Challenges of HRM

Diagnostic Study of the

Human Resource Management
System in Public Administration of
the Republic of Serbia
Belgrade, June 2002
Challenges of HRM
Diagnostic Study of the
Human Resource Management
System in Public Administration of
the Republic of Serbia

Belgrade, June 2002

Index Page

1. Preface.......................................................................................... 1

2. Acknowledgements ....................................................................... 2

3. Structure of the Report .................................................................. 3

4. Objectives and Methodologies....................................................... 4

5. Executive Summary....................................................................... 5

6. Selected HRM Focus Points........................................................ 10

6.1 Formal (Legal) Framework on HRM ...................................... 10

6.1.1 Legal Acts.................................................................... 10
6.1.1.1 Provisions of the Law on Labour Relations in State
Bodies (LRSB)...................................................................... 11
6.1.1.2 Implementation of the Law on Labour Relations in
State Bodies (LRSB) ............................................................ 13
6.1.2 Organigrams................................................................ 14
6.1.3 Job Descriptions .......................................................... 18
6.2 HRM Functions ..................................................................... 18
6.2.1 The Existence of Personnel Units ................................ 18
6.2.2 The Handling of HRM Functions .................................. 20
6.3 Public Employees – Facts and Figures ................................. 28
6.4 Public Employees Register ................................................... 30
6.5 Applied HRM Procedures and Practices ............................... 32
6.5.1 Employment................................................................. 32
6.5.2 Conditions for Access to Public Administration ............ 32
6.5.3 Announcement ............................................................ 34
6.5.4 Evaluation of the Candidates ....................................... 34
6.5.5 Shortcuts in Employment and Competitiveness ........... 35
6.5.6 Decision Taking ........................................................... 35
6.5.7 Job Introduction ........................................................... 36
6.5.8 Probation Period .......................................................... 36
6.5.9 Staff Appraisal ............................................................. 37
6.5.10 Promotion .................................................................. 37
6.5.11 Mobility ...................................................................... 37
6.5.12 Termination................................................................ 38
 6.5.13 Documentation of HRM Procedures........................... 38
6.5.14 Internal Information.................................................... 39
6.5.15 Labour Unions ........................................................... 39
6.5.16 Discipline, Corruption, and Conflict of Interest ........... 39
6.5.17 Conclusions – Applied HRM Procedures ................... 40
6.6 Development of Competencies (Training) ............................. 42
6.6.1 Funding of Training...................................................... 42
6.6.2 A preliminary Training Needs Analyses ....................... 43
6.7 Salaries and Benefits ............................................................ 45
6.7.1 Salary Structure........................................................... 45
6.7.2 Benefits ....................................................................... 48
6.8 Certain Organisational Issues ............................................... 48
6.9 Public Sector Employment Attractiveness ............................. 49
6.10 Respondents’ Proposals, Initiatives and Ideas .................... 50

7. Summary – Findings and Conclusions......................................... 51

7.1 Findings ................................................................................ 51

7.2 Conclusions .......................................................................... 54

8. HRM Reform Trends and HRM Comparative Studies.................. 57

8.1 Trends .................................................................................. 57

8.2 Comparative Studies............................................................. 58
1.1 Countries in Transition.......................................................... 63

9. Recommendations....................................................................... 65

9.1 Develop a strategy for change. ............................................. 66

Figure no. 4 Proposed Sequences in HRM Reform .............. 66
9.2 Clarify the ambition - tradition versus transition? ................... 66
9.3 Integrate the strategy for change of the HRM system into the
national reform agenda. .............................................................. 68
9.4 Policy-Making. Assuming the development of a civil service
system, policy-options should be clarified. .................................. 68
9.5 Decision-Making. Decisions on fundamental policy issues
should be a starting point for the development of the legislative
framework. .................................................................................. 68
9.6 Institutional Capacity Building I: Creation of a central level unit
responsible for the overall HRM system across the RIs. ............. 69
9.7 Institutional Capacity Building II: Creation/strengthening of
personnel units in RIs responsible for HRM functions. ................ 70
9.8 Institutional Capacity Building III: Prepare for Training -
 Creation of a permanent mechanism for continuous training of
public employees (civil servants)................................................. 70
9.9 Launch of ‘pioneer’ pilot projects. .......................................... 71
9.10 Law Making......................................................................... 71
9.11 Enactment of the legislative framework. .............................. 73
9.12 Start of the implementation of training. ................................ 73
9.13 Resources needed for the implementation of the legislative
framework. .................................................................................. 73
9.14 Design of the future top management system. .................... 74
9.15 Introduction of results-oriented (performance) management
techniques. ................................................................................. 74
9.16 A civil service pay-reform (as a long-term action)................ 74
9.17 Awareness of the management of the process.................... 75
9.18 Further work required.......................................................... 77

