledge through international organisations and international contacts.
However, the experience has been that the improvement of KM practices goes well beyond the need for new tools and processes or formal strategies. A key finding of OECD research is that good KM practices may be best enhanced by long-term efforts to change behaviours by building trust, team spirit and co-operation in the workplace. It also appears that organisations whose missions are more outwardly focused tend to have more demanding KM requirements and therefore better KM practices. There are also potential pitfalls: unless they are well designed, KM policies can lead to added costs in terms of information overload and a dilution of accountability.

The Brazilian government launched a new policy on continuous qualification of public servants in 2006. Ministries are supposed to develop qualification plans for their employees based on competencies and efforts are being made to modernise methods of learning and development. A national network of government schools has been established and partnerships with other providers are being developed. There are significant challenges to be faced (Amaral, 2006). While the level of education of those recruited into the public service has risen over time, there is a good deal of variation in skill and qualification levels in different areas. While areas such as diplomacy, universities, hospital-schools and finance make substantial investments in training, some ministries suffer from a shortage of well-qualified or appropriately qualified staff. Moreover, the ageing of the public workforce means that in the next 11 years, roughly 70% of the current federal civil servants will be entitled to retire, engendering both problems and opportunities with regard to building capabilities. A general provision in the Law 8112 was introduced only in 2008 to allow civil servants to take some paid leave in order to obtain a Masters or PhD degree, but beforehand, there was no framework for those demands which were considered on a discretionary basis by the individual ministries and government organisations. According to ENAP the main concerns expressed by the Brazilian governments management development institutes include: the strategic importance of training and development is not appreciated and as a result it receives insufficient attention from senior management; information about training and development is patchy so it is difficult to get a full picture of how much training is done and to what standard; the capacity of many ministries to develop training plans is still insufficient.
At the same time, ENAP understands that training and development initiatives cannot work in isolation. The creation of the National Policy for Civil Servant Development seeks to establish the necessary linkages with competency management, selection and performance management. However, this initiative is still in its infancy and faces considerable challenges: the national system of management development institutes is still being developed and capacity varies considerably. Most do not have adequate staff or
178 2. STRENGTHENING GOVERNMENT CAPACITY structures and have not yet developed the necessary relationships with their client ministries. ENAP itself is experiencing capacity issues for building leadership and management training. The cultural, economic and social diversity and the geography of Brazil, as well as the highly dispersed delivery of public services also create challenges in terms of scale, access and design. The steering committee set up to oversee the implementation of the national policy has decided to focus initially on training those responsible for implementation. This appears to be a good first step. Courses and workshops are being organised for those involved in human resources, training, and planning and budgeting in ministries. Additionally, ministries are being offered training in competency-based management to strengthen their capacity to develop their training plans. A national training syllabus is being established by the network of government schools. It is difficult to get a picture of how much training and development is being done in terms of expenditure and numbers trained as there is no central database. ENAP is surveying training offers and expected to have an overview by the end of 2009. There are currently no measures of the cost-effectiveness or quality of training. While extremely competitive entrance exams mean that new entrants to the public service are well educated, the academic focus of the exams means that they do not necessarily possess the competencies required for their new roles. Most new recruits go through a training period of variable length and have a probationary period of three years. In some cases the initial training is part of the selection process. ENAP is responsible for leadership and management training. It trains entrants to the new public service management careers and also provides training for DAS civil servants, although the DAS does not require training. The numbers participating in management development courses rose from 7 800 in 2003 to 29 600 in 2008. The greatest increase was in participants in distance learning, which has become an important method of delivering training. Public servants increasingly realise that they need to show a high level of qualifications to be selected for DAS positions and increasingly use training for that purpose. Similar trends exist for holders of DAS positions in order for them to be maintained in their posts, reappointed or promoted within the DAS system. Efforts are being made to modernise the methods of training and development through distance education, in-service training, seminars and sharing of best practice. However, much of the training is still classroom-based and uses traditional methodologies.
KM in the Brazilian public service is at an early stage. There are a number of isolated instances of successful implementations of KM initiatives in major state-owned enterprises, such as Petrobras and the Banco do Brasil, but KM practice is not generally well developed in federal ministries and agencies. A draft decree establishing a public policy on KM has been prepared and is under consideration. As regards HRM, the federal government needs to improve KM to prepare for the large number of retirements that will start to occur in ten years. New legislation will allow civil servants to be tutors in government training schools and thus share their knowledge. This is leading to the emergence of communities of practice among course participants. Roundtables of specialists in particular issues have also been held. Internal networks are being encouraged to offer the opportunity for better communication. The
establishment of the national network of government schools is intended, among other things, to promote the sharing of knowledge. There are organisational features of the public service that can favour knowledge sharing as well as features that impede it. DAS mobility within the public service and as a result of DAS appointments from outside the public service can be viewed as a way of disseminating knowledge. Reforms of the DAS system should take account of this. Another feature that favours KM is the new public management careers established in recent years, such as the EPPGG. These public managers are potentially a valuable vector for KM. Features that impede KM include ministerial silos (there seems to be relatively little communication or collaboration among ministries) and inflexible careers which inhibit mobility.

Brazils approach of using competencies to drive training and development is going in the right direction. The recommendations below are aimed at supporting implementation, promoting closer integration of training and development with other HRM processes, and increasing the cost effectiveness of training and development activities.
Roles and responsibilities

At present the approach to training and development is relatively centralised, with the Human Resources Secretariat (SRH) in the Ministry of Planning, Budget and Management and ENAP responsible for evaluating annual training plans and reports of ministries and agencies and giving direction on the allocation of training resources. The actual training is done primarily through the network of government schools. This involves the central bodies in a lot of detailed oversight activity. It is recommended that the SRH refocus its activities on creating frameworks and support for ministries and agencies as they implement the national policy for civil servant development and approach training and development more strategically. For example, a framework might set broad parameters for how much ministries and agencies should invest in training and development, leaving some flexibility as to how they carry it out. It should also set out key linkages between training and development and other areas of HRM, such as performance management and career progression. Support provided by the SRH might include guidelines and templates to assist ministries and agencies to develop their own strategies, as well as standards, best practice and information on training and development resources. Support should include helping ministries to develop workplace-based methods of staff development. Oversight should focus on assessing progress with implementation and dealing with problems rather than detailed evaluations of ministries training plans. Special support might be given to ministries that experience problems with implementation. This approach would be consistent with the SRHs responsibility for formulating HRM policies and guidelines. ENAP should maintain its responsibility for executive and management development and should continue to provide expert advice on the implementation of the national policy for civil servant development. Heads of ministries and agencies and line managers should have well-defined responsibilities in relation to training and development of their staff and these responsibilities should form part of managers performance objectives. Staff should be
180 2. STRENGTHENING GOVERNMENT CAPACITY responsible for their own ongoing learning and development. A framework should support them in this: competencies, guidance, resources and support from their managers.
Integration with other areas of HRM

Building a culture of learning and development will require changes in other areas of HRM that affect incentives for managers and staff to invest effort and resources. In particular, links need to be created with promotion, career opportunities and performance management. As regards promotion, building up the capacity of the public service will mean giving more weight to the development staff have undertaken, as opposed to seniority, not mechanistically but as part of assessing how well prepared they are to undertake a higher-level role. As regards career opportunities, there is great disparity in the extent to which public servants have access to promotion and therefore in their incentives to engage in ongoing development. Overhauling the career structure to create more pathways for professional growth and career progression is a necessary part of a skills strategy for government. The developmental aspect of performance management should be strengthened using the competencies approach. Managers should be trained in how to assess and address the developmental needs of their staff in order to improve on-the-job performance. At the same time, a careful balance is needed between the development focus and the results focus of performance management.
Methods and delivery

The need to bring training and development methods up to date is appreciated. Given that much of the recruitment in the Brazilian public service is at base grade and early in the career, investment in initial training is essential. At present the amount of training in different ministries and agencies appears very uneven. It is recommended that this be reviewed and that requirements be set for minimum initial training appropriate to different types of job categories in consultation with the hiring organisations, although a level of flexibility should be maintained to adjust the training to the needs of organisations.. Classroom-based training should be based on the most modern adult-learning methodologies. Other forms of development workplace-based activities such as on-thejob training and developmental assignments and secondments should also be supported. Distance learning should continue to be developed as a means of expanding access to ongoing training. A modular approach to training should be developed, linked to a competency framework. Given the geographical dispersion of the public service, it is understandable that Brazil has invested in developing a network of government training schools. In addition, ministries and agencies often use private providers. There is probably scope for rationalisation to avoid duplication of effort and concentrate investment on priorities. Quality assurance methods should be applied to both government schools and private training consultants. Universities should be encouraged to set up courses in public management and to develop partnerships with ministries and agencies to provide specialised ongoing development for particular professional groups.
Developing leaders and managers

ENAP and the network of government training schools should continue to focus on developing leaders and managers, building on appropriate international best practice. Initial and ongoing development should be linked to core competencies to ensure a common framework for development. A framework for ongoing development should incorporate not only formal training but also a range of other activities, such as networking and executive coaching. The executive development frameworks in a number of OECD member countries, outlined in Box 2.15, provide examples of how this could be approached. Box 2.15. Development of senior civil servants: examples from OECD member countries
In Australia the Australian Public Service Commission supports leadership learning and development. The Senior Executive Leadership Capability Framework defines the capabilities required of senior executives in the public service. A suite of development programmes, events and services provided by the Commission has been specifically designed to reflect this framework. The Commission works closely with leading institutions and training providers, across industry, to develop and deliver programmes which have been specifically designed to meet the changing needs of public service employees. In Canada, the Canadian Office of the Chief Human Resource Officer offers programmes and information to senior staff that foster professional growth. For the most senior level, Assistant Deputy Minister (ADM), the agency provides individual ADMs with advice on assignments, promotions and learning opportunities, as well as personal and career development strategies. In Germany the Bundesakademie fr ffentlich Verwaltung organises development and further training of federal civil servants. However, the federal public service offices and those of the federal states are responsible for deciding who may participate in the courses offered by the Bundesakademie. The programmes are not compulsory. In Sweden the leadership task of senior civil servants is emphasised by the governments leadership policy, which provides guidelines and basic principles. Specific training and courses aim to develop the leadership skills of senior civil servants. The Ministry of Finance decides which subjects are important for training. However, the organisation of training is decentralised to individual agencies.
Source: Survey carried out on behalf of the Office for the Senior Public Service in the Netherlands, EIPA/Berenschot (1998), and in some cases from government websites.
A consistent approach to developing leaders and managers would be facilitated by changes to the way the DAS operates, as recommended in Chapter 4. It is recommended to establish specific requirements regarding training and development of civil servants nominated to DAS positions. This should include induction as well as development based on core competencies. In addition, all persons nominated to DAS positions, including those coming from outside the civil service, should be required to undergo an induction programme dealing with public service values, ethics and code of conduct.
Evaluating the cost effectiveness of training

Evaluation should focus on the extent to which training and development are meeting the needs of the organisation: for example, the percentage of staff deemed to be at acceptable competency levels and whether the skills and qualification profile of the organisation is satisfactory. Measures of cost effectiveness should be developed for ministries, agencies and government training schools to use to evaluate their training activities: for example, management feedback data on how employees apply what they learn and improve their performance; feedback from clients of public services; and cost-benefit data for specific training interventions.
KM in the Brazilian administration is at a very early stage. It will progress when competency management becomes well established and when the system of job categories has been reformed to provide more fluidity of movement within the public service. As regards how HRM policies can contribute to KM, OECD experience highlights the importance of leadership, staff involvement and incentives to build organisational cultures that are conducive to KM. The development of competency frameworks in the Brazilian public service provides an opportunity to integrate KM into HRM. KM should be considered a core competency for all managers and should be an element of their performance appraisal. It should also be integrated into training for both managers and staff. A survey of KM practices in ministries, departments and central government agencies in OECD member countries points to a number of important factors that the Brazilian government should take in to account in its efforts to establish KM (see Box 2.16). Box 2.16. OECD survey of central government KM practices
The following factors were found particularly important for the success of KM in a crosssection of OECD member countries:
high priority given to the KM initiative at the very top of the hierarchy; well-developed and co-ordinated communication plans for the initiative; strong involvement of staff; establishment of incentives to share knowledge; allocation of sufficient financial resources.
Source: OECD (2003a), Conclusions from the Results of the Survey of Knowledge Management Practices for Ministries/Departments/Agencies of Central Government in OECD Member Countries, GOV/PUMA/HRM(2003)2, OECD, Paris.
General conclusions
In recent years, the federal government of Brazil has made considerable progress in strengthening its human resource capacity by increasing the level of qualification for entry into the public service and ensuring merit-based selection processes at entry. These are the first important steps in the construction of a capable public service. Staff capacity, however, remains undermanaged, with very limited management of competencies, narrowly defined merit selection systems, and rigid and narrow job categories which prevent the optimal use of human resources and limit opportunities for staff to develop their careers through lateral mobility or vertical progression. The government needs to take a number of measures to develop its civil service into a fully modern civil service similar to those of most advanced economies. Further efforts in the area of management capacity and competencies and in reforming the job category systems are priorities and should go hand in hand so that they reinforce each other. This involves designing a competency framework for the civil service, developing the capacity within ministries and other government organisations to manage competencies, and ensuring that key HRM tools and processes are related to competencies. Competencies and the development of senior managers should be a priority area of emphasis. The central HRM body has a special responsibility for managing transversal categories and maintaining coherence across the system of competency management in government organisations. The management of competencies includes of course its application to the recruitment system, which is based on a narrowly defined notion of merit and does not at present guarantee the selection of the most competent person for the job. Recruitment exams can be modernised to go beyond tests for knowledge and skills acquired in universities. Modernisation of the recruitment system will probably entail the establishment of some sort of independent appointments board to give guidance on recruitment, set standards, possibly act an appeal body, and mandate recruitment providers. Commissioned functions and DAS positions are an important exception to the principle of transparent competitive selection of staff in the federal government. DAS positions should probably be a priority for systematising a transparent but modern recruitment process, based on experience and competencies, and some organisations seem to be doing so already. This would fill in a gap in terms of transparent recruitment process, professionalise the recruitment of senior management, help build group cohesion across managers, constitute a trial process for selection that is not based on knowledge, and thus help build confidence in more modern ways of measuring merit in recruitment. As for the Commissioned functions, it is important that they be reintegrated into the job category system and that appointment to those positions follow regular procedures rather than discretionary appointments. This can be implemented over the years as staff go on retirement. The management of competencies will not achieve most of its potential without an indepth restructuring of civil servants job categories and career opportunities. The rigid and fragmented way in which job categories are managed today hinders the optimal allocation of staff, creates high transaction costs and pressures for increased compensation costs. In addition, the DAS system, especially for non-managerial positions, has been a relatively unhealthy way to provide flexibility in the rigid management of job categories.
184 2. STRENGTHENING GOVERNMENT CAPACITY Reforms in job categories are technically and politically very complex to implement but have been conducted successfully in a number of OECD member countries with similar difficulties. This can inspire Brazils efforts. The federal government should certainly consider reducing the number of job categories, increasing transversal job categories, developing job profiles that underpin the career structure and favour mobility, and designing a job classification system. The procedures for mobility and promotion across careers, however, need to be transparent and based on competitive processes with transparent and publicly available listing of openings. Many countries are moving towards opening up some positions to lateral entry into the public service. Brazil has already moved in this direction through the DAS system. This system, however, is an imperfect solution designed as much to give some freedom to those in the job category system as to increase competition and allow the entry of people with different competencies into the system. For middle and senior management positions, the DAS system could remain, with more transparent appointment processes based on competencies for lower management positions and more discretionary appointments at higher management levels (Chapter 3). For other positions, however, when the job category system has been reformed, it is advisable that they be reintegrated into the job category system, still allowing, however, for lateral entry into the system of staff from outside the public service.
Notes
1.
The European Group of Public Administration (EGPA) has undertaken a comprehensive study of competency management in the public sector in Europe: see Horton, Hondeghem, and Farnham (2002). The jurisprudence of the Supreme Court does not allow mid-level recruitments within the regular job category system, but they exist for some positions such as university teachers, researchers in research institutes, and infrastructure senior specialists. The DAS system comprises about 22 000 positions, outside of the job category system. Most senior positions are included in the DAS system, but the majority are relatively junior positions. Appointments to the DAS system are discretionary, although a large percentage are legally reserved for civil servants. The full description of the DAS system is in Section 3.2. The competency-based methodologies are described on the Belgian federal governments personnel website www.fedweb.belgium.be/fr. This paragraph is drawn from Farnham and Horton (2002). This analytical framework was proposed by Osterman in 1987 and discussed in Boxall and Purcell (2003: 117-118). Some careers in regulatory agencies have a qualification reward (Gratificao de qualificao) that aims to differentiate among new entrants according to competencies and experience. But these rewards have never been used since 2004 because of a lack of regulation. The career was created by the Provisional Measure 389/2007, later transformed in the Law 11.539/2007, later reformulated by the Law 11.661/2008, derived from the Provisional Measure 407/2007. Eight hundred eighty-four positions (84 seniores and 800 analysts) of infra-structure analysts have been created since then. They are distributed mainly in line ministries such as Transports, Energy and Mines, National Integration, Cities and Communications. The career was created by the Law 3.952/2008. There are 2 400 positions to be fulfilled by the line ministries (Education, Health, Social Development, Agrarian Development, Human Rigths, Women, Racial Integration, Employment, etc.). Appointment process to those positions will start at the beginning of 2010. The creation of this career Project Law 3952/2008, 2 190 positions is destined to populate the critical areas of human resources, procurement, financial services, administrative routines. It has not yet been approved by the Congress. The career was created by the Provisional Measure 441/2008, transformed in the Law 11.907/2009. Three hundred fifty positions have been created and a public selection to fill 230 positions has just been realised.
2.
3.
4. 5. 6. 7.
8.
9.
10.
11.
12.
It should be kept in mind that the number of central government civil servants in France is much larger than in the federal government of Brazil and, when comparing with the federal government of Brazil, the number of job categories and groupings should be adjusted accordingly. There are however exceptions, most notably in the Nordic countries, where the decentralisation of human resource management to independently led executive agencies has led to an almost total harmonisation with the arrangements and practices in the private sector. The protection against patronage is in these countries based on deeply internalised public service values, an extensive and legally guaranteed transparency, and access to appeals. Quotas existed in the past for the lower grades but were not properly enforced. This section draws partly on information included in the OECD (2007a: 81-82), and from OECD (2006), Survey on Strategic Human Resources Management, OECD, Paris.
13.
14. 15.
ANNEX 2A.1. JOB PROFILE TEMPLATE 187
Annex 2A.1 Job profile template
188 ANNEX 2A.1. JOB PROFILE TEMPLATE
JOB TITLE POSITION DESCRIPTION & COMPETENCIES OVERALL PURPOSE OF THE POSITION: KEY RELATIONSHIPS: Internal External
ACCOUNTABILITIES AND TASKS
Key result areas
Accountabilities/tasks
REQUIRED ATTRIBUTES: TECHNICAL KNOWLEDGE MANAGEMENT AND LEADERSHIP COMMUNICATION PERSONAL ATTRIBUTES AND ABILITIES
JOB COMPETENCIES AND INDICATORS
Job competency
Key behaviours/indicators (demonstrated by)
3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP 189
Chapter 3 Enhancing performance orientation and building leadership
A constant challenge for governments is the efficient delivery of services and operation of programmes. This chapter analyses the strategies implemented by the Brazilian federal government to enhance performance and build leadership in the federal public administration. Taking into consideration the experience of OECD countries, the chapter analyses a number of elements and activities which form the set of drivers of performance in the Brazilian federal government: budget management, staff performance management, the remuneration system, and individual performance assessment. The management of senior managers is seen as a critical element for reinforcing the performance orientation of public governance and public management, and for enhancing the delegation of responsibilities for human resource management.
190 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP
3.0. Introduction
It is easy to support the idea that government should deliver efficient services and operate efficient programmes. This has in fact been a key goal of all countries that have moved beyond archaic governance systems. Public resources are always limited, and getting the most out of them has always occupied the minds of modernisers, whatever the national context. It is of course easier said than done. Public activities differ from private ones on two critical points. First, the way output is achieved is at least as important as its economic value. Second, the output or results of public activities are normally not assigned a market price that integrates quality, quantity and customer satisfaction. Performance in public administrations and services is a broad concept that includes not only costs, output and effects on outcomes, but also such things as appropriateness, due process and trustworthiness. A public servants performance involves not only working and delivering but also respect for the laws of the country, for the democratic system and for the elected government during its term of office. Nor does good performance just happen, at least not consistently. It requires appropriate actions by political leaders, legislators, public managers and public servants. It is about culture and attitudes as much as about organisations, mandates, competences and incentives. Much has been written about strategies and arrangements for enhancing performance, almost all of it on how to manage the workforce and how to make public employees perform better. The last decades have generated a wealth of management literature that offers different models and recommendations, although most are only concerned with market enterprises. Discussions about public servants performance long focused on how they behaved and worked. Goals were expressed in terms of correct behaviour, impartiality, legality and appropriate procedures. Accountability arrangements emphasised controlling inputs, compliance with rules and regulations, and hierarchical structures. Incentive structures focused on compliance, and as such, discouraged initiative and innovation. Although these were critical for the trustworthiness of the public administration, they were said to inhibit innovation and hamper efforts to enhance efficiency and performance. They have been questioned in all OECD member countries, in different ways and at different paces. The general trend has been to delegate managerial authority and increase accountability for results and performance. This is by no means an easy task, and countries are still striving to achieve a better balance between controls and efficiency. Given its relatively strong emphasis on control, this is clearly a direction that the federal government of Brazil should follow, using caution so as not to undermine ethical standards in the public service.
3.1. Enhancing performance orientation The experience of OECD member countries The drivers of organisational performance
While there is no best case country or model, it is possible to outline a number of elements and activities which form the set of drivers of organisational performance in any public administration. First, the government has to make clear statements about the outputs and outcomes it wants to achieve and its expectations of performance in the different parts of its administration and from its employees. This strategic management of public activities involves setting and regularly updating a set of organisational goals, which have to be specific enough to enable assessments of organisational performance. It also includes setting the standards and promoting the values that should guide its employees in their work. Second, the government has to provide the necessary financial resources for the different parts of its administration, so that they have a reasonable possibility of reaching their goals. The goals of the governments budget management should not only be to control the amount of expenditure and the allocation of expenditure across organisations and activities, but also to do it in such a way as to provide adequate and optimal conditions for public organisations pursuit of enhanced performance. Third, the government has to ensure that its administration has a workforce possessing the skills and competences necessary for the activities it is expected to perform and able to maintain them over time. This requires an adequate level of workforce planning, competency management that builds on a competency framework, competency profiles to guide recruitment and training activities, and being an attractive employer able to meet the growing competition for scarce skills and essential labour. Fourth, the government has to ensure that it has competent and loyal managers at all levels, able to lead the different parts of the administration towards their respective goals, and to encourage and stimulate employees to improve their performance. This requires managers who are empowered and have sufficient managerial discretion, especially concerning performance rewards for their employees. Finally, the management of public employees has to change. Good performance must be rewarded and unsatisfactory performance must be attended to. Incentives must be provided for both personal and organisational development and innovation must be encouraged. Employees need to be encouraged to provide good service and to enhance their own capacities and competences. This will be very difficult if management by rules and regulations is not replaced by spheres of managerial discretion and responsibility for results and performance.
These five sets of elements and arrangements are interdependent and mutually reinforcing. It is difficult to enhance overall effectiveness, efficiency and quality without satisfactory standards in all five areas. Some of the measures involved can be introduced even in a bureaucratic environment. These include performance management and
192 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP budgeting, performance measurement, improving financial management and tracking of public expenditure. Other measures entail more innovative approaches, such as a relaxation of financial and managerial input controls, an increase in managerial flexibility in areas of spending and staff, and use of internal market-type mechanisms. This implies that managers are increasingly trusted to improve performance and have the freedom to manage, but are also more effectively being held accountable for how they manage, how wisely resources are used, and what results have been achieved. This relaxation has to be combined with new governance and management arrangements to ensure that the basic values of public service are still respected and complied with. The most important of these involve collecting information on performance and results; new means of assessing the performance of managers, organisations and employees; and improved internal audits. In practice, OECD member countries have taken different approaches to the relaxation of input controls and to the provision of formal performance information. Europes Nordic countries have a long history of independently managed executive agencies and started relaxing input controls during the 1970s. In other countries, many of the mechanisms needed to support increased flexibility, such as delegated financial and performance management and systems to develop and gather performance information have only recently been put in place.
Aligning human resource management to enhance performance orientation

In addition to general enablers of good performance, appropriate human resource management (HRM) practices are essential in the quest for enhanced performance. In 1960 Douglas McGregor published his seminal book on modern human resource management. He challenged the Taylorist approach and argued that employees performed better if empowered, motivated and stimulated than if merely commanded. Previously, performance incentives had been quantitative measures intended to make a labourer work harder and faster. McGregors article became the starting point for experimentation with new forms of more sophisticated performance incentives, linking rewards and other forms of incentives to the strategic goals and results of the organisation. By now it is generally accepted that enhanced performance cannot be achieved simply through set rules and preordained procedures, although standards, rules and appropriate procedures will continue to set the scene for active human resource management.
Assessing performance
It is possible to discuss and assess performance at several levels: the organisation, the group or team, and the individual. The ability to measure or assess performance at any of these levels depends on the ability to describe the desired results of the organisation's activities in a sufficiently operational way. Systems for rewarding organisational performance are always based on such descriptions, and expectations of team or individual performance should always reflect the organisations goals. The concept of performance acquires new dimensions when one moves from the organisation to the team and the individual. It is no longer merely a question of doing the right things and doing things the right way. It also involves how an individual behaves in a workplace context and how he/she contributes to a well-functioning workplace and to a well-functioning organisation.
Previous OECD surveys and studies show that existing systems for assessing individual employee performance vary across organisations from very simple to complex, and that they are also very context-dependent. A simple system may consist only of subjective supervisor assessments or of a few easily observed quantitative variables. More evolved systems structure assessments according to different aspects and/or competencies or include more variables. Among the more complex systems used in some organisations are the so-called 360-degree assessments in which not only supervisors but also colleagues, subordinates (if any) and customers/clients assess an employees performance. Advanced systems can contain elements intended to standardise the assessment of different supervisors and to reduce the risk of subjective and discriminating treatment. Such elements include assessment guides and assessment training for supervisors. Employees may also have a right to appeal a negative assessment. Figure 3.1 provides an indication of which criteria are used for assessing the performance of government employees in different OECD member countries.
Figure 3.1. Criteria used for assessing performance of employees in central governments of selected OECD member countries
Source: OECD (2005c), Performance-related Pay Policies for Government Employees, OECD Publishing, Paris.
Early in performance management, a number of countries established rather sophisticated measures to assess outputs and outcomes, using models aimed at achieving a certain level of scientific assessment. These models have proven very cumbersome from a bureaucratic point of view, and have focused employees attention not on their general behaviour and overall delivery of services but on a few outputs and measures. These systems have since evolved and adopted more diverse criteria for assessing performance. The criterion improvement in competencies has become increasingly important, partly because it is a way to encourage the development of the key skills required of staff. It may also be easier to agree on what constitutes technical competencies than to assess what outputs have been achieved. This route has enabled countries to avoid the divisiveness often associated with performance-related pay based on appraised
194 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP performance outputs. In 2009, for example, Japan introduced performance assessments with criteria for both outputs and outcomes and improvement of competencies. In most cases, standard criteria are developed to assess the individuals performance. Overall, the most important criteria highlighted in country reports are: outputs achieved, which include the objectives specified above; competencies and technical skills; interpersonal skills and teamwork; leadership and management skills; and inputs. Other criteria mentioned by individual countries include ethics (Canada) and innovation (Denmark). Interpersonal skills have taken on more importance with the spread of more flexible, team-based working practices and the need to be more responsive to individual citizens requirements. Associated with these are leadership and management skills. They are especially relevant for managerial staff, but measures to devolve more decision making and responsibility to front-line staff make these skills relevant for staff lower in the organisation as well. Performance-related pay schemes based on achieved outputs have encountered assessment and attribution problems. The other criteria described above are also not immune from similar problems. It may be hard for instance to measure competencies in the absence of formal certification, as they may be difficult to define in a way that is acceptable to both staff and managers. Relying simply on a managers subjective judgement as to whether an employee has acquired a particular competency can be as difficult as deciding whether an employee has achieved a certain level of output. Performance rating, like performance assessment, tends to be less standardised, less formalised and less detailed than a decade ago. Performance appraisals rely more on dialogue with line managers than on strictly quantifiable indicators; more diverse criteria are now more flexibly applied. In most cases, managers and their staff have two meetings a year, one to set objectives and the other to assess the results obtained. Systems for rating performance which impose quotas on the number of public servants to be rewarded are widespread in OECD member countries. Some are formal, and some are informal. Practitioners generally agree that it is relatively easy to identify the 10% best or poorest performers. The difficulty lies in assessing the other 80%. For these, the value of the performance appraisal system lies more in the discussion of objectives and achievements than in the actual rating.
Rewarding good performance

A number of studies have conclusively shown that rewards for good performance do not have to be monetary. Attention, praise in front of colleagues, being singled out for attractive tasks and for career enhancement are at least as effective as remuneration in promoting better performance. The role that past performance plays for selection for functional promotions, whether within a job category or in competition for entry into another job category, is also a very important incentive for enhanced performance. Targeting unsatisfactory performance is as important as rewarding good performance. Supervisors are, however, typically more comfortable with rewarding good performance than with tackling unsatisfactory performance. This may therefore have to be given special attention in supervisors training. When a number of unsatisfactory performance assessments can lead to termination of employment, special care has to be taken that the assessments are correct and defensible.
Performance-related pay
Forty years ago, nearly all public servants in the central governments of OECD member countries were paid according to salary scales based on length of service. Today, significant numbers of public servants in most OECD member countries are covered by performance-related pay (PRP) schemes of one kind or another. These are most frequently used for senior managers, but increasingly also for non-managerial employees. The reasons for introducing them vary across administrations and are typically complex, but they generally focus on improving individual motivation and accountability of public servants as a way of improving organisational performance. This does not necessarily mean that the pay of public servants differs on the basis of performance in most OECD member countries. It does mean that the notion of performance has been introduced and allows for singling out excellent or poor performers in terms of their pay. In fact, however, very few OECD member countries have extensive formalised PRP schemes, and PRP is sometimes more rhetoric than reality, with performance rewards distributed to all. There is a spectrum of arrangements in OECD member countries for linking remuneration to performance assessment. Some countries have introduced the possibility of performance bonuses (rather than performance increments). In many OECD member countries, the salaries of public servants now consist of three components: a base pay, a supplement related to the nature or duties of the position, and one or more PRP elements. The two types of variable pay components should not be confused. The first relies on an ex ante evaluation of the responsibilities and requirements associated with the position, while the other relies on an ex post evaluation of individual performance. Other countries have made salary progression on fixed salary scales dependent on favourable performance assessments. A few have introduced individualised salaries, with performance just one of several factors influencing salary revisions. Aside from a few exceptions, the size of performance payments is generally a fairly modest percentage of the base salary, in general less than 10%, especially among nonmanagerial staff. At management level, performance payments are generally around 20% of the base salary. Recently, a few countries have started to establish collective or group performance schemes, at the team/unit or organisational level. This is an interesting development, especially for career-based systems in which individual performance management has proven more difficult (see Box 3.1). A number of studies have failed to demonstrate any significant correlation between individual PRP schemes and the performance of the concerned organisations, although PRP seems to be easier to implement for simple piecework production than for complex tasks. This does not mean that such correlations do not exist, but that performance-related pay alone is not enough. Instead, PRP has to be part of broader performance management systems, with appropriate career opportunities and other forms of recognition. PRP systems also have to be operated by competent managers and based on appropriate and reliable performance indicators or assessments. Performance-related pay is not a standalone feature.
Box 3.1. Conclusions of a study on collective performance-related pay

