Can Performance-Based Pay Fix the Civil Service?

Jun 21, 2018|Ebehi Iyoha

In Nigeria, wage issues currently loom large; the Nigeria Labour Congress (NLC) argues that workers are underpaid, but many state governors point out that they cannot afford current salaries, much less pay increases. Against the backdrop of this wage discussion is the daily experience of an inefficient public sector – teacher absenteeism, an unreliable police force, unresponsive bureaucrats, etc. – leading many to wonder why we spend such large amounts on running the government. 

Some attempts have been made at reform. The Bayelsa state government has focused on reducing its wage bill by weeding out ghost workers, while Kaduna state's approach has been to retrench underqualified or underperforming workers. However, the changes are temporary fixes and do not tackle the underlying the underlying problem with the incentive structure in the public service. Could a performance-based system provide a lasting solution?

Most people would agree that workers should be paid based on how well they do their jobs. For example, we would be willing to pay more for a tailor who can sew a well-made outfit within two weeks than to someone who makes poorly finished clothes and delays for months. It doesn't matter if the less capable tailor is older or has been in the business longer; at the end of the day, we only care about the end product – our clothes. The same principle should be applied to the public service – staff should be hired, paid and promoted based on their ability and efficiency.


Getting Feedback that Matters

But measuring productivity can tricky. While metrics exist for roles like teachers, these criteria do not easily transmit to the administrative tasks found in the civil service. The current approach to promotion which involves a written exam measures ability to some extent, but it does not adequately capture day-to-day effectiveness at work, and may overlook good workers who are simply poor test-takers. 

However, the Bureau of Public Service Reforms (BPSR) has announced a new Performance Management System to measure efficiency. The details are unclear, but the hope is that the system accounts for a public officer's ultimate responsibility: to serve the Nigerian public. 

The groundwork for this kind of measurement already exists: the federal SERVICOM initiative assigns service delivery quality scores to government agencies. The same can be done for individual civil servants, weighted by how closely they interact with the public. For example, people calling into government offices could be asked to complete an anonymous survey naming the individual they interacted with and how well they were served.

While this approach should incentivise better service delivery, it could also encourage manipulation. In fact, you could argue that SERVICOM ratings of government offices have been consistently low because the low scores have no consequences, so no one has bothered to inflate them.

If civil servants knew that their service delivery rating mattered, they would simply ask their friends and family to regularly call in and leave positive scores. Or, devious individuals could threaten public officers with low ratings to coerce them into doing something illegal. One way to limit this kind of manipulation would be to make it difficult to predict whose rating will matter by randomly surveying visitors. 


In Favour of Flexibility

Measuring and rewarding productive workers would be good, but would only impact promotions every few years. Another thing we can do is set up a flexible pay structure, like in Singapore where a worker receives a fixed monthly salary along with performance-related bonuses and clauses.

One advantage of this approach is the flexibility it offers to adjust the civil service wage bill based on prevailing economic conditions. A variable component of civil service pay is linked to the country's economic performance, and in times of weak growth, this component may not be paid at all. This would help the government manage its finances in leaner times.

Yet, we must be cautious about employing the same strategy in Nigeria. While National Bureau of Statistics has demonstrated its independence, other bureaus should be treated more sceptically. And politicians can game the system by pressuring agencies to inflate the relevant economic variable.  


Scaling Back the Service

Finally, we need to address the elephant in the room: the size of the civil service. A bloated civil service would undermine improved performance and pay structures. And because civil service hiring practices are not always transparent, recruitment may not be tied to department need or candidate ability. 

If the civil service has more workers than it needs, then we waste money by paying too many workers, and the quality of the service diminishes. This is because of a free-riding problem: if three people have been hired to do a job that one can do, a volunteer dilemma arises – each worker will wait for the next to do it until the job gets shoddily done or not done at all. Not to mention the loss to the economy of employing civil servants that would be more productive elsewhere. Therefore, a crucial part of payroll reform would involve honestly assessing the staffing needs of government agencies to identify instances of overhiring.

In practice, this will be the hardest part to achieve. Retrenching workers is never politically popular even when it is justified, and there is a generous redundancy plan on the table. For example, the Nigeria Labour Congress protested the Kaduna state government's retrenchment of 22,000 primary schoolteachers based on their low qualifications. And because public service workers are an organised political force through unions, most savvy politicians avoid antagonising them. 

All of this leaves the government in an unattractive place, even if it wanted to push through reforms. To paraphrase a famous U.S. World War II veteran, Nigerian civil servants are like cannons – they won't work, and you can't fire them.


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