Changes to performance rewarding system in the works


The plan was discussed at an international conference in Ljubljana on Wednesday, with Minister Rudi Medved noting that the austerity measure freezing performance bonuses in the public sector would expire in July.

Medved said that it would be ideal if the proposed changes were implemented by then or, if not, in the autumn at the latest, after they were tested with a pilot project and a consensus was reached with public sector trade unions.

The basic solutions were presented by Peter Pogačar, who noted that the current system allowed for someone to have up to 48% higher wage than another employee who did the same job.

The differences are not a consequence of the performance, but seniority, explained the head of the ministry's public sector directorate.

According to him, the government wants to abolish annual evaluation as the basis for promotion for a total of ten wage brackets. Under the proposal, promotion would be automatic over a longer period of time, up to five wage brackets.

Variable rewarding of performance would be introduced, and considerably more funds would be earmarked for this purpose, with an individual being able to receive performance bonus equalling up to 30% of their base pay.

Minister Medved said that one of the reasons was that the public sector was already facing problems with attracting experts, for example in digitalisation.

Wages in the public sector are not high, and the sector has become unattractive for young people, who are looking for opportunities in the private sector as the economy is growing and good job opportunities are popping up, he added.

For this reason, the plan is to make the system more stimulative, Medved said, adding that the experience of countries which had a long tradition in this field had been examined, even at today's conference.

Daniel Gerson of the Organisation for Economic Cooperation and Development (OECD) said that performance-based remuneration models should be implemented cautiously and gradually, and unwanted consequences should be monitored.

The conference also heard that the capability of the management to evaluate how well someone performs and how high the reward should be should also be questioned, and that the criteria to be used would also need to be negotiated.

Jakob Počivavšek, one of the top public sector trade unionists, referring to Gerson said that the two main problems were the competences of the management and prudent implementation.

"I claim that we have major issues in Slovenia with this," he said, adding that there were already elements in the pay system related to performance and quality of work that could be applied in Slovenia today.

Počivavšek labelled as misguiding the claim that promotions had so far been exclusively tied to seniority and said that the new system must not be introduced at the expense of the basic pay.

But Medved reiterated for trade unions today that they could not count on an "influx of fresh funds from the budget" for performance bonuses and that the wage bill would not be increased significantly.

The ministry highlighted in a statement in the afternoon that the purpose of proposed changes was not to reduce funding for wages in the public sector, but to increase opportunities for variable rewarding.