Collective performance pay is a recent phenomenon and aims to respond to criticisms of individual performance pay as having a negative impact on cohesiveness and team spirit in the public service. It is not yet widespread and only a few countries, such as Denmark and Finland, have started to go in this direction. The definition of the scope of the group to which collective bonuses should apply seems to be very important. This is one of the reasons invoked by the United Kingdom for the failure of the introduction of collective performance bonuses in employment agencies. In Finland, collective bonuses are mostly applied in agencies rather than in central services. In Finland, which has a very sound system of cascading objectives, collective bonuses are based on the achievement of performance objectives. These are divided into two parts: one is related to multi-annual objectives, and another is related to annual objectives. Bonuses are only allocated past a certain threshold, and represent between 1.5% and 4.5% of annual gross salary. Sometimes collective bonuses are the same for all who are rewarded; more often they are proportional to ones salary. Finnish government bodies using collective bonuses have to fund them themselves. They consider this a useful tool for taking note of achievements and recognising excellent work. There are a number of conditions attached to collective performance pay:
the existence and credibility of the multi-annual strategy; precise and measurable objectives; understanding of the cumbersome processes attached to allocation of those rewards and efforts to incite a dialogue; investment in making performance part of the organisational culture.
In conclusion, the Inspection gnral des Finances in France advises the following: allow collective performance pay through a general framework but decentralise its management to the organisations management levels; treat collective performance pay as a contractual device; make it a condition that strategic documents exist and are credible; do not link collective performance rewards to efficiency measures regarding personnel costs; start small; formalise collective performance pay into explicit contracts; favour simplicity and equity through an equal distribution of collective rewards in the teams; associate team members in the definition of objectives; incite managers to get training in management and in discussing objectives and achievements.
Source: Inspection Gnrale des Finances (2009), Rapport sur lintressement collectif (comparaisons internationales), April. France.
A final word of caution is necessary. Differences in remuneration and other rewards for employees with equal tasks and competencies need to be generally recognised as motivated and legitimate, in order to not affect the workplace climate and morale negatively. The performance of any group of employees tends to vary according to the Gaussian normal distribution (also called a bell curve), with the majority clustering around the median and with a smaller number of outliers substantially above and below the median. Introducing evidence-based pay differentials in the large groups clustered around the median typically entails high transaction costs, but there is seldom sufficient added value to outweigh these costs. The use of individualised and differentiated pay should thus not be overdone. There are inherent values in standardised pay, and the ability to differentiate should only be used if and when managers have the required competence and evidence base for differentiation, and when there is a sufficient business case.
Decentralising pay setting for performance pay

The transaction costs involved in trying to combine centralised wage setting with elements of individual performance-related pay are substantial. Objective output indicators have long been used for piecework by blue-collar labour but tend to be less suitable for assessing the performances of white-collar employees, especially public servants. The performance of a public servant can normally only be observed and assessed by the immediate supervisor. The introduction of elements of performancerelated pay therefore always entails further decentralisation of human resource management. However, decentralising pay setting does not necessarily mean individualising pay, as managers can be delegated the authority to manage pay for groups rather than individuals. Decentralised pay setting creates a number of challenges for public administrations, even if it only concerns a small part of total remuneration. Supervisors need to have the necessary competencies and to be comfortable with grading their subordinates. Steps have to be taken to ensure the consistency of pay structures across the administration, so that two employees with similar tasks and qualifications and performing equally well are paid approximately the same. Appropriate financial management arrangements are also essential to ensure that aggregate pay developments do not get out of line. The chances of a positive outcome of decentralised pay setting will improve if the central agency provides adequate and appropriate support for those who manage the decentralised pay setting. This can include guidelines, handbooks, training, peer consultation networks and statistical tools that enable pay-setting entities to benchmark their pay system and pay structure to that of other pay-setting entities in the public administration and to the evolution of market pay for comparable skills and tasks. Introducing PRP can be a very slow process. It seems to require a minimum of eight to ten years to attain full coverage. In Denmark, implementation started in 1997 and was completed in 2005. In 2002, only about 35% to 50% of the civil service in Finland had successfully implemented the new pay system launched in 1992. The rest of the civil service was to implement it at the beginning of 2005 at the latest.
198 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP Gradual implementation allows a new system to be piloted on a limited number of employees, and to improve it by drawing on lessons learned from such experiments. It also contributes to a smoother implementation process with unions and greater acceptance by employees. Partial or gradual change processes are more akin to learning and adaptation crucial for PRP than to reform.

The quest for better performance is evidently on the agenda in almost all parts of Brazils federal administration. Most organisations seem to have undertaken measures intended to improve the results of their activities or have been discussing such measures. At the same time, concerted action covering all parts of the federal administration is still limited and the previously mentioned five sets of elements and activities that constitute the main drivers of organisational performance.
Strategic management and budget management

The scope for enhancing performance through improved human resource management depends on the adequacy of strategic and budget management. Although these are beyond the mandate of this OECD review, there are reliable indications of the need for reform in these areas. As mentioned in Chapter 1, progress has been made in budget and financial management in the past ten years. Efforts have been made to make the budget process more programmatic and more forward-looking and performance-based to some extent, although improvements in the capacity to implement those are still needed to get some returns out of these changes. Although a performance culture seems to be taking root in the federal government, organisational strategic management is still hampered by difficulties in programming and managerial rigidities. Attention to performance seems primarily to be promoted through ad hoc and/or informal political signals to the organisations concerned. As would be expected, this seems to work best for organisations that are not dependent on budget allocations and that have clearly defined variables in terms of economic results (i.e. state-owned enterprises). Efforts in the past ten years aimed at improving the programmatic aspect of budgetary management and the strategic management of organisations should continue and be reinforced to enhance a performance culture in HRM. The government is drafting a proposal for a law to implement Constitutional Amendment in force since 1998 (EC19) that changed two articles of the Constitution (art. 37 and art. 39) to allow: i) that any agency or ministry that establishes a management or performance agreement can get more autonomy and reward its managers and employees or civil servants according to targets and results achieved; ii) the payment of bonuses to civil servants following economy in current expenses. The draft law was the object of public consultation for 30 days in January 2009, but is still in the process of internal consultation.
The broad human resource management framework and its influence on performance orientation
HRM is a core driver of enhanced organisational performance. If public employees are not enabled, empowered and helped to work towards this goal, it is doubtful whether other drivers can achieve anything. Brazil has recently begun to introduce competency management as part of a strategy to strengthen the capacity of the public service. A government decree in 2006 introduced the concept of a competency-based administration (Gesto por competncias) and a national policy for civil servant development has been established. However, competency management is initially being approached merely as a way of reorienting and strengthening training opportunities and individual development. In the longer term, it will be necessary to broaden competency management so that it can serve as one of the pillars of strategic human resource management. These issues are developed in Section 2.1. How jobs in the federal administration are defined, classified and grouped sets the scene and context for the design and operation of all other aspects of human resource management. The HRM arrangements in Brazils federal administration are both complex and fragmented. Successive attempts at reform and solutions intended to address the changing needs of individual institutions have led to a variety of overlapping arrangements. This patchwork is, as discussed in Section 2.2, dysfunctional and in need of simplification and reorientation towards competencies and a stronger focus on the needs of the entire federal administration. The federal administrations arrangements for acquiring new human capacity and talent are weakened by the fragmented system of grouping jobs described above. This means that it cannot benefit from the advantages of either centralised or decentralised recruitment arrangements. The arrangements are also unsophisticated and not yet linked to the emerging work on competency profiles and competency management. These issues are examined in Section 2.3. Brazils system for selecting and managing senior management is flexible and allows the government to select the right person for each post, regardless of background. The management categories are dominated by the DAS (Grupo-Direo e Assessoramento Superiores) system, but also include persons in certain other job categories. The DAS system is opaque overall, despite efforts by some organisations to professionalise the appointment to DAS positions and make them more transparent. DAS positions are temporary assignments. Appointments to DAS positions are at the will of the government and can easily be terminated. There is no concerted management of the managerial cadres, no general competency profiles, no systematic training and no concerted effort to promote cohesive values and attitudes among the public managers. These issues are discussed in Section 3.2.
Staff performance management policy and practice1

It is evident that the federal government has taken many initiatives to establish specific tools for increasing attention to performance in staff management. Attempts to establish performance management as the basis of management of federal government employees started in 1960 with linkages between promotion and compliance criteria. This was followed by the adoption of a performance evaluation system in 1977 with a ranked distribution (after three years the emphasis returned to seniority). Then, in 1994, a curve mechanism was introduced in the performance evaluation system in order to justify the payment of performance-based compensation for a group of job categories in the
200 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP Treasury, the Budget Secretary, for Specialists in Public Policy and Public Management (EPPGG) and IPEA (Institute of Applied Economic Research) employees and in 1998 the possibility of dismissal for poor performance was introduced in the Constitution (however, no system of performance evaluation that could lead to a dismissal was ever designed). After 1995, bonuses based on performance have been established and have become generalised but have limited real value in terms of managing performance, although in some parts of some ministries performance-related pay seems to be functioning. Presently, the relevant regulations are: The federal Constitution refers to the performance evaluation of civil servants. It makes their promotion subject to participation in training courses, and creates the possibility of dismissal for insufficient performance. Legally, civil servants are to go through performance evaluation during their probation period. A decree of 1980 established rules for performance evaluation although it really re-established functional progression. Specific laws establish criteria for evaluation that are specific to the different careers. A recent regulation (Law n 11.784 of 2008) makes an unprecedented effort at standardising performance evaluation throughout the administration.
It is difficult, however, to form a clear picture of the actual management of staff performance in different parts of the federal administration, and it can be reasonably assumed that there are large differences. There are evidently islands of excellence, but equally evidently parts of the administration in which the focus is on narrow payroll issues rather than competencies and performance. The detailed central regulations also mean that opportunities for operational managers to promote and reward good performance are limited. All parts of the federal administration are expected to carry out performance assessments for their statutory employees. The level of implementation varies. In some organisations, assessments rely on the personal opinion of the closest supervisor. So far, more formalised assessments have typically focused on outputs and on competencies. Most federal organisations do not seem to have acquired the necessary experience and competencies to use performance evaluation and performance rewards adequately at individual or team level. Nor does there seem to be a concerted national effort to develop this experience and these competencies. Opportunities for promotion are often curtailed by the system of job categories or based more on seniority than on performances. Performance pay is not functioning properly.
The remuneration system and the opportunity for pay increases and bonuses
As discussed in Chapter 1, basic salaries for federal employees are regulated by salary scales in the statutes governing each job category. The revision of salary scales is prepared on an ad hoc basis by the Ministry of Planning in collaboration with the ministry responsible for the category in question but has to be approved by Congress in every case.
The Brazilian public administration used to have like many OECD administrations a relatively large number of supplements, allowances and bonuses. There is a trend (Law 11.784 [9.22.2008]) and Law 11.907 [2.2.2009]) towards simplifying the remuneration system by reducing these, which might make the remuneration system and its linkages with performance clearer. A constitutional amendment has for example eliminated these for certain categories, including the judiciary, legal careers, attorneys, and certain police officers. Today Brazil has two alternative remuneration systems: A variable compensation system consisting of a base salary, a possible performance-based award and in some cases a supplement for an academic degree. There is an individual bonus related to individual performance and a bonus related to institutional performance. There can also be an additional amount based on the role in a certain ministry. The variable compensation system is used for most categories, and the total possible variable amount varies across categories. Compared to OECD member countries, the so-called performancerelated pay is a much more important part of overall pay, as it commonly represents 50% to 100% of the baseline pay. There are even records of bonuses corresponding to 100% to 800% of baseline pay (Pires, 2007: 11). A total remuneration system without variable components but with three or four different pay levels (up to 13 for certain job categories). This system is often referred to as a subsidy system. It is used for management categories, legal careers, attorneys, police officers, diplomats and auditors.
Performance-related pay does not have the credibility that should be proportional to its importance in overall remuneration. Bonuses are too often attributed largely across the board and are now in reality part of base pay, although some parts of the administration have made efforts to link some part of performance-related pay to performance assessments. An example of the inconsistency between the attribution of performancerelated pay and its links with performance assessments is the fact that in some of those cases the courts have ruled that retired staff and pensioners had the right to get the maximum value of performance-related pay or at least the average paid for the active civil servants in the same career. It seems possible, however, to delay or even withhold progression in careers for public servants whose performance is judged insufficient. There is also a trend towards reducing or eliminating seniority awards for new employees, although employees already in place will continue to get awards based on time served. Individual differences in base salary are also normally very limited for staff belonging to the same category. For example, the Management Group (Grupo de Gesto) has (among others) four job categories with a common salary scale. Two of these (Analista de Finanas e Controle, Analista de Comrcio Exterior) are restricted to a specific ministry while the third (Analista de Planejamento e Oramento) and fourth (Especialista em Polticas Pblicas e Gesto Governamental, EPPGG) exist in several ministries (but under the management of the Ministry of Planning). The common salary scale has four classes (A, B, C and Especial). The first three classes have three steps, and the fourth has four.
202 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP A move from the lowest to the highest step in a class would generate a salary increase of about 5% in the three lowest classes and about 6% in the highest class. The maximum possible salary spread for the four categories is thus not more than 33% in some cases, about 40% in other cases and even 56% in 2011 for the Social Security Career Plan when the new law is fully implemented. Entry into a category is always at the lowest step in the lowest class. The employee progresses to the next step for his/her class after 12-18 months. Promotion to a higher class is possible after the same period in the highest step, and is dependent on favourable performance assessments (in some cases, for example the EPPGG career, promotion also depends on the participation in regular courses in the National School of Public Administration; diplomats can be promoted also only if they take some courses in the Instituto Rio Branco). Almost all employees thus reach the highest possible salary level for the category after 13-20 years. No information is provided on the share of staff who fail to reach this level before retirement. SIDEC, the System of Careeer Development, was introduced by law in 2008 as a new general rule for a set of core government job categories such as attorneys, tax auditors, internal accountants, planning and budget analysts, Central Bank specialists, public managers, and so on. It aims to permit the development in the careers from the bottom to the top following some merit principles and rewarding qualification (academic or not), experience, etc. But this new system (that will also forbid promotions based on seniority only) faces resistance, and more than 14 months after its introduction in the law, it is still not in force as requires an Executive Order to be implemented. To conclude, salary progression is not used as a management device for signalling good performance. It is mostly seniority-based, and performance-related pay is attributed in many parts of the administration across the board by job category although it is less automatic in some areas of government compared to others. Considering how difficult and risky the individualisation of pay is for public administrations, even for those with the most sophisticated management systems, this is likely to be a wise choice for the moment. For good governance purposes, the government should probably acknowledge the true nature of the system and the fact that performance-related pay is in reality part of base pay, although the system could be kept and improved in the areas of government where the most progress has already been achieved.
Opportunities for functional promotions

Some job categories for more qualified tasks are sufficiently broad to allow for functional promotion within the category. The rules are the same as for salary progression, which means that seniority plays a larger role than performance assessments. The main opportunity for a functional promotion and a more significant salary increase is an appointment to a DAS position (see Section 3.2. for a discussion of this system). Except in the DAS system, functional promotions within careers are not performancerelated (legally they are, but in reality they are only midly performance-related, apart from some exceptions), and careers in ministries are rigidly determined. Staff rarely change careers, and this would in any case require taking an entry level competitive examination (see Section 2.1).
Individual performance assessments

Individual performance assessment seems rudimentary in most parts of the federal administration. A law of 2008 (Law 11.784 edited on 22 September 2008) has defined how performance assessment should be conducted across government organisations but it is too early to assess how it has been implemented and its effects on the quality of performance assessments throughout public administration. The lack of central support places the brunt of assessment on supervisors, who can consequently be expected to act carefully and with caution. Weak and even non-existent pay differentiation for individual performance in large parts of the federal administration is appropriate, given the lack of adequate and reliable individual performance information and of competence for and experience in differentiated pay setting.
Suggestions for further reforms

Brazil is at an important point in the evolution of its federal administration. It introduced a bureaucratic management paradigm in the 1930s, a relatively early date in international comparisons but much more recent than in most OECD member countries. As a result, the core values and principles of this paradigm may not yet be sufficiently internalised in the values and expectations of politicians, public employees and the general public. Yet globalisation and the need for a competitive economy mean that Brazil has to complement its bureaucratic paradigm with a strengthened performance orientation that might seem to challenge its bureaucratic values. This is a challenge shared with many other countries, including some OECD member countries, but one which Brazil seems able to handle.
The drivers of organisational performance

Brazil evidently has a federal administration that is interested in reform and willing to and capable of change in order to improve results and enhance performance. At the same time, it is evident that such efforts are needlessly hampered by inadequate and inappropriate structures. First, strategic management of the federal administration and budget management (which are not covered by this review) need reinforcing. This report deals with human resource management and thus refrains from providing recommendations in those areas. It is nonetheless necessary to underline the need for adequate and appropriate strategic management in order to provide the necessary focus and direction for efforts to improve results and performance. Addressing performance through human resource management actions has to be embedded in a hierarchy of strategic plans, business plans, and organisational goals and targets. Second, Brazils human resource management is, as noted above, fragmented and less efficient than it might be. There is a substantial capacity gap that the Brazilian government should close through a co-ordinated effort across the different areas of human resource management, such as competencies, job categories, recruitment, training, staff assessments, remuneration and performance management. Specific conclusions and recommendations regarding these areas can be found in the other sections of this report. Three issues are however so important as drivers of organisational performance that they need to be highlighted here: The culture of dialogue and horizontal agreement that seems to exist in Brazils federal administration should be maintained. In order to achieve results in this
204 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP way there must be clearly stated government-wide goals and expectations. Assisting in and contributing to the necessary reforms should also be a key performance variable for senior managers. Employees need to be empowered to provide good service and to enhance their own capacity and competencies. This can be facilitated by reducing rules and regulations to the essentials and by replacing excessive judiciary involvement by credible internal systems for monitoring, auditing and appeal. The spheres of managerial discretion need to be broadened and combined with effective responsibility for results and with measures to ensure that public managers have the competencies necessary to manage with a view to enhanced performance. In terms of human resources it is likely that the two most important points of entry for increasing performance orientation in government are changes to the management of the senior civil servants (see Section 3.2) and the design of a competency management system that supports recruitment, job definitions, training and promotion (see Chapter 2).
Staff performance management and practice

The importance accorded to performance in Brazils federal administration varies widely, and much remains to be done to link human resource management practices to enhancing organisational performance. Human resource management arrangements require a number of reforms if the countrys potential is to be fully exploited. In this, Brazil is not different from most OECD member countries. All human resource management components of Brazils federal administration should be designed to facilitate and promote enhanced performance. They should be part of an integrated system, mutually supportive, and thus able to generate synergy effects. This will require co-ordinated changes in certain human resource management arrangements. The recommendations in this section should therefore be viewed together with conclusions and recommendations in the sections on workforce planning, competencies, job categories, recruitment, training and senior management. The structure of job categories is a fundamental issue, since it is the basis of all human resource management activities and promotion. The way job categories have been designed over time have resulted in a fragmented system that is unnecessarily complex and a poor basis for performance-oriented human resource management. The analyses, conclusions and recommendations concerning job categories are found in Section 2.2. The recommendations call for extensive restructuring, strengthening of central coordination, a widening of job categories and as far as possible replacing ministry-specific categories with transversal categories that can be used by several or all ministries. They also call for introducing or strengthening a career dimension in job categories where this is possible. Every effort should be made to give good performers interesting career opportunities based on an assessment of their performance. Introducing and strengthening systematic competency management is another important issue and is discussed in Section 2.1. By basing different human resource management activities, such as recruitment, training, skills assessment and promotion, on a common competency framework, it becomes easier to ensure that the federal administration has access to a workforce with the skills and competencies necessary for good performance.
The management of senior management is discussed in Section 3.2. The key recommendation is to make the DAS system more transparent and differentiate the management of top officials from the rest of officials in DAS and non-DAS positions. For DAS positions other than senior managers, these positions should remain open to outside applicants to increase competition in the system, but performance assessment should be an essential criterion and the recruitment process should be transparent and based on qualified applicants performance. In addition, the career dimension in selected job categories for qualified employees should be reinforced. Salary structures should be modified in line with recommended changes in the job category structure and the reinforced career dimension of selected job categories. Thus, in many cases, the relatively narrow bands between the first step in the first class and the final step in the final class in a job category should be widened through the insertion of more classes and/or steps and a higher final salary step. Seniority (i.e. time in a class and/or step) can continue to be used as a main qualifying factor for salary progression and promotion to a higher class, but only in job categories without a career dimension, and in the early stages. It is, however, recommended that in job categories with a clear career dimension, seniority should gradually be de-emphasised as employees progress up through the system. Promotion to the top class or classes in a category with a clear career dimension should be seen as a functional promotion which in suitable categories would qualify for posting to managerial positions. It should therefore be selective and entirely based on transparent assessments of skills, competencies and performances. It seems clear that the existing system of individual performance bonuses is not working well in many parts of the administration. This may be due to a lack of competency, experience and/or reliable information on performance. It is therefore recommended to reduce the emphasis on this system in order to enable a new start, although the system can be retained in organisations which have made the most progress in this area. This means reducing (or eliminating) the share of total remuneration allocated to performance bonuses in favour of base pay (or recurring benefit). The bonuses could later be increased (or reinstated) when supervisors have gained more competence and experience and more confidence in their ability to make reasonably sound performance assessments. A system of performance-related pay could nonetheless be retained for senior managers and may help improve organisations performance management. This should only be implemented when DAS positions have gained in transparency and performance orientation (see Section 3.2). The recommended reforms require improved employee assessment. As assessments become more decisive for salary progression, functional promotions and postings, it becomes increasingly important for all employees to be assessed according to a common model and measured against a common standard. A first step was taken after the new law of 2008 that establishes general rules for how performance assessments should be conducted (Law 11.784 edited on 22 September 2008). However, legal changes are certainly not sufficient. It is therefore recommended that the Brazilian government continue to strengthen its common framework for employee assessment and establish a central mechanism for promoting this framework and monitoring its application. The government should also invest in training supervisors in skills and performance assessment, and support them in their roles as assessors by providing guidelines, handbooks and other forms of support.
206 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP The Brazilian government should not attempt or expect to get quick results. It will take time for the different stakeholders (managers, supervisors, employees, union representatives) to gain the necessary skills and experience with performance assessment in order to differentiate rewards for competence and performance. Instead of attempting a wholesale reform, the government should start small, invest in improved capacity and competency, and gradually expand the role of skills and performance in salaries and promotion.
Change management Changing the values

Changing to a performance culture entails altering the attitudes, focus and incentives of managers and employees and aligning administrative systems, organisations and resources towards multi-dimensional performance targets. This is a complex process, as it involves altering formal structures and arrangements, but also the informal incentives and ingrained habits that underpin the system. Moreover, it is not a simple or straightforward task. Many OECD member countries have introduced performance-oriented reforms which have changed formal structures and processes, but have found that they did not result in the intended changes in behaviour. Lessons learnt point to the following: Need for a coherent framework. Performance accountability should be matched with managerial room for manoeuvre in the management of staff and financial resources. The different elements of increased performance orientation interact, and the synergy drives cultural change. Simultaneous and matching actions in several areas are therefore required. Political support. Governments, as well as individual organisations, have their own cultures, beliefs, values and norms, which determine acceptable behaviour. To advance a performance culture calls for a whole-of-government approach openly supported at the highest political level. It is not a coincidence that the three cases presented in Section 3.2 all meet that criterion. Incremental reforms. Although sweeping reforms offer ways to exploit windows of opportunity, they risk failing if preparation, capacity and competencies are insufficient. The advantage of incremental reforms is that the first steps require little previous experience, but each step generates the experience and competency to move ahead. The challenge then is to sustain the momentum for reform so that the lessons learnt in one step quickly feed into the design of the next. Build ownership. A problem observed in several OECD member countries is the general reluctance of influential groups at the centre of government to relax their control and to allow managerial discretion to expand. Trade unions representing public employees are also typically organised for central action and tend to react similarly. The lack of enthusiasm for greater flexibility in these groups can be understood as a natural concern about the capacity of operational managers to handle greater responsibility for financial and human resource management. In these cases incremental reforms may offer a viable path forward.
Finally, any system of control raises issues relating to the balance between accountability and flexibility. The need for compliance with regulations has to be weighed against the freedom managers need to do their jobs well. There are obvious dangers in relaxing control in the absence of adequate financial and managerial systems.
However, there are also dangers in failing to relax these controls sufficiently. Too many restrictions create conditions which do not give managers enough freedom to improve performance. Achieving an appropriate balance is an unending struggle, and the approach taken may have to vary from sector to sector within the same administration.
Introducing elements of staff performance management

Reorienting human resource management towards enhancing performance requires parallel and synchronised efforts in several fields, including managerial competencies and mandates, performance assessments and performance incentives. It often also necessitates increased decentralisation of pay setting and other elements of human resource management. These changes have to form part of a coherent performance management strategy. Achieving this coherence across policy areas can be a substantial political challenge. Introducing and extending performance assessment, performance-related pay elements and decentralised pay setting are challenging tasks. They require managerial and supervisory competences that public managers often recruited for and schooled in a bureaucratic management mode do not normally possess. In addition, there is the risk of faulty performance assessments and subjective pay differentiation which would affect work morale and performance negatively. It is all too easy to spot instances of failed reforms in OECD member countries, although these have seldom been sufficiently analysed. The reasons for failure when introducing performance-related pay often seem to be inadequate preparation and too hasty introduction. Fortunately in such cases, most managers, instead of trying to allocate performance bonuses on the basis of faulty or inadequate performance information, have chosen to share bonuses more equally if they have had the opportunity. In some cases a combination of decentralisation and inadequate financial management arrangements has led over time to substantial inconsistencies in the public administration pay structure, in terms of remuneration levels in different organisations. These inconsistencies obviously constitute inequities, but they also have negative economic effects. Recruitment and retention problems tend to push up sub-standard wages, but no correcting forces push down too generous wages; this drives total costs up and reduces cost efficiency. Such inconsistencies also affect the allocation of skills and competencies negatively. Once they have grown too large, it becomes difficult (and expensive) to eliminate them. As mentioned, it should not be a priority for the federal government to introduce wider pay differentiation and pay individualisation. The more important drivers for enhanced performance orientation today relate to the management of job categories and of senior management. Nonetheless, when the government is ready to move towards increased individualisation of pay, it should establish frameworks for pay increases that prevent excessive pay differentiation across organisations and should strengthen reporting requirements on employee compensation in order to ensure close monitoring of costs.
3.2.
Managing senior management The situation in OECD member countries

As performance and efficiency issues have become more urgent in public governance and management, more attention has also been paid in OECD member countries to the role, tasks and capabilities of management in the public administration. OECD member countries have witnessed an influx of new ideas and initiatives in the field of public governance and management. Many recent public management reforms involve reinforcing the performance orientation of public governance and public management and, consequently, delegation of responsibility for human resource management. Senior management plays a key role in implementing these new policies and its quality and capacity have thus become a key public governance issue. Countries vary widely in how they manage their senior managers. Senior public managers also find themselves at the sometimes tense interface between the political executive and the public administration. They are responsible for the appropriate implementation of legal instruments and of political strategies and measures and for the consistency, efficiency and appropriateness of government activities. Senior managers are expected to be committed to the interests of the state as such and to the legal government, and not to the interest of a particular government or political party. They are also expected to be responsive to the elected government. A key issue in any review of senior managers in public administration is thus their relation to the political level and the degree of political involvement in appointments, remuneration and management of senior managers. In a classic bureaucracy, civil servants handle these issues. However, that political influence in staffing matters may work well, provided that there are other checks and balances in the system. There is as of now no best practice regarding the selection and management of senior managers in the public administration. It is not even possible to see a general trend in the basic arrangements chosen by different OECD member countries, since these are the product of their public administration system and their specific historic, political and social context. Recent OECD studies of senior public managers indicate a number of common elements in the reforms debated or enacted (see Box 3.2). Foremost among these is an increasing focus on the quality of the senior management in reforms intended to improve performance. The selection of senior managers has been the object of multiple reforms and has become more transparent in many countries. The competencies required of senior civil servants have become more varied and are used as a basis for recruiting and training public servants. Many countries have also taken measures to increase competition for senior management positions. Even countries with closed career systems for other public servants have opened up senior levels to external recruitment. Performance assessments and rewards have been introduced to increase senior managements responsiveness without infringing on their professionalism. Some countries have introduced fixed-term mandates in order to support greater performance orientation.
Box 3.2. General trends in the management of senior management in OECD and European Union countries
In general, a career-based civil service system recruits top civil servants from a wideranging group. Recruitment takes place after university or early in the career and often relies on competitive examinations. Thereafter progression is managed by the organisation. This system invests a lot of resources in the development and careers of those selected in order to prepare them for top executive positions. In a position-based civil service system, candidates for particular top executive positions are recruited from the wider civil service and the private sector. This creates a large pool of possible candidates. A sub-category of the position-based system is the department-based system which has no well-developed whole-of-government structure. Appointments tend to be made on the basis of seniority and merit within the department. This typology implies different degrees of centralisation in recruitment and appointment processes. Although very few countries follow any one of the above systems exclusively, it is possible to know which system applies best to any given country. This is of practical value when comparing management reforms in different countries senior civil service. The significance of reforms often depends on the type of system at the outset, as the two systems create very different incentives for individuals and therefore tend to foster different cultural characteristics. There is a general tendency in many countries to focus on developing management capacities. While performance management is already a focus of reforms in all countries, it is increasingly supplemented by a focus on leadership and change management as well as human resources management. To a varying degree, most countries have decentralised management responsibilities and established mechanisms to ensure individual accountability of senior executives. Career-based systems with a tradition of centralised recruitment, promotion and training are introducing external competition for open positions, ministerial management by objectives and lifelong training programmes. In Belgium, Hungary, Ireland, Italy, Portugal, Spain, Malta and Romania, special recruitment procedures have been established for senior managers, with fixed-term mandates in Belgium and Malta, and the recruitment of external candidates for some senior positions (Austria, Belgium, Ireland, Italy, Korea, Portugal, Spain, Romania). In Hungary, recruitment for senior management positions has been separated from recruitment into the civil service. Position-based systems with extensive decentralised management of appointments, promotion and training increasingly introduce central guidance of appointments, talent pools and inter-ministerial databases of present and potential senior civil servants. The Dutch government has established a programme of young academic talent to start their careers in the civil service with the aim of becoming public managers after several years. Poland uses a state staffing pool system from which the best candidates are chosen when a position becomes available. In order to ensure the independence of the recruitment process, countries have relied on panels or selection committees, supervising bodies, a central organisational body or involvement of outsiders. Most European Union members have a body or committee for recruiting or advising on the best candidates for senior civil service positions so as to ensure political neutrality and independence in the recruitment of senior civil servants. The term of appointment of senior civil servants varies; most have a permanent appointment as civil servants but a fixed-term appointment for a specific position or within the group of senior civil service positions. In some career-based systems, private contracts are sometimes introduced for individuals in senior management positions who are not civil servants. These individuals never become civil servants in this way (France, Spain).
Box 3.2. General trends in the management of senior management in OECD and European Union countries (contd)
The management of senior managers competencies has also received increasing attention. Half of EU member states have central competency profiles for senior civil servants. These profiles are used for recruitment and for training.
Source: OECD (2003b), Managing Senior Management: Senior Civil Service Reform in OECD Member Countries, OECD, Paris; and Ministre du budget, des comptes publics et de la function publique, (2008c), Top Public Managers in Europe: Management and Working Conditions of the Senior Civil Servants in European Union Member States, tudes et perspectives, EIPA, Maastricht.
In general, countries have found it increasingly important to manage senior managers as a separate group. The management of senior managers often includes special rules for recruitment (more centralised, more open to outsiders, very focused on competencies and past performance, early identification for fast-stream programmes), more emphasis on the management of their performance, often a level of performance-related pay, and special training and socialisation programmes.
Political cabinets
Political cabinets consist of politically appointed advisers and other close associates of ministers and other members of the political executive. They are appointed at will, can normally also be dismissed at will, and leave office when their government or even their political principal leaves office. Some practitioners question the existence of such cabinets, while others argue that they are essential to avoid politicisation of top management. The role played by political cabinets is important for understanding the full picture of senior management arrangements. In Denmark, top managers are expected to be able to provide political advice to their ministers. Both Belgium and Sweden have political cabinets. In Sweden they are relatively small (five to ten advisers per minister) and cannot give orders to civil servants. In Belgium they are much larger and have assumed top managerial functions. The United States has politically appointed senior managers; this limits the need for political cabinets. The Senate decides which positions are open for political appointment.

