salary system and performance related pay

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Salary System and Salary System and Performance Related PayPerformance Related Pay

Mr Peter ReinbergAustria

“Building a Professional Civil Service in Kosovo”Pristina, 26-27 June 2008

A. Salary systems in Europe

1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain

B. Performance Management

C. Salary System for Kosovo

Salary system and performance related pay Pristina 27/06/2008page Peter Reinberg2

A. Salary systems in EuropeAustria

8,4 mio inhabitants84.000 km2

9 regionstraditional civil service systemsstill career-basedcivil servants


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





contractual public employeesbiennial stepsfixed salaries for highest functionsuniform public service law in discussion


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





position-based salary systems• federation – basic salary and function allowance• Vorarlberg – 29 grades • Upper Austria – Hay 25 grades• Styria – Hay 24 grades• Lower Austria – Hay 25 grades• Tyrol – 25 grades• equal pay for civil servants and contractuals• flattened salary curve• extra costs 2 % per year


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeBelgium

3 regions3 communitiessalary systems essentially career-basedlife-long statutory basis


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeBelgium

A = university degree (master)B = higher education, short studies (bachelor)C = higher secondary school certificateD = no special school certificateallowancesmanagement and staff functions (fixed salaries)


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeEuropean Union

life-long appointment as official"other servants" under contractbasic salaries grade and stepallowances

AD (Administrator) AD5 to AD16AST (Assistant) AST1 to AST11


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeGermany

civil servants• classical system – maintenance principle• basic salary• allowances• A, B – civil servants• A16 – highest• W – professors• R - judges


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeGermany

public employees• collective agreement – "Länder" (regions)• 15 pay groups (E grades)• E15 – highest• steps by function of professional experience• steps 4-6 additionally by function of individual performance


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeMoldavia

basic pay related to gradepay supplementsperformance-related bonus: 50 % of monthly salaryOECD recommends max. 10 - 20 % variable performance-related paydecompression ratio only 2,5


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropePortugal

New System of Remuneration (NSR)still a career systemvarious professional groupspoints between 100 and 900 (general scale)index 2008: 333,61 Euroallowances


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeSpain

career systemlife-long statutory basis30 levels (grades)5 groups A-EBasic remuneration

• sueldo• triennial (seniority)


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain




A. Salary systems in EuropeSpain

Supplements• level supplement (grade)• specific job supplement• performance related pay• gratifications (bonuses)Compression ratios 2,1 :1 – 19,7 : 1


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





scepticism towards performance related pay (PRP)Germany 2005 reform project• performance variable of 2 %, 4 %, 6 % or 8 %• bureaucracy expected• current discussion: improving the bonus system


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





pros and cons – Francisco Cardona• difficult costly and time-consuming• only applicable at senior levels• no dealing with underperformance• improvement in performance or quality of the service not proven


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





performance management easier to manage if it has no direct link to pay • part of the general strategic procedure• strategic goals• annual goals object of "contracts"• dialogue on goals, degree of their achievement and reasons for it


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





performance dialogue• proposals for personal development• individual training needs• horizontal mobility• career planning


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





Salary reform as part of a broader administration reformPolitical leadersrealistic budget frame


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





Strategic objectives• personnel of sufficient quantity and quality• being competitive to the private sector• ensuring civil servants´ motivation• fairness of the system – equal pay for equal work• giving security and stability to civil servants• higher contributions paid off in reasonable and transparent form


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





reform team• HR specialists• administrators• unions• external experts


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





guidelines of a reform• all-in monthly salary• position-based system• 16 grades• job families by general regulation of the central HR authority• salary tabloid with seniority steps• flattened life-earning curve• reasonable decompression rate of 5 or 6


1. Austria

2. Belgium

3. European Union

4. Germany

5. Moldavia

6. Portugal

7. Spain





guidelines of the reform• fixed salaries for the highest managerial (and judge) functions• appointment revision and renewal every 5 years, except judges• no elaborated PRP-system• bonuses 1 % of the personnel budget – partially decentralized• only 2 performance rates: adequate/not adequate• "not adequate" – 10 % deduction – second time dismissal

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salary system and performance related pay

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