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Cyprus

Possible pay rises of 2.2 per cent for civil servants

 

Pay-hikes for civil servants should not exceed the annual rate of nominal growth of the economy’s gross domestic product (GDP) and evaluations of civil servants should be carried out by line managers, the director of the civil service personnel department told lawmakers on Monday.

Addressing a session of the House finance committee, Kypros Kyprianou presented the government’s proposals on reform of the state’s payroll and job appraisals.

“Under no circumstances should the increase in the state’s payroll exceed the rate of nominal GDP growth,” he said.

“There have been simulations and calculations by the finance ministry, and we have found that, given reasonable growth rates, both annual pay rises and cost-of-living allowance (CoLA) – if applicable – will be granted.”

As an example, a ministry representative said, given today’s GDP growth rates, the government could afford pay hikes up to 2.2 per cent in 2017 and 3.2 per cent for 2018.

For 2017, he added, “pay increments are expected to reach 0.8 per cent of the total payroll, leaving 1.4 per cent available to distribute, and if CoLA is anywhere from 1 to 1.5 per cent, then you give half of the available sum and you are left with a fraction of GDP growth rate – say, 0.6 per cent – to give out as general pay rises”.

But whether to distribute this surplus – the 0.6 per cent – will be the object of negotiation and agreement, following a request, and is certainly not an automatic concession, Kyprianou pointed out.

He added that the government bill is part of the overall reform effort to overhaul the state payroll, noting that the pension schemes of civil servants had already been reformed, saving more than €10 billion over a decade.

“The bill is part of a reform effort that has brought Cyprus’ public payroll as a percentage of GDP close – if slightly higher – than the European average,” Kyprianou said.

The committee also discussed at length the government’s proposals on the evaluation of civil servants, with deputies stressing the need for fairness.

Some also argued in favour of mutual appraisal, meaning appraisees being able to evaluate appraisors.

But a revolutionary system of job appraisals was not an end in itself, Kyprianou warned.

“We need to look at best practices employed abroad, and what results they brought,” he said.

“Personally, I am not aware of any public service implementing mutual appraisal and including it in promotions or appointments.”

The government could look into it, but “let’s make the first step before jumping to the second one”, he added.

Asked whether, under the new system, appraisals for purposes of promotion or appointments would be assigned to line managers, Kyprianou wondered “if line managers aren’t best suited for the job, then who can be”.

The finance ministry, he explained, toyed with the idea of assigning ministries’ permanent undersecretaries with the task of reviewing objections to appraisals, but said that “if 60 per cent of people working in the ministry filed an objection, he would be required to decide on all of them, without even being directly aware of each person’s performance”.

“Appraisors, line managers, directors, they are the ones who are aware,” Kyprianou said.

“However, if there are any suggestions addressing or protecting from arbitrary evaluations, we would be more than happy to hear them.”

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