The senior management structure in Brazils federal administration, while providing breathing space for the political sphere and top managers within an otherwise rigid and fragmented management system of staff, is also unfortunately far from transparent. The DAS system seems to be generally regarded as the core management cadre, although most DAS staff do not hold managerial positions. There are also 30 categories with over 57 000 persons listed under the heading categories and functions of confidence and gratifications (Cargos e funes de Confiana e Gratificaes), some of whom are said to be senior managers. An example is the Cargos de Natureza Especial, NES, which has 52 persons who seem to have top management positions. Political appointments to senior management positions in regulatory agencies, state-owned enterprises and in pension funds are also outside the DAS system.
The DAS system

The DAS system has six levels, and the top levels can be considered as senior management. In March 2009, there were 20 664 persons in the DAS system compared to 16 000-17 000 ten years earlier. Of these, 4 229 were in the three top levels which are considered to be management positions, of whom 208 in the top level, and 978 in the second highest level. The number of persons in these two senior levels has increased by over 40% during the last ten years. A narrow definition of senior management would thus include about 200 persons and a broader definition somewhat over 1 100 within the DAS system. To this should be added an unknown number of persons in specialised senior management positions outside the DAS system. The DAS system covers the ministries and organisations directly subordinated to a ministry (the so-called direct administration), as well as a large number of autarchies and foundations (regulatory agencies and universities are notable exceptions). The number of positions open to DAS appointments is regulated in the statute of each organisation. DAS appointees may either be seconded from another public organisation (mainly from the federal administration but also from a state or municipal administration) or recruited externally. Secondment is only possible for DAS positions; it can thus be primarily understood as a secondment system used for senior management positions, rather than as a senior management system as such. Tenured civil servants seconded through appointment to a DAS position continue to receive their basic salaries from the organisation that seconded them, and an additional wage bonus from the organisation in which they serve in a DAS position. The DAS system provides the very complex and relatively static system of job categories a necessary element of flexibility. Its main advantages are to enable adequate staffing of the core government functions and to provide career opportunities for skilled and gifted public servants, regardless of their job category. It also allows the government to bring in external competencies. Its main limitation, as discussed below, is its lack of coherence and transparency.
Appointments of senior managers

The DAS system is an exception2 to the rule that entry into the Brazilian public administration is through open competition (and formal exams). Appointment to a DAS position is at the governments discretion but does not in itself entail a right to tenure. Such appointments can be terminated as easily as they are made; appointees who are tenured civil servants then go back to the organisations and categories from which they were recruited unless they are invited to another DAS position. A number of ministries and organisations have established processes for appointment to DAS positions in order to favour professionalism but the extent of the use of those processes is difficult to assess. It shows, however, a growing awareness that there is a necessity for transparent processes and professionalisation of DAS positions. Each organisation usually has its own rules for the appointment process and responsibilities. In general, the higher the DAS level, the higher the hierarchical position of the authority that decides on the appointment. Appointments at lower levels are normally delegated to senior management. There does not seem to be any formal internal vetting or co-ordination of DAS appointments, although appointments for senior DAS levels (levels 4, 5 and 6) have to be approved by the Casa Civil. This procedure, however,
212 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP seems to be mainly political (including the need to control appointments based on personal preferences only) and there is no indication of a formal process for examining the appropriateness of senior management appointments (but the process includes some investigation about private activities and the judicial situation of the appointee in order to comply with integrity rules). At the higher DAS levels, 40% of those at the level 6 and 31% at level 5 were recruited from outside the public administration. The share is around 22-24% for the lower and primarily administrative and technical levels. In 2005, legislation (Decree 5.497) set a ceiling of 25% of external recruitment for the three lowest levels and 50% for level 4. No ceiling was set or foreseen for the two highest levels. This makes the DAS system much more position-based than the rest of the civil service. This is also not uncommon in OECD member countries. There are other examples of countries which mix quotas for civil servants and for non-civil servants for their mid-level to high-level managerial positions (Ireland, Korea). The management of the DAS system lacks transparency. There are no publicly available descriptions of competency requirements for positions to be filled or of the merits of the persons selected. The DAS system is never audited by the Supreme Audit Institution or the Court of Accounts (Tribunal de Contas da Unio). There seems to be no documentation of the reasons for specific DAS appointments, and no data are therefore available on why it was felt necessary or appropriate to select an external candidate for a specific DAS appointment. There is thus no identity between political appointments and external recruitment, or between objective grounds and internal recruitment. The selection of a tenured civil servant for a DAS position can be based on political considerations, while an external recruitment can be based on objective grounds. One may assume that the main reason for an external recruitment is the positions need for specific skills and competencies. The DAS system, seen in this perspective, enables the political leadership and senior managers to bypass the deficiencies of the normal selection process in order to obtain the necessary talent and experience. One may, however, also assume that some DAS appointments are made on a more political basis. The reason needs not be patronage or partisanship but may be the need to ensure a sufficient affinity and compatibility between the political executive and the core management units in ministries and public organisations. One cannot, however, disregard the possibility of an implicit spoils system and the risk of political and/or personal patronage inherent in appointments at the will of the political executive. It seems nonetheless reasonable to assume that reasons of competency and affinity are more prevalent at the top DAS levels than at the lower administrative and technical levels. The risk of patronage may therefore be higher at the lower DAS levels. No data could be provided on turnover in DAS positions and the exact rate is unknown. It was, however, confirmed that persons in DAS positions are often replaced in connection with changes of government or of the relevant minister. Changes are very rare at the four lowest levels and more frequent at the top two levels. It was also noted that this may have a negative impact on management continuity, but that continuity can still be maintained if there is a strategic plan and formal policies. The quotas for positions reserved for internal candidates aim at limiting the risk of patronage. However, as mentioned, recruiting staff who are already civil servants does not necessarily decrease this risk, and, at the same time, limits the possibility to look for skills outside of government staff. It does, however, help civil servants have a better and
more stable picture of possible career opportunities. While the level of quotas seems reasonable today, this should not be considered a solution to the deficiencies of the DAS system, which requires more transparency in terms of appointments and reinforced management of competencies.
The political-administrative interface

The political cabinets (political advisors) seem small. There are not any indications that members of these cabinets assume managerial roles, contrary to some OECD member countries. Instead, the system seems similar to that of the United States, in which the political executive governs through politically appointed senior managers, but it lacks the transparency of the US system. The political-administrative interface in Brazils federal administration is thus a factor that affects the top levels in the DAS system but is not visible to an outside observer, since it is not known why a person was selected for a senior management position. Consequently, it is difficult for the Brazilian public to know where political activities end and where professional administration begins. The same can be said for the other specialised categories that include senior managers. All civil servants aspiring to a senior managerial position have to hope for an appointment to a DAS position or to a similar position in another category. Because these appointments are not systematically transparent and at the will of the political executive, potential candidates for senior managerial positions may try to avoid displeasing the concerned minister or ministers, although there is no doubt that it is also known that high potential is an implicit criterion of appointment in a good number of cases. The system thus entails a risk of politicisation that can affect lower functional levels within the federal administration.
Managing the senior management groups

Despite some easier and more natural routes to DAS positions for staff in some job categories, senior managers are less managed as a group3 than in many OECD member countries (see Figure 3.2). ENAP, the Brazilian National School of Public Administration (Escola Nacional de Administrao Pblica) provides training for senior managers, but this training is not compulsory, although the number of requests for training has increased tremendously over the past years. No effort seems to have been made to strengthen crossinstitutional consistency of senior managers or to foster whole-of-government perspectives. Tenured civil servants appointed to a DAS position are, as mentioned above, seconded from the organisation in which they served before, and keep the basic salaries they would have had in their previous jobs. In addition they receive a standardised pay supplement that depends only on the DAS level (Ministrio do Planejamento, Oramento e Gesto, 2009b). There does not seem to be any specific or standardised system for performance bonuses or any other form of performance-related remuneration for senior management.

Figure 3.2. Degree to which senior civil servants are managed by separate HRM policies in central government
2005
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 United K ingdom O E C D 26 0.0 P ortugal Belgium F inland P oland C z ec h R epublic F ranc e C anada Hungary Netherlands United S tates K orea Aus tralia T urkey G ermany J apan S lovak R epublic Ic eland Ireland L ux embourg Norway Braz il Italy
Note: This index is a composite indicator of results on variables about the definition of the senior civil service, the identification of potential future leaders early in their careers, the average age upon entering the senior management group, and the difference between the employment framework of senior management and regular staff. Source: OECD (2009c), OECD Government at a Glance 2009; OECD (2008b), The State of the Public Service; OECD Survey on Strategic Human Resource Management filled in by the Brazilian Ministry of Planning, Budgeting and Public Management.
The fact that DAS appointments are revocable does mean, however, that it is possible to sanction insufficient performance or inacceptable behaviour. It also means that senior managers have incentives to improve their performance and behaviour. However, the lack of transparency surrounding terminations of appointments also entails the risk of an excessive tendency to avoid political displeasure.

Compared to OECD member countries, arrangements for the management of senior managers suffer from the following deficiencies: The interface between the political and the administrative level is invisible, perhaps non-existent. This hampers the growth of a cadre of non-political senior managers specialised in public administration and loyal to the credo of public servants. The system for selecting senior managers lacks transparency, despite some changes in some parts of the administration to improve the recruitment system of DAS positions. This makes it impossible to enforce any reasonable accountability for selections, decreases the chances of systematically choosing the most qualified and competent managers, and entails a risk of improper actions. It also provides a
fertile soil for suspicions and accusations that can undermine trust in the professionalism and objectivity of the public administration. The group of senior managers is not well defined and the management of senior managers is neither systematic nor comprehensive. The dominant system of senior managers the DAS contains non-managerial positions and a number of senior management positions are handled outside this system. This undermines managers accountability and does not provide a good basis for the management of the competencies of senior managers that the federal government needs today, including a cohesive group of senior managers able to overcome the fragmentation of the public management system. The recent creation of the job categories of infrastructure analysts and social analysts with possible outside recruitment at relatively experienced levels is an interesting development aimed at providing a professional bureaucracy with no necessary linkages with the DAS system. It shows the fact that there is recognition of the need to make the system evolve in this area. The initiatives remain bound within narrow occupational categories, and cannot really be considered as a building block of a strong senior management level that needs to show strong cohesion across ministries and organisations.
The senior management system

It is possible to identify in the light of the spectrum of different arrangements existing in OECD member countries alternative ways of correcting these weaknesses. Before looking at these alternatives, some other conclusions need to be highlighted. The growing complexity and heterogeneity of public services makes it necessary to be able to bring new competencies and experience into the group of senior managers. The possibility of appointing persons other than tenured civil servants to senior management positions is valuable and should be maintained, not only at the political but also at the administrative level. The system for selecting senior management should entail credible opportunities for tenured civil servants to be promoted to this level, opportunities that are not dependent on political approval. The administrative and technical levels in the DAS system and in similar systems should be reintegrated into a reformed job category structure but remain open to applicants from outside the public service in order to bring in new skills and to increase competition within the public service. This would not necessarily prevent a system with secondments from other public organisations to core managerial units or the existence of pay supplements for seconded staff. Given the political-administrative interface in the federal government today, the very small size of the ministerial cabinets should be safeguarded. Ministerial advisers should continue to be just that and should not be involved in operative functions. This result is one that a number of OECD member countries would like to achieve, but have not been able to, and is thus an asset for Brazil.
216 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP It is not possible, given the very diverse arrangements in OECD member countries, to say how the management of senior public managers in Brazil should evolve. Three options that might serve as inspiration for a continued discussion in Brazil are sketched out below. They can be modified in various ways. They all preserve the governments influence over the selection of senior managers while creating greater transparency and a clearly visible interface between the political and the administrative levels. The first alternative is inspired by the system in the United States. A limited number of senior managerial positions would be identified as reserved for political appointments. These positions should also have clear job descriptions. Their holders would be freely appointed but also freely discharged and expected to resign when the government changes. Below this there would be a corps of tenured senior managers, recruited by open competitions focused on the management skills, experience and potential required for specific positions (see Box 3.3). Box 3.3. Senior managers in the United States
The United States is quite highly institutionalised but also has a more open political involvement. Its arrangements are characterised by presidential control over the executive functions combined with active monitoring by the Senate. The number of political appointees is relatively large, but special features help to maintain a proper balance between political responsiveness and neutral competence. After each presidential election, the Congress publishes a list of positions in the legislative and executive branches of the federal government which may be subject to non-competitive appointment. The present list contains 7 996 positions throughout the country, of which 1 141 require the Senates agreement to the Presidents appointment. The merits of such candidates are therefore normally scrutinised very carefully, even if there is no formal competition. Among the positions requiring the Senates consent are the secretaries of the 15 Cabinet agencies, deputy secretaries, under-secretaries and assistant secretaries, and general counsels of those agencies; certain jobs in the independent, non-regulatory executive branch agencies and in the regulatory agencies. The Senior Executive Service (SES) is a personnel system covering top-level policy, supervisory and managerial positions in most federal agencies. The SES includes most civil service positions above a certain grade. Currently, 8 328 SES positions are authorised by the Office of Personnel Management (OPM). About half of SES positions are reserved for public servants. The main reason is that the need to ensure impartiality is felt to require career employees. The remaining SES positions may be filled either by career or non-career appointees. Career appointments are made through a competitive process, including published announcements, rating and ranking of eligible candidates, approval by the agency of the professional qualifications of the selected candidate, and a further review and approval of the executive/managerial qualifications of the proposed appointee by the SES Qualifications Review Board. A career appointee serves a one-year probationary period. Upon completion, the appointee acquires tenure rights and may be removed from the SES only for cause or for poor performance. Special rules protect career appointees from improper patronage. A performance appraisal for a career appointee may not be made within 120 days after the beginning of a new administration. A career appointee may not be involuntarily reassigned within 120 days after the appointment of a new agency head and may not be involuntarily transferred to another agency.
The second option is similar to the ABD system in the Netherlands. The basis would be a corps of tenured senior managers recruited by open competition for general service, and in principle able to serve in any senior management position. Appointment to a specific position would be at the will of the government and for a predetermined period. At the end of the period the person would either be reappointed for a new period or appointed to another senior management position, unless he/she is eligible for retirement. Box 3.4. Senior managers in the Netherlands
The Netherlands have recently introduced a more systematic management of its senior managers. Its Algemene Bestuursdienst, ABD, is composed of the five top levels of the Dutch national government administration (secretary-general, director-general, director, department heads and policy makers). The top three levels are called the Top Management Group (TMP). In June 2008 there were 780 persons in the ABD, of which 65 in the TMP. The system is managed by a central office, the Bureau Algemene Bestuursdienst, BABD, in the Ministry of the Interior. It plays a major role in recruitment, career development, training and promoting mobility for the ABD group. All ABD positions are open to both internal and external candidates. Recruitment is centralised, and all appointments are to a position. ABD vacancies are published on the BABD website. Candidates are assessed on their formal education, previous experience and performance, and interest and motivation. The BABD is responsible for the preliminary selection and presents a shortlist of three to five candidates to the appointing authority. About 60% of those appointed already hold an ABD position, and about 10% come from outside the civil service. Appointments to ABD position are for five years, and can be prolonged in exceptional cases. The maximum for TMP-positions is seven years. Statistics show that ABD members remain an average four years in their positions. An ABD member can be seconded to another department for up till two years. There is a special programme set up by the BABD to develop leadership in the higher grades in the national government.
Chile has also recently instituted an interesting reform for the management of senior civil servants (see Box 3.5) which could be an inspiration to Brazil. It relies on parliamentary scrutiny and both its design and its change management process have made the reform a success.
Managing the senior managers

The Brazilian government should, regardless of the basic institutional arrangements chosen, develop and implement a consistent approach to managing senior managers. The exact details of this approach will depend on the evolution of Brazils system for senior management. The first challenge should be to determine what the group of senior managers should be. Selecting sectoral groups should be avoided in order to favour cross ministerial cohesion at senior management levels. This is very important especially in Brazil where fragmentation of the public service is a major issue. Definition of the senior management group should thus be cross ministerial and defined by the level of managerial responsibility. The group should be managed as a group irrespective of the belonging to ones job category. The top levels of the DAS system is thus the system on which to build the senior management group.
Box 3.5. Managing senior managers in Chile

Chile has a group of staff known as senior public managers. In 2003, the Chilean government, with the agreement of all political actors (opposition political parties, nongovernmental organisations, civil society), created the Sistema de Alta Direccin Pblica (ADP), a central senior civil service system, in order to modernise public management and make it more transparent and to deal with allegations of corruption at senior levels. The aim of the ADP was to establish a professional senior management with hiring based on public competition. The ADP contracts out most of the selection process to specialised enterprises. Just over half of the 200 services in the national public administration participate in ADP. They have 102 posts at the first hierarchical level (heads of service, director generals) and 735 at the second hierarchical level (regional directors, heads of division). The system has been implemented gradually as adherence to the ADP system does not immediately result in a public competition; this takes place when the post falls vacant. As of 2008, 61% of the posts covered by the ADP have been filled by open competition. The National Civil Service Directorate (DNSC) is responsible for management of the ADP. However, the Senior Public Management Council (Consejo de Alta Direccin Pblica) is in charge of guaranteeing the transparency, confidentiality and absence of discrimination of the selection process. It is chaired by the director of the DNSC and four members proposed by the President of Chile and approved by the Senate. The selection process, which takes around four months, begins with the publication of the vacancy in the media. A specialised enterprise commissioned by the Council analyses the curricula vitae of the different candidates and prepares a shortlist for the Council or a selection committee (under the Councils supervision). Professional competence, integrity and probity are some of the criteria used in the selection process. Subsequently, the Council or the committee selects the best candidates for interview and prepares a final shortlist for the competent authority for the final appointment. Senior managers selected through the ADP system are appointed for a three-year term, and the appointment can be renewed for two subsequent equivalent terms. Although the managers are selected by the ADP, they can be removed by the President for poor performance or loss of confidence. The ADP system was based on international experience. In particular, the experience of OECD member countries such as Australia and New Zealand strongly influenced the Chilean model. The system is considered one of the main achievements of the modernisation of Chiles public management. One effect has been the decline in the number of political appointees in the central government; they currently represent only 0.5% of the total public workforce. It is also argued that the presence of women in senior positions has increased under the system; they occupy 32% of positions compared to 15% in the Chilean private sector. However, the ADP system faces at least three main challenges. First, it has to extend its coverage to more services. There are still almost 100 public services whose senior positions are not part of the ADP system. In the central government as a whole, there are 3 114 senior positions at the first and second hierarchical levels, of which only 837 are part of the system. Second, the system has to find ways to speed up the process for the final appointment by political authorities. One proposal has been to leave the final decision to the Council and not to the political authorities. Finally, in some cases the ADP has not been able to fill vacancies owing to the lack of candidates; for technically complex and politically problematic positions with low salaries and lack of political support, potential candidates do not find working conditions appealing.
Source: Costa, R. and M. Waissbluth (2007), Tres Aos del Sistema de Alta Direccin Pblica en Chile: Balance y Perspectivas (Three Years of the Senior Management System in Chile: Assessments and Perspectives), paper presented for discussion at the Libertad y Desarrollo Consortium.
The government should review the arrangements for handling the remuneration of tenured civil servants appointed to senior management positions. There should be a special salary schedule for senior managers, which takes into account the complexity and level of responsibility of the different management positions. Brazils senior management system should also have induction programmes for new senior managers and activities aimed at reinforcing the management skills of those who serve as senior managers. ENAP and ESAF (School of Public Finance) have started such programmes that should be reinforced and systematised. Competency management should guide their recruitment and training (see Section 2.1) and there should be a centralised control of those processes (although detailed implementation can be left to the recruiting ministry/organisation). Senior managers should be managed as a group and be given more systematic opportunities to meet on a regular basis as a group in training, seminars and various collective gatherings in order to build cohesion. Their involvement in the group should be one of the values guiding their recruitment, renewal in position, and promotion. Efforts to strengthen performance management should be made first and foremost for this group, and special tools for recognising good management could be adopted. Finally, Brazil could develop fast stream careers for potential senior managers; to avoid favouritism and nepotism, a transparent process is essential. This is not an easy process and that could first be developed within careers with some oversight and definition of the rules of the game by the Ministry of Planning. Canada has such a programme, which is considered quite successful and could be used as an inspiring example (see Box 3.6).
Change management
Two main groups of stakeholders are involved in the management of senior managers. One is existing and potential senior managers among the career employees. The other is existing and potential political executives, since the change will affect their interface with the public administration. The potential problems differ between these two groups.
Box 3.6. The Canadian Career Assignment Program and follow ups
The Career Assignment Program of the Government of Canada (CAP) aimed to accelerate leadership development and advancement by recruiting public servants with demonstrated executive potential. During a three-year placement, CAP participants took part in a combination of hands-on work experience and training sessions to prepare them for more senior positions. CAP was one in a suite of leadership development programmes designed to develop managerial and leadership know-how in the public service. The programme was committed to employment equity.
Who qualified?
CAP was for employees with experience at up to three levels below the Executive Group (IS05 or AS-06, for example), or as an EX equivalent. Applicants must have:
a university degree or an acceptable equivalent in education and experience;
Box 3.6. The Canadian Career Assignment Program and follow ups (contd)
management experience, which may include project management or team supervisory experience; a consistently high level of work performance and proven track record; a CBC/CBC language profile or a demonstrated aptitude and willingness to obtain the required profile; a willingness to be assigned, change jobs or relocate; a demonstrated capacity to function at the EX-01 level within the three-year time period of the programme; a minimum security authorisation of enhanced reliability.
CAP participants were chosen through a competitive process at the organisational level, using the agencys assessment tools and the key leadership competencies profile. The Career Assignment Program was a cost-sharing arrangement involving the Office of the Chief Human Resources Officer at the Treasury Board Secretariat, the home organisation and the host organisation. Before undertaking the CAP recruitment process, interested organisations had to answer the following questions:
To what extent does CAP respond to our human resources planning needs? Can we offer participants a position at the end of the programme? What support framework do we have for participants? How many participants do we plan to support?
How will we use the programme to help meet our employment equity objectives? As part of the strategic review of central HR organisations in Canada which was completed in 2008, the existing suite of leadership development programmes, including Career Assignment Program, that had been managed by the Canada Public Service Agency/Office of the Chief Human Resources Officer is being eliminated. There is currently a much greater onus on the departments to create their own leadership development programmes, which can work similar to CAP. In other words, departments can decide to replicate programmes like CAP at the departmental level. This is a development to be expected in a country when there is enough ownership for such programmes in departments and enough shared values.
Source: Treasury Board of Canada Secretariat (n.d.), Career Assignment Program, www.tbssct.gc.ca/prg/cap-eng.asp accessed in August 2009; and information provided by Tatyana Teplova, the peer reviewer from Canada.
Senior tenured employees interested in continuing as or becoming senior managers will ask themselves how their future career opportunities will be affected by a change. The non-systemic and non-transparent character of the present system limits the risk of negative reactions. The creation of a centralised career management function such as the Dutch BABD or an introduction of stronger controls or restrictions on existing external recruitment will on the other hand probably generally be received favourably by most employees, but may be opposed by the highest senior managers.
All members of the political executive may not be enthusiastic about a change that limits their sphere of appointments at will or that introduces more formal and transparent processes for the selection of the senior management, even when this change is proposed by their own government. The opposition in Parliament would typically be more favourable, as long as they are in opposition. However, they might also take a short-term perspective and oppose changes intended to improve the performance orientation of the governance of the administration. Several OECD member countries have recently reformed or are in the process of reforming how they manage senior managers. The content of the reforms vary depending on the starting point. Little has been written about their experience of the change processes. There are however a few tentative conclusions. Sensitive reforms require clear political ownership and support at the highest level. They need at the same time to be designed in an open process in which the interests of different stakeholders are taken into account as far as possible, without deadlocking the reforms. Career employees who already have acquired rights should not be deprived of these without carefully weighing reasons. They will have to accept, however, that promotions to managerial positions will become more selective and based on managerial capacity. A centralised career and recruitment function for senior management will facilitate reforms, regardless of the character of the reforms. It should be situated within the core ministerial structure but preferably be seen as a resource by all ministries.
General conclusions
To respond to the more pressing demands for performance and efficiency, Brazil needs to develop a more sophisticated system of staff performance management and develop leadership among government employees. Many efforts have been made in the past to develop performance orientation in the management of staff, but these have been hampered by a lack of perseverance, inconsistencies in the overall management framework, and a lack of capacity to implement changes. Further reforms in the management of staff performance should include stronger strategic and budget management in organisations and increased flexibilities for managers. Regarding human resource management in general, reforming the job category system to provide more career opportunities for employees, and improving the management of senior managers are necessary entry points into the reforms aimed at improving the performance orientation of the HR system. Performance pay should not be the main tool for attempting to enhance performance orientation and should be downplayed in the system of incentives. Efforts should focus instead on providing opportunities for functional promotions that should be at least partially performance-based (in a reformed job category system), once the system of performance assessment has been strengthened and is better monitored by the Ministry of Planning. It is necessary to reform the management of senior managers not only to enhance the performance orientation of the human resource system, but also to further professionalise senior civil servants and ensure transparency in the management of the top executives. The DAS system provides senior managers with a welcome possibility to bring in skills
222 3. ENHANCING PERFORMANCE ORIENTATION AND BUILDING LEADERSHIP from the outside and increase the level of competition for posts, but the delineation between the level of posts whose appointment can remain discretionary and the level of appointments that should be based on more transparent criteria of appointment should be made clearer. This does not mean that appointments should follow the usual criteria and processes for entry in the public service, and every effort should be made to base the process on competency requirements and past records of performance. In general, senior managers should be managed as a group, with clear competencies defined, opportunities to develop group cohesion, and induction and training opportunities. Positions in non-managerial positions in the DAS system can remain open to individuals who are not civil servants, but there is no reason not to develop recruitment criteria and processes that are transparent for their recruitment. Their management should also be reintegrated into a reformed job category structure. Like for many HRM reforms, efforts should be made to limit the need for changes to the law when implementing reforms. There is no clear reason why most of the changes implemented on performance management should require legal changes and should instead be considered as management changes driven by the Ministry of Planning.
Notes
1. 2. 3.
This section is based on Pires (2007). This exception is allowed in the Constitution. The EPPGG job category was created to fill the positions of senior management and reduce the dependence on the DAS system, and although this result has not been achieved, a large number of EPPGG or former EPPGG members act as senior managers filling in DAS positions.
4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT 225
Chapter 4 Strengthening human resource management reform in the Brazilian federal government
In order to design and implement human resource management reforms successfully, governments must analyse a number of structural conditions. Considering the experience of OECD countries, this chapter discusses three elements that will have an impact on the success of the Brazilian civil service reforms: ensuring consistency between traditional values and the values embedded in the legislation and human resource management (HRM) tools; adapting the capacity of the central HRM department to empower it to conduct strategic human resource management and have a clear division of responsibilities between the central HRM department and the HRM units in ministries and agencies; and making HRM reforms consistent with other government reforms like budgeting and strategic organisational management.
226 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT In order to design and implement human resource management (HRM) reforms successfully, governments have to consider a number of structural conditions. First, reforms will succeed if the values embedded in new legislation and new HRM tools are clear, consistent with traditional values, and accepted by all. Core values are a reference point for staff, and they help to give meaning to reforms and to build and strengthen a sense of community in government. In addition, well-established core values help maintain trust in government. Although HRM policy helps establish and maintain core values, it also has to be consistent with the overall values and help promote them. Second, to be successful, reform implementation strategies need to be planned carefully. HRM reforms have to be consistent with other government reforms, especially in the fields of budgeting and strategic organisational management. Building peoples ownership of reform, sequencing the different phases, providing effective leadership and ensuring mechanisms to sustain the reform are all crucial aspects of implementation strategies. Third, the implementation of HRM reforms requires adapting the capacity of the central HRM department which needs to be fully empowered to conduct reforms and to adjust to the requirements of strategic human resource management. Reforms often affect the division of responsibilities between the central HRM department and HRM units in ministries and agencies. It is therefore necessary to plan for these changes.
4.1. Core values The experience of OECD member countries

The values embedded in the public service culture, which guide the behaviour of public servants, are an important part of governance. Public service values such as respect for legality, integrity and political neutrality are among the defining features of a democratic society. As such, they tend to be enshrined in the legislation that applies to the public service or in constitutions, supported by codes of conduct, and protected by administrative procedures and sanctions. Well-defined values that lead to consistent government practices are essential to maintaining trust in government. They reflect what the public service is trying to achieve, help design collective and individual objectives, and maintain the collective public service culture. In OECD member countries these core values include traditional values such as integrity, impartiality, legality, probity and merit and newer values such as efficiency, transparency, diversity and user orientation. Traditional core values usually revolve around three main principles: ensuring ethics and integrity in the public service; securing the continuity of the public service; and guaranteeing the legality of decisions. It is these values that have justified an employment framework for public servants different from that of employees under general labour laws in most OECD member countries. Broadening the definition of the public services core values has become a key strategic objective in many OECD member countries as a way to increase citizens trust in government. Also, with the introduction of more managerial flexibility in public management and less control on inputs and processes, countries have sought to incorporate these values in management processes. Values-based management is viewed as a more efficient way of maintaining core values in the public service than controls that hinder the move towards more performance-based management.
In many OECD member countries core values have been slowly evolving to include user orientation, increased individual responsibility, and focus on outputs and outcomes. In addition to these goals related to public policy outcomes, diversity has become a core value in HR policies.
Figure 4.1. Frequently stated core public service values
2000 & 2009
Impartiality Legality Transparency Integrity/Honesty Efficiency Professionalism
0%
20%
40%
60%
80%
100%
Percentage of the 29 countries that responded to both the 2000 and 2009 surveys
2000
Source: OECD (2009c), Government at a Glance 2009, OECD, Paris.
2009
The fact that values are reviewed from time to time does not mean that they are unstable. While public service reforms have added new values, they have also reaffirmed existing core values. Indeed, successive cycles of public service reform have brought discussion of values to the fore and heightened awareness of how changes in HRM and other areas of public sector management may affect values and culture (Matheson and Kwon, 2003). For example, increased managerial flexibility has been a feature of public management reform in many OECD member countries and has led to greater emphasis on the explicit definition of public service values and the reinforcement of integrity frameworks. Some OECD member countries have organised discussions of core values as part of deliberations on public service reforms in order to highlight their centrality. For example, in France a public opinion survey on public service values was organised in 2008 and debates and roundtables, involving both public servants and others, were held (Silicani, 2008). In Australia, a review of core values was a key part of revising public service legislation, and the new Public Service Act of 1999 explicitly sets out these core values.
228 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT
Core values and human resource management

