2.  Overview of Public Sector Performance and the Incentive Issue  The Reality About Monetary Incentives in Poor Countries  Critical Questions About Non-monetary Incentives  Effect of Disincentives in Sierra Leone  On-going Policy Effort at Addressing Incentives  Key Challenges

3.  A systemic reality in many developing countries is that public service incentives are weak.  There is the monetary side and the non-monetary side of incentive systems.  Effective incentive systems — which link financial and non- financial aspects to measured performance — can lead to the provision of better public services.  An overriding objective in providing incentives is the achievement of a performance-based accountability system (P-BAS).  The P-BAS requires careful attention for choosing the right design for the system, and must be monitored, evaluated and adjusted as needed to meet performance goals.

4.  The monetary incentives are needed to make ends meet for the worker; to give focus to work; and to reduce corruption tendencies especially where the worker handles huge sums of money.  The non-monetary incentives are equally critical to provide the enabling environment for workers to deliver their best.  Incentives could be perceived as positive and negative, such as rewarding performance and nonperformance, but both have the same objective of inducing desired output and results from workers

5.  Often, wages are too low and pay scales are barely sufficient to live off of; they are not competitive with the private sector.  They do not compensate for postings to remote locations.  Wages are too compressed, not reflecting the skills, training, and seniority of management positions as compared with low paid jobs.  Moreover, wages are hardly adjusted for rising costs of living in many poor countries.

6.  This has led to a culture of absenteeism, alternative employment, rent-seeking, and low productivity, often compounded by a system of non-transparent benefits and allowances that discourage rather than encourage performance.

7. Fundamental questions to ask under this category of incentives include:  Are there effective management functional systems which spell out roles and responsibilities clearly?  Are there logical institutional structures/Organogram  Are there performance appraisal systems with culture of recognizing output and effort?  Are there other motivational inducements at work such as performance management contract  Are there training opportunities?  Are their opportunities for promotion?  Are there attractive organizational brands to attract workers?

8.  In Sierra Leone, like other West African countries, the civil service is characterized by inefficiency and corruption, partially due to the lack of incentives.  Hence the public service fails to attract and retain talents who graduate from universities and who are absorbed into the private sector because incentives there are forthcoming.  This has led to a high rate of attrition in the Sierra Leone Civil Service.  Coupled with this, those who could have actually contributed more to policy formulation and implementation have left the service for better paid jobs.

9.  Government has undertaken a Comprehensive Pay and Grading Reform  Plans underway to revise Civil Service pay structure in light of rising cost of living  Functional management has been strengthened—better organizational structures, records management, introduction of complementary outfits such Policy and M&E Units in MDAs, etc.   The Conversion of the Establishment Secretary’s Office (ESO) into the Human Resource Management Office (HRMO)

10.  A Training Policy for the Civil Service has been developed  Right-sizing the civil service to give room to performance—retiring officials falling due to give room to vertical mobility among other things.  Introduction of Performance Management Contracts  Having in place performance appraisal system

11.  Sustainability of Reforms—limited internally generated revenue and aid uncertainty; limited technical capacity in the public sector.  Limited capacity to utilize the Natural Resource Potential of the Country.  Behavioural Change and Inculcating Culture of Results