I. ICSC/56/R.3 - REVIEW OF THE PAY AND BENEFITS SYSTEM: AN OVERVIEW

1. VALIDATION AND PROMULGATION OF THE PROPOSED MASTER STANDARD
   1. FICSA participated fully in the workshops in Geneva and New York. At the Geneva workshop, FICSA declared its view that the exercise was lightweight, and that a much more thorough validation was needed. This would involve the classification of 200-300 job descriptions that do not indicate the grade assigned using the current Master Standard, by small teams of participants working independently and comparing results. The new tool also needs to be tested on the job descriptions of translators, editors and other jobs that do not easily reflect grade-determining features such as "innovative" and "groundbreaking".

      Weighting

   2. The weights given to the different levels of the various factors were not presented nor explained nor justified. FICSA noted that different levels for the factor "Enabling environment" had been given the same number of points, which wasn’t correct: either the levels should be merged (e.g. "Supportive exposure" and "Collaborative") or they should be given different weights (number of points). FICSA also noted that a single move from one level to the next for one factor (e.g. "Results") sometimes resulted in arriving at the border with the next grade or even jumping into the next grade. FICSA therefore requested that the values for the weights be reviewed.

      Values

   3. The classification of a job reflects the value placed on functions and competencies by an organization. In some workplaces, for example, analytical skills and creativity may be highly valued because they are essential to achieving the organization’s aims. In others, risk-taking and action-orientation may be the most essential characteristics of the workforce.

   4. FICSA questioned the values implicit in the new Master Standard, while recognizing the difficulty of identifying a set of values common to all the organizations of the common system. The new Master Standard appears to promote values that are important to organizations in transition: "innovation"; "developing new approaches, techniques, policies"; "creating new concepts, theories or principles", to name but a few. The facilitator explained that change would be ongoing in the common system for a long time, and that these values would lead to dynamic workplaces. He continued by saying that the new Master Standard was not set in stone and should also be a dynamic tool. At the first workshop, the view was stated that organizations should not have the option of adapting the tool to their own context by changing the values, or weights. However, at the second workshop, organizations were encouraged to adapt the standard to the work and mandate of their respective organization. FICSA expressed reservations about the values inherent in the new system and would have preferred that the validation exercise provide more opportunity to examine the underpinnings of the new system.

      Specific comments

      • Most of the participants agreed that the language was sometimes unclear, ambiguous, and even culturally insensitive in some cases, e.g. the words ‘provocative’ and ‘opportunistic’ might be offensive in certain cultures.
      • In view of the difficulties with the language, most participants felt a glossary should be provided.
      • Job classification should continue to be done by human resources (HR) professionals. Feedback received by FICSA in response to its report on the first workshop included comments from staff of an organization that has eliminated its classification section. Staff said that classification carried out by managers had led to situations in which the same tasks and duties were classified at different levels and that cronyism was a problem.

      Downgrading posts

   5. In an earlier paper on job evaluation, document ICSC/54/R.3/Add.1, ‘Realigning job evaluation to support organizational performance’, it is stated in paragraph 91 that the new evaluation system will most likely result in a number of downgradings; however, during the workshop, the facilitator maintained that few posts would be downgraded, as the matching rate for grades using the new system was around 88-93 per cent. FICSA would like confirmation that application of the new standard will not result in the downgrading of existing posts.

      Objectives of job evaluation

   6. FICSA is of the view that job evaluation should:
      • Provide an objective basis for determining individual staff member’s grade and pay levels.
      • Help ensure equal pay for work of equal value.
      • Enable meaningful salary comparisons between the common system, the comparator (P level) and outside employers (GS level).

      Any realignment of job evaluation should meet those minimum criteria.

      Pay equity

   7. The issue of equal pay for work of equal value should not be confused with performance issues. If a staff member is under-performing, that does not imply that the tasks, or competencies, are of lesser value to the organization. Equitable contribution is a performance issue; pay equity based on equal pay for work of equal value is a job evaluation issue.

      General Service classification standards

   8. FICSA notes that the Commission may be asked to include in its work programme for next year the revision of the General Service classification standards. Staff in the General Service category have expressed serious concern about protection from being expected to perform out-of-class tasks, should the new classification standards become more general in nature. The performance of out-of-class tasks should ensure career growth and pay increases. Concern was also expressed about the impact of new standards on job comparisons with outside employers that do not use such general systems.

2. STRATEGY FOR REWARDING CONTRIBUTION

   Credible, reliable performance appraisal a prerequisite

   9. The International Civil Service Commission (ICSC) reported to the General Assembly the following decision with regard to broad banding and related pay-for-performance (A/57/30, paragraph 60), which was noted in document A/RES/57/285:

      "(a) A credible and reliable performance appraisal system that is acceptable to all parties concerned was an absolute necessity in moving forward with broad banding and/or pay-for-performance,

      "(b) The organizations needed to provide the Commission with quantitative and qualitative data on their performance management system and a critical analysis of the ability of their current performance appraisal systems to differentiate levels of performance, in particular when those systems are linked to pay".