Human resource management arrangements in the public service in OECD member countries play an essential part in institutionalising values. For example, methods of recruiting public servants through open, merit-based competition or other sorts of competitive selection procedures are a guarantee of freedom from patronage. Tenure arrangements and protection against dismissal have traditionally been seen as protecting the independence and neutrality of public servants and ensuring continuity. Discipline provisions are meant to uphold probity and legality. Professional socialisation through training, career management processes, and the senior executive services that exist in some public services are also important for instilling values. Competency management and performance management can be used to signal values to individuals through the establishment of performance and competence criteria. They are also more directly used to help strengthen performance orientation and professionalism. It is also well recognised that the informal norms and behaviours that are part of an organisations culture strongly influence values (Silicani, 2008). If there is a gap between formal rules and procedures or stated values and the way things are actually done, an informal set of values will take root and shape the culture in ways that can be extremely difficult to change. One of the challenges of public service reform is to bring HRM into line with priorities such as results orientation, improved service delivery and capacity for innovation without undermining existing core values. For example, in introducing competency or performance management mechanisms, it is essential to be clear about the values that are being promoted and to ensure that they are consistent with and do not undermine other values such as integrity and continuity.
Core values and codes of conduct

Codes of conduct that are fully implemented and adhered to are an essential part of values-based management in the public service (OECD, 2009e: 43-46). Most OECD member countries have introduced instruments such as integrity codes which state the core principles, values and standards of conduct expected from civil servants. The most recent are the codes of conduct in New Zealand in 2007 and in Austria in 2008. A large majority of OECD member countries rely on handbooks, websites and other forms of internal communication to ensure that public servants are aware of values and codes of conduct. Box 4.1 contains the OECD Principles on Ethical Conduct in the Public Service (OECD, 2008). Disclosing wrongdoing in the public service is a key concern in OECD member countries. Measures obliging public servants to report misconduct and/or provide procedures to facilitate reporting have been introduced in most OECD member countries.
Box 4.1. OECD Principles on Ethical Conduct in the Public Service

1. Ethical standards for public service should be clear (civil servants and political officials should know where the boundaries of acceptable behaviour lie). Codes of conduct serve this purpose. Ethical standards should be reflected in the legal framework (laws and regulations provide the framework for guidance, investigation, disciplinary action and prosecution). Ethical guidance should be available (socialisation facilitates ethics awareness, but ongoing guidance and internal consultation mechanisms should be made available to help civil servants (and politicians) apply ethical standards). Public servants should know their rights and obligations. Political commitment should reinforce ethical conduct of public servants. The decision-making process should be transparent and open to scrutiny (this also points to the role of the legislature and the press). There should be clear guidance for interaction between the public and the private sectors. Managers should demonstrate and promote ethical conduct (by providing appropriate incentives, adequate working conditions and effective performance assessments). Management policies, procedures and practices should promote ethical conduct.
2. 3.
4. 5. 6. 7. 8. 9.
10. Public service conditions and management of human resources should promote ethical conduct (this relates amongst others to recruitment processes, promotion and adequate remuneration). 11. Adequate accountability mechanisms should be in place within the public service (internal as well as outward accountability to the public). 12. Appropriate procedures and sanctions should exist to deal with misconduct.
OECD member countries have given special attention to measures to prevent conflicts of interest in the public sector. A large majority have enacted measures that target officials in positions particularly susceptible to corruption in order to help prevent conflicts of interest and combat illicit enrichment. These include professions that are exposed to sectors in which economic interests are at stake and at the intersection of the public and private sectors, such as budget execution (Australia and Japan) or health personnel (Norway) (OECD, 2000). In Australia, Greece, Ireland, Italy, Korea and the Netherlands, certain categories of public officials are required to disclose their personal assets and financial interests. Almost all OECD member countries provide training on ethics issues. Training courses can be compulsory (e.g. for those entering public service in Luxembourg) or largely voluntary (e.g. Australia). The scope of training in OECD member countries also ranges from general training schemes covering the whole public service (e.g. Germany, Italy) to specific programmes determined by ministries or agencies (e.g. Ireland, Japan), or a combination of both. Measures to increase the openness and transparency of the public service can also help strengthen ethics management. A number of OECD member countries have created Ombudsman functions to provide an additional channel for hearing and investigating complaints from citizens and users of public services. New anti-fraud or anti-corruption
230 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT offices have also flourished, e.g. the Serious Fraud Office in the United Kingdom, the Independent Commission against Corruption in New South Wales (Australia), the Commissions on Integrity in the United States, and the Antifraud Office in Catalonia (Spain). Such functions can help to highlight issues relating to ethics and conduct.
Figure 4.2. Countries that offer protection for whistle-blowers
2000 & 2009
Protection for whistle-blowers
Legal
Anonymity
Other
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percentage of the 29 OECD countries that responded to both the 2000 and 2009 surveys 2000 2009
Source: OECD (2009c), Government at a Glance 2009, OECD, Paris.
Core values and public service reforms

Changes in core values are a measure of the reforms taking place in the public service and can also be a yardstick for the success or failure of reforms in public management in general and in human resource management in particular. Conflicts inevitably arise between reforms aimed at improving efficiency and customer focus, for example, and the preservation of traditional core values such as continuity, probity and merit. When assessing HRM reforms it is essential to learn whether they have succeeded in instilling new values and whether traditional values have not been undermined. Outcomes that are relevant include: Civil service and wider public service management legislation and practices preserve institutional memory, continuity, probity, merit and a whole-ofgovernment perspective, without creating undue rigidity. Oversight arrangements: provide robust and independent assurance that public servants are appointed on merit and maintain integrity in public decision making and public trust in government; ensure an effective political-administrative interface.
Emergence of new core values such as performance, efficiency and diversity is supported by solid institutional arrangements that do not undermine traditional core values. At the same time, major changes in HRM practices are aligned with the development of explicit new core values. Organisational strategic thinking is aligned with core values.
As mentioned, there are tensions between traditional and new values. In the wake of reforms, new HRM tools cannot promote new and traditional values simultaneously. It is usually when traditional values are judged sufficiently solid and ingrained in the culture of organisations that governments have felt able to consider newer values such as performance orientation and citizen focus, which require lessening controls that ensure, for example, merit, continuity and integrity. Organisations maturity in terms of traditional values is closely related to history and culture and is not necessarily stable over time. Societal changes, changes in the economic situation, or wider reforms in the organisation of government may from time to time require retightening control to ensure that traditional values continue to be respected and maintained. The balance between traditional and newer values is probably the most important challenge for Brazil today. Even for newer values, all cannot be instilled at once. Staff attention to reforms is necessarily limited, and many countries start, for example, with a strong emphasis on building a performance culture, which requires tremendous reform efforts, and then focus reform efforts on customer orientation. This does not mean that these are separate, but the level of emphasis shifts over time. Finally, all values should not be considered equal. The rule of law and integrity, for example, are cornerstone values and should never be compromised.
The situation in Brazil Core values in the federal public service

An OECD Review of the Integrity Framework in the federal government of Brazil is scheduled to take place in 2010, and will analyse the situation of ethics and integrity in depth. Integrity is just one element of the core HRM values, and HRM is just one part of an integrity framework. The two reviews therefore overlap slightly on this issue but are fully co-ordinated. The rights and duties of Brazilian public servants are set out in the 1988 Constitution. The Constitution contains detailed provisions relating to the rights, remuneration, retirement and pension entitlement of public servants, but provisions relating to their conduct and duties are not enunciated in detail. There is simply a general provision requiring the public administration to obey principles of lawfulness, impersonality, morality, publicity and efficiency. The imbalance between the articulation of rights and of responsibilities was redressed when the provisions of the Constitution were developed in 1994 with a Decree that Approves the Code of Professional Ethics of the Civil Servants of the Executive Branch (this regulation follows Law 8.112 of 1990 [Statute of the Civil Servants] and Law 8.429 of 1992 that establishes the penalties to public agents in case of undue enrichment in the exercise of public functions). A Code of Conduct of the Higher Administration was approved by Presidential Decree on 28 August 2000, after an Exposition of the Motives of the Minister of Civil House that proposed a body of norms regarding good behaviour
232 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT for those in the higher ranks of public administration, without legal character but which, if transgressed, could involve warning, ethical censure, and possibly dismissal. The merit principle is firmly enshrined in the 1988 Constitution, which establishes that investiture in a government position depends on passing a public entrance examination. State-owned enterprises can hire staff on contract under the general labour law; however, these staff too must be hired through public examinations. The government, the public service and the general public all attach a great deal of importance to merit-based recruitment as part of the essential foundation of a professional, impartial public service. Merit assurance seems robust; there are ample oversight and recourse mechanisms, including legal recourse, at least for non-DAS positions.1 The results of entrance examinations have on occasion been nullified where there is evidence that all procedures have not been properly followed. The Court of Accounts scrutinises all appointments, but this is a very heavy procedure from a bureaucratic point of view. There appears to be strong public confidence that the system is fair and applicants are said to pay a lot of attention to the fairness of the overall process. While the emphasis on merit is very important and is understandable given the history of political patronage in public service appointments under some previous regimes, the current merit system is knowledge based and is very bureaucratic (although several selections for senior staff examine also academic and professional titles). This results in long delays in recruitment while entrance examinations are being organised. Adherence to a system of academic examinations also creates the possibility of a mismatch between the profile of those recruited and the skill requirements of the public service (see Chapter 2). The examinations may also be a barrier to increasing socio-economic diversity in the public service, in that candidates who can afford to do so tend to prepare by attending private fee-paying courses (see Chapter 1). Most countries have moved away from strict academic examinations to assessment of competencies and past performance (see Chapter 2), which are considered more adequate ways of measuring merit for recruitment in public administrations. In this case, assessments are in two stages, one assessing academic skills and basic knowledge (often computer based, see example from Belgium), and another with a selected group of candidates, assessing competencies and past performances in some cases. Although the Constitution contains a provision reserving a percentage of positions for handicapped persons, values relating to diversity do not appear to be well developed in the public service (see Chapter 1), because diversity is still considered to call for exceptions to the role of merit in staff recruitment and careers. Strong legal and constitutional protections relating to employment in the public service reinforce the independence, political neutrality and continuity of the public service. Civil servants benefit from tenure,2 which protects them from arbitrary dismissal. Overall protection of civil servants jobs is high and the courts seem to take a view that reinforces employee rights. DAS appointments are an important exception to the requirements as regards impartiality, political neutrality, continuity and merit. While political and managerial discretion over appointments and dismissals of all supervisory and managerial staff provides for needed flexibility in a rigid HRM system, it increases the risk of patronage and undue influence and creates a risk of instability as staff can be removed at will. It is possible to maintain flexibility in DAS recruitment while ensuring more transparency and merit, by allowing for entry of individuals who are not public servants, and by ensuring recruitment practices based on competencies below level 4 and shortlists based on
transparent and modern recruitment procedures above that level, even if the final decision is made by the political authority and if the really top level possibly remains appointed entirely at the discretion of the recruiting authority. There is presently a bill that aims at transforming approximately 2500 DAS positions into Commissioned functions that can only be filled by civil servants. While this shows a level of concern over discretion of appointment outside the civil service, the issue is not the level of recruitment within the civil service or outside, but, wherever appointees come from, that the largest number of appointments be based on transparent procedures. While the principle of reserving a certain proportion of lower- and middle-level DAS positions for civil servants reduces the scope for patronage, the promotion of civil servants into and within the DAS lacks transparency. OECD member countries adopt different practices with regard to the level of political neutrality they expect from their public service, and Brazil will choose its place on that spectrum. However, should the principle of discretionary appointment be maintained, it should certainly not apply to all 22 000 DAS positions but be reserved to senior positions. New values relating to performance and efficiency are reflected in the HRM policies that are currently being implemented in the Brazilian administration. The efforts being made in the area of training and competencies are raising the professionalism of the public service, but more reforms are needed if they are to fully become part of the public service culture (see Chapter 2). The introduction of performance management mechanisms (performance, assessment, performance pay) is intended to reinforce efficiency and effectiveness, although, as noted in Chapter 3, efforts are needed to better embed performance management in the government culture. Over time, the implementation of competency management and performance management tools have given clear signals regarding the new values, but these efforts have been undermined by changes in reform priorities, by the difficulties of implementing the reforms, and by the lack of managerial flexibility needed to accompany them. Greater emphasis on transparency in government and on user orientation is to be seen in the establishment of the function of Ombudsman in 2003. There is a federal Ombudsman as well as an Ombudsman in each ministry and public body. The aim is to provide a channel for citizen complaints so as to improve the quality of public services and strengthen participatory democracy. As part of the democratisation of labour relations in the Brazilian public service, an Ombudsman office for the civil service hears civil servants views, proposals and complaints regarding HR policies and HR management. The Ombudsman function is new in Brazil and is still being implemented, but the growing volume of contacts indicates that the function is establishing itself as a trusted channel of communication with the administration. And while the federal Ombudsmans office appears to be reasonably well resourced, the same is not true of all Ombudsman functions in individual ministries and public bodies, where resources depend on managers willingness to allocate space and budget.
Tensions between new and traditional values

While the basic organising principles of the Brazilian public service reflect the classic government values of merit, continuity and impartiality, successive waves of public service reforms have emphasised citizen orientation and performance. There is tension between the efforts being made to inculcate new values and the highly regulated approach to employment and HRM in the Brazilian public service and between the requirements of a well-performing public service and existing employment systems. When core values
234 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT evolve, it is difficult to keep exactly the same employment framework. Rules and management have to incorporate new values while protecting the essential foundations of an impartial, merit-based public service. A key issue is the view that legality and merit imply the need for strong control over how candidates are tested for entry into the public service, but this makes it difficult to modernise the recruitment process to enable bringing in people with the right skills. It is clear, of course, that to maintain integrity and merit, countries history and culture call for different levels of control. The difficulty is to decide when to begin to lessen control in certain areas with as little risk as possible to traditional core values. Another tension arising from efforts to inculcate performance-oriented values is the existence of a culture that understands merit and fairness to mean that everyone should be treated the same. Bureaucratic and managerial values also conflict when it comes to progression up the salary scale (seniority versus performance). There is also tension between the need for a more flexible workforce and the strong restrictions on hiring staff outside the rigid civil service employment framework of public examinations and narrow job categories. The use of more flexible categories of staff on short-term contracts and private law contracts appears very limited (see Chapter 1). In the past, temporary contracts were an entry point in public administration as civil servants saw their contracts transformed into regular contracts by administrative measures. While present restrictions have their roots in efforts to ensure that access to permanent public service employment is based on transparent, merit-based processes, as well as on political values that favour the delivery of most public services by tenured civil servants, the result is an unduly rigid workforce. In particular, the issue of contracting out shows an impressive tension between the need to ensure efficiency and a level of flexibility in the management of workers and the fear that it might undermine traditional values. Tensions are also evident between the strong protection afforded to public servants tenure rights and the need for more flexibility and mobility in staffing to improve service delivery. Public servants apparent culture of litigation in defence of acquired rights makes management reforms more difficult.
Weaknesses in processes that maintain and strengthen the collective ethos

Strengthening the collective ethos of the public service has become more important as governments face problems that require effective, co-ordinated action by different parts of the public service. For example, issues such as urban renewal, persistent social inequality and environmental pollution do not fall neatly under the responsibility of one government department or agency. OECD member countries are addressing the need to build the collective ethos of the public service through various initiatives: more cohesive senior executive groups, articulation of common values, promotion of networking, mobility initiatives, incentives for co-operation, a stronger focus on the clients needs. Although the Brazilian public service has features that might be expected to create a cohesive ethos such as the fact that people are recruited at the start of their career and socialised as they move up through the public service, and a hand-picked senior group there are a number of structural weaknesses in the HR system that undermine this collective ethos. There is little sense of a unified public service held together by strong shared values. This is evident in a number of areas: Corporatist attitudes which run counter to a collective ethos are fostered by a fragmented employment system with many separate occupational or professional
job categories in individual ministries or agencies (see Chapter 2). Some key groups have strong professional associations and individual job categories and professions defend their interests energetically. The system of separate job categories, with little possibility of mobility within or between categories or organisations, means that people are socialised within their own group rather than as members of the broader public service. There is no clearly stated set of public service values that is institutionalised through HRM policies and practices in key areas such as recruitment, training, competencies, performance management and promotion. For historical reasons, the guarantee and strength of merit-based appointment and career in the public service culture are rather strong. This is a rather limited view, and other traditional and new values have not been institutionalised in a consistent manner. The DAS system does not operate as a glue to build a shared ethos at senior levels that aims at serving whole-of-government goals within an agreed framework of values. On the contrary, because people are appointed to the DAS at the will of ministers (or in the case of less senior DAS appointments by heads of ministries and agencies), even if in some cases appointment processes in place in some organisations guarantee openness and transparency, their loyalty most likely tends to be to their own agency rather than to the broader public service. Moreover, there are few mechanisms that build a collective ethos among senior public servants in many OECD member countries, such as collective training and shared core competencies but the increased use of training for DAS is a sign that this is likely to be improving (see Chapter 3 for a thorough discussion of senior management).
On the positive side, the creation of inter-ministerial job categories such as the longstanding career of Specialists in Public Policy and Government Management (the EPPGG) has the potential to strengthen the collective ethos. The EPPGG is a centrally managed generalist group which operates government-wide and is supposed to facilitate co-ordinated public policy formulation and strategic management (Goldsworthy, 2009). EPPGG personnel go through a common induction and initial training and can be assigned by the Ministry of Planning to positions throughout government. The creation of more inter-ministerial job categories and the establishment of a new senior management system, as recommended in Chapters 2 and 3, would provide a foundation for strengthening the collective ethos. The new careers created or proposed to Congress such as infrastructure analysts, technical analysts of social policy and executive analysts go in this direction but wider-ranging job categories could also be envisaged.
Values and standards of conduct

Brazils actions to promote ethics and integrity in the public service as part of its overall effort to modernise the state and reduce corruption have resulted in policies and frameworks that are in line with the OECD Principles for Managing Ethics in the Public Service and the OECD Guidelines for Managing Conflicts of Interest in the Public Service, although there are areas in which improvements can be made to further strengthen the integrity framework in terms of human resource management. Brazil uses a combination of compliance instruments and awareness-raising to prevent breaches of ethics and promote integrity. A Code of Conduct, applicable to all public employees, was introduced in 1994. Prior to this, other instruments had been put in
236 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT place such as the 1992 Law on improper administrative behaviour. Needless to say, the 1990 statute for civil servants was an important legal building block for promoting integrity. In 1999 a Commission for Public Ethics was set up and put in charge of developing a code of conduct for senior government officials, which was introduced in 2000. It applies to DAS level 6 or higher ministers, executive directors, presidents of state-owned enterprises. These codes of conduct contain provisions, which are in line with standards in OECD member countries, designed to prevent nepotism, conflict of interest, parallel activities, lobbying, participation in private companies and access to privileged information. There are also provisions dealing with restrictions on postemployment. Article 6 of provisional Measure 2.225-45 of 4 September 2001 states that ministers, executive secretaries, and secretaries (DAS-6) and also equivalent agents that have had access to information that can have an economic impact are forbidden from working in any service of their area of expertise for four months after departing their jobs in the public service, and should avoid: i) accepting jobs as counsellors or managers; ii) establishing professional links with persons or firms with whom they maintained direct official and relevant relationships in the six-month period before their departure from their position in the public service; iii) intervening in favour of any person or firm in entities of public administration with whom they have maintained official and relevant direct relationship in the six months prior to their departure from the public service. During this cooling off period, former public service agents have the right to receive a compensation equivalent to that they received as public service agents. A draft bill dealing with conflicts of interest is before Congress, and its enactment would reinforce the provisions in the Code of Conduct. This draft bill establishes much stronger provisions on revolving doors, and extends the cooling off period to 12 months. All DAS-5 staff are concerned by this law in addition to DAS-6. Although the codes of conduct do not cover whistle-blowing, there is a provision for anonymity for whistle-blowers and the Commission for Public Ethics investigates complaints. What to do in cases of suspected wrongdoing is covered in ethics training. The Commission for Public Ethics, which is attached to the Presidency, is responsible for implementing the codes of conduct as well as for oversight and evaluation. Investigation of wrongdoing is handled by the Commission in the first instance and can be referred to the Public Prosecutor, the Courts of Accounts, internal affairs or the police, as appropriate. It is mandatory by law that people fill in confidential declarations of assets and interests when they take high-level positions (including civil servants in DAS positions) and the Commission for Public Ethics can issue a warning/recommendation if it is felt there is a potential risk. Other civil servants also have to complete a declaration when they take office, but not all agencies have implemented this. The implementation of the civil servants codes of conduct appears to be somewhat uneven. The Commission for Public Ethics carries out follow-up visits to check on implementation and it is important to take steps to ensure its consistent application. Each ministry and agency has its own ethics commission responsible for information and training.
The implementation of integrity frameworks in the state-owned enterprises visited during the peer review appears to be robust. Petrobras stands out as an example of values-led management and its code of ethics has been reviewed and updated twice since its inception in 1998. Brazil has taken an active approach to increasing awareness of ethics and conduct. A significant training effort is under way, spearheaded by the Commission for Public Ethics, and the impact of the training is evaluated annually as part of an annual survey on ethics. This survey, which covers both public servants and members of the public, is a useful tool for assessing the degree of understanding and trust. It indicates that further work is needed to instil a common understanding of ethical values.

Strategic management of public activities includes setting the standards and promoting the values that the government wants its employees to be guided by in their work. Given that values are evolving as Brazil modernises its public administration, the peer review points to two strategic priorities: There is a need to clarify and renew the core values of the Brazilian public service, so that the values are explicit and are shared by all concerned. There needs to be consistency between the rules and processes by which the public service is managed and the core values both the essential traditional values and the newer values.
Clarify and renew core values

Clarifying and renewing core values is critical for a public service that is undergoing change. This is particularly true in Brazil, given that successive waves of reform over the past two decades have emphasised different values, and this has undoubtedly created some confusion. The 1988 Constitution emphasised restoring merit and creating a rulesbased bureaucracy, the Collor Administration focused on cost-cutting, the Cardoso Administration implemented new public management principles, and the Lula Administration has emphasised fiscal balance, transparency, responsiveness to citizens, and the strengthening of the administration capacities. The process by which core values are clarified and renewed is crucial in terms of building a shared ethos. A whole-of-government approach (within the executive branch) is recommended. It should involve not only the public service, but also the legislative and judicial branches. The values and ethos of the public service are strongly influenced by the values demonstrated by the other branches of government. An inclusive approach, for example a broad-ranging national debate along the lines taken by the French government, is recommended. This would bring values to the fore and make them explicit, as well as build support for a new, consistent vision of the public service. Brazil might find the approach taken in France during the recent reflections on the reform of the public service interesting. Values were accorded a prominent place and several concrete steps were taken to bring them to the fore in the functioning of the public service (see Box 4.2).
Box 4.2. France: Clarifying, diffusing and bringing to life the values of the public service
The Livre Blanc on the future of the public service, produced in 2008, was the result of a national debate lasting six months on the values, mission and functions of the public service. The reflection on values explicitly considered both the traditional core values that underpin the public service, such as neutrality, probity and legality and new values that should be emphasised, such as effectiveness, transparency and innovation. One of the six strategic orientations for the reform of the public service identified in the Livre Blanc was clarifying, diffusing and bringing to life the values of the public service. Three proposals were made to formalise and renew values: 1. 2. Establish a charter of public service values. Implement an action plan to ensure the effective application of values.
Ministers and senior managers to be given the objective of promoting the application of the charter of values by all public servants under their responsibility. An experienced public servant in each ministry and service to be made responsible for advising on values. Values to be integrated into the initial training of public servants. Values to be one of the criteria in the performance evaluation of each public servant. The charter of values to be published and brought to the attention of public service users by all possible means.
3. A National Commission for Public Service Values to be established. The commission would have four main functions:
to animate a network of values advisers in ministries; to advise on questions relating to values and their application in practice; to ensure that the values remain relevant and up to date; to develop indicators to evaluate the effective application of values and to monitor this.
One of the major challenges for any organisation is to bring its values to life and make them a real part of daily work. A good example is the Finnish governments project called Values to be Part of the Daily Job. The objective is to highlight values and ethics in the practical work of public servants (see Box 4.3).
Improve consistency between core values and HRM Balancing traditional and newer values
For Brazil, as for many OECD member countries, there is a need to balance traditional public service values, such as integrity and merit, with newer values emphasising performance and responsiveness to citizens. The values should be clearly visible in strategic thinking about the public service. They should underpin strategic management in the public service and should be used to guide HRM reforms.
Box 4.3. Finland: Values to be Part of the Daily Job

The task of the State Employers Office for the Finnish public service is to reinforce common values and promote efforts to put values into practice. A working group on Values to be Part of the Daily Job was set up in 2002. The principal task of the working group was to identify good examples of practical methods for applying values in government organisations. Five government organisations took part in a pilot project to identify good practices. The organisations chose different ways of working, but they all engaged both the staff and managers in formulating the definition of the organisations values and helping the staff to internalise the values and act according to them. A crucial point was that the entire staff participated in the process. Drawing on the experience of the five pilot organisations, the working group proposed three types of measures:
values as a tool of management; values as an officials moral code; monitoring implementation of values.
The project showed that to transform values into a management tool, careful attention has to be paid to the incorporation of values into performance management, the discussion of results and the remuneration system. Working atmosphere surveys, the example set by senior managers, evaluation of management, training, recruitment and attitudes towards actions that are contrary to values are also important. There should be a continuous debate about values, their implementation in daily work should be monitored, and the outcomes should be incorporated in the organisations annual report.
Source: OECD (2005f), Public Sector Integrity: A Framework for Assessment, OECD Publishing, Paris; Utrecht School of Governance, Utrecht University, and Ministry of the Interior and Kingdom Relations of the Netherlands (2008), Catalogue of Promising Practices in the Field of Integrity, Anti-corruption and Administrative Measures Against Organised Crime in the EU, Ministry of the Interior and Kingdom Relations of the Netherlands, The Hague.
Getting the balance right so that there is clarity about values and consistency in how they are applied is a major challenge for any public administration. The Canadian public service offers a very useful example. Following several waves of public service reforms, the need was recognised to renew the public service and revitalise its values. The core values, which are a condition of employment in the public service, are set out in the Values and Ethics Code for the Public Service, adopted in 2003. Of particular interest for Brazil is how Canada integrates traditional values with newer values in four overlapping families: democratic, professional, ethical and people values. As Box 4.4 shows, the definition of values includes a clear performance-oriented approach involving effective and efficient use of public money by civil servants, greater efficiency and effectiveness of government programmes and services, adaptation to changing needs through innovation, improvement of the quality of service, and meritbased appointment decisions. At the same time, essential traditional values such as integrity, impartiality and fairness are also prominent. The core values are fully integrated into HRM (see Box 4.5): for example, the code explicitly guarantees that values should play a key role in recruitment, evaluation and promotion. The core values are also explicitly integrated in the leadership competencies that apply to employees at all levels.
Box 4.4. Values of the Canadian Federal Public Service

Democratic values: Helping ministers, under law, to serve the public interest: Give honest and impartial advice and make all information relevant to a decision available to ministers; loyally implement ministerial decisions, lawfully taken; support both individual and collective ministerial accountability and provide Parliament and Canadians with information on the results of their work. Professional values: Serving with competence, excellence, efficiency, objectivity and impartiality: Work within the laws of Canada and maintain the tradition of the political neutrality of the public service; endeavour to ensure the proper, effective and efficient use of public money. How ends are achieved should be as important as the achievements themselves. Commitment to serve Canadians should be constantly renewed by improving the quality of service, by adapting to changing needs through innovation, and by improving the efficiency and effectiveness of government programmes and services offered in both official languages, and by striving to ensure that the value of transparency in government is upheld while respecting duties of confidentiality under the law. Ethical values: Acting at all times in such a way as to uphold the public trust: Civil servants should perform their duties and arrange their private affairs so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and enhanced; they should act at all times in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law. They should fulfil their official duties and responsibilities, make decisions in the public interest; if a conflict should arise between the private interests and the official duties of a public servant, the conflict shall be resolved in favour of the public interest. People values: Demonstrating respect, fairness and courtesy in their dealings with both citizens and fellow public servants: Respect for human dignity and the value of every person should always inspire the exercise of authority and responsibility; people values should reinforce the wider range of public service values. Those who are treated with fairness and civility will be motivated to display these values in their own conduct. Public service organisations should ensure participation, openness and communication and respect for diversity and for the official languages of Canada; appointment decisions in the public service shall be based on merit; public service values should play a key role in recruitment, evaluation and promotion.
Source: Treasury Board of Canada Secretariat (2009), Values and Ethics, www.tbs-sct.gc.ca/chro-dprh/veeng.asp, accessed in December 2009.
Box 4.5. How are core values integrated in HRM management in the federal government of Canada?
Values and Ethics Code for the Public Service is a condition of employment in the public service of Canada. Each letter of offer, for an initial appointment, includes the following statement: You will find enclosed a copy of the Values and Ethics Code for the Public Service. This Code is a key policy for the management of human resources and is part of your conditions of employment. As such, employees are obligated to follow the Code in their daily decisions and practices.
Box 4.5. How are core values integrated in HRM management in the federal government of Canada? (contd)
The values of employment equity and official languages are among key values in the Canadian public service and are an inherent part of the recruitment and promotion process. For instance, as part of the appointment policy, administered by the Public Service Commission, employment equity objectives are integrated into the design of appointment processes. Employers must make appropriate accommodations to ensure that the needs of all potential candidates, including members of designated groups such as people with disabilities, are met. In addition, persons are entitled to participate in the appointment process in the official language(s) of their choice. All information concerning appointment processes is communicated in both official languages. In addition, statements of merit criteria for most positions include leadership competencies (for the appropriate level of employees) with values and ethics being a key component. The assessment process includes structured interviews and reference checks which primarily focus on assessing values and ethics component of the statement of merit criteria for the position. This process applies to both initial entry positions into the public service, which can be at any level as well as for any subsequent promotions/competitions. For the executive category, the statement of merit criteria must be based on the EX qualification standard, which is mandatory in assessing candidates for executive appointments. The EX qualification standard consists of four areas (in accordance with leadership competencies): values and ethics, strategic thinking, engagement, management excellence. The EX Group Qualification Standard represents the minimum requirements for staffing an EX position and falls under essential qualifications. Therefore, it applies to all appointment and deployment processes to and within the EX group, at all levels. EX qualification standard is also a major element of talent management, leadership development programmes, the Public Service Commission assessment services (e.g. measuring range of abilities for various groups and levels, leadership assessment services for internal and external hiring) and the performance management programme. In addition, as part of the performance management process for executive cadres and certain categories of managers and specialists, a written assessment of actual results achieved during the fiscal year and the level of key leadership competencies demonstrated, including values and ethics, is required. All performance agreements, among others, should include:
the expectations for the results that are to be achieved; how they are to be achieved (key leadership competencies, including values and ethics); as well as the performance measures that will be used to assess the individuals performance.
Performance agreements are used to identify individual development priorities for managers/specialists, including the development of key leadership competencies in individual behaviors and decisions. In addition, values and ethics are an integral part of the Management Accountability Framework which is an integral part of the performance management agreement between the Clerk of the Privy Council and every Deputy Minister in the Canadian public service. As such, deputy ministers are responsible to ensure that through their actions, organisational leaders continually reinforce the importance of public service values and ethics in the delivery of results to Canadians (e.g. democratic, professional, ethical and people values). The performance agreements of all executives in the department must be aligned with the performance agreement of the deputy minister, including the commitment on values and ethics.
Source: Information provided by Tatyana Teplova, the Canadian peer reviewer.
Bring HRM into line with core values