Annexes

A1 List of Law and Rules Guiding the Public Employees

A2 Laws and Rules Guiding the Public Employees (specified)

B1 Staff Units in Republican Institutions – Profiles (specified)

B2 Staff Units in Republican Institutions – Functions (summarized)

C1 Human Resources – Composition (specified)

C2 Human Resources – University Degree Specification (speci-

fied)

C3 Human Resources – Age, Sex and Turnover Rate (specified)

D Register on Public Employees (specified)

E1 Public Employees – Preliminary Training Needs Analyses

E21 Ranking of Training Topics - Employees in General (summa-

rized)
E22 Ranking of Training Topics - Managers in General (summa-
rized)

E23 Ranking of Training Topics - Heads of Personnel Units (sum-

marized)

F1 Public Employees’ Salaries, Year 2001 (specified)

F2 Average Gross Salaries, Year 1996-2001 (summarized)

F3 State Administration Salaries Share in the Budget, Year 2001-

2002 (summarized)

G Certain Organisational Issues (summarized)

H Public Sector Employment Attractiveness (summarized)

J1 Comparative Study – Hungary

J2 Comparative Study – Latvia

J3 Comparative Study – Slovakia

J4 Comparative Study – Slovenia

K1 Interview Guide, Part I

K2 Interview Guide, Part II

K3 Training Needs Assessment - List of Topics

L List of RI Participating in the Study

M Selected Bibliography – References

N Acronyms and Glossary of Selected Terms

1. Preface
This diagnostic study, carried out from April to June 2002, is part of a technical as-
sistance project “Human Resource Management System in Public Administration in
Serbia – basic Analyses and Training”, funded by the Royal Danish Ministry of For-
eign Affairs. On behalf of the Government of Republic of Serbia, the Agency for
Public Administration Development (APAD) by Mrs. Sonja Cagronov, Director, is in
the possession of the ‘ownership’ of the project.

Other elements of the project are a comparative study on civil service issues in
countries abroad, the drafting of certain policy papers on Human Resources Man-
agement (HRM) and finally the conducting of training on basic HRM and project ma-
nagement.

The outcomes of the first component of the project – the diagnostic study - are basic
analyses, conclusions and a list of recommendations regarding HRM in the public
administration. For a further review of the existing system, these results should be
taken into consideration. Furthermore, the findings may prove valuable in connec-
tion with the programming and implementation of future short and medium-term in-
terventions in the area of HRM.

Who should study this report? We suggest the following target group: Cabinet minis-
ters responsible for public administration issues, top and other officials operating at
the strategic level, members of the Civil Service Council, and advisors and consult-
ants working in the area of public administration reform, civil service development
and HRM. Also programming officers from international organisations and other do-
nor societies would probably benefit from the reading.

Busy readers can get a quick overview of the report by reading chapter 5, ‘Executive
Summary’.

In its publication of December 2000, “Governance for Human Development”, UNDP

recommended to “conduct a diagnostic study of the present situation in the field of
human resources management, beginning with the 15 Federal Ministries”. By the
present study, exactly this kind of study has been carried out. The basic steps have
been taken, and a joint platform for future actions has been set up. No questions
about it, a lot of further work is required.

1
 A small team of local and foreign consultants assisted by representatives from
APAD conducted the interviews, drafted the conclusions and listed the recommen-
dations. However,
views expressed in this publication do not represent official views neither of the Min-
istry of Justice, the Agency for Public Administration Development nor of any of the
republican institutions (RI).

