Read the following three related case studies on public service reform in Trindidad and Tobago. The solution to historical problems of low pay in the public services has been to increase pay by 14%. However, as Dr Roger Hosein, senior lecturer at the University of the West Indies (UWI) states there are two associated challenges - worker absenteeism and worker ethic. The head of the Salaries Review Commission has asked you to write a report which addresses these two challenges. You must write a report for your client - head of the Salaries Review Commission – which critically evaluates the causes, consequences and wider implications of these two challenges. Having critically evaluated the causes, consequences and wider implications of these two challenges you should provide some evidence based recommendations which will provide your client with practicable solutions which will help your client to address these challenges. You must use relevant academic journal articles, as well as internet research on public service reform, to produce a report which your client can use to guide changes to public service reward systems in future. 1: History of reward in Trinidad and Tobago public service 1960 – 2010 – reward problems A major aspect of reform initiatives in the public service of Trinidad and Tobago over the past ten years has been the attempts to change the infrastructure for Personnel Management. Specifically, this has entailed efforts to reduce the dominance of the central agencies, the Service Commissions Department and the Personnel Department. The Service Commissions (public, Police, Teaching, Judicial and Legal) were established under the constitution to recruit, transfer, promote, discipline and terminate public servants - the objective being to protect career public officers from governmental and political machinations. The other half of the personnel management function, that is, negotiating with the representative associations in respect of the terms and conditions of service, and administering the classification and compensation plan, was assigned by separate legislation to the Executive (the Personnel Department being its administrative arm). These arrangements, made in the 1960s, subsequently placed an indelible stamp on the character of public administration in post-independence Trinidad and Tobago. As the public service grew in size and complexity during the 'oil-boom' years of the 1970s, the level of centralization which these arrangements spawned became increasingly dysfunctional. Outside observers and public servants alike began to clamour for change. In the early 1990s, the decentralization process began in earnest. It continues at the time of writing with the establishment of Human Resource Management units in all Ministries and Departments. As these structural changes take place, it is timely to focus on other emerging Human Resource Management challenges facing the Public Service. The following three are perhaps the most pressing. Challenge - Rewards and Compensation for Public Servants As a result of the steep downturn in the economy of Trinidad and Tobago in the middle 1980s, there was no upward movement in Public Service salaries between the years 1981 and 1996. On the contrary, there were cuts. In 1987, the government of the day discontinued merit increases as well as cost of living allowances. Two years later, an award for increases made by the Special Tribunal of the Industrial Court was suspended, and simultaneously, salaries were cut by 10 percent. In the 1996/1997 period, as the economy improved, were Public Service unions able to negotiate increases for their members. In spite of this recent upward movement, salaries in the sector remain at very uncompetitive levels. For example, senior executives in the private sector attract salaries of between TIS25,000 to overTTSIOO,OOO per month in some cases. Their counterparts in the Public Service, Permanent Secretaries, receive approximately TT$ 15,OOO including perquisites. Similar disparities exist at all levels. This situation cannot continue if the Public Service is to attract suitably qualified staff, particularly for jobs in the professional class. References Baptiste, R. G. (1998), Human Resource Management: Challenges for the Public Service of Trinidad and Tobago, Caribbean Dialogue, 4: 47- 51. Baptiste, R. G. (2004), The transformation of the postal services of Trinidad and Tobago. Public Admin. Dev., 24: 385–396 Solution to historical reward problems in Trinidad and Tobago public services? 2: 14% pay hike for public servants http://www.trinidadexpress.com/news/14-pay-hike-for--public-servants-296012061.html Against the background of continued “rest and reflect” action by members of the police, prisons and fire services over unsuccessful wage negotiations, public servants will receive a 14 per cent pay hike, retroactive at four per cent from January 2011, Chief Personnel Officer (CPO) Stephanie Lewis announced yesterday. The agreement follows a series of 14 meetings with the Public Service Association (PSA) on revisions to salaries and allowances for officers of the civil service, Tobago House of Assembly (THA), and statutory authorities, subject to the Statutory Authorities Act, chapter 24:01. The 14 per cent hike in salaries is calculated after the consolidation of cost of living allowance (COLA) of $145 and takes effect