Following on from a process to clarify and renew core values, the Brazilian government will need to assess the extent to which HRM rules and processes need to become better aligned with values. This touches particularly on areas such as the employment framework, recruitment and performance management. Codes of conduct for public servants may need to be reviewed in light of the renewal of core values and brought up to date if necessary. Particular attention may need to be paid to clarifying how traditional values are balanced with newer values and how this translates into the application of values in practice. The Brazilian government could usefully look at the Australian reform of the public service legislation undertaken in 1999, and possibly review the Public Service Act which defines the Regime Juridico Unico. This provided an opportunity to review public service values and place them at the centre of a new Public Service Act. Building on this foundation, the values carry through into the different areas of HRM in the Australian federal public service: the employment framework, recruitment and selection, the code of conduct, core competencies for public servants, training, and performance evaluation (see Box 4.6).
The employment framework and core values

Changes to the employment framework of the Brazilian public service may be updated to reflect new core values relating to government efficiency, performance and citizen orientation. The rigidities associated with the current system of job categories (civil servants who change careers need to pass a competitive examination and start again from the bottom of the scale, and careers are rather narrowly defined) and the resulting immobility and virtual tenure of public servants in the position to which they are initially recruited do not reflect these new values. The employment framework should be made more flexible by reforming the system of job categories, as recommended in Chapter 2, and measures should be taken to increase mobility, as recommended in Chapter 1.3 Another area of imbalance is the emphasis on the employment rights of public servants without a corresponding emphasis on their duties. A new statement of rights and obligations, as in Australia, would redress the balance and offer an opportunity to incorporate the core values into the employment framework.
Recruitment and core values

The key issue in terms of recruitment is the need for the Brazilian administration to modernise its view of merit. The principle of recruitment on merit should be restated as a core value. However, considering its achievements regarding merit, the Brazilian government may now start moving away from the idea that merit necessarily implies strong bureaucratic control. While this was necessary at a certain point in order to combat nepotism in recruitment and build public trust in the system, the situation has changed. This does not mean that nepotism no longer exists but that merit-based recruitment has been better internalised as a core value and ex ante controls and rigid procedures might gradually be lessened, as recommended in Chapter 2. As in other countries, it will be necessary for the government to assess on a frequent, regular basis how changes to recruitment procedures affect core values over time.
Box 4.6. Australia: Values enshrined in public service legislation

The values and related Code of Conduct applying to Australian public servants are set out in the Public Service Act (1999). The values state that the Australian Public Service:
is apolitical, performing its functions in an impartial and professional manner; is a public service in which employment decisions are based on merit; provides a workplace that is free from discrimination and recognises and utilises the diversity of the Australian community it serves; has the highest ethical standards; is openly accountable for its actions, within the framework of ministerial responsibility to the government, the Parliament and the Australian public; is responsive to the government in providing frank, honest, comprehensive, accurate and timely advice and in implementing the governments policies and programmes; delivers services fairly, effectively, impartially and courteously to the Australian public and is sensitive to the diversity of the Australian public; has leadership of the highest quality; establishes workplace relations that value communication, consultation, co-operation and input from employees on matters that affect their workplace; provides a fair, flexible, safe and rewarding workplace; focuses on achieving results and managing performance; promotes equity in employment; provides a reasonable opportunity to all eligible members of the community to apply for APS employment; is a career-based service to enhance the effectiveness and cohesion of Australias democratic system of government; provides a fair system of review of decisions taken in respect of employees.
Act 1999,
Source: Australian Public Service Commission (1999), Public Service www.apsc.gov.au/publications/legislation.htm, accessed in December 2009.
The key point is that strong and independent protection of merit, which is absolutely essential, can be ensured in ways that make it possible to update recruitment methods. The merit protection arrangements in OECD member countries show how this can be done. For example, in Canada, the Public Service Employment Act emphasises oversight and the independent Public Service Commission (PSC) is accountable to Parliament for safeguarding the integrity of appointments and overseeing the political impartiality of the federal public service. It acts to safeguard the values of a professional public service: competence, non-partisanship and representativeness. Its investigations are an important oversight tool for monitoring the staffing system and the non-partisanship of the public service.
Box 4.7. Australian Public Service (APS): Get it Right: a recruitment kit for managers
Get it Right has been designed to help APS line managers make quality recruitment and selection decisions. Developed in consultation with HR areas and line managers from across the APS, Get it Right explores recruitment within the APS legal framework, seeks to increase awareness of effective recruitment techniques, and highlights three key principles for effective recruitment: define, attract, select. There are three parts to the kit:
project planner outline of the project plan approach; capability cards to define roles and identify selection options; electronic tool detailed steps in the process.
The capability cards are used to: define new roles; determine the capabilities required for the team and the role; clarify the responsibilities of existing roles; develop selection criteria; identify effective selection options.
There are 23 capability cards and three priority cards. The capability cards: are grouped by skills, personal qualities and specific knowledge; provide behavioural indicators for each capability; include options for selecting people with the capability described.
The priority cards are included to assist when determining the relative importance of different capabilities. Ethics and values are among the personal qualities looked for in recruitment. The capability card for ethics and values advises that individuals who demonstrate this capability will:
model the APS values and code of conduct; serve the government of the day irrespective of personal preferences; act with integrity and have high ethical standards; inspire trust by treating all individuals fairly.
The recommended ways of assessing candidates for the ethics and values capabilities are: a structured interview, a behavioural styles questionnaire, reference checking.
Source: Australian Public Service Commission (2009), Get it Right A Recruitment Kit for Managers, www.apsc.gov.au/getitright/index.html, accessed in December 2009.
Recruiting people with a strong record of promoting good core values would help alleviate the need for strong controls. The first step is to define the recruitment and selection criteria to include personal qualities that reflect core values, such as probity, integrity and commitment to diversity. Such qualities cannot be assessed with a written examination. This requires skilled interviewing and possibly use of behavioural profiling techniques. This can be applied in priority to managers and senior managers within the changes to their recruitment procedures as developed earlier. The Brazilian government could usefully look at the approach taken in the Australian Public Service, which has developed a sophisticated set of tools to assist managers in recruitment. One of these is a capability card set which provides guidance on how to incorporate ethics and values and other key personal qualities into recruitment (see Box 4.7). The way appointments are made to DAS positions also sends an important signal about core values. The changes recommended in Chapter 3 are intended, among other things, to apply a transparent, merit-based process for appointments to DAS positions which are not defined as politically appointed.
New values and performance management

As noted in Chapter 3, strong shared values are an important part of the governance arrangements for the new performance management approach that is recommended for Brazil, combined of course with new forms of accountability and performance arrangements. Brazil has started to implement changes in performance management that have probably created some changes in values and may want to make those clearly stated as part of core values. Care should be taken that performance management strengthens other core values such as quality, transparency, legality and probity. Risks of perverse incentives that might undermine core values should be analysed and addressed when designing and implementing performance management systems. It is extremely important for new citizen-oriented and performance-oriented values to be clearly stated and supported by management tools such as effective performance assessment processes, building a culture of dialogue and coaching for improved performance, and providing managers with the means to differentiate between good and poor performers. Promoting the acceptance of new values by managers, staff and trade unions will take time and will require explicit action. These new values will also require behavioural changes on the part of central management agencies. A very careful balance will need to be struck between providing managers with the means to apply performance management processes effectively and maintaining standards and essential controls.
The role of managers

While it is essential for core values to be expressed in public service legislation and HRM policies and practices, this alone will not guarantee that the values will be deeply embedded in the public service ethos. Managers at all levels play a crucial role in modelling and applying values in their daily work. OECD member countries have found that the attitudes of top managers and leaders set the attitude for the whole organisation. Recruiting the right people and making them accountable for these attitudes are thus fundamental to values-based management. A significant effort is needed to form the management culture of the Brazilian public service and this should be viewed as a longterm undertaking. Defining the competencies that managers should demonstrate is an important first step. Chapter 2 gave an example of how values are incorporated into competencies in the
246 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Canadian federal public service. Brazil should develop a set of management and leadership competencies which are based on core values and which apply to all managers. The competencies should guide the recruitment and selection of managers, as in Australia (see Box 4.7), as well as their training and development. The competencies should be an element of the performance assessment of managers. Managers should be accountable for values and ethics and should be supported by tools and access to advice. Responsibility for providing supporting tools and advisory services should be placed with a specific service in the central management agency and consideration should be given to having a high-level values and ethics counsellor in each ministry and agency.
4.2. The division of responsibilities in human resources management The experience of OECD member countries
Many OECD member countries have pursued a general policy of delegating operational HRM authority to line ministries and managers to the extent possible. The purpose is to simplify and reduce the costs of HRM systems while making more efficient use of available resources. Paradoxically, the delegation of HRM authority has required reinforcing the role and functions of the central HRM body to strengthen its position and give it sufficient power to co-ordinate and control the civil service. The central HRM body is expected to provide the mechanisms to ensure that civil service policy will be followed. In addition, this central body is generally in charge of managing the preparation of reform legislation, implementing civil service reforms, setting HRM standards and establishing mechanisms to guarantee the fair and equal treatment of civil servants across all government institutions.
The central HRM body

A large majority of OECD member countries have a body that deals with HRM at the central government level. It acts as the driver of civil service reforms in a whole-ofgovernment approach. This may involve being responsible for developing HRM strategy, monitoring progress towards goals, linking HRM objectives to broader governmental goals, and reporting on progress and reassessing strategies as progress is made. In OECD member countries, central HRM bodies have been instrumental in implementing HRM reforms by promoting sharing of information and good practice, taking steps to avoid duplication of activities, gaining acceptance of frameworks and standards, facilitating collaboration across government agencies and ministries, and fostering innovation and risk taking in HRM (Shipton et al., 2006). Their political responsiveness is thus crucial. However, the organisation and structures of countries central HRM bodies vary significantly. They are located in Prime Ministers offices and chancelleries, in ministries of the interior, finance or labour, and in special ministries of public administration. When countries see HRM in a wider management context linked to public expenditure, they usually establish a central HRM body within the Ministry of Finance. In contrast, if they emphasise policy co-ordination or departmental performance, they tend to place the central HRM body under the head of the executive or the Cabinet.4 The most promising OECD experiences suggest that central HRM bodies are more effective when they:
Act under a managerial framework that provides the setting in which HRM policies and practices will be strengthened and evolve. The legal foundation of HRM policy gives the central HRM body a clear mandate for its activities. Have a plan that allows them to act strategically to achieve the governments goals and to assess how well they succeed. Their political responsiveness depends in part on this. Assume a co-ordination, monitoring and enabler role in the implementation of HRM policies by providing guidelines, technical support and feedback. The oversight role of the centre is not necessarily transaction-oriented, it may rely on strategic monitoring and measurement of results and risks. Have adequate financial and human resources to strengthen HRM in the public service. Central HRM bodies should have the capacity to prepare civil service reform or to control the implementation of the Civil Service Act. Have a leadership role in the development of civil service reform proposals, manage the preparation of reform legislation, and set homogenous HRM standards without interfering too much with the traditional role of other ministries, above all the Ministry of Finance.
The HRM central body should have an in-depth understanding of its role in the management of the public sector and of the importance of balancing: Managerial autonomy and flexibility with whole-of-government direction, coherence and transparency across the systems. The delegation of managerial authority with the need to understand how delegated authority is exercised. This requires a robust regime of accountability and sound information systems to monitor the overall health of the public service.
The central HRM body should not be in charge of protecting the rights of civil servants (in addition to the courts). Most OECD member countries now have special independent bodies, such as the Merit System Protection Board in the United States and the Public Service Commissioner in the United Kingdom. The Ombudsman for the civil service should play this role in Brazil.
The evolving role of the central HRM body towards the delegation of HRM authority by national/federal governments
Austria, Finland, Ireland, Japan, the Netherlands, Norway, Switzerland, the United Kingdom and the United States have refocused or redefined the role of the central HRM body towards a more strategic and less detailed managerial role. In Australia, Belgium, New Zealand, Portugal and Sweden, instead, this body co-ordinates the management of human resources across departments and agencies. This has meant a shift towards decentralising control of HRM responsibility in order to increase managerial flexibility and to improve performance and responsiveness, although the scope and pace of delegation varies across countries.
248 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Delegation of HRM authority empowers public managers to make specific operational decisions to adapt centrally defined HRM practices to the business needs of their organisations. In general, OECD member countries rely on three methods of delegation: i) transferring responsibilities for HRM from central bodies to line ministries/departments/agencies; ii) simplifying rules and procedures when devolution concerns the operational aspects of HRM, while responsibility for more general policy remains with the centre; and iii) developing more flexible HRM policies. The central government administration never totally delegates authority for human resource management, as governments want to maintain a set of shared values and common structures and processes which need to be managed from the centre. Four different types of delegation can be identified in OECD member countries: Delegation of establishment. This refers to the ability to decide on staff numbers and the types of staff employed. In Belgium, Finland, Norway, Sweden and the United States, departments and agencies have broad autonomy for determining, within legal budgetary limits, the numbers and types of posts in their organisations as well as the allocation of the budget envelope between payroll and other expenses. Delegation of manpower planning enables organisations to determine how many employees they need and the required skills mix. Sometimes the authority to decide when to use purchased services and contractors is delegated. Delegation of compensation levels. This refers to the management of the pay system and the management of the variable portion of pay (benefits and performance-related pay). In Austria, Belgium, Finland, Germany, Japan, Luxembourg, Norway, Spain and Switzerland, the general management of the pay system is centrally defined (fixed part, progression on pay scales, etc.), but in Australia, Sweden and the United Kingdom, and to a lesser extent the United States, it is delegated to departments, agencies or even work units. Delegation of position classification, recruitment and dismissal. The post classification system in Austria, Germany, Ireland, Italy, Japan, Korea, the Netherlands, Portugal, Spain, Switzerland and the United States is primarily defined by the central HRM body, while in Belgium, Finland and Hungary there appears to be some delegation. However, in Australia and the United Kingdom, departments and agencies have even wider room for determining their classification system. For individual recruitment into the civil service in Ireland, Japan, Korea, Luxembourg, Mexico or Spain, the HRM central body is quite directly involved in the recruitment of regular staff; the recruitment of casual staff is more readily delegated to departments and agencies. The key aspect of delegation of recruitment functions is not the actual selection, but the specification of required competences and selection criteria which are an essential complement to manpower planning. Delegation of the definition of employment conditions. The management of working conditions (flexibility and adjustments to working conditions) is generally delegated, within a general framework, in Australia, Austria, Finland, Hungary, Mexico, the Netherlands, Portugal, Sweden, the United Kingdom and the United States. However, in Belgium, Ireland, Japan, Norway, Spain or Switzerland it appears to be more centralised. Delegation of working arrangements allows line ministries and agencies to adapt these arrangements to meet their own needs. For example, authority for staff training and development
may be delegated but the centre establishes minimum standards for recruitment procedures, selection criteria and competency frameworks. In order to motivate their employees, organisations need to be able to reward them for good performance and behaviour and sanction misconduct. Therefore some countries have delegated control over monetary rewards. OECD member countries experience shows that effective delegation of HRM authority requires two things: first, it needs to be accompanied by a strengthening of certain central functions, such as monitoring the implementation of HRM policy and holding managers accountable for their handling of the delegated authority; second, it has to be accompanied by the existence of adequate managerial capacity and competence at sub-central levels. This is why some countries are reforming their senior management structures. Central HRM bodies are assuming responsibility for horizontal implementation of the Civil Service Act whereas line ministries and agencies focus on more vertical HRM responsibilities. As the civil service becomes more fragmented, the centre will be primarily concerned with ensuring that public expenditure and performance targets are met and with identifying and disseminating advice and best practice. HRM authority has also been delegated to varying degrees across the central government in OECD member countries. However, when the central HRM body delegates authority to line ministries and agencies, these bodies may not delegate that authority further down the chain of command to managers and front-line supervisors.

The Brazilian federal government has a centralised system in which the Ministry of Planning, Budgeting and Management has responsibility for the co-ordination and management of planning, federal budgeting, civil personnel, administrative modernisation and the ICT systems of the federal public administration. As Figure 4.3 shows, the delegation of HRM authority to line ministries, departments and agencies is rather limited. The Ministry of Planning decides on staff levels, the type of staff employed, compensation levels, position classification, recruitment and dismissals, and conditions of employment. It is also closely involved in implementation. Other ministries have little room to adapt HR processes and procedures to their business needs.

Figure 4.3. Extent of delegation of HRM authority to line ministries in OECD member countries and Brazil
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 O E C D 26 United K ingdom D enmark 0.0 Ic eland New Z ealand Aus tralia S weden P ortugal G ermany Mex ic o B elgium F inland T urkey Ireland J apan C anada L ux embourg H ungary United S tates Netherlands Norway S witz erland Aus tria F ranc e K orea B raz il S pain Italy
Source: OECD (2009c), Government at a Glance, OECD Publishing, Paris; and OECD (2008b), The State of the Public Service, OECD Publishing, Paris. Data for Brazil are drawn from the response of Brazil to the OECD 2006 Survey on Strategic Human Resource Management.
The role and functions of the central HRM body

Within the Ministry of Planning three units are directly involved in the management of human resources. The Human Resource Secretariat (SRH) is responsible for elaborating standards and defining procedures to be observed by other HRM units in the federal public administration (see Box 4.8). Its aim is to modernise human resource functions in the federal sector to simplify administrative procedures, facilitate the management of human resources, and provide better quality services. SRH is the point of reference for HRM policy making at the federal level. The Management Secretariat (SEGES), in turn, is in charge of co-ordinating and supervising public management policies and optimising the allocation of resources in the federal administration. It authorises administrative units in the direct administration (ministries) and indirect administration (autarchies and foundations) to organise open competitions to fill vacancies. SEGES reviews the case for every application to ensure it is within the budget limit and assesses the organisations personnel needs before authorising the competition. SEGES is also responsible for proposing policies and guidelines for the management of senior managers in co-ordination with SRH. Finally, SEGES is responsible for analysing the distribution of DAS positions across departments and agencies and submit its proposals for changes to the President. The Budget Secretariat (SOF), on the basis of information provided by SRH and SEGES, determines the financial ceiling for the creation of new posts and functions and monitors personnel policy: economic aspects (payroll of in-service and retired employees, fringe benefits, authorisation for hiring and studies regarding new positions). SOF also certifies budgetary availability for all measures or activities that imply an increase in expenses in the areas of personnel and benefits.
Box 4.8. Responsibilities and organisational design of the SRH

The main responsibility of the Human Resources Secretariat (SRH) of the Ministry of Planning, Budgeting and Management, is the provision of an adequate professional workforce in the federal government through the design and implementation of HRM policies that allow public servants to be part of the modernisation of the state. In general, the SRH:
acts as the central body of the Federal Civil Service Personnel Administration System (SIPEC) with the competence to write legal acts regarding public servants under direct federal public administration (Office of the Presidency and ministries), independent bodies (autarquias), including special regimes and public foundations, and the activities of audit and Ombudsman. formulates policy proposals and guidelines for the administration of human resources, including those related to social security, beneficiaries, labour relations, cadres, remunerations, and capacity and dimensioning of the federal labour force; designs policies and mechanisms to guarantee the democratisation of labour relations of the federal administration in order to improve civil servants (servidor) working conditions and to implement the principles of efficiency and effectiveness in the federal public services; elaborates proposals for the development and implementation of information systems for HRM; conducts analyses of the information contained in the databases of the Integrated System of Administration of Human Resources (Sistema Integrado de Administrao de Recursos Humanos, SIAPE).
The SHR has a total staff of 274 of whom 159 are part of the SRH civil service establishment; 36 are employees of other ministries, departments or states that have been detached to work at the SRH; 36 are appointees belonging to the DAS system; and 43 are contractees. In total, SRH has 79 DAS, 22 of which are above level 4. The SRH is organised in seven units:
Cabinet (Gabinete); Ombudsman of the Public Servant (Ouvidoria do Servidor); Audit function (Auditoria de Recursos Humanos) ; General Co-ordination of Training (Coordenao-Geral de Capacitao); Department for Labour Relations (Departamento de Relaes de Trabalho, DERT); Department for Administration of HR Information Systems (Departemento de Administrao de Sistemas de Informao de Recursos Humanos, DASIS); Department for Norms, Legal Procedures and Dissolved Organisations (Departemento de Normas, Procedimentos Judiciais e rgos Extintos, DENOP).
Source: Mission notes.
As pointed out in earlier chapters, to design appropriate HRM practices, it is necessary to focus first on how public organisations function. Although the Ministry of Planning has shown the capacity to design and implement reforms in areas such as competencies, remuneration and performance management, several issues need to be
252 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT addressed in order to improve its capacity to lead the reform of HRM at central government level. For instance: Lack of vision and long-term planning. Brazil has adopted a piecemeal approach to reforming HRM which makes most decisions operational rather than strategic and based on a long-term vision. Long-term workforce planning that includes a forward thinking about the type of civil service, workforce numbers, skills, competencies and workforce diversity desired by Brazilian authorities for the long term is being developed but still at its infancy. The dialogue between the Ministry of Planning and line ministries and agencies on HRM issues is still driven by demands for posts and increases in remunerations. Restricted technical capacity. Talks with Ministry of Planning officials revealed that SRH and SEGES staff do not have strong HRM backgrounds. They are largely formed and trained in the service. This is also the case for staff responsible for HRM issues in other ministries. They lack training in strategic planning, and this obviously weakens their capacity to integrate HR strategy into public management reform programmes. Lack of culture and capacity for collective negotiation. The reform proposals of the Ministry of Planning are not submitted to a wide negotiation and discussion process within government and with external agents. The information gathered from talks with Brazilian officials suggests that the goal has been to avoid confrontation, in particular with trade unions. As a consequence, negotiations and discussions to tackle difficult reform issues do not take place. Very likely this is also the result of lack of managerial experience in dealing with controversial issues in negotiation processes. However, the Federal Civil Personnel Administration System (SIPEC) (see Box 4.9) provides a way to bridge the gap in sectoral co-ordination and negotiation. The fact that the central HRM function has managed to put a number of important issues on the agenda and to initiate a number of partial reforms means that it has become adept at horizontal cooperation, that is, at achieving results by engaging in dialogue, identifying common interests and welding agreements. This mode of working should continue, but it would be facilitated by clear government-wide goals and expectations for what should be attained.
Box 4.9. The Brazilian Federal Civil Personnel Administration System (SIPEC)
Led by the Human Resources Secretariat (SRH) of the Ministry of Planning, SIPEC groups all organisational units that carry out HRM activities in the federal government; these represent approximately 10 000 civil servants. Members of SIPEC are organised into 24 sectoral bodies which include departments, divisions and units from ministries and the presidency; and 274 sectional bodies from departments, divisions and agencies from other government entities. SIPEC aims for closer co-operation between the central HRM body (SRH) and the sectional and sectoral organs through events to disseminate information on personnel management in the federal government. SIPEC has the task of linking HRM policies to the political strategic orientations of government and generating the required organisational structures to achieve governments goals.
Source: Mission notes.
The need to create agency and managerial flexibility and enhance strategic HRM
Current HRM arrangements in the public administration do not provide the conditions for the amount of delegation of HRM responsibilities that would foster the forwardlooking and performance-based organisational culture that is beginning to emerge in Brazil. The Ministry of Planning exercises very centralised, technocratic and bureaucratic control over HRM planning and processes, and little emphasis is given to other core functions that the central HRM body should perform: providing guidance and support to line ministries, exercising leadership on strategic HRM policy development, ensuring adequate managerial capacity and competence in units at lower hierarchical levels, establishing benchmarks to assess when and to what extent to delegate and deregulate, and strengthening horizontal dialogue and co-ordination for the design and implementation of the HRM policy. Centralisation has brought about an HRM system with the following limitations.
Limited strategic HRM

Brazilian authorities have acknowledged the need to develop a culture of strategic planning and sectoral co-ordination in the public administration. Indeed, judging by the functions, activities and responsibilities of the different HR departments in line ministries, HRM does not yet seem to be considered a strategic area for pursuing broader governmental goals. There is no consideration of how key HR policies, practices, and processes can help to improve the performance of public organisations and there is limited technical capacity for HRM planning. ENAP has provided certificates in this field, but punctual training is not enough. Brazilian public administration lacks mechanisms to integrate sectoral policies and plans from a whole-of-government perspective that incorporates the disparities across ministries and agencies, and the imbalance regarding the current staffing levels, competencies and diversity of the workforce. This is one of the reasons why line ministries and agencies have not developed the capacity to think strategically on HRM. SRH or SEGES have just started to provide guidance on how to plan workforce needs strategically, but the framework is still incomplete (see Chapter 1), and there are very wide degrees of implementation as managers are not held to account on workforce planning. This produces a lack of coherence in the efforts to do workforce planning as a collective work. Undoubtedly, this also contributes to increases in the costs of the workforce which does not necessarily translate into efficiency and capacity gains. There is also no accountability framework that makes managers accountable for the management of their workforce as part of their regular reporting and according to the needs and strategy of their organsiations and the more general government goals in terms of HRM.
A focus on inputs and control rather than on efficiency

As this review has shown, Brazils centralised input- and control-oriented HRM practices have produced a rigid HRM system that limits staff reallocation and mobility. For example, SEGES and SRH have been trying to reduce the level of specialisation of several positions in the federal government, but barriers imposed by the legislation make their work difficult. In fact, even the organisational design of the SRH emphasises operational and input and control processes to the detriment of strategic HRM and
254 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT attention to efficiency. No unit is specifically responsible for HRM policy development and strategic workforce planning. Moreover, the sense of cohesion in the public service seems more the product of central control and oversight than of identification with a single strategic vision to which everyone adheres. The bodies involved in controlling the legality and regularity of personnel actions include the Court of Accounts (TCU), external auditors, the internal control unit, internal auditors, the judiciary and the Ethics Commissioner, in addition to the managers and directors in charge of personnel decisions for their employees. All personnel actions are controlled ex ante and ex post by different bodies. The nature of these controls, notably those of the TCU, is not always clear: the TCU finds that approximately 4-5% of the 110 000 decisions examined each year are illegal (including on pensions). In view of the number of controls, this is in fact a big number that calls attention to the following issues: i) problems of clarity in the legislation and regulations on personnel and the frequency of changes in each career; and ii) the HRM capacity in the various ministries and departments.
Lack of flexibility in HRM

Very detailed regulation coupled with tight controls, instead of management accountability frameworks, result in a lack of flexibility and limit the power of line ministries and managers to make operational decisions on HRM. While the decisionmaking process regarding HRM policy and strategy is very centralised, its execution is rather fragmented and requires a number of controls to avoid mismanagement or fraud. However, although this may appear to create a proper balance, in Brazil it has led to very strict and detailed policies, strategies and procedures which leave line ministries with very little ability to adapt them to their business needs. Managers have little incentive to focus on performance and competency management as they have little control over staff management (profile definition, recruitment, training, promotion, etc.) and are thus not held responsible for how they manage their staff numbers, costs and competencies.