   10. FICSA canvassed its members to seek their views about whether the performance appraisal system in their organization was credible and reliable. Based on the views expressed, it may be premature to proceed with pilot studies on broad banding and pay for performance. The views received are annexed to the paper.

3. PILOT STUDIES ON BROAD BANDING AND PAY FOR PERFORMANCE, AND ICSC/56/R.3/ADD.3 BROAD BANDING/PERFORMANCE PAY PILOT STUDY

   Aspects of broad banding unattractive to staff

   11. The FICSA membership at it 56^th Council in February decided to oppose broad banding and to object strongly to pilot studies. According to the Federation’s research, there are a number of aspects that are unattractive to staff:
       1. Less control over salaries; they may decrease below a competitive level or increase disproportionately.
       2. Difficulty in maintaining system-wide consistency and equity in pay administration.
       3. More inter-agency and intra-agency competition as staff move to the highest payer.
       4. Loss of step increases.
       5. Difficulty in controlling costs.
       6. Increased administrative costs.
       7. Activities driven by the bottom line.
       8. Supervisory discretion in pay setting leads to conflicts.
       9. No clear protection from arbitrary job assignments and the obligation to perform out-of-class work without extra pay.
       10. Increases in the range of tasks to be performed, which can have a negative impact on performance.
       11. Additional administrative workload- for managers and supervisors.
       12. Increased delegation of authority on such decisions as classifying positions, making final selections, and disciplining and removing employees, but no established mechanisms to ensure accountability.
       13. Pay progression slows after an initially higher starting pay, which is enticing for recruitment purposes but not for retention or career growth. Long service/age is therefore penalized.
       14. Work is shifted from higher-level to lower-level positions.
       15. More promotions early in a career as skills grow, and fewer promotions later. Long service/age is therefore penalized.
       16. In the U.S., studies show a bias against women and minorities in broad banded systems.
       17. Staff may choose to perform the high profile tasks for which they are rewarded and ignore mundane aspects of job.
       18. Potential for negative impact on teamwork as staff compete for rewards and recognition.
       19. Adverse impact on retirement credit.

       Prerequisites for broad banding

   12. A banding system has a number of prerequisites:
       1. Good, reliable labor market data.
       2. Merit principles and protections for staff (i.e. obligations of the organization to its employees/ explicitly stated labor rights).
       3. Effective and objective performance evaluation.

       4. Competent and honest/objective managers.
       5. Mandate/mission-related performance criteria and clear objectives.
       6. Initial and ongoing training for managers, employees and HR specialists.
       7. Objective criteria for movement within pay grades and clear distinctions between levels within broad banded classifications.
       8. Predictable and stable funding.

   13. At the present time, the common system does not have any of the above-listed prerequisites for a broad banded pay system, and has not addressed the negative features of broad banding.

       No criteria to assess broad banding pilot

   14. At the last session of ICSC, FICSA questioned how a broad banding pilot would be evaluated and suggested that an independent panel be constituted to assess the pilot studies when these were completed. To date, FICSA is not aware of the development of any criteria to assess the success or failure of the pilots.

   15. Document ICSC/56/R.3/Add.3, paragraph 25 states that the conclusion phase will address quantitative and qualitative aspects of the pilot study. Quantitative aspects include:
       • Payout amounts
       • Distribution of awards
       • Distribution of rankings
       • Efficiency gains (if a measurement tool can be applied).

       Qualitative aspects include:

       • Attitude surveys among participants and administrators. (N.B. It should be assumed that administrators would also be participating.)

   16. If the above aspects are considered criteria to assess the success or failure of the pilot study, how will they work? For example, how will knowing the total number of payout amounts serve as an indicator of success? In the widest sense, what is a successful broad banding pilot?

       Assessment and duration of study

   17. FICSA also questions the amount of time required to fully assess the project. Research into broad banded pay systems has shown that pay progression and career growth slow over time, and that the first several years are the optimal ones. In effect, the pilot study will address only the optimal years. When FICSA asked for an evaluation/assessment of broad banded systems outside the UN system, the response was that it was too early to evaluate their effectiveness as they had been in place for fewer than five years. How then can ICSC expect to evaluate the effectiveness of the pilot in two years?

       An unsuccessful pilot

   18. In the event that the pilot study does not achieve its objectives and broad banding is abandoned, how will staff be reinserted in the pay system? What will happen to their pensionable remuneration? Will they be able to keep whatever ‘gains’ they may have made?

       National pay systems

   19. FICSA would like to note, with regard to Annex I of ICSC/56/R.3/Add.3, that in many cases the countries mentioned have more than one pay system, and that broad banding has not been applied across-the-board. The US General Schedule, for example, with which UN salaries are compared, has not been broad banded. In fact, even though legislation has provided for broad banding in the public service in the U.S., few federal government departments have implemented it. At the state level, some state governments have adopted broad banding for educational institutions and police and fire departments. Unions have strongly opposed it because workers have reported that it has had a negative impact on teamwork, pay progression and older workers with the most seniority. California abandoned efforts to pass legislation to broad band the salaries of IT workers.