2. Acknowledgements
First of all we would like to thank for the assistance offered by the foreign donor, the
Royal Danish Ministry of Foreign Affairs. This helping hand made it possible to cre-
ate a solid foundation for future interventions in the important area of HRM.

Also we want to thank Mr. Ivica Ezdenci, Assistant Minister, and Mrs. Gordana
Stanic, Head of Unit, both from the Ministry of Justice and Local Self-government,
for their constructive guidance.

Without strong backing from a large number of high-ranking ministry representatives

and others this study could not have been carried out. Around 70 top officials from
republican ministries and other public institutions devoted their time and provided
very valuable written and oral information in an atmosphere of active participation,
openness and commitment. All interviews were carried out punctually and well pre-
pared.

In particular we want to thank Mr. Dragan Sebrek, Secretary General, Mrs. Andjelka
Dimitrijevic, Senior officer, Mrs. Bratislava Ristic, Officer, all from Ministry of Social
Affairs, Mrs. Jelena Tisma Jovanovis, Secretary General and Mrs. Slavica
Kapetanovic, Senior officer, both from the Ministry of Education and Sport and finally
Mrs. Julijana Vuckovic, Secretary General and Mrs. Gordana Prokic Vojnovic, Man-
ager, both from the Ministry of Labour and Employment for their extraordinary assis-
tance in connection with the preliminary testing of the Interview Guide.

At an early stage of the diagnostic study Prof dr Dragoljub Kavran, President of the
Civil Service Council, provided useful information. Both Mr. Thomas Kercher, Pro-
gramme Advisor, United Nations Development Programme, and Mr. Nicolas Mar-
coux, Programme Manager, European Agency for Reconstruction, kindly contributed
by offering important background information. We are grateful for all of their inputs.

2
 In order to collect data for the comparative study on civil service issues we ap-
proached a number of contact persons in the countries in transition. They showed
their readiness to provide most valuable information. We take the opportunity to ex-
press our gratitude for their contribution.

3. Structure of the Report

This report is structured in three parts: I) Results from the diagnostic study (chapters
no. 6-7), II) HRM trends and results from the comparative study (chapter no. 8), III)
Recommendations (chapter no. 9), IV) Annexes.

In chapter 4 we describe the objectives and the methodologies.

Chapter 5 is the executive summary.

In chapter 6 we highlight a number of 10 selected focus points on certain HRM is-

sues including formal framework, HRM functions, profiles of public employees, pub-
lic employees register, applied HRM procedures and practices, training, and sala-
ries.
Also certain organisational issues and organisational challenges have been dis-
cussed. A number of annexes, which include detailed data, are connected to this
chapter.

In chapter 7 we list the main findings and conclusions of the diagnostic study.

In chapter 8 we describe major trends in HRM in other countries and a report from a
comparative study on selected civil service issues in Hungary, Latvia, Romania, Slo-
vakia and Slovenia is included.

Chapter 9 includes a list of recommendations on further steps to be taken in the field

of HRM.

A number of annexes include the details from the diagnostic study. In some cases
this information has been specified institution-by-institution, which can be identified
by their respective institution code number (ICNo) (please see Annex L). In other
cases details are presented in a summarized form.

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4. Objectives and Methodologies
According to the Terms of Reference, the objective of the study is:

“To develop a solid and agreed foundation for future initiatives and interventions in
the field of public HRM – by describing the present situation and by proposing needs
and directions for future development”.

The consultants - based on the main objective and resources available - developed
methodology applied in the study, as the most appropriate one. As regards the di-
agnostic study, the project team decided to focus on a number of specific human
resources management issues – based on information provided by no less than 30
ministries and other public institutions at the republican level. The involvement of all
ministries ensured the reliability of the information. This large sample approach was
on the expense of in-depth analyses. Further studies in selected areas will be re-
quired in the future.

This report includes a comparative study as well. In order to create a basis for an
informed debate on civil service options and solutions, information on particular civil
service issues in a selected number of countries was collected and reported.