at four per cent from January 2011, at four per cent for January 2012 and at six per cent for January 2013. A release yesterday from the Personnel Department of the Office of the CPO stated the new COLA rates at $160 per month for 2011, $175 per month for 2012, and at $225 per month for 2013. “The parties have agreed also to a 15 per cent increase in the majority of allowances as specified,” the Office of the CPO stated. “This brings to an end the negotiations for revised terms and conditions of employment for the above-mentioned officers for the period January 1 to December 2013.” In the aftermath of the 14 per cent settlement, president of the Public Services Association (PSA) Watson Duke thanked CPO Lewis for displaying her “human” side. He also said 14 per cent was the highest offer ever. Meanwhile, members of the national security services today embark on day four of their “rest and reflect” action. The representing associations for police, prison and fire officers have been in negotiations with the CPO over wage increases. They, however, are refusing to accept her offer of 60 per cent of a 16 per cent market shift, which will translate into a rough average of 9.6 per cent increase of current salaries. The associations have been negotiating for current salaries to be brought in line with those of estate police at the Airports Authority which range from $24,000 to $26,000 monthly (for an ASP). The equivalent in the police and prison services ranges from $12,000 to $13,000 monthly. The CPO is not willing to give an increase in line with the Airports Authority, however, as these had not been approved by the Inter-ministerial Committee. 3: Economist on PSA settlement: Link wage hike to productivity http://www.guardian.co.tt/business/2015-03-13/economist-psa-settlement-link-wage-hike-productivity The 14 per cent wage increase the Public Services Association (PSA) settled for on Wednesday should be matched by increased productivity or else it could lead to inflation, Dr Roger Hosein, senior lecturer at the University of the West Indies (UWI), said yesterday. “Wage increases that are unmatched by a corresponding improvement in productivity will lead to some degree of inflation. The challenge here is to get a corresponding increase in productivity from the benefitting members of the PSA,” Hosein told the T&T Guardian yesterday. PSA has signed off on a new collective agreement with Chief Personnel Officer (CPO) Stephanie Lewis for the 14 per cent salary increase which covers the period 2011 to 2014. Commenting on that development Hosein said: “Two associated challenges would be worker absenteeism and worker ethic. The increase in salaries has to come with an increased element of monitoring and accountability. I am not sure what measures have been laid with the wage settlement by way of proportionally changing worker productivity and addressing issues associated with work ethic but I am assuming that it is a similar proportional change to the wage increase,” he said. He said that is more urgent during economically trying times. “If output per worker in the economy continues to fall, as has occurred since 2007, and wages increase, the real effective exchange rate will take a further hit and it is already about 50 per cent over valued. These are trying times and the hands of the next government will be filled with managing these various issues.” Daphne Barlett, president of the San Fernando Business Association, said the fact that Government can afford to pay public servants a 14 per cent salary increase over three years means the T&T economy is not as bad as it seems. “The fact that the Government as the largest employer can do this shows that the Treasury can handle this,” she said. Bartlett expressed concern that this higher wage level may not be be sustainable in the long run. “If the oil prices continues like this into the next fiscal year, the Government may have to look at job cuts and other decisions that could affect the economy negatively like a devaluation. Remember, this is an election year,” she said. However, labour consultant Robert Giuseppi does not believe the wage settlement will cause inflation. “A couple negotiations ago, the PSA settled for nine per cent and the other state agencies had settled for more as they held out for more during their negotiations. The PSA has been lagging. Only now PSA is filling the gap between their union wages and those other state agencies,” the retired trade unionist said. He said he wants to see how the 14 per cent salary increase and other benefits will be divided among the different grades of the public service. “When they get their retroactive payments and other benefits I hope the higher paid grades of the public service do not get more than those of the bottom,” Giuseppe said, adding that he does not see the outcome of the PSA negotiations impacting on other wage talks currently taking place. “This will not impact on the labour market as as each sector has its own circumstances and must negotiate on their own terms,” he said. He advised trade unions and employers to take into account the current state of the economy and do what is best. “The oil prices are playing tricks now and each party must give and take during the negotiations but must also do what is best for the country so that the economy will not suffer. Negotiations must be constructive,” he said.