In order to improve central government capacity in HRM, Brazilian authorities need to focus on two main areas: i) reorganise and redefine the role of the central HRM body; and ii) deregulate the HRM framework to enhance flexibility and empower line ministries and managers to make specific HRM-related decisions when a clear framework has been established; an HRM body re-empowered that is able to set directions and make managers accountable for the management of their workforce.
Redefine the role and organisation of the central HRM body Define a long-term vision for HRM aligned with broader governmental goals
The experience of OECD member countries suggests that when embarking on strengthening the role and functions of the central HRM body, it is first necessary to build a framework that sets HRM strategy in the context of the governments policy objectives and strategic priorities. This framework should provide a long-term vision for the civil service to guide all HRM reform policies and programmes. A more strategic and holistic perspective helps avoid making reactive and short-term organisational changes. Alignment with the long-term strategic objectives of government and other managerial reforms is crucial for the sustainability of HRM reforms. The Ministry of Planning may
need to undertake a wide-ranging discussion with stakeholders to build this strategic framework. Brazil can draw on the experience of the US Office of Personnel Management (OPM) for ways to align strategic objectives with the mission of the central HRM body. The OPMs efforts focus on efficient provision of human capital advice and leadership to federal agencies. The Ministry of Planning might also look at the HRM policy of Petrobras. It is linked to the long-term vision and mission of the company and has facilitated the building of a sophisticated HRM system with a focus on continuous development. Petrobras vision for 2020 is to be one of the worlds five largest integrated energy companies and the preferred choice of stakeholders. Its mission is to operate in a safe and profitable manner in Brazil and abroad, with social and environmental responsibility, by providing products and services that meet clients needs and contribute to the development of Brazil and the countries in which it operates. In this sense, HRM is seen as an agent for corporate sustainability to ensure that Petrobras possesses the necessary competencies to carry out its strategies. The HRM strategy is thus aligned to the vision and mission of the company facilitating strategic planning and the obtaining the required skills and competencies to meet Petrobras goals.
Redistribute responsibilities within the Ministry of Planning

The available information suggests that co-ordination between SRH and SEGES suffers from the current distribution of their responsibilities, as both have competencies for HRM. To make HRM more dynamic and coherent, Brazilian authorities should assess the need to constitute a one-stop shop for HRM policy development, guidance and assessment. This change, however, necessarily requires preliminary changes to the structure and culture of SRH and SEGES, as SRH is presently absorbed by its negotiations on careers and with unions and its payroll administration role, and SEGES role in HRM is driven by individual negotiations with ministries and agencies on staffing numbers, although it seems that SEGES is evolving towards a role more strategy focused workforce planning (see Chapter 1). There is clearly a need for a much stronger body on HRM, with increased capacity and evolutions in the culture of the management of HRM so that it is seen and conducted in a fully professional manner by differentiating (including through different sub-units): 1. the negotiation process with unions; 2. the design of reforms and accountability frameworks for managers and units on HRM; 3. the long term strategic dialogue to be conducted on HRM with sectoral ministries and agencies regarding their strategic workforce planning and the implementation of HRM changes in their units; 4. the management of compensation and payroll. Considering the strong corporatist tendencies within the Brazilian public service by relatively narrowly defined groups of staff, it is extremely important that discussions about and negotiations with subgroups or related to the conditions of employment of subgroups be subdued to an overall HRM strategy that determines the outcome of those negotiations and discussions. This may require, at least in the short to medium term, keeping units in charge of HRM separate to avoid capture. In the longer run, however, attention should be focused on building a single HRM organisation within the Ministry of Planning in order to develop consistent and staretgic HRM policies.
256 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Box 4.10. The management of the French civil service, the DGAFP
In June 2007, the General Directorate for Public Administration and the Civil Service (Direction gnrale de ladministration et de la fonction publique, DGAFP) was transferred from the Prime Ministers office to the Ministry of Budget, Public Accounts and Public Function so that civil service and national accounts tasks are dealt with by a single ministry. The aim is to improve the balance between personnel management and the implementation of the Constitutional Bylaw on Budget Acts (LOLF), increase the transparency of public finances and make the day-to-day work of the civil service and financial services easier. The DGAFP is thus a one-stop shop for signing and countersigning requests, in total co-operation with the Budget Directorate, with which it shares joint employment and pay files so that the two directorates can work together on the steering and regulation of central government resources. In addition to the DGAFP and the Budget Directorate, the ministry includes the General Directorate for State Modernisation (DGME) which groups three state reform structures: innovation, advice and projects. In 2006, the DGAFP set in motion a major reorganisation process in liaison with the staff. This process culminated with the launch of a new organisation chart and new operating procedures in January 2007. The reform was steered by three strategic goals: i) assert the role and value added of the DGAFP vis--vis the ministries human resources directorates; ii) improve the consolidation of the human resource management elements; and iii) acknowledge and assert the vital aspect of information and communication. Its three organisational principles are: i) simplification of the management structure based on the three strategic goals to avoid creating satellites that report directly to the Director General and duplication; ii) promote a customersupplier way of working; and iii) be pragmatic. The DGAFPs traditional task is to enforce the general staff regulations that ensure civil service cohesion and unity. It provides government and ministries with expertise on staff rules, pay, pensions, working hours and the staff benefits system. It is the supervisory body for the inter-ministerial civil service schools (regional senior civil service institutes and the National Senior Civil Service School ENA). It is also responsible for monitoring social dialogue with the unions. More recently, the DGAFP has turned to steering central government human resource management and ensuring the consistency of human resources policies. Three main assignments structure this activity: i) steer staff regulation consistency; ii) prepare and implement social dialogue in the civil service; and iii) define and steer the new human resources policy and its major projects: new management procedures, manpower, job and skills planning, information systems, management of senior managers, etc. The DGAFP now works in close liaison with the Budget Directorate to propose a sustainable public finance strategy to develop world-class public policies. Two resources directorates, one in charge of central government HRM and the other in charge of its financial affairs, share a system of joint files on employment and pay and together steer and regulate central government resources as a whole. The DGAFP conducts a wide range of assignments covering: development of staff regulations and pay, revision of the staff grading scale, professional code of conduct, training, recruitment and workplace diversity, management of the senior executive grade, inter-ministerial staff benefits, amenities and associative activities, inter-ministerial health and safety provisions, and international administrative co-operation. Throughout these areas, the DGAFP is responsible for conducting and sustaining inter-ministerial social dialogue.
Source: Direction gnrale de ladministration et de la fonction publique, www.fonction-publique.gouv.fr accessed in September 2009.
Brazil could benefit from Frances experience in reorganising the management of the civil service. Like Brazil, France has a centralised HRM system, a career-based system,
and responsibility for HRM and budgeting in a single body, the Ministry of Budget, Public Accounts and Public Function. There are approximately 2.5 million public servants managed at the national level of government in France. Like France, Brazil could take advantage of having budgeting, human resources and public management in the same ministry in order to orient and co-ordinate long-term goals under a whole-ofgovernment approach that can lead to efficiency gains. Brazil might also consider Chiles experience in management of the civil service. Chile also has a centralised administration and a predominantly career-based system. However, in Chile, the central HRM body, the National Civil Service Directorate (Direccin Nacional del Servicio Civil, DNSC), is a decentralised agency of the Ministry of Finance which provides it with its legal status and assets. In addition, DNSC is responsible for the management of the senior civil service (Sistema de Alta Direccin) (see Box 4.11). Box 4.11. The Chilean agency for the management of the civil service
The Chilean National Civil Service Directorate (Direccin Nacional del Servicio Civil, DNCS) co-ordinates, supervises, and proposes measures for the modernisation of HRM public policies. The DNSC aims to: i) design policies to improve HRM in the national public administration in the areas of recruitment, career development and performance evaluation; ii) ensure an effective and efficient functioning of the senior civil service system; iii) provide specialised advice on HRM issues to the different public service agencies; iv) design and implement training programmes to strengthen the modernisation of public service agencies; v) support the professionalisation of human resource units within ministries and public service agencies; and vi) promote reforms and measures to improve HRM within the public sector.
Source: OECD (2009e), Accession Assessment Report: Chile, internal document.
Whatever the body chosen for the management of the senior executive service, it is necessary that the senior management be managed and seen as being managed by a single body able to give it direction, provide expertise on career paths and job profiles for senior managers and able to build a comprehensive senior civil service based on a strong competency framework. It should also be in a position to help develop methods and tools for managing individual senior managers careers, and conduct the internal, interministerial, or open competition to recruit senior managers (the non-political levels that should not be appointed in a discretionary manner) and oversee the political or administrative appointment of senior staff. It should also be in a position to examine all projects and requests for changes to staff regulations and grade-related pay concerning senior civil servants in order to prevent mismanagement, and able to establish a leadership development policy that focuses on the knowledge, skills, and moral values needed for effective and adaptive public service action.
Streamline SRH
The experience of OECD member countries suggests that although some central coordination and control are important for a successful HRM strategy, the focus of the central HRM body should be more on monitoring, evaluation and reporting progress, both as a means of feedback and as a means of expanding accountability in HRM. Brazilian authorities may thus wish to explore the possibility of reorganising the Ministry of Planning along lines better suited to a long-term vision for the civil service in order to
258 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT facilitate co-ordination, monitoring, formulation of policies and guidelines, and provision of technical support to line ministries and agencies. Two examples from OECD member countries may be helpful (see Box 4.12). The more strategically oriented design of the French DGAFP focuses on inter-ministerial dialogue, which is one of the key functions of a central HRM body. It conducts a wide range of assignments grouped into three main areas: information and legislative drafting, careers and remuneration, and inter-ministerial policies. The US Office of Personnel Management (OPM) organises its functions around executive areas for the development and co-ordination of HRM policy, and programme divisions which focus on the management of particular programmes in the provision of HRM services to other governmental organisations and internal units. The French model may be more compatible with the Brazilian organisational culture as both DGAFP and SRH/SEGES are part of a central administration body whereas OPM is a decentralised agency of the US federal government. Box 4.12. Examples of the design of central HRM bodies in OECD member countries
The French General Directorate for Public Administration and the Civil Service (DGAFP) is headed by a general director and assisted by a director and an assistant director and a head of office. The DGAFP has three sub-directorates encompassing all the directorates structures and assignments: The Information and Legislative Drafting Sub-Directorate, which comprises:
the Legislative Drafting and Information Systems Bureau; the Forward Planning and International Affairs Bureau; the Statistics, Studies and Evaluation Bureau; the Communications Unit; the Documentary Resources Centre.
The Careers and Remuneration Sub-Directorate, which comprises: the Public Sector Employment Planning Bureau; the Special Staff Regulations and Careers Bureau; the Senior Management Staff Bureau; the Pay, Pensions and Working Hours Bureau.
The Inter-ministerial Policies Sub-Directorate, which comprises: the General Staff Regulations and Social Dialogue Bureau; the Social Policies Bureau; the Recruitment and Training Policies Bureau.
In the United States, the organisational structure of the Office of Personnel Management reflects the primary business lines through which OPM carries out its programmes and implements its strategic objectives. The core management team can be divided into executive offices and programme divisions.
Box 4.12. Examples of the design of central HRM bodies in OECD member countries (contd)
Executive offices:
the Office of Communications and Public Liaison (OCPL), which promotes the policies and directives of the President and of the OPM director; the Office of Congressional Relations oversees and co-ordinates all of OPMs congressional relations, and provides strategic advice and legislative analysis to the director; the Office of the General Counsel (OGC) provides legal advice and representation to OPM managers and leaders; the Office of Modernization and Human Resources Line of Business oversees the development, implementation and standardisation of new and existing programmes within OPM; the Office of the Inspector General conducts comprehensive and independent audits, investigations and evaluations relating to OPM programmes and operations.
Programme divisions:
the Federal Investigative Services Division (FISD) provides federal agencies with personnel background investigations to ensure federal employees meet critical personnel security standards; the Human Capital Leadership and Merit System Accountability Division (HCLMSA) supports the Human Capital Program by leading the transformation of human capital management across government; the Human Resources Products and Services Division (HRPS) provides high-quality, cost-effective products and services that help OPM customers recruit and retain the best talent through the Talent Services Program; maintains independent administration of the Voting Rights Program; develops and maintains results-oriented leadership through the Leadership Capacity Services Program; the Management Services Division (MSD) provides OPM offices with full range of administrative services, including human capital and equal employment opportunities management, information technology, facilities management, etc.; the Office of the Chief Financial Officer (OCFO) is responsible for implementing the Presidents Management Agenda within OPM and providing OPM offices with the full range of financial management, strategic planning and budget services; the Strategic Human Resources Policy Division (SHRP) designs, develops and leads the implementation of innovative, flexible, merit-based human resources policies and strategies that enable federal agencies to meet their missions and achieve their goals.
Source: Direction gnrale de ladministration et de la fonction publique, www.fonction-publique.gouv.fr accessed in September 2009; and US Office of Personnel Management, www.opm.gov, accessed in September 2009.
260 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT In addition, Brazilian authorities should consider the advantages of creating a unit with specific responsibility for strategic HRM policy development. The rationale is the growing recognition of the need to delegate HRM authority to line ministries and managers. However, policy making has to remain under the responsibility of the central HRM body. The proposed unit would conduct studies and research on human resource management in the civil service and monitor public sector employment developments and HRM practices in Brazil and abroad. More importantly, it would design, develop and implement innovative, flexible, merit-based HR policies and strategies from a whole-ofgovernment perspective and align HRM with other managerial reforms. The French Forward Planning and International Affairs Bureau of the DGAFP, the US Strategic Human Resources Policy Division of OPM, and the Planning and Evaluation Unit of Petrobras can serve as models in this respect.
Professionalise human resource management experts

The Ministry of Planning needs to give HR professionals the opportunity to develop a career both inside and outside of the public service. If the HRM function is to be strategic, traditional HR expertise must be combined with an understanding of how it can help meet the strategic goals of the Ministry of Planning and of government. In other words, the HR career path must make it possible for HR professionals (in the Ministry of Planning and in sectoral ministries and agencies) to stay in their position, move sideways to gain broader experience, take on a bigger role, or (temporarily) move out of the public service. This, however, should not mean yet the creation of another career in a system where the number and fragmentation of careers are already a problem. It is also important that HRM professionals are not stuck in an HR career and may move to other management positions. It is thus more recommended that special development opportunities be provided to individuals within general public management careers or careers from which future managers are often drawn in order to build future capacity in HRM. The recent proposal to Congress (see note 31 of Chapter 1) to create a career of executive analysts could help fulfil this gap, although the idea is to create a culture of strategic workforce management and not increase the number of analysts carrying out daily personnel processes. Ideally, future capacity should also draw from those organisations of state-owned enterprises and the private sector where HRM capacity is strong already and which can provide a wealth of ideas for HRM within direct administration. ENAP has already developed courses in HRM, which is an excellent start and all managers should also be trained in HRM, but preferably when the accountability framework for HRM has been designed. Therefore, the Ministry of Planning may consider developing a profile for the HR career. In the Cabinet Office of the United Kingdom, HR professionals meet standards which include specification of effective performance outcomes. The important point is to define what is expected of HR professionals and how to measure their performance (see Table 4.1).
Delegate and deregulate the HRM function while increasing accountability

There is a growing consensus in the Brazilian government about the need to empower line ministries and managers to make specific HRM decisions and to deregulate the HRM function to make it more flexible. However, Brazil, like OECD member countries, faces the challenge of finding a balance between central control and co-ordination and the delegation of HRM decision-making authority to operational levels. In this area, Brazilian authorities may be interested in exploring the Canadian reform which transferred HRM
authority from the central HRM body and the Prime Minister to deputy ministers (see Box 4.13). The main points are the need to restructure the central HRM authority for its new role and the delegation of authority to make operational decisions while maintaining responsibility for HRM policy making with the central HRM body.
Table 4.1. HR Professional standards in the UK Cabinet Office
Key areas Knowing the business Professional standards Understand the organisation and how HR can best contribute to its success. Outcome of effective performance
Understand and communicate organisations priorities, and support line managers in working towards them. Align HR policy and services to the organisations business. Use people information to assist decision making in the line. Demonstrate how HR practices and effective people management help line managers achieve their goals. Deliver HR services in a professional, responsible, accessible, and cost-effective way. Use information to inform HR decisions and make improvements within HR. Engage, enable and challenge line managers to manage their people effectively. Continuously update and develop professional knowledge. Ensure confidentiality, and practice HR to the highest ethical standards. Communicate effectively to help make change happen. Demonstrate a positive attitude to change. Use change and project management techniques to develop and deliver HR plans. Listen, question and communicate in an influential and engaging way. Present clear and concise information in response to queries. Deliver outputs on time and to the agreed standard. Reinforce the organisations values and desired behaviours through example. Demonstrate a proven track record for customer service, delivery and capability.
Demonstrating HR expertise
Understand and deliver practices suitable for organisation which lead organisational success
HR the to
Act as a change agent
Make organisational change happen
Personal credibility
Personally demonstrate the organisations values, build trust with partners in the organisation, and proactively contribute to organisational success
Source: UK Cabinet Office (2009), HR Professional Standards Handbook, Cabinet Office, United Kingdom.
Box 4.13. Delegation of HRM responsibilities to deputy ministers in Canada

The 2003 Public Service Modernization Act (PSMA) introduced significant changes to revitalise and improve human resource management in the Canadian public service. It aimed to facilitate hiring the right people when and where they are needed, promote a more collaborative approach to labour-management relations, focus on learning and training for employees at all levels, and clarify roles and accountabilities of the centre, managers, deputy ministers of organisations and human resources specialists. The PSMA emphasised delegation of responsibility from central agencies and the Public Service Commission (an independent oversight agency) to deputy ministers in departments and agencies with a view to allowing departments and agencies to better adapt their human resources management approaches to their needs. Deputy ministers, in turn, can delegate their authority to managers. These provisions gave departments and agencies more flexibility and authority and made them answerable for the consequences of their decisions. Deputy ministers derive their HRM responsibility from their ministers whose mandate is to manage their departments and agencies effectively. Other legislative statutes give deputy ministers a number of direct responsibilities for human resources management. These responsibilities provide the foundation for deputy ministers human resources management and allow tying human resources to business needs at the departmental level. This new managerial flexibility is balanced with the renewed role of the central agencies, which is moving from prescriptive rules-driven and enforcement-oriented activities to providing riskbased oversight, focusing on accountability and enabling departments and agencies to meet the new HRM standards. The role of the central agencies is currently being structured along the following three functions:
Leadership: development and implementation of direction-setting strategic frameworks, policies and clear HRM indicators and measures to assess departmental performance. Oversight and monitoring: provision of monitoring and reporting systems designed to facilitate accountability and transparency. The People Component of the Management Accountability Framework provides a common structure for assessing HRM in departments and agencies. The assessment is based on clear indicators and measures and risk assessment, supported by robust administrative systems and surveys of employee perceptions. Enabler: supporting deputy ministers in performing their HRM functions based on clear demand and in areas that allow for economies of scale or elimination of duplication of effort, or where functional support is required.
Currently, a new wave of initiatives is under way, including Public Service Renewal, to strengthen the decentralisation of the HR function in the Canadian public service and enable deputy ministers to better manage their human resources in accordance with their business needs. These initiatives are supported by improvements in data collection processes to ensure that the centre has the information required to assess the overall state of the public service workforce, workplace, leadership and infrastructure and determine the degree of required interventions, if any.
Source: Information provided by Tatyana Teplova, the Canadian peer reviewer.
The Ministry of Planning may also draw valuable lessons from the state-owned enterprises Petrobras, Banco do Brasil, or Correioros. Although they operate under different rules with different constraints, they are relevant in defining what might be acceptable within the Brazilian culture, even if their practices would have to be adapted to the functioning of government ministries. Petrobras is an example of vertical delegation within the organisation. Every unit has an HR manager and corporate policy is set by corporate HR. Managers are able to adapt HR practices to their business needs. BNDES (Banco Nacional de Desenvolvimento Econmico e Social Brazilian Economic and Social Development Bank) is an example of horizontal delegation. Although it has to get authorisation from the Ministry of Planning regarding staffing levels, it is free to decide on the composition of its workforce and may suggest a way to begin to delegate HRM authority to other public organisations. However, the experience of OECD member countries like Australia, New Zealand, the United Kingdom and the United States suggests that to delegate HRM authority to line ministries it is necessary to have strong mechanisms to ensure accountability and transparency and internalised core values so as to protect against patronage and other forms of misuse of authority in the human resources field. Thus, Brazilian authorities may reflect on the following issues: 1. Establish reliable mechanisms for accountability and transparency for oversight but also for feedback. As the Brazilian government moves towards delegation and deregulation, the key question is how to ensure joint action, common standards, and shared systems, on the one hand, and vertical accountability for individual performance of the administrative unit, on the other. Brazilian authorities should make sure that delegation entails holding ministries and agencies to account for improvements in strategic HRM. It is therefore advisable to establish performance indicators to measure effectiveness and compliance in the Brazilian HRM system. The US Office for Personnel Management offers a clear example of how to hold agencies to account for improvements in strategic human resource management by providing agencies with direction and consultative support; monitoring compliance with civil service laws and regulations and appropriate use of flexibility/authority; and providing agencies with tools, resources, guidance, education, and evaluation to improve HR operations (see Box 4.14). The UK Cabinet Office, as the central HRM body, carries out capability reviews to ensure that departments and agencies have the necessary resources and expertise to meet their strategic goals (see Box 4.15). The results of these exercises help uncover deficiencies and can be used to propose solutions but also to enhance accountability. In Brazil, such reviews might also be used in relation to deregulation and delegation of HRM authority, and particularly to assess whether further deregulation and delegation would make the HR system more efficient and effective. In the same vein, the Canadian Management Accountability Framework (MAF) gives Brazil a valuable example of accountability when delegating HRM authority. MAF defines the conditions that need to be in place to ensure that the government is well managed and to promote management excellence. MAF makes annual assessments of most departments and agencies and public reports on the state of management, including HRM (see Box 4.16).
Box 4.14. The US strategic alignment system: human resources as strategic partner
In order to hold leaders accountable for results, OPM has aligned key elements of the human resources system to performance indicators. Key HR element: the agencys human resources system is proactively involved in the agencys strategic and workforce planning efforts.
Effectiveness indicators
HR staff consults with managers and supervisors across the agency on various management issues. HR staff provides advice and guidance to managers on human capital strategies tailored to meet organisational needs. HR staff assesses and anticipates needs of customers (managers, supervisors, employees and applicants), develops functions and services to support and fulfil those needs, ensures quality of services, and communicates programme requirements to customers. HR staff involves line functions in programme review and/or development and is invited by line functions to organisational meetings and retreats to identify and advise on HR issues. Federal Human Capital Surveys and/or other surveys or interviews indicate that HR staff members are viewed as internal consultants and human capital strategies support the broader agency mission. Policies describe the process and procedures for communicating customer issues, resolving customer dissatisfaction, and handling customer comments. HR measures and communicates the value of products and services it provides through feedback mechanisms.
Compliance indicators
The agency holds managers and human resources officers accountable for efficient and effective HRM in support of the agencys mission and in accordance with merit system principles. Key HR element: the agencys human resource management system includes a staff with the skills and competencies required for partnering with executives and managers in strategic planning.
Effectiveness indicators
The agency uses HR staff development needs and assessment studies to identify competency gaps. The agency has strategies (e.g. automation, competitive sourcing, recruitment, mentoring and training) to close competency gaps in HR staff and provide managers the advice and tools they need to operate. HR staff conducts programme reviews, customer surveys, and regular assessments of information systems and other support functions to identify areas for improvement.
Box 4.14. The US strategic alignment system: human resources as strategic partner (contd)
Analysis of staffing levels includes considerations such as HR servicing ratio, HR staff distribution by series/grade/pay band, HR staff average grade/pay band, age, length of service, training completed, retirement eligibility, HR supervisory ratio, and ratio of personnel actions to personnel staff.
Key HR element: the agencys human resource system has an information system able to provide relevant and reliable data for making fact-based human capital decisions. HR staff partners with managers to:
Conduct workforce studies and analyse results in collaboration with managers; the data are used for decision making. Use all available functions and features of the agencys current system to facilitate effective agency workforce management (e.g. process and report on personnel transactions, query data) and provide routine reports to managers. Participate as appropriate (i.e. depending on level in organisation), in agency and/or OPM initiatives to support the OPM Enterprise Human Resources Integration Initiative, which will support HR management across government. Participate, as appropriate, in other e-government initiatives such as e-payroll and the modernisation of the retirement system. Use of HR information system to promote employee self-service and manager access to a broad range of human capital information and indicators.
Source: US Office of Personnel Management, www.opm.gov accessed in September 2009.
Box 4.15. The British Civil Service Capability Group and the Capability Review Programme
The Cabinet Office is the centre of government and the head office of government (together with the Treasury). Its overarching purpose is making government work better. The department has three core functions which enable it to achieve this purpose: i) supporting the Prime Minister to define and deliver the governments objectives; ii) supporting the Cabinet to drive the coherence, quality and delivery of policy and operations across departments; and iii) strengthening the civil service to ensure that it is organised effectively and has the capability in terms of skills, values and leadership to deliver the governments objectives. The Cabinet Office is responsible for overall human resource management in the civil service. The Civil Service Commissioner ensures that the civil service remains effective and impartial by setting standards of recruitment and hearing appeals under the Civil Service Code. To support its functions, the Cabinet Office created the Civil Service Capability Group to strengthen the effectiveness of the Civil Services organisation, leaders and workforce to deliver the governments business priorities and improve public services. Its objectives are:
to support departments to raise their capability to deliver their strategic purpose; to promote HR capability and effectiveness across the civil service;
Box 4.15. The British Civil Service Capability Group and the Capability Review Programme (contd)
to promote a more effective and diverse civil service; to provide modern and efficient HR services on behalf of the civil service.
In 2005, the Cabinet Office, through the Civil Service Capability Group, launched the Capability Review Programme to assess the capability of central government departments against a common framework of leadership, strategy and delivery. The reviews aim to: improve the capability of the civil service; assure the public and ministries that the civil service is well equipped to develop and deliver departmental strategies; and help departments act on long-term key development areas. The reviews provide an assessment of capability for departments, identify key areas for improvement and set out key actions. Each review is carried out by a team of external reviewers assembled specifically for the department under review, and supported by the Capability Review Team from the Cabinet Office. The reviewers are drawn from senior leaders in the public, private and third sectors. From 2010 a new model of capability will be implemented with new key features against which the performance and activities of departments will be assessed. These are:
linking capability to results and outcomes; sharpening the focus on delivery; challenging departments to innovate; raising the bar on collaboration; emphasising the importance of achieving value for money.
Source: UK Civil Service (2009), The Capability Review Programme, www.civilservice.gov.uk/about/improving/capability/index.aspx, accessed in December 2009.
Box 4.16. The Canadian Management Accountability Framework

In the context of increased emphasis on results and performance management and increased delegation of management functions to departments, the Canadian government has developed a Management Accountability Framework to ensure departmental accountability for management results, including human resources. The MAF is structured around ten key elements that collectively define management and establish the expectations for good management of a department or agency. It sets clear indicators and measures that can be used to gauge performance over time to help managers, deputy ministers, and central agencies to assess progress and to strengthen accountability for management results. The MAF is part of the governments efforts to move away from prescriptive rules and heavy central regulation to focus on risk-based monitoring and accountability for results. The government uses annual MAF assessments to identify management strengths and weaknesses in individual departments and agencies and ultimately government-wide. The assessment process leads to a joint agreement on specific management improvement action plans and ultimately public reporting on the state of management. MAF assessment now also factors into deputy ministers performance appraisals.
Box 4.16. The Canadian Management Accountability Framework (contd)

Public service values By their actions departmental leaders continually reinforce the importance of public service values and ethics in the delivery of results to Canadians (e.g. democratic, professional, ethical and people values). Governance and strategic direction The essential conditions internal coherence, corporate discipline and alignment to outcomes are in place for providing effective strategic direction, support to the minister and Parliament, and the delivery of results. Policy and programmes Departmental research and analytic capacity is developed and sustained to assure high-quality policy options, programme design and advice to ministers. Risk management The executive team clearly defines the corporate context and practices for managing organisational and strategic risks proactively. People The department has the people, work environment and focus on building capacity and leadership to assure its success and a confident future for the public service of Canada. Stewardship The departmental control regime (assets, money, people, services, etc.) is integrated and effective, and its underlying principles are clear to all staff. Citizen-focused service Services are citizencentred, policies and programmes are developed from the outside in, and partnerships are encouraged and effectively managed. Accountability Accountabilities for results are clearly assigned and consistent with resources, and delegations are appropriate to capabilities. Results and performance Relevant information on results (internal, service and programme) is gathered and used to make departmental decisions, and public reporting is balanced, transparent, and easy to understand.
Learning, innovation and change management The department manages through continuous innovation and transformation, promotes organisational learning, values corporate knowledge, and learns from its performance.
The People Component of the MAF provides a common structure for assessing human resources management in departments and agencies. It sets out vision, expectations, key performance indicators and associated measures for sound human resource management. It centres on key workforce, workplace, leadership and HR infrastructure outcomes, and associated measures. The outcomes are:
a workforce that is talented, professional, representative, engaged and productive, with the required competencies and values to meet current and future needs; a workplace that is healthy, safe and fair and enables employees to work effectively in a supportive environment and a culture of excellence; strong leadership and management capacity to effectively lead organisations and people in a complex and dynamic environment; effective infrastructure, which facilitates effective organisational planning supported by strategic and enabling human resources management and achieves high levels of client satisfaction.
The key people management performance indicators provide a solid foundation on which managers at all levels, including deputy ministers and human resource professionals, can build their accountability regimes for quality human resources management and assess their organisations business and human resources outcomes. Every department and agency (except for small and micro agencies) in the federal public service is assessed in each component of the Management Accountability Framework (MAF). Each MAF component is further subdivided into Areas of Management (AoM), each of which has lines of evidence with associated rating criteria and definitions to facilitate an overall rating by AoM. The four-point assessment scale measures each AoM as either strong, acceptable, opportunity for improvement or attention required.
Box 4.16. The Canadian Management Accountability Framework (contd)

The MAF assessment process is performed annually by Treasury Board Secretariat (TBS) (OCHRO performs assessment of the people component of MAF), based on evidence submitted from departments and agencies to support the defined quantitative and qualitative indicators within the framework. Assessments are completed by TBS representatives, including a quality assurance process to ensure results are robust, defensible, complete and accurate. The seven main steps to the MAF assessment process are detailed below: Step 1: Priority Setting: The MAF assessment process begins with the previous rounds context page provided by TBS to the deputy head, which outlines the key priorities to be addressed in the coming year. During the year, action plans and efforts are made by the departments and agencies to address the identified deficiencies and improve managerial performance within the organisation. Step 2: Preparation and Document Submission: In advance of the assessment round, TBS conducts awareness and training sessions to introduce changes in the assessment criteria. Once the assessment round commences and based on the documented assessment and rating criteria developed for each AoM and line of evidence, departments and agencies submit documentation to enable an assessment against the measures. Step 3: Assessment: The process to arrive at a preliminary assessment includes detailed analysis, reviews and approvals within the policy and programme sectors of TBS. This includes vertical (a review of all AoM results for an individual department or agency) and horizontal reviews (a comparison of AoM results across all departments and agencies assessed), which are performed by senior TBS officials. The draft assessment results are released to the individual departments and agencies for feedback. Step 4: Finalisation and Reporting: Based on the feedback from the departments and agencies, the assessment results are finalised. In addition, a context page and a streamlined report are drafted to support the assessment results and identify management priorities for the upcoming year. Step 5: Communication: The final reports are approved by the Secretary of the Treasury Board and a letter is sent by the Secretary to each deputy head informing them of the results and identifying priorities to address in the upcoming year. To provide support in the development of action plans, bilateral debriefings are scheduled between the deputy head and the Secretary for selected departments. This is complemented by the evaluation process in the Senior Deputy Minister Committee, whereby the Clerk of the Privy Council provides direct feedback to each deputy head regarding his/her performance, including the MAF results for his/her department. Step 6: Post-Mortem: Once the round concludes, the TBS launches a postmortem with staff, management area leads, and MAF co-ordinators in various departments and agencies. The purpose of the post-mortems is to assess the process and methodology to identify areas for improvement to be integrated into the subsequent round. Step 7: Publication: To ensure transparency to the public, the MAF assessment results are publicly released on Treasury Boards website.
Source: Information provided by Tatyana Teplova, the Canadian peer reviewer, and Treasury Board of Canada Secretariat (2009), TB Management Accountability Framework, www.tbs-sct.gc.ca/mafcrg/index-eng.asp, accessed in December 2009.
2.
Consolidate and simplify the regulatory framework that governs HRM and focus it on efficiency controls. The complex regulatory HRM framework has unnecessary rules and regulations that interfere with the timely completion of work, although the Brazilian emphasis on legality and regulatory controls is understandable in a country that aims at building a transparent and ethical public service. However, regulations should allow for as much flexibility as possible, and, at least, be replaced by management policies that do not necessarily have to be in laws or decrees; deregulating certain areas would help achieve the necessary flexibility. For instance, less rigid legal barriers to staff mobility could allow the use of mobility mechanisms such as secondments and loans. There is little doubt that controls should be rationalised as HRM capacity in core ministries and departments is strengthened. Some existing audit and control capacity should be moved to efficiency controls, as is already being developed. A focus on outputs and outcomes would allow ministries and agencies to retain regulation that they need but that other organisms do not. Encourage more collaborative working practices in HRM policy development and a culture of collective negotiation. In several OECD member countries, the central HRM body is supported by other reform-oriented groups or networks that help identify priorities, propose specific reforms and provide advocacy for reform in general. These networks may have management authority for human resources or constitute forums for discussion of experiences and exchange of information. In Brazil, there seems to be a movement towards more collaborative action on HRM through SIPEC. This is still at a very early stage but must be encouraged. The United Kingdom has lengthy experience with implementing collaborative arrangements in the management of the civil service and shows that collaborative working practices help foster ownership of reform initiatives and a whole-ofgovernment approach in HRM (see Box 4.17).
3.
Senior managers need to be trained in negotiation. ENAP and the network of public administration schools can play a leading role here. The focus should be on developing strategic leadership at higher levels with components such as strategic thinking, political savvy, vision, external awareness, influencing or negotiating, and cultural awareness. Several OECD member countries have experience in developing strategic leadership which may Brazil may wish to explore. Norway focuses on the development of strategic leadership for managers and management (see Box 4.18). 4. Develop a strategy for the dissemination of HR best practice and research. The Ministry of Planning should assume responsibility for ensuring that line ministries, departments and agencies have sufficient information to make strategic decisions on HRM. Regular seminars or conference programmes to share experience and best practice in HRM, such as the National Conference on Human Resources in the Federal Public Administration, should be continued and expanded. Such forums open spaces for debate, exchange of ideas and communication among key actors and allow for a deeper understanding of critical HRM issues. A good example is the Finnish Finwin programme which brought together managers from different ministries and agencies to participate in a series of seminars in order to reach a shared understanding and vision regarding future challenges and their management. Finwin facilitated the dissemination of information and the exchange of positive and negative lessons on reform in different areas and levels of government. The programme, directed at top civil servants and employee representatives, facilitated horizontal dialogue regarding a common vision. The programme involved not only
270 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT seminars but also learning cafs and workshops to complement discussions held during the seminars. Box 4.17. Civil service governance in the United Kingdom
The two key governing bodies for the civil service are the Permanent Secretaries Management Group (PSMG) and the Civil Service Steering Board (CSSB), both chaired by the Cabinet Secretary. The two groups work together to ensure that the civil service as a whole has a clear direction and is a coherent and effective organisation. The PSMG discusses issues of strategic importance to the civil service. It provides corporate leadership to the civil service as a whole where a single position is required. Its membership consists of all permanent secretaries and other selected permanent secretaries and directors general. The PSMG considers issues of importance to the civil service as a whole, including: senior leadership, efficiency, reputation, employee relations, risk, financial management, standards and values, capability of the civil service as a whole, skills, pay, pensions. The CSSB focuses on specific areas delegated to it by PSMG: i) civil service risk management; ii) development of a strategy for improving (and defending) the reputation of the civil service; iii) ensuring the civil service delivery capacity; iv) deciding what type of employer the civil service wants to be what the offer in workforce needs are going to be in the future; and v) supporting departments to ensure shared services arrangements are implemented. CSSB has executive powers in these areas.
Source: UK Civil Service (2009), Civil Service Governance, www.civilservice.gov.uk/about/leads/governance/index.aspx, accessed in September 2009.
5.
Lead by example by becoming the expert unit for strategic HRM. To become the leading central government body for strategic HRM, provide direction and be recognised as an authority not only in theory but also in practical terms, the Ministry of Planning must provide evidence of its commitment to strategic planning, flexibility and delegation. The organisation of the ministry and its administrative units must be guided by a common vision and strategic objectives. Thus, the Ministry of Planning should direct its efforts towards building leadership and staff capacity to further become a high-performing organisation. It should focus on improving business operations and provide exemplary internal customer service. It should make better use of financial and human resources to meet strategic goals and use performance results to inform management decisions.
Box 4.18. Strategic leadership programme in Norway