Based on the findings a number of recommendations were developed by the con-

sultants.

Annex L contains a list of the RIs, which were invited for interviews. Bearing in mind
the ongoing restructuring of the federal/republican public administration, it was de-
cided exclusively to include institutions at the republican level.

Information was collected through (structured) interviews, which were conducted on

the basis of an ‘Interview Guide’ (part I and II). A draft of the Interview Guide was
tested at meetings with representatives from 3 ministries (see chapter no. 2). These
consultations led to valuable corrections of the draft.

The interviews were implemented from 17 April to 13 May 2002 by a project team
composed by 4 members (two representatives from the Agency for Public Admini-
stration Development (APAD): Mrs. Snezanana Nenadovic, Programme Coordina-
tor, and Mrs. Svetlana Djukovic, Project Assistant, and two external consultants (Mr.

4
 Amir Beslagic, Belgrade, and Mr. Jens Møller, PLS RAMBOLL Management, Den-
mark).

High rank officials from each of the ministries/other public institutions were inter-
viewed. Typically 2-4 officials under chairmanship of the secretary of ministry at-
tended each of the meetings, which usually lasted two hours. In total 67 officials
were involved in the interviewing phase.

In order to facilitate the collection of facts and figures (hard data), part I of the Inter-
view Guide was forwarded to the respondents in advance, whereas part II was not
introduced until the start of the interview. This latter part includes also the assess-
ment of certain issues, and it should be observed that the reported results exclu-
sively reflect the views of the interviewed (high rank) officials.

Some information is reported in the annexes of this study. In order to ensure the
confidentiality, personal views (assessments) based on part II of the Interview Guide
are summarized.

Regarding the legal framework, it should be noticed that the assessment was done
on the year 2001 version on the laws on HRM.

An institution code number (ICNo) for each republican institution have been as-
signed by the APAD, according to the type of organization and the chronology of
interviews held.

5. Executive Summary
This study focuses on the present Human Resource Management (HRM) in 30
Republican institutions (RI). The goal was to create a platform for future
interventions in this important strategic area – a starting point for debate and work.

The basis for reflection and debate has been widened – through the study’s provid-
ing of information about HRM systems in Hungary, Latvia, Romania, Slovakia and
Slovenia. Similarities and variations are detected. In our opinion, this material offers
a unique possibility to discuss the future Serbian model for a public HRM system.
Useful inspiration regarding models of HRM can be achieved from the comparative
studies.

5
The study has resulted in findings, conclusions and ‘recommendations based on
interviews with top officials in 30 Serbian Republican institutions, - some of them
traditional and ‘old’ organisations and others ‘young’ and newly created entities.

The study points out that the existing HRM system is based on a tradition for a legal
framework, which implies rather detailed regulations. Probably these detailed
regulations may foster a ‘what-was-not-prescribed, is-prohibited’ attitude.

So far, only limited initiatives for the development of the HRM system have been
taken, and a review or reform of the legislative framework is just in its early phases.
Although the new Labour Law opened up new opportunities for liberal HRM solu-
tions and some RI introduced new HRM tools and procedures, there is a need for a
systematic and coordinated approach to HRM changes or reform. At present, it is
too early to assess whether the new Labour Law improves (part of) the public HRM
system.

Despite the fact, that each ministry enjoys a high degree of autonomy regarding
HRM issues, the existing HRM system in Serbian public administration seems to be
rather unified and static. Despite some variations, in general the RIs practice within
the existing legal framework in a similar and standardised manner – based on the
legal framework and traditions.

Another characteristic is that politically appointed persons occupy key positions. Al-
though the study is not in a position proving that the administration is strongly politi-
zed, the presence of political appointees in strategic positions, e.g. as heads of
ministerial departments (assistant ministers) and secretaries of ministry, leads to –
at least in theory – a ‘risk’ of political hands-on in the recruiting of employees - that
decisions are influenced by political preferences. It should be noticed, that (part of)
the members of commissions for the assessment of candidates are political ap-
pointees. The study provided only anecdotal evidence that in certain cases non-
qualified people were employed based on non-objective criteria.