4. SENIOR MANAGEMENT SERVICE (SMS)
   20. In previous sessions of ICSC, FICSA questioned the need for and cost of a Senior Management Service (SMS). It noted that the Senior Executive Service (SES) of the comparator had experienced a number of difficulties, had not always achieved its objectives and the costs increased. While welcoming attention to the need to improve managerial capacity in the common system, FICSA questioned whether the creation of a SMS was the solution. FICSA therefore agrees that the Commission should not pursue this aspect of pay system reform.

II. ICSC/56/R.3/ADD.2 - STRATEGY FOR REWARDING CONTRIBUTION

Background

21. FICSA would like to note that the Commission carried out work on this subject in 1994, identifying principles and guidelines for performance appraisal and management and for the recognition of different levels of performance (A/49/30, Annex VIII) and again in 1997, when it undertook an in-depth review of this subject (A/52/30, paragraphs 167-219), and took a number of decisions (paragraph 219). Notable among the decisions were that organizations should report biennially on their performance appraisal systems, and that the ICSC would circulate to the organizations and staff a portfolio of best practice in the area of performance management. In reviewing subsequent reports of ICSC to the UN General Assembly, FICSA did not find any follow-up to those decisions. FICSA thus questions the administrations’ intention to develop effective performance appraisal systems.

    Current performance appraisal systems

22. FICSA agrees with the view of the organizations that their performance appraisal systems would not fully support the performance for pay decision at the present time (paragraph 20).

    Assessment of competencies

23. In response to the statement in paragraph 21 that the confluence model has a distinct advantage "since staff may view competency development and team performance as more ‘observable’ and less a matter of judgement of their supervisors", FICSA is concerned about how organizations intend to assess competencies for recruitment and advancement purposes. Few organizations use assessment centres, and those that do have reported that the process is costly.

    Client feedback

24. FICSA has reservations about the use of client feedback to measure team performance. Aside from the valid questions about the identification of the client(s), there are questions about the reliability of client response. A client may offer a positive assessment in order to gain favour, secure future funding or ensure work for a local workforce. There is not yet a code of conduct for "clients". This is particularly the case when "deliverables" are not obvious.

    Link between ratings and pay

25. The fact that few staff in the UN system receive a rating of "unsatisfactory" or "does not meet expectations" is not solely a result of an appraisal system that is not linked to pay. Poor performers may receive higher ratings to facilitate their transfer. Some managers seem intent on making poor performers someone else’s problem because they do not want to confront the problem of poor performance. Addressing poor performance involves inter-personal confrontation that makes some people uncomfortable, and generally entails lengthy administrative steps that discourage busy supervisors because the process is so time-consuming. This is more an issue of managerial competence and training, than an appraisal system not linked to pay.

    Distribution of ratings

26. FICSA notes that the introduction of merit awards, both cash and non-cash, was approved by the General Assembly in 1994. FICSA would like to ask why few organizations have offered cash merit awards. Had the organizations implemented the decision, it would have been possible to assess the effectiveness of at least one type of pay-for-performance scheme, over a period of nine years.

27. It has been reported to FICSA by a staff association of an organization that uses forced distribution of ratings that in several work units, because all staff were performing well, cash awards were given in alphabetical order. Those who missed out one year, would receive an award the following year. Staff reported that, while they were pleased to receive the cash award, it was not seen as a motivator.

28. Forced distribution of ratings defeats the objectivity of performance appraisal, especially when limited by financial controls.

    Acquired rights

29. FICSA does not share the view presented in ICSC/56/R.3/Add.3, Annex III.

    The current policy of annual within-grade salary increment can be considered as a fundamental condition of appointment in that it provides a staff member with advance knowledge of an annual within-grade salary increment. It should therefore been seen as an essential condition of appointment: to have a predetermined or acquired right to promotion, as in national civil services.

III. ICSC/56/R.4 - CONTRACTUAL ARRANGEMENTS

Proposal for a framework for contractual arrangements (paragraphs 68 to 72)

30. FICSA supports:

    • The use of three types of appointments: career, fixed-term and short-term. FICSA prefers the term ‘career’ to ‘indefinite’ because the opportunity for a career in the international civil service is a recruitment, retention and reward tool. It can also be used to support mobility.
    • Automatic conversion of fixed-term/ALDs into career appointments after a pre-determined period not exceeding 5 years. according to conditions agreed between the staff association and the organization (e.g. performance, competencies).
    • A probationary period on entry into the organization on a fixed-term appointment, but no period of probation when the appointment is converted to indefinite/career.
    • A one-year probationary period for poor performers who, after written notice of shortcomings and a two-year written and mutually agreed plan for improvement, fail to improve.
    • Limiting the number of short-term contracts given to a single employee. Short-term contracts should be converted to fixed-term after a period of two years if the work continues.
    • Setting a goal of 70 per cent career contracts in each organization, as is done in national foreign services.
    • Retention of staff with career appointments in cases of reduction-in-force.
    • Improved separation indemnities which also include provisions for after-service health insurance coverage.
    • Adoption of common appellations for designating types of appointments.