The Directorate of Public Management, a subordinate agency of the Ministry of Labour and Government Administration, has the main responsibility for leadership development in Norway and has introduced a detailed strategy for managers and management. The strategy acknowledges the greater skills and demands required of the leader in a technologically advanced and more diverse society. Ongoing training of managers is recognised as being as important as initial training, and the manager of today is supported by seminars and workshops to aid in relating to staff and to acquire skills in encouraging teamwork, vision and incentive. Increasing the representation of women in management is regarded as a priority.
Source: OECD (2001), Public Sector Leadership for 21st Century, OECD Publishing, Paris.
Build ownership for delegating HRM

Delegating HRM authority has proved to be a complicated and controversial task in OECD member countries as it surely will be in Brazil. The nature of the required changes will depend on Brazils cultural, political and historical context. To move the debate forward, Brazil needs to consider HRM as a strategic tool to reach broader social and economic goals. This entails a major cultural change in Brazilian public administration and strategic thinking. Stakeholders need to realise the benefits and the need for a different perspective on HRM. Before delegating HRM authority to line ministries, departments and agencies, the Ministry of Planning should lead the debate on a number of key issues. What level of responsibility are HRM units in line ministries ready to take on? Brazilian authorities may need to analyse the capacities of different HR units in line ministries, departments and agencies to assess whether they have the resources and technical knowledge to take on new responsibilities. The Ministry of Planning should conduct a review to assess the extent to which deregulation and delegation are possible and needed in order to make the HR system more efficient and effective. The implication is that not all HRM authority can or should be delegated so as to preserve coherence and cohesiveness. What HRM authority can be delegated to managers and supervisors in a first wave of delegation? What are the priority areas? Managers and supervisors would like more responsibility for classification, job profile definition, determination of staffing levels and performance management in order to make HRM practices more flexible and be able to adapt their workforce to their business needs. However, it is important to know whether managers and supervisors are trained well enough to conduct these new activities. How can the Ministry of Planning help line ministries take over new responsibilities considering that delegation implies additional workload? Training provided by SRH and ENAP as part of the modernisation of HRM will be crucial. The Ministry of Planning will need to assess the HRM training and information needs for both HR staff and managers and supervisors. Moreover, it will need to inform managers and supervisors about the deregulation that has taken place, the responsibilities that have been delegated, current flexibilities, and the tools that are available.
272 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Until what hierarchical level is delegation feasible in a first wave of delegation of HRM authority? Delegation and deregulation are ongoing, long-term processes. In addition to assessing what HR responsibilities line ministries and departments are able to take over, the extent to which vertical delegation can take place should be evaluated. HR units and senior managers will likely have to take responsibility first and then start delegating down the chain of command to managers and supervisors. Which HRM areas is it feasible to delegate to line ministries and managers? The Ministry of Planning, in discussions with other ministries and agencies, would need to determine the HRM areas that can be delegated. Delegation of authority on equal opportunity matters, employee discipline, staffing and labour relations may be a possibility in a first wave and would allow managers to exercise their independent judgement in hiring the best candidate and promoting deserving employees.
4.3. Reform implementation strategies The experience of OECD member countries

The most important thing to say about reforms in public administration is that there is no single formula for success. Each country has its own specific characteristics. The organisation and culture of its public services have been shaped over time by its unique circumstances. Previous administrative reforms will have left their mark. The legislative framework in which the public service operates is different in each jurisdiction. There are different priorities, different coalitions of interests at work and different capacities to design and implement reforms. It is essential, therefore, to ground any discussion of reform in specific situations. Comparison is useful, however, as a way to learn from experience in other countries. OECD member countries lengthy experience and wide variety of public service reforms provide a rich source of information for anticipating and dealing with issues and challenges that are commonly encountered. However, the solutions and reform pathways that are chosen in Brazil will reflect the priorities of the Brazilian government and must be appropriate to the particular circumstances of the Brazilian public service. Perhaps the key lesson from the experience of OECD member countries is that HRM reforms should not be approached as stand-alone modernisation initiatives (Huerta Melchor, 2008). They should be based on an overall view of how government should function in order to meet emerging challenges and they should be consistent with public service values and other public management reforms. Strategic HRM reforms should be shaped by the centre of government and should embody a clear vision of the connections between the features of the HRM system such as how people are recruited, organised and motivated and the objectives and priorities of the public service. In recent years, OECD member countries have better linked the design and implementation of HRM reforms to the overall management and strategy of public service organisations. Similarly, HRM reforms have increasingly been seen as crucial for the successful implementation of other reforms. Most importantly, countries have used staff management tools to provide incentives for staff to implement other reforms. Staff are now considered a strategic resource that should evolve as the priorities of organisations evolve, and their attitude towards broader management reforms is seen as not only crucial but also as manageable.
OECD member countries5 have found that failure to integrate HRM in public management reforms creates many difficulties for the implementation of reforms owing to inconsistencies between staff management reforms and reforms involving budgeting, performance management or increased consultation with citizens. HRM has often tended to lag behind because structural HR reforms are often politically sensitive, subject to political cycles, and sometimes require difficult negotiations with unions. In addition, HRM, more often called personnel management, may be seen as an administrative function rather than a core strategic element and the personnel function itself may have insufficient capacity to contribute to strategic reforms. The evolution of the role of the central HRM body, the linkages between organisational strategies and the HR strategy, and the capacities of managers and HR staff in ministries and agencies for managing people are all determining factors in terms of moving from personnel management to strategic HRM. HRM reforms in the public service face some special challenges (Matheson and Kwon, 2003). Changes to HRM will, over time, affect the culture and values of the public service. It is essential therefore to carefully examine the likely impact of changes, to ensure that the changes send a consistent message regarding the desired behaviour of managers and staff, and to monitor their impact to ensure consistency with the core values of the public service. For example, one of the challenges is to improve flexibility and create incentives for performance and innovation in order to respond to changing needs and increase efficiency while maintaining a collective and distinctive public service ethos. Different OECD member countries have responded to this challenge in different ways, with varying emphases on matters such as tenure of civil servants and the maintenance of a unified civil service structure (OECD, 2005). A common trend, however, has been renewed debate about the distinctive role and ethos of the public service and a heightened awareness of the need to make more explicit the connection between HRM policies and the type of public service countries wish to have in the future.
Sequencing reforms
OECD member countries experience has been that the sequencing of reforms is very important. This has to do with the interdependencies between reforms and the way different elements of HRM fit together to provide a coherent direction and to give additional leverage to reform efforts. Sequencing is highly contextual: choices about how to approach reforms depend on what has already been done, on identifying key levers of change and serious blockages, on issues of capacity to implement different types of reform, and on using windows of opportunity. There is an element of analysis and an element of pragmatism. It is therefore risky to generalise about experience in other countries. Approaches to HRM reforms have varied widely. However, it is worth commenting on a few key issues. One of the lessons learnt from several decades of reform in OECD member countries is that while all public service reforms should include attention to HRM, it is very important to focus first on how public organisations should function and then to design appropriate HRM practices. For example, some countries have tried to put staff performance management at the core of their reforms before organisations performance management is properly functioning. Unfortunately, not only have such reforms not been successful, but they have also undermined the credibility of performance management and the collective ethos.
274 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT A related key lesson is that reforms should build upon one another and that this is best achieved by having an overall roadmap of reforms rather than a series of disjointed initiatives. For example, the pace in decentralising HRM to empower managers has to be adapted to the pace of implementing the appropriate budgeting and accountability systems, developing the necessary management capabilities and embedding a culture of managerial responsibility needs to be firmly embedded. A highly centralised HRM system makes it difficult to implement individualised HRM practices such as performance management. Industrial relations issues may need to be tackled before HRM reforms can be attempted. It may be that changes to the legal framework of public service employment are also needed in order for changes to take place.
Phases of reform
HRM reforms are usually lengthy processes. Results may not be apparent for a number of years. OECD member countries experience shows that it is useful to see the reform process in three phases, each with its own requirements and challenges.6 They are: Planning defining the need and motivation for reform and setting its strategic objectives by developing a vision which can be communicated convincingly to all key stakeholders and implemented in the political timetable available to the government. Implementation building leadership for the reform, overcoming resistance to change and creating a sense of ownership of the reform among affected stakeholders. Sustainability avoiding reversal of the reform, assessing the degree of success and evaluating results.
The main tool used by OECD member countries in the planning phase has been the organisation of large-scale public debates and consultations, as in France in 2007 with Confrence nationale sur les valeurs, les missions et les mtiers du service public et de la fonction publique (National Conference on the Values, Missions and Functions of the Public Service and the Public Administration) and in Spain in 2006 with the public debates and consultations organised in order to create consensus for reform of the Basic Statute for the Public Employee (EBEP). Independent expertise and evaluation can also be helpful in the planning phase. A recent example is the Irish governments invitation to the OECD to carry out a review of the public service in 2007. The review formed the basis for a reform strategy launched by the Irish government in 2008. The goal of the implementation phase is to build strong leadership to address the challenges of the reform process, create political commitment for the reform and overcome the inevitable resistance to change. This requires cultivating a sense of ownership of the reform among the various stakeholders so that legal and institutional changes lead, over time, to lasting changes in behaviour and in the culture of the public service. Clear electoral mandates can provide a basis for implementation. The French RGPP (Revue gnrale des politiques publiques) reform in 2007 is a good example of an election that provided the strong leadership and political legitimacy for a major reform. Compensation of potential losers is frequently used to build support, or at least reduce resistance to, reform. It is clear from the experience of OECD member countries that
reforms cannot be implemented successfully without the right incentives. Compensation may be financial (improving or restructuring remuneration) or non-financial (improving jobs to make them more satisfying or enhancing the human capital of public servants to increase their employability and value on the labour market). In Ireland, for example, payment of salary adjustments resulting from a pay benchmarking exercise required public service organisations to have introduced performance assessment and changes in work practices. The public service tends to be highly unionised, so that engaging public service unions and gaining their co-operation is likely to be important for building staff support for reforms. Particularly for HRM, changes may have to be negotiated with staff and their unions. Reform of labour relations can itself be an important plank in the reform strategy. Countries such as Germany, Ireland, the Netherlands and the Nordic countries have longestablished partnership models with close involvement of unions. Complementary reforms can also strengthen implementation. E-government is a good example. A significant component of the Copernicus reform in Belgium, the French reform of the public administration and the Canadian Public Service Renewal Initiative all involved the development of e-government. As reforms imply changes in skills and mindsets, training and development of public servants are also important. Moreover, training can help lead to job enrichment and career progression. OECD member countries experience has been that front-line staff, middle managers and senior executives have to be trained. For example, in Canada, the Public Service Renewal Action Plan focuses on employee development at all levels. In the United Kingdom, the Professional Skills for Government initiative is a key component of public service renewal. In the United States, a focus on building human capital in the public service is both a driver and a tool of reform. Effective leadership is essential for launching and implementing reforms. OECD member countries such as Finland, Germany, New Zealand, Norway and Sweden have found that the first, crucial stage in the development of leadership is selection of leaders and a clear definition of the competencies required of future leaders. Good communication is needed at all stages of reform. It is especially important in the implementation phase to keep stakeholders well informed and to make sure that clear, accurate information about progress is circulated. This helps to build ownership and address the criticisms that inevitably arise. Many countries also use innovations in government awards programmes, another example of using communication to support the implementation of reforms. The main tools used by OECD member countries to sustain reforms are evaluation and reporting. In Canada, a high-level advisory committee provides the Prime Minster with a detailed annual public report on progress. In France, public reporting and the issuing of a scorecard on each measure helps sustain current reforms. In Ireland, a highlevel performance verification group evaluates and reports on implementation. One of the major risks to sustainability is the fact that the time horizon of reforms may extend beyond the mandate of the government and that a change of government may lessen the commitment of the political leadership. A number of OECD member countries have tried to ensure long-term support for reforms by creating independent institutions responsible for implementation, as in the case of local government reforms in Australia.
276 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Ombudsmen and high-level committees have also proved useful for sustainability. An Ombudsman can be a powerful communication channel and when reforms affect public service employees individually, an Ombudsman can play a role in voicing and addressing grievances. High-level committees can also enable different groups of stakeholders to voice their concerns and can address issues and claims.
The situation in Brazil Legacy of past reforms

The situation in the Brazilian public service today is shaped by the legacy of past reforms. This must be taken into account in deciding how to approach further change. Brazil has gone through several phases of public administration reform since the mid1980s. The emphasis has changed under successive governments with the result that reform efforts have suffered from a lack of continuity. The main waves of reform are detailed below. The 1988 Constitution aimed at re-establishing a classical bureaucracy to repair the damage done under the military regime and by the clientelistic use of the institutional framework put in place by the military by early democratic governments. All recruitment was to be carried out through competitive public examinations and a much stricter public service employment framework was established, with all employees to be hired with civil service status. Huge cuts in public service employment and salaries were made in a very short period of time under the Collor Government in the early 1990s. This severely weakened the capacity of the public service and badly damaged the morale of those who remained in public service. Those dismissed during the Collor Administration have since been reintegrated through a long and complex process of amnesty. Under the first Cardoso Administration (1995-99), an ambitious managerial reform programme was launched along new public management (NPM) lines, including programme budgeting. The aim was to make service delivery more effective by restructuring the administration and introducing performance incentives. Major restructuring of public service organisations along agency lines was attempted, some elements of public services were to be outsourced or privatised, and efforts were made to introduce performance-based management methods. Efforts to import NPM into a largely unprepared and weakened public service did not really succeed, leaving a legacy of partially implemented arrangements. It is therefore not surprising that HRM policies and structures in the Brazilian public service today are a mosaic resulting from an accumulation of disconnected reforms, several of which have been incompletely implemented or reversed. The legacy of past reforms has created a situation that will require a lot of groundwork to make a case for reform, build the necessary trust and support among stakeholders and create sufficient capacity to implement changes. A number of legacy issues will have to be addressed if Brazil is to attempt a new set of HRM reforms. Changes of direction under successive governments have undoubtedly created a strong degree of reform fatigue, confusion, lack of trust and cynicism. In such a context, public service organisations tend to crave continuity and resist change, while employees tend to defend their interests strongly against any perceived attempts to change their conditions of employment.
Past reforms have been largely top-down, with insufficient involvement of managers and staff and insufficient advance capacity building. Reforms that have been more or less imposed by the centre have probably left a legacy of suspicion about the handling of future reforms. Some areas of the administration are still recovering from past staff cuts. Although recruitment has resumed under the Lula Administration, ministries capacity is quite uneven, with some still needing to build up their skill base. Line ministries, especially, still require investments in capacity. Past efforts to introduce performance-oriented HRM have left a legacy of performance pay and performance appraisal arrangements that do not work as intended (see Chapter 3), as performance pay is not linked to performance and implementation of performance appraisals is very uneven. This will make it difficult to implement new performance-related arrangements. However, while performance orientation is weak, the central HRM agency is committed to strengthening performance management.
Current focus on adjustments rather than long-term strategic and coherent reforms
The Lula Administration has not attempted long-term strategic HRM reform, focusing instead on adjustments to address a number of specific issues. This has enabled Brazil to moderate the most serious deficits of the patchwork of previous reform attempts. The main concerns have been to reform civil service pensions and to build up the capacity of the public service through renewed recruitment and investment in training. The government has made strong efforts to improve relations with public service unions. In 2003, discussions were established with the unions and negotiation structures were put in place, through a system of permanent negotiation table. These have provided a forum for regular discussions between the administration and the unions. To date, the focus has been mainly on wages and 77 collective agreements have been concluded, affecting 1.3 million public servants. The government has had some success in reforming public service pensions and restructuring remuneration for some key groups of public servants. It has thus demonstrated a capacity to deal with stakeholders and build support for sensitive reforms touching on the pay and conditions of individuals. Some efforts are also being made to improve key areas of HRM such as performance management, training and competencybased management. There is no indication, however, of a long-term view of what the public service should look like, and what the core values of the reforms undertaken so far are. Staff report that public management reform in general has not been a priority of this government, and a search in the Brazilian literature confirms this. Considering past waves of reforms, this has probably been a judicious choice in order to rebuild trust and confidence and allow time to plan reforms.
278 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT In sum, the Brazilian government currently focuses on adjustments to HRM that lack a strategic focus which will undoubtedly weaken their impact on the overall performance and effectiveness of the public service. This is probably a result of the chequered experience with past reforms.
Capacity to plan and implement reforms

The HRS and SEGES in the Ministry of Planning are the central HRM agencies for designing HRM reforms. Judging by the recent work on strategic workforce planning, competencies, performance management and the remuneration system, they possesses the potential to design and implement reforms provided they further build capacity as described earlier and provided they are able to isolate themselves from corporatist pressures by individual groups of staff. The capacity of HR professionals and line managers to implement changes appears generally weak as a result of the highly centralised, input-based approach to HRM. However, the skills and capacities of HR managers appear to be strong in some areas of the Brazilian public service, and these organisations could serve as examples to others. This is particularly true of some of the state-owned enterprises that are exposed to the market, such as Petrobras, which has a highly sophisticated approach to HRM.

The inter-related issues identified by this peer review show that there is a strong case for a coherent long-term reform of HRM in Brazils federal administration. Brazil should build on the significant progress made in areas such as integrity and the human resource information system and on the foundations being laid in areas such as workforce capacity building and performance management. Key areas in which the federal government would benefit from reforming its HRM include: workforce planning, pay setting, recruitment, job categories, performance management, the senior management system and managing competencies. In these areas, Brazil will need to take a coherent approach to reform rather than engage in case-by-case adjustments. Brazil may draw from the experience of OECD member countries regarding the need to integrate HRM properly with other public management reforms (OECD, 2009h: 7). The OECD Economic Survey of Brazil noted the need to improve human resource management to complement ongoing initiatives towards greater cost-effectiveness of government operations, with better integration of human resource management into the budget-making process and long-term budget planning (OECD, 2009d). It is important to underline that recommending a strategic, focused and coherent approach does not mean tackling everything at once. On the contrary, Brazil should not attempt a big bang reform. The experience in OECD member countries is that reform takes time, with successive phases of reform building on one another. It will take time to build up the necessary support for reform among stakeholders and to create the necessary capacity to implement reforms in the Brazilian administration. Brazil is currently in a phase of its political and policy planning cycles that offers a window of opportunity to build the case for reform and plan a set of integrated changes to modernise HRM as part of the governments new programme and the new multi-annual plan. In deciding how to approach reforms, the Brazilian government might usefully
consider the different policy tools which OECD member countries have found useful for planning, implementing and sustaining reforms (see Table 4.2).
Table 4.2. Public administration reform challenges and possible policy tools
Key challenges Planning reform phase Policy tools
Bridging information gaps and developing a clear roadmap with measurable intermediary targets and final outcomes
Independent systems of expertise and preliminary evaluations
Public debates and consultation strategies Creating support for the reform: citizens and civil Seize the moment: take advantage of crises servants Implementation phase
Building on leadership and political commitment to the reform Overcoming resistance to change and creating a sense of ownership of reforms Developing capacity and knowledge
Communication Sustaining phase
Clear electoral mandates Compensating losers Implementing complementary reforms Contracts and experimentation Training plans and public administration schools
Avoiding policy reversals Evaluating reform and assessing success
Evaluation mechanisms Independent and permanent institutions Ombudsmen and high-level committees
Source: OECD, (2009i), Supporting Administrative Change: Greece, Working paper H6, unpublished.
Build the case for reform

An essential first step in building the case for reform is to create a sense of the challenges facing the public service. Brazil is evolving rapidly and is facing new challenges: rapid economic growth, continuing integration into the global economic system, ageing of the population, rising expectations of citizens and environmental issues, to name but a few. The Brazilian government is well aware of the need to further strengthen the capacity of the public service so that it can play its part in meeting these challenges. An approach used with success in some OECD member countries to build the case for reform has been to organise a large-scale public debate on the public service. Such a debate would be an opportunity for the Brazilian government to engage a wide range of stakeholders from across the society in discussions on the type of public service that will best serve Brazil in the coming years. It would involve looking at the core values that should underpin the public service and how they should be reflected in the way the public service operates. It would also mean looking at how HRM policies and practices should be modernised in order to respond to the emerging challenges facing the government and to bring them into line with other public management reforms. This type of debate can be useful not only for opening up a discussion on the need for reform; it can also begin to draw out information regarding the interests of different stakeholders which can provide valuable input into subsequent planning of reforms. Citizens tend to have a whole-of-government opinion about how the public service functions, i.e. one that is undifferentiated by level of government. Because the core principles of HRM in government are the same at the different levels, the federal government tends to be seen as taking the lead in management reforms. It is thus
280 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT legitimate to consider public service users as essential stakeholders in HRM reforms in the federal government and to hear their views. The work on core values also requires their involvement, since this should help strengthen trust in government. Up to now, the views of citizens and users have not been particularly heard. However, Brazil has a growing level of social participation and should build on this to draw citizens and users into the debate about the need for reform. Frances recent experience with organising a national debate on the future of the public service is a good example of a broadly consultative but well-focused process that brought concrete problems to the fore and led to the implementation of a number of key HRM reforms. A national debate on the values, missions and functions of the public service was launched by the Prime Minister in 2007. The debate, lasting six months, resulted in the publication of a White Paper analysing the problems identified and setting out the proposed reforms (see Box 4.19). Box 4.19. France: National debate on the future of the public service
The debate took a variety of forms and involved users of public services, public servants, trade unions, public service employers, ministers, members of Parliament and specialists on public administration. Five public round tables were organised on the following themes: public service values, the experience of reform in other countries, public service and Europe, public service users, and management of public service organisations. A permanent public Internet forum was set up to invite comments and proposals and a number of public opinion surveys were carried out on public service values and the public perception of reforms already in progress as well as possible future reforms. Sixty working groups provided a forum for users of public services and public servants to exchange views and discuss their respective expectations on important issues such as equity, mobility, management and quality of services. Schools of public administration organised debates involving young public servants and users of services. A consultative panel involving employers, unions and high-level experts met monthly to discuss the issues arising from the public debate and carry forward the work. Experience in a number of other countries was looked at. Three conferences involving the ministers responsible for the public service and the social partners on key topics such as purchasing power, social dialogue and professional careers were held over a period of several months. A week-long conference in February 2008 drew up a first synthesis of the results of the national debate and the White Paper was delivered to the Minister in April 2008.
Source: Silicani, Jean-Ludovic (2008), Livre blanc sur lavenir de la fonction publique: Confrence nationale sur les valeurs, les missions et les mtiers du service public et de la fonction publique, Ministre du budget, des comptes publics, et de la fonction publique, Paris, www.ensemblefonctionpublique.org/le-livre-blanc.php, accessed in September 2009.
The Spanish consultation process for the Basic Statute for the Public Employee that took place in 2006 is another useful example of how a public debate and consultation strategy can create support and legitimacy for a major reform (see Box 4.20).
Box 4.20. Spain: The consultation process for the Basic Statute for the Public Employee
In 2006, Spain carried out a consultation process for reforming the Basic Statute for the Public Employee (the EBEP). The participation of a number of political actors and members of civil society in the discussions on the reform draft during the planning phase proved crucial for obtaining legitimacy, support, and political commitment from authorities at every level of government. The need for change was perceived internally by political and social forces at different levels of government, with all stakeholders pursuing the same goals. According to the Ministry of Public Administration, there was consensus at three levels: institutional (with the governments of the autonomous communities and with the representative organisation of municipalities); social (with the unions) and political (with all political parties). Although the Spanish Constitution of 1978 called for the creation of a statute for the civil service, the civil service was still regulated by a pre-constitutional Civil Service Law of 1964, partially amended by a Law of 1984. Therefore, the EBEP was intended to fill a gap in the legislation concerning the public service and public employment by creating a single normative framework establishing the principles for the management of the public service. Political parties, autonomous communities, local entities, social agents, trade unions and citizens took part in the discussions through national forums, co-ordinated by the Ministry for Public Administration, to enrich the initial draft of the EBEP. The parliamentary debate resulted in more than 300 amendments to the draft, which was finally approved in April 2007. For instance, one of the most debated issues was the scope of application of the EBEP. It was decided, after lengthy debate, to include all members of the staff working for the public administration both civil servants and labour employees, including temporary staff. The EBEP is a single management framework applicable to 2.5 million civil servants and public employees from the central administration, autonomous communities and local entities. It aims to improve the working conditions for public employees and, at the same time, the quality of the public services by adopting a performance-oriented culture in the public service.
Source: Huerta Melchor, O (2008), Managing Change in OECD Governments: An Introductory Framework, OECD Working Papers on Public Governance, No. 12, OECD Publishing, Paris.
Crucial aspects of both the French and Spanish debates were the wide scope of involvement, the variety of forums and, most important of all, the genuine opportunity for stakeholders to have input into formulating the reform and thus to have a sense of ownership and legitimacy. This is essential in designing a reform with a good chance of succeeding and being sustainable.
Involve stakeholders
The acceptance of a reform needs to be built from the outset by involving key stakeholders in the conception and planning phase. Stakeholder involvement is also essential in the implementation phase. Those affected are unlikely to feel ownership of a reform unless they have a clear idea of where it is going, what it intends to achieve, how it will be implemented and, most important of all, how it will affect them personally, the role they are expected to play in the process and how they will be supported in dealing with change.
282 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Key stakeholders in the Brazilian context include the government itself, the legislature, the judiciary, public servants, retired public servants, trade unions, political parties and society at large. The experience with past reforms and adjustments will have given the Brazilian government a good picture of the likely stance of the different stakeholders with regard to future reform efforts. This should help to plan engagement with stakeholders. Mobilising support requires identifying the potentially supportive constituencies and convincing them of the value and likely success of reforms. Governments from states and municipalities are also stakeholders in the sense that they will be affected to some extent by any reform at the federal level. It is worth consulting them to build ownership of the reform and help draw attention to HRM reform in government throughout all levels. Building political support for reform in the Congress and securing the support of the judiciary will require careful attention, but will be necessary. A major challenge in terms of stakeholder management is to involve rank and file public servants. The strongly hierarchical tradition of the Brazilian public service means that there is not a well-developed culture of involvement and consultation in the workplace. Public servants are not used to being consulted about change and many managers are not used to involving their staff or resolving employee relations issues on the ground. The establishment of the Ombudsman for the public service has provided a channel for employees to express their views and get information on matters affecting their employment. However, reform processes generally call for a range of ways of involving staff in order to win their support, the most important of which is probably the way their line managers deal with them and the managers attitudes to the reforms. The Mexican administrative reform process provides an interesting example of how a sense of ownership can be created among civil servants, as it recognised the necessity and advantages of drawing lessons from both local and external experiences (see Box 4.21). Box 4.21. Mexico: Building ownership of change
The federal government organised national meetings of administrative development once or twice a year, giving local and municipal governments, federal ministries and state-owned enterprises the opportunity to exchange experiences regarding the administrative modernisation process. The impact of these meetings was twofold: they showed the importance of internal and external criticism and helped to create ownership of the reform process, as civil servants from different levels of government were allowed to provide feedback. Although the administrative modernisation programme focused on the central government, local and municipal governments were inspired by these events, and by the fourth year of the implementation of the reform, governors and municipal presidents were taking an active part in the meetings to share their experiences and provide feedback to the central government.
Source: Huerta Melchor, O (2006), Understanding International Agents of Policy Transfer: The Case of the OECD and Mexican Administrative Reform, PhD Thesis, University of York, York, United Kingdom.
Trade unions have become more important in negotiating change and the experience of the past several years provides a basis for further positive engagement between the government and public service unions in negotiating reforms. Previous negotiations have enabled both the employer and union sides to develop the skills and attitudes needed for successful negotiation. The chances of achieving sustainable reforms would be enhanced by a stable, mature method of engaging with the unions. The negotiation process is still being developed and it is relatively fragile in so far as it depends on the good will of the current government for its continuation. As over 400 different unions represent public servants, any departure from a stable system of negotiation involving the union confederations would likely lead to a fragmented situation in which different unions pursued competing interests. Industrial relations systems in the public service vary widely across OECD member countries and Brazil will have to find its own formula. However, engagement with unions would appear to be a promising channel for bringing about change. The history of reforms in OECD member countries is filled with examples of failed reforms due to weaknesses in the negotiation process with unions, such as the difficulties for reforming HRM in Japan since 2002; today Japan is focusing on increasing union negotiating rights regarding pay and working conditions. Unions are not the only players representing the interests of public servants. There are strong professional associations in the core civil service which vigorously defend the interests of their members. Nevertheless, the successful restructuring of remuneration for groups such as auditors, diplomats, some of the police points to the ability to achieve trade-offs. The capacity of the Ministry of Planning to involve them all in joint reform efforts will certainly determine at least partially the outcome of the reforms. In this context, the Irish social partnership process (described in Box 4.22) may point to one of the possible ways forward. Since 1987, social partnership has enabled government, unions, employers, and social interests to forge durable agreements on economic, industrial relations and social policy matters.7 Key features of the Irish partnership approach are that it is an ongoing process which is dependent on a shared understanding of problems and policy tools and is characterised by a problem-solving approach designed to produce consensus (National Economic and Social Council, 1996:66). Social partnership is widely acknowledged to have been a major factor in Irelands economic success over the past two decades before the economic crisis (ODonnell, 2001). However, it has also encountered problems, outlined in Box 4.22, from which others could learn. And while the partnership process has struggled to gain traction in the very difficult conditions created by the current economic crisis, few would advocate abandoning it.
284 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT Box 4.22. The social partnership approach in Ireland
Since 1987, Irelands economic and social policy has been conducted within the context of social partnership. While wage bargaining has been a core aspect of social partnership, its remit has been much broader than wages and industrial relations. Seven multi-year social partnership agreements have been concluded, covering a range of macro-economic, industrial relations and social policy matters. The first, agreed at a time of profound economic and social crisis was the Programme for National Recovery, which ran from 1987 to 1990. The most recent was Towards 2016, Ten-Year Framework Social Partnership Agreement 2006-2015. Social partnership originally involved central government, employers, trade unions and farming interests. Since 1997, the community and voluntary sector, comprising networks and organisations engaged in combating poverty and social exclusion and promoting equality and social justice has been included. The government has assumed a strong leadership role in social partnership. The partnership negotiations take place in the Department of the Taoiseach (Prime Minister) and are chaired by the Secretary General of that department. The Department of the Taoiseach is also responsible for quarterly monitoring of the partnership programme.
Public service modernisation

