MINISTRY OF FINANCE, FINLAND Tuomo Vainio 6.10.2003 o:\pam\2003\kalvot\pariisi\1 PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND ASSESSING.

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MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\1 PERFORMANCE-RELATED PAY IN THE STATE ADMINISTRATION IN FINLAND ASSESSING PERFORMANCE-RELATED PAY POLICIES Expert Meeting OECD, Paris

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\2 Public sector personnel in Finland The state administration persons, 4,9 milliard € Municipalities and federations of municipalities persons (schools, hospitals, etc.)

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\3 The State administration personnel by sub-sector University education Defence Forces, Border Guard Police, rescue services State funds management & insurance and financial services Research Business services Administration of justice Operations at Ministry level Regional and environmental services Transport and communication and related services Other educational and training services Social affairs and employment services Other operations Parttime Fulltime

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\4 COLLECTIVE AGREEMENTS IN THE STATE SECTOR Ministry of Finance/SEO - The Government approves - The Finance Committee of Parliament approves additional costs COLLECTIVE AGREEMENTS FOR STATE PERSONNEL - expenditure framework - general employment terms - labour peace obligation Central State sector employee organisations Employer Agencies - Ministry of Finance approves - pay systems - flexible working hours - other agency-specific issues Agency-level employee unions Employers’ national central organisations, including State Employer’s Office (SEO) INCOMES AND LABOUR-MARKET POLICY AGREEMENTS Employee national central organisations Agency-specific collective agreements

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\5 Overview of the new remuneration system Personal/performance pay Job-related part of pay Demand levels

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\6 The structure and the message of the new system Result-Based Reward The result of the unit or it’s part Let’s do it together (results, quality, good service) Personal/ performance part Performance and possession of professional skills Develop yourself, struggle to good results and good quality Job-related part of pay Demands of the jobAcquire and use professional skills, try to attain demanding jobs Parts of the remuneration BasisMessage

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\7 Example of a NPS (without RBR)

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\8 Progress of the NPS Estimated by the Agencies in March 2003 Situation in March 2003 Estimate: in the end of 2003 Estimate: in the end of 2004 Target: in the beginning of 2005

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\9 Spheres of the RBR’s and paid RBR’s

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\10 Amounts of the RBR’s

MINISTRY OF FINANCE, FINLAND Tuomo Vainio o:\pam\2003\kalvot\pariisi\11 Experiences of the NPS All phases in the building process of the NPS are important and have positive repercussions (e.g. surveying the real content of each job) Management by objectives becomes concrete reality with the NPS Leadership possibilities and skills improve Personnel find the NPS more justified because pay differentiation is motivated by the accepted criterias