The system with political appointees in administrative top positions may lead to cer-
tain instability of public administration. Despite the fact that more of the top officials,
who participated in the interviews ‘survived’ the recent change of government, only
very few of them have been in their present position for several years. For the im-
plementation of long-term goals and strategies, continuity at the top level is key, and

6
we recommend a discussion of the design of the top management system. Regard-
ing officials at lower organisational levels, it might be the case that the administra-
tion is too static. All officials are employed on a permanent basis and dismissals are
reported to be rare.

Last year 6,25% of the employees left their job, and not all of them were replaced.
The recruitment and keeping certain categories of high profile specialists, appears to
be a major problem (in the future) and it should be considered how a personnel pol-
icy and amendments of the salary system could support solutions in this respect.

Unfortunately, this study does not have a sufficient background for drawing conclu-
sions regarding the efficiency and the effectiveness of the public administration.
However, we assume that more focus on output measurements – based on agreed
objectives and goals – would increase the efficiency, which by certain of the respon-
dents was reported being a serious issue. The introduction and realization of a per-
formance evaluation system will be an important tool in that respect.

The small – however encouraging – steps to improve professionalism in the recruit-

ment and selection process – by the introduction of new tools such as personality
and problem solving tests - should be continued and supported.

We conclude that it is a matter of urgency to find solutions for the establishment of a

training mechanism for continuous training of public employees.

The future project on the creation of a database on public employees – based on

advanced IT solutions – represents a huge step forward regarding the provision of
fast, reliable and detailed HRM information. Whenever possible, a link between this
database and the salary system, should be made, among other things to improve
the statistics and strengthen the monitoring of personnel costs.

As the Serbian public administration faces demanding challenges, e.g. drafting and
implementation of new legislative frameworks, strengthening of the citizens orienta-
tion, market economy, privatisation, contracting out, competition among service pro-
viders, strengthened international cooperation, European approximation, and the
introduction of administrative systems based on advanced information technologies,
HRM systems, that match these challenges should be developed.

7
Human resources at all organisational levels should be considered as an important
strategic resource and development of competencies will be crucial for the success-
ful implementation of reform goals.

The study recommends to prepare for the future by considering how to create a
modern, dynamic, flexible, differentiated, less rigid and bureaucratic, de-politicised
HRM system, in which the main focus is on motivation, performance measures, out-
puts, efficiency and effectiveness, quality and service.

Balanced solutions of stability (core administration) versus flexibility (‘other public

institution’) must be introduced. For the implementation of a ‘real’ reform of the HRM
system, the enactment of a law on civil servants is a ‘must’.

In brief the main recommendations are the following,

• to sequence the interventions in the area of HRM;

• to clarify the Serbian ambition – tradition versus transition?;
• to integrate a strategy for changes of the HRM into a national (public admini-
stration) reform agenda, in which the future state administration system
should be designed;
• to develop HRM policy options;
• to streamline the top management system by reviewing the border line be-
tween politics and administration (converting the status of key positions);
• to create a unit responsible for the overall HRM system across republican in-
stitutions;
• to create or strengthen HRM units in the RIs;
• to create a permanent mechanism for continuous training of public employ-
ees;
• to launch ‘pioneer’ pilot HRM projects, e.g. on management contracts, yearly
performance evaluation based on setting of individual objectives,
• in the medium-term to consider a public pay-reform;
• to pay attention to the management framework of the process,
• to consider whether a specific country (Austria?, Hungary? Sweden?) could
serve as a role model and its HRM system – after a careful review - more or
less be duplicated;

8
Much further work and research in the area of HRM is needed in the future - includ-
ing,

• an appropriate design of the future top management system (de-politization),

• a review and assessment of the appropriateness of the existing HRM control
system (the Rulebook on Internal Organisation and Job Systematisation and
the appropriateness, efficiency and effectiveness of the Administrative In-
spection set-up),
• a review and an assessment of the salary budget preparation and monitoring
system,
• a review and an assessment of the appropriateness, efficiency and effec-
tiveness of the Republican General Affairs