Modernisation of the public service is one of the planks of the current partnership agreement. Payment of the pay increases for the public service in the case of each sector, organisation and grade, is dependent on verification of co-operation with flexibility and ongoing change, including co-operation with satisfactory implementation of the agenda for modernisation set out in the agreement, maintenance of stable industrial relations and absence of industrial action in respect of any matters covered by the agreement. To this end, the social partners agreed on a Performance Verification Process. Performance Verification Groups (PVG) were set up for the civil service, education, health and local government sectors. Each sectoral PVG has an equal number of management, trade union and independent members and, in addition, an independent Chair. The PVGs agreed the reporting templates, procedures and timetable to be used to assess and verify progress in relation to performance (as described above mainly implementation of reforms and stable industrial relations) at sectoral, organisational and grade level, including specific performance indicators. Action plans for implementation have to be approved by the PGVs. Heads of organisations prepare progress reports which are presented to the appropriate partnership committee for consideration and then sent to the Secretary General responsible for the sector. Each sectoral PVG makes an assessment of progress in advance of each of the dates for payment of salary increases specified in the partnership agreement and decides whether the conditions for the relevant pay increase have been met. The Public Service Monitoring Group and the Public Service Sub-Committee of the National Implementation Body set up under the partnership process are responsible for overseeing implementation of these arrangements.
Partnership institutions
The partnership process is supported by a number of institutions that play an important part in its effective functioning. The National Economic and Social Development Office (NESDO), a statutory body, comprises three bodies whose membership includes the interests involved in social partnership:
The National Economic and Social Council (NESC) is charged with analysing and reporting on strategic issues relating to the efficient development of the economy and the achievement of social justice. Prior to each round of partnership negotiations, NESC prepares a report setting out its analysis of economic and social trends and the parameters within which the new programme should be negotiated.
Box 4.22. The social partnership approach in Ireland (contd)

The National Economic and Social Forum (NESF) monitors and evaluates the implementation of policies and programmes aimed at achieving equality and social inclusion. The National Centre for Partnership and Performance (NCPP) monitors and promotes partnership at the level of enterprises and organisations.
Conditions for effective working of partnership

The following conditions for the effective working of partnership have been identified by NESC (National Economic and Social Council, 1996:66):
The partnership process involves a combination of consultation, negotiation and bargaining. The partnership process is heavily dependent on a shared understanding of the key mechanisms and relationships in any given policy area. The government has a unique role in the partnership process. It provides the arena within which the process operates. It shares some of its authority with social partners. In some parts of the wider policy process, it actively supports formation of interest organisations. The process reflects inter-dependence between the partners. The partnership is necessary because no party can achieve its goals without a significant degree of support from others. Partnership is characterised by a problem-solving approach designed to produce consensus, in which various interest groups address joint problems. Partnership involves trade-offs both between and within interest groups. The partnership process involves different participants on various agenda items, ranging from national macroeconomic policy to local development.
The partnership process has not been without its critics, who have pointed to a number of problems, including (ODonnell):
That the scope of partnership has expanded to include so much that its strategic focus has been blunted, the speed of decision-making has been reduced and the proliferation of partnership bodies is using up too much time and energy. That the spread of the partnership ethos is undermining policy making and implementation because there is excessive consultation; That there are shortcomings in the results, such as areas where public policy or public institutions do not work well and a widening disparity in incomes and living standards between the best and the least well off.
Sources: National Economic and Social Council (NESC) website, www.nesc.ie, accessed in September 2009; ODonnell, R. (2008), The Partnership State: Building the Ship at Sea, in Adshead, M., P. Kirby and M. Millar, Contesting the State: Lessons from the Irish Case, Manchester University Press, Manchester and New York; ODonnell, R. (2001), The Future of Social Partnership in Ireland: A Discussion Paper Prepared for the National Competitiveness Council, National Competitiveness Council, Dublin; Teague, P. (2002), The Irish Experiment in Social Partnership, paper presented at the International Institute of Labour Studies, Geneva, 10 February; Irish Civil Service Performance Verification Group, www.cspvg.gov.ie/towards-2016-agreement/section-33performance-verification-process, accessed in September 2009.
Recognise winners and losers

Reforms generally create both winners and losers. Creating solid support for an integrated, balanced reform will require careful identification of winners and losers and delicate trade-offs to win support without damaging the integrity of reform measures. Reform of the system of job categories is one area that is likely to create winners and losers. In the federal administration, differences in the remuneration and career structures of different groups of public servants across and within job categories and between different ministries mean that defence of sectional interests tends to be strong. There is considerable scope to build support for change by avoiding further adjustments of individual job categories and instead making the case for how a comprehensive restructuring of job categories would result in a fairer system with better career opportunities based on transparent criteria. In this sort of reform, the situation of potential losers can be addressed by transitional measures. Compensating potential losers is a tool frequently used to achieve support or at least curtail opposition.
Strengthen the capacity for reform

Senior and middle managers are essential to successful reforms. They need to be fully engaged in the conception and planning phases and their capacity to carry through the implementation is decisive. The disparities in the capacity of HRM functions and line managers in different parts of the Brazilian public service tend to suggest that some reforms should be implemented gradually, starting with the most capable organisations and using the experience accumulated to support implementation in areas with less capacity. However, this approach would not be suitable for all reforms. For example, general changes relating to pay and employment conditions of public servants are better introduced for everyone at once, not least for reasons of equity. While there is considerable management capacity at the senior levels, senior managers probably do not see themselves as a cohesive leadership group and therefore would not currently be in a position to provide strong leadership for reform. If anything, senior managers would tend to defend the interests of their ministries and agencies, a culture which is probably reinforced by the method of appointing people to DAS positions. While the establishment of new inter-ministerial management careers such as the EPPGG provides an opportunity to build a more unified management cadre, these groups are still relatively small and their members are still relatively junior. The Brazilian government could look to the experience in a number of OECD member countries in which building the necessary leadership for public service reform has been a priority (see Box 4.23). Middle managers also have a great deal of influence on whether change is accepted or rejected. The centralised approach to HRM in the Brazilian federal administration at present means that while middle managers are asked to take on added responsibility for matters such as training and performance management, they have relatively little say in formulating HR policies and few real management tools. That aside, middle managers in any organisation can tend to see changes in HRM as burdensome and their support and active involvement needs to be cultivated carefully. The experience of middle managers in the Brazilian public service has probably not, in most cases, equipped them well to act as supporters or even champions of reform.
Box 4.23. Leadership for reform: development strategies in selected OECD member countries
Finland. The Finwin leadership initiative focused on creating a common understanding and vision in 150 ministries and agencies in various administrative branches which were highly independent in their operations. The message was that all efforts should point to a common aim. The programme was directed at top-level civil servants and employee representatives. It started in June 2007 and ended in May 2008 with a turnout of some 1 200 participants. The programme was organised around seminars which served as forums for discussion on topics like well-being at work, social innovations, functions of the state sector and regional administration reform. Other forums included learning cafs and workshops that complemented the discussions held at the seminars. Finwin concentrated on training top managers for managing change. It intended to provide them with a common vision and the necessary communication and leadership skills to face a changing environment. The programme facilitated horizontal dialogue. Senior managers from different ministries and agencies had the opportunity to discuss where they were going, what they wanted from the future, where they would be in ten years, and the desired level of quality. The seminars gave them the opportunity to share experiences and fears regarding the future and the challenges ahead. United Kingdom. Since 1999, the civil service has been undergoing major reform. The Cabinet Office is defining the leadership skills required for the 21st century in order to establish programmes to ensure that these skills are obtained and maintained. Two projects have been implemented to define leadership skills: i) identification of a set of core competencies; and ii) the senior civil service leadership project. Leadership seminars and workshops have been conducted in order to canvass opinion and establish the parameters of these projects and have been attended by most senior civil servants. It is believed that senior civil servants must have the insight and the skills to communicate the broader vision, be receptive and responsive to staff, and open to change and learning. United States. Leadership development has been supervised by the Office of Personnel Management. One of its strategies is to draw up a list of Executive Core Qualifications (ECQs) which are continually monitored and adjusted to suit current requirements. Training schemes are based on these ECQs, which are designed to foster creative thinking, the ability to negotiate, to relate to staff, to handle increasingly complex information technology, to improve business acumen, and to recognise particular talents among staff. The OPM established the Office of Executive and Management Development (OEMD) to organise assessment programmes, training seminars and continuous learning opportunities. The OEMD also engages in partnerships with agencies and departments within the federal administration to examine and improve leadership skills according to their specific requirements.
Sources: OECD (2001), Public Sector Leadership for the 21st Century, OECD Publishing, Paris; Huerta Melchor, O. (2008), Managing Change in OECD Governments: An Introductory Framework, OECD Working Papers on Public Governance No. 12, OECD Publishing, Paris; US Office of Personnel Management (2009b), Leadership Development and Training, www.leadership.opm.gov, accessed in August 2009.
One of the most important steps that could be taken to increase the capacity for reform would be to modify how HR professionals and line managers function. If the Brazilian government is to successfully implement key HRM reforms such as competency and performance management, it has no choice but to place more responsibility on line managers. The nature of these processes is such that they cannot be run successfully as centralised processes at arms length. Line managers and HR staff in ministries will have to assume more responsibility for HRM and be given the tools that
288 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT will allow them to shift from an input focus to more strategic HRM, with the management of staff being part of the strategic management of the organisation. This requires delegating more responsibility for HRM from the Ministry of Planning to ministries and agencies, at the same time as the competencies of managers and HR staff to handle delegated HRM are built up. The two processes need to go hand in hand. The skills of HR units in ministries and agencies should be reinforced. Regular meetings and common training involving these units and the Ministry of Planning would be useful for building confidence and communication. Although efforts are being made to train HR staff to equip them with skills to implement new HRM policies, for example in the area of competencies, a major effort would be needed to raise their skills. Brazil is by no means unique in this regard. The experience in both the public and private sectors in OECD member countries has been that a significant investment in training and development is needed to equip HR staff to act as internal HR consultants to line managers and to play a more strategic role. Experience also shows that new HR skills may need to be recruited from outside the public service. There is scope for Brazilian public service organisations to learn from one another. Some of the state-owned enterprises, in particular, have very well-developed HRM capabilities and ways to share this experience and expertise should be found. For example, HR specialists and managers from organisations that have successfully implemented changes could participate in training for others, setting up networks and organising temporary placements for HR staff in the organisations that are considered to have the best HRM functions. Although there is no doubt that it is probably easier to implement HRM change in state-owned enterprises than in core government ministries and agencies, they can also be considered as experiences that can be acceptable in the context of the Brazilian culture, and their successes and failures can likely feed the reform process in government. The Ministry of Planning will also need to strengthen its capacity to plan HRM reforms in a holistic way in the context of the governments policy objectives and strategic plan. A determining factor will be the extent of political commitment which the ministry and the secretariat can secure and their ability to bring other ministries and agencies along (see Section 4.2).
Sequence reforms carefully

It is difficult to generalise about the sequencing of HRM reforms. As noted earlier, it is a mistake to import a blueprint from elsewhere. Nonetheless, the experience of OECD member countries can point to mistakes that should be avoided. Two critical areas on which many OECD member countries have focused attention in order to create the conditions for further reforms are cultivating shared and explicit values, as highlighted in Section 4.1, and building leadership capacity, as in the examples given above. Successful change in these areas creates a positive environment for further change and provides the necessary skills and leadership to manage change. Canadian public service reforms since 2001 show how successive reforms can build upon one another (see Box 4.24). The Public Service Modernization Act, launched in 2001 and approved by Parliament in 2005, significantly changed core legislation affecting human resource management: the Public Service Employment Act (2005), the Financial Administration Act (2005), the new Public Service Labour Relations Act (2005) and the new Canada School of the Public Service (2004). It also encompassed eight major nonlegislative reforms in the area of leadership, compensation and human resource systems
(Scott-Douglas, 2009b). The Canadian experience also illustrates the sorts of governance structures that could be put in place to implement and sustain reforms.
Box 4.24. Public Service Renewal in Canada (2001-09)

The Canadian government felt that reform of the federal public service was needed to address long-standing fragmentation of the roles and responsibilities for HR management and to modernise its management practices, especially by increasing the authority and accountability of deputy ministers for HR management in their departments, increasing the flexibility of managers in the area of staffing while preserving the merit principle, enhancing the training systems and improving the dispute resolution mechanisms. In fact, this major reform was a follow-up to previous attempts to modernise the federal civil service, which can be traced back to the 1960s (Glassco Commission) but that accelerated in the 1990s. In 1990, the White Paper on the Renewal of the Public Service was published, together with the First Annual Report from the Clerk of the Privy Council (the highest public authority in Canada) and the plan entitled Public Service 2000 (PS 2000). In 1995 a programme review was launched to identify the most effective and cost-efficient way of delivering programmes and services. In 1997, the La Relve Initiative sought to address two problems: first diminishing job satisfaction and levels of motivation of public employees; second, the low capacity of the public service to attract, develop and retain employees. It was followed in 1999 by the first Public Service Employee Survey. These earlier reviews and experiences with reform convinced the government and senior civil servants that a huge and comprehensive reform was necessary, despite the strong efforts made over the years to increase responsiveness in the civil service, cut costs and implement modern HRM methods. The expected results of the reform were, first, a shift from a rules-based, process-laden regime to one of values and appropriate oversight based on judgement on a complex set of performances. Second, the goal was to implement more flexible management of human resources to increase the governments ability to meet its objectives. Third, the reform aimed at greater transparency to allow more efficient oversight of the public sector by the Parliament and enhance accountability. Fourth, more modern HRM was expected to yield positive results in matters of job attractiveness and productivity of the public sector. The Treasury Board, a committee of ministers who serve as the management board of the government, had overall responsibility for the reform. It was supported by the Treasury Board Secretariat, the Public Service Human Resources Agency (as it then was), the Canadian Centre for Management Development (as it then was), and the Public Service Commission. A dedicated task force, led by a senior deputy minister seconded for the project, was created in 2001 and reported to the President of the Treasury Board, who had overall ministerial authority. The team, drawn from HR specialists across government, numbered about 25. Within each department, the assistant deputy minister responsible for human resources management was involved in departmental planning and all deputy ministers were consulted regularly. It was also an important management priority for the Clerk of the Privy Council who is head of the public service. The task force was disbanded once the legislation was passed and implementation was largely the responsibility of the Public Service Human Resources Agency.
Box 4.24. Public Service Renewal in Canada (2001-09) (contd)

Once the reform was passed, a new governance structure was charged with supervising implementation. A Deputy Minister Committee on Public Service Renewal is in charge of advising the Clerk of the Privy Council on establishing a strategic framework and policy approach. It also develops and monitors action plans. A Prime Ministers Advisory Committee on the Public Service was also established in 2006. It aims at giving advice to the Prime Minister and to the Clerk of the Privy Council on the renewal of the public service. This new structure is consistent with the new logic of HR management in Canada. On the one hand, the deputy ministers now have primary responsibility and accountability for managing their workforce. On the other, co-ordination structures allow mutual assistance and overall consistency in the reform. There were a number of core elements to the Public Service Modernisation Act reform:
the Treasury Boards role as employer of the public service was consolidated; the Public Service Commissions role as the guardian of the merit principle was reaffirmed and reinforced and it retained sole authority over staffing, carrying out investigations and audits and reporting to Parliament (most of its operational functions were transferring to the Public Service Human Resources Agency); all staffing responsibilities were delegated from the Public Service Commission to deputy ministers; learning and training responsibilities and resources were largely consolidated within the new Canada School of Public Service and its mandate was enlarged beyond the senior levels of the public service; a new internal governance committee was formed to manage HRM within government, comprised of deputy ministers; and a new dispute resolution tribunal came into effect (with increased mediation services).
In addition there were specific non-legislative reforms in areas such as classification, compensation policy, learning policy, a values and ethics code, term employment policy, and recruitment policy and practices. Management tools were also developed to allow/encourage adoption of reforms by each line ministry. Government branches were encouraged to adopt integrated plans in order to manage the reform rigorously. Recruitment methodology was totally reshaped, in particular by targeting specific audiences in terms of skills. Employee development plans were implemented including training, talent management and performance management programmes. Lastly, web-based tools were developed to facilitate collective staffing and standardisation of work/qualification descriptions. The governance structure is completed by a set of instruments aimed at continuous assessment of the reform and its outcome. Surveys of public service employees are carried out on a regular basis, and the state of the legislation and its implementation is reviewed on a regular basis. The Clerk of the Privy Council establishes an annual report tracking progress and setting priorities to sustain momentum.
Source: Scott-Douglas, R. (2009b), Public Administration: The Processes of Reform. A Practitioners View on the Architecture, Levers and Conditions of Success for Administrative Reform, paper commissioned by the OECD-GOV, unpublished.
For the sequencing of reforms, Brazil should start by putting in place the necessary foundations for effective HRM before attempting other reforms. Developing the workforce planning system and accountability framework of managers are essential steps in this regard. This will help start shifting from an input focus towards more strategic HRM, at the same time as HRM capacities in the Ministry of Planning and sectoral ministries are strengthened. Reforming the system of job categories and developing a job classification system are essential undertakings and will require careful preparation in terms of technical analysis and stakeholder management. Nevertheless, reforms are essential and should probably be phased in over several years, as has been done for example in France with the merging of corps. The risk is that this gives interest groups opportunities to undermine the reform or change it in their favour. An alternative is a complete change of system such as Spains in 1984, but this option may be less realistic considering the importance of the job category system in Brazil. Training and competencies should also be tackled at the outset and Brazil has made a good start in this regard. Competencies and leadership development for senior managers should have priority. Training to build the capacity of line managers and HR staff should also be prioritised. Brazil should not attempt to implement highly sophisticated performance management and competency management systems at this stage. Implementation should be sequenced to gradually build up the necessary capacity. Building the performance management and competency systems should be used as an opportunity to improve collaboration with ministries, thereby laying the foundation for further delegation of responsibility in the future. Workforce planning also offers opportunities to build collaboration and to develop capacity within ministries. Improving the recruitment system will be easier if competencies are already in place. Development of job profiling would also be valuable for improving recruitment. Improved management of senior management should be addressed at an early stage, even though this is likely to be a sensitive issue. Reforms along the lines recommended in the report would send an important signal about values which could help to build support for other reforms. Another important point is that agents attention can only focus on a few reforms at a time. Reformers should make special efforts to clarify the specific goals of a reform before developing a catalogue of reforms to be prioritised according to the goals that have been set.
Sustain reforms
As noted earlier, evaluation, reporting and oversight by high-level, independent bodies are key tools in tracking progress and sustaining reforms. The Canadian practice of an annual public report published by the Prime Ministers Advisory Committee on the Public Service is an example of this (see Box 4.25). In some countries, independent and permanent organisations have been set up to ensure that leadership of a reform is sustained over time. Comparative case studies of the performance of such organisations highlight some of the characteristics that seem necessary to guarantee their ability to help sustain reforms (see Box 4.26).
Box 4.25. Canada: Reporting progress on public service renewal

The Prime Ministers Advisory Committee on the Public Service, which is made up of experienced independent experts, makes recommendations for areas related to public service renewal in Canada, and overall progress is reported by the Clerk of the Privy Council in his annual reports to the Prime Minister. These two reports are very closely linked. The PM Advisory Committees report is structured around four broad areas for renewal. Planning: which provides a clear understanding of the skills and knowledge needed to meet departments business objectives now and in the future. It considers that business planning and human resource planning have to go hand in hand. Without this, recruitment and employee development will be largely ad hoc and short-term. Recruitment: recruiting the best possible talent to the public service is indispensable to a long-term capacity to serve Canadians with excellence. Recruitment focuses on replacing retirees and responding to increasing demands in areas such as security and health. The approach is direct hiring by departments, especially of recent post-secondary graduates, into indeterminate positions. Employee development: the development of public servants as leaders, managers, professionals and empowered employees is central to a high-performance institution. Such development occurs in the context of careful attention to assessing performance and managing talent. Enabling infrastructure: correcting tools and system deficiencies requires improving the governance of human resources, simplifying reporting, and making sure that the basics in areas like staffing and information systems work much better. The Committees report sets out the specific commitments agreed for the previous year following consultation with the deputy minister community (heads of ministries) and the progress and results for each commitment.
Source: Government of Canada, Privy Council Office, www.pco-bcp.gc.ca, accessed in August 2009; OECD (2009i), Supporting Administrative Change: Greece, Working Paper H6, unpublished.
Box 4.26. Characteristics associated with the success of independent and permanent organisations in sustaining reforms
First, a reform-driving organisation has to be closely connected to the political leader. A Korean case study shows that reforms driven by organisations connected to the Presidential Office are progressing better than those under the control of line ministries and even the Prime Minister. In France, the RGPP is monitored by the Secrtariat gnral du gouvernement (SGDN), an office considered to be the head of the whole public administration and reports directly to the Prime Minister (who is appointed by the President). Second, the reform-supporting organisation has to be permanent. In Korea, the only reformsupporting organisation that was not permanent failed to implement the reform. In Belgium, the transversal Human Resource and Organisation Department is the guarantor of the Copernicus reform.
Box 4.26. Characteristics associated with the success of independent and permanent organisations in sustaining reforms (contd)
Third, the mandate of the reform-leading organisation should be a single reform. There is a trade-off here. On the one hand, the reform-leading organisation has to have most of the levers needed to actually implement the reform under its control. For instance, the French SGDN is in charge of the design of the entire set of central administrations and of the conception of all major procedures and is the entity able to manage all the necessary variables to be changed in order to implement the RGPP. On the other hand, organisations that are in charge of multiple tasks, either other reforms or the daily management of the operations of the public bureaucracy, may fail to focus their attention on the management of reform. This does not necessarily mean that one organisation should be responsible for reforming one public management tool. One organisation should be responsible for managing and implementing a broad reform that involves many variables (e.g. job categories, performance management, leadership, etc.) to achieve its goals. Fourth, the reform-leading organisation should have flexible teams with responsibilities that are not too restricted in order to maximise organisational flexibility. Bureaucratic organisations are obviously poorly adapted to manage change. This is why, in some cases, new specific organisations can be quite successful in implementing reforms. While they may initially be powerless owing to their youth, they can successfully design and implement reform if they succeed in organising quickly, since they are designed for the reform and are not diverted by alternative goals, duties and organisational constraints. Fifth, the reform-leading organisation should be able to involve not only civil servants but also people drawn from other sectors of the economy and society.
Source: Comparative study carried out by the OECD/Korea Policy Centre (2008) cited in OECD (2009i), Supporting Administrative Change: Greece, Working Paper H6, unpublished.
It is important to note that the concept of a reform-leading organisation does not imply that the reform should be entirely centralised and top-down. Central bodies and line ministries have separate and complementary roles. Central bodies should manage strategic issues and provide oversight and monitoring of progress, while responsibility for implementation should be devolved to line ministries, with appropriate support from the centre.
4.4. General conclusions

The federal government of Brazil should be praised for its achievements in terms of ensuring merit, continuity and impartiality in the management of its public servants. These are values that seem to have taken root in the culture of the management of the federal government employees. With these basic requirements now fulfilled, it is reasonable to add new elements, such as performance and efficiency, to traditional core values. These elements have been introduced through successive waves of reforms that have created confusion regarding core values. The rules-based processes that have ensured achievements with traditional core values have also created negative effects and perverse incentives that run counter to core values, such as corporatist attitudes and the fragmentation created by the evolution of the job category system.
294 4. STRENGTHENING HRM REFORM IN THE BRAZILIAN FEDERAL GOVERNMENT A whole-of-government definition of new values and the design of concrete reforms to bring them to life without undermining core values should thus be a priority focus for the government. Priority areas for aligning core values with staff management will be the modernisation of recruitment practices, reforms to increase flexibility in the employment framework and job categories, and staff performance management. Maintaining traditional core values in the daily management of staff, however, will be crucial to ensure the sustainability of reforms and good governance of the HRM system. This will require attention to, and close monitoring of, the influence of changes in daily HRM practices on traditional and newer values. It will also require further strengthening the integrity framework to develop preventive measures, raise awareness of ethics issues in the public service and address risks. These aspects will be further developed in the OECD Integrity Framework Review of the Federal Government of Brazil (forthcoming). Work on core values will be crucial to give sense to HRM reforms in general. The effective implementation of HRM reforms, however, will require strengthening reform implementation strategies. Today, the HRM system in Brazil is shaped by a very strong and justified willingness to ensure impartiality, merit and continuity in the management of the public service, as well as by successive fragmented attempts to modernise. In very recent years, the governments ambition has been limited to adjustments rather than reform, perhaps appropriately in light of the disruptions created by previous reforms. These adjustments, however, seem to lack a strategic and coherent focus and that may weaken their effectiveness. Developing a vision of the type of civil service it wants for the future, designing ways of using HRM reform or adjustment to adapt to this vision, and defining steps to achieve that vision will be necessary to make progress in HRM. Creating a sense of the challenges facing the public service and possibly organising debates on these issues with various stakeholders will help the government build the case for the necessary reforms. Ownership of the reform will be built by involving key stakeholders the government itself, the legislature, public servants, retired public servants, trade unions and the society at large in the conception and planning phases. It will also require identifying winners and losers and means of compensating losers, and probably establishing processes and institutions to follow reforms over time to ensure their sustainability, review successes and failures and draw from them to adjust reforms over time. The capacity to implement reforms will also require strengthening the HRM body. The challenge for the Ministry of Planning is to develop and maintain the capacity for strategic HRM planning and reform. The government may want to create a one-stop shop for HRM in government. This change, however, necessarily requires preliminary changes to the structure and culture of SRH and SEGES, as SRH is presently absorbed by its negotiations on careers and with unions and its payroll administration role, and SEGES role in HRM is driven by individual negotiations with ministries and agencies on staffing numbers. There is clearly a need for a much stronger body on HRM, with increased capacity and evolutions in the culture of the management of HRM so that it is seen and conducted in a fully professional manner by differentiating (including through different sub-units) among the core roles of a central HRM body in a modern administration including: i) the negotiation process with unions; ii) the design of reforms and accountability frameworks for managers and units on HRM; iii) the long-term strategic dialogue to be conducted on HRM with sectoral ministries and agencies regarding their
strategic workforce planning and the implementation of HRM changes in their units; iv) the management of compensation and payroll; v) the management of managers. The existing managers in HRM do not have the training and experience on the area as the focus of their work has largely been on operational issues. HRM units in line ministries lack sufficient managerial capacity and competence to be able to ensure the realisation of the expected benefits from delegating HRM authority and strategic longterm dialogue on HRM. HRM would benefit from a competency approach to their management, and future HRM mid- to high-level staff be given development opportunities in this field. They could constitute a trial example for new career management without necessarily creating one more career. Finally, building a long-term strategic dialogue with sectoral ministries and agencies is necessary but it will take time and will require the central HRM body to establish itself in a leadership position in HRM that is built on dialogue. It is impossible for the central HRM body to implement all changes involved in future reforms with the same level of input and process controls it is using in different HRM areas today. This would require too much work, effort and personnel, and would be counterproductive. Reform efforts have to be built on a new relationship between the central HRM body and sectoral ministries that may be incarnated in a management accountability framework as developed in a number of OECD member countries.
Notes
1.
The 22 000 DAS positions are positions at different levels of the hierarchy, including senior and top management positions. A proportion is reserved for public servants in the four lower levels, but otherwise, appointment of non-public servants is possible. The appointment process is left at the entire discretion of the recruiting authority. Technically speaking, a 1998 Constitutional amendment says that in some special cases (suppression of position, under-performance), civil servants can be dismissed, but the implementing legislation has not really been established (see Chapter 3). A new employment framework was proposed in 1998 through Constitutional Amendment No. 19 which has not been approved by Congress. In central and eastern European countries it is also possible to find a wide diversity of arrangements and capacity for the management of the civil service. For instance, in the Czech Republic and the Slovak Republic current managerial capacity is weak as the civil service office in both countries has been abolished. Instead, Lithuania and to a lesser extent Latvia have developed and maintained stable and capable central civil service management structures since EU accession in 2004. For further details see OECD (2009f). This paragraph and the following two are drawn from OECD (2009h). The discussion of phases of reform is drawn from OECD (2009i). For a discussion of social partnership see ODonnell, R. (2001); ODonnell, R. (2008); ODonnell, R. and D. Thomas (2006); Teague, P. (2002).
2.
3. 4.
5. 6. 7.
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OECD PUBLISHING, 2, rue Andr-Pascal, 75775 PARIS CEDEX 16 PRINTED IN FRANCE (42 2010 08 1 P) ISBN 978-92-64-08221-2 No. 57361 2010
OECD Reviews of Human Resource Management in Government
BraZil 2010
FEDERAL GOVERNMENT
This review of human resource management (HRM) in the federal government of Brazil provides a detailed diagnosis of the management of government employees, and solutions for improving it. The assessments and the recommendations are based on the lessons learned from the experience of OECD member countries. This review assesses whether: the federal government is managing the size, skills, and competencies of its workforce in a sustainable manner; the HRM system in government is strategic and performance oriented; there is a balance between the flexibility and consistency of HRM practices; the values promoted by the government are consistent with management rules and practices.
The full text of this book is available on line via these links: www.sourceoecd.org/employment/9789264082212 www.sourceoecd.org/governance/9789264082212 Those with access to all OECD books on line should use this link: www.sourceoecd.org/9789264082212 SourceOECD is the OECD online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials, ask your librarian, or write to us at SourceOECD@oecd.org.
www.oecd.org/publishing
isbn 978-92-64-08221-2 42 2010 08 1 P
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Oecd HR Peer Review Brazil 2010

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OECD Reviews of Human Resource Management in Government

OECD Reviews of Human Resource Management in Government: Brazil 2010

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

Figure 1.6. Figure 1.7. Figure 1.8.

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

0.1. Towards a modern and dynamic HRM system

0.2. Towards successful and sustainable reforms

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

0.1. Vers un systme moderne et dynamique de gestion des ressources humaines

0.2. Vers des rformes efficaces et durables

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 21

Assessment and recommendations

ASSESSMENT AND RECOMMENDATIONS 23

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 25

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

26 ASSESSMENT AND RECOMMENDATIONS

ASSESSMENT AND RECOMMENDATIONS 27

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 29

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 31

ASSESSMENT AND RECOMMENDATIONS 33

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 35

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

36 ASSESSMENT AND RECOMMENDATIONS

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

ASSESSMENT AND RECOMMENDATIONS 37

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

38 ASSESSMENT AND RECOMMENDATIONS

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

I.1. The federal government general characteristics

I.2. Structure of the executive federal government

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

Source: Brazilian government web portal www.brasil.gov.br/governo_federal/estrutura/ministerios and mission notes.

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

I.3. General economic situation

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

I.4. An overview of Brazils public management reforms

The 1988 Constitution

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

The Collor Administration

The Cardoso Administrations

The Lula Administrations and the challenges ahead

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

1. WORKFORCE PLANNING AND MANAGEMENT 53

Chapter 1 Workforce planning and management

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010

OECD REVIEWS OF HUMAN RESOURCE MANAGEMENT IN GOVERNMENT: BRAZIL OECD 2010