PUBLIC ADMINISTRATION: CHALLENGES AND OPTIONS

1. PUBLIC ADMINISTRATION: CHALLENGES AND OPTIONS “SEVEN PERENNIAL DESIGN CHALLENGES—A UNION PERSPECTIVE” By John L. Fryer A World Bank Seminar: May 4th 2004 Room No H-1-200

2. A Public Sector Union View of Consultations with the World Bank “You indict us in our absence… You try us in our absence… You convict us in our absence… And then invite us to consult on the method of our execution.” Larry Brown, Secretary Treasurer National Union of Public & General Employees (NUPGE-Canada)

3. Introduction • Sincere thanks to Gary Reid for invitation. • Delighted to learn—last Thursday, April 29th, during PREM Learning Week—from PREM VP Gobind Nankani as well as VP for Human Development Jean-Louis Sarbib that World Bank “believes in and supports real consultations with unions”. • Also happy to hear on April 30th from PREM Public Sector Governance Director Sanjay Pradhan that his department strongly supports the “bottom up” approach to consultations with public sector unions. • So it is clear that all of you can help greatly in making these wishes a reality at the country level. • Therefore my purpose today is to identify approaches to public employee consultation designed to maximize positive outcomes.

4. SEVEN PERENNIAL DESIGN CHALLENGES • Pleased to accept Gary Reid’s Seven Point template. • Reference introductory paper and indicate general agreement that any nation and their people are generally well served by an efficient and effective public service. • Might not share ideological imperative that “small is always beautiful”.

5. DESIGN CHALLENGE #1BIG BANG VERSUS INSTITUIONAL REFORMS • Preference for institutional reform with clear goals and targets. • Need to understand union viewpoint that loss of a job is equal to economic capital punishment. • Generally means death sentence to workers future standard of living as well as that of family members. • Must, therefore, expect resistance.

6. DESIGN CHALLENGE #2ENSURING ADEQUATE PLANNING OF REFORM EFFORT • Agree and urge very early involvement of unions/associations representing workers likely to be affected. • Appoint member of country team to have specific responsibility for union consultation and liaison. • Creative consultative mechanism with maximum union input (i.e. joint chairs). • Consider assistance to unions to build capacity—designed to improve capacity of unions to engage meaningfully. • Use facilities of WBI to plan such training at country level.

7. DESIGN CHALLENGE #3ADDRESSING SOURCES OF RESISTANCE • Expect union “push back”. • Engage unions, from outset, in design and purpose of downsizing plans. • Consider carefully union input with regard to design of implementation program and timetable. • Be sure to keep all workers aware of plans and their time frame.

8. DESIGN CHALLENGE #4SEQUENCING • Ensure that any salary adjustments (not just “major”) follow completion of all other steps in adjustment program(s).

9. DESIGN CHALLENGE #5TARGETING REDUCTIONS—HIGHLIGHT RATIONALE FOR EACH OPTION, KEY CHALLENGES OF EACH OPTION AND DEVICES FOR ADDRESSING THESE CHALLENGES • Involve unions and members in design, prioritization as well as implementation. • Emphasize voluntary attrition. • Ensure fairness (across the board?). • Make every effort to minimize pain involved in programs of “right sizing”.

10. DESIGN CHALLENGE #6FACILITATING RE-ENTRY INTO LABOR FORCE FOR DISMISSED EMPLOYEES • Fully involve unions and members in design of both assistance and re-entry assistance programs • Learn from extensive previous experience (i.e. Armour Automation Committee—George Schultz) • Programs tailor made to individual assistance strategies known to work best.

11. DESIGN CHALLENGE #7MAKING SEVERANCE PAY PROGRAMS EFFECTIVE • Determine severance budget in advance. • Be prepared to allow maximum union involvement in design and implementation of severance programs. • Resist desire to object to “seniority” and/or “family obligations” in design. • Be willing to allow union to administer severance programs and thus allow unions to accept criticism and handle complaints from individual employees.

12. IN SUMMARY • Be sure to let union leaders know, at the outset, that the World Bank welcomes their input. • Begin consultative process at earliest opportunity. • Encourage “bottom up” involvement by unions representing affected employees. • Ensure client governments understand that union involvement will be part of the process. • Anticipate and accept that there will be resistance to retrenchment by unions • Be, at all times, open to their input and let them know that if they have a better idea, you will work for its acceptance. • Be sure that unions receive positive reinforcement for constructive contributions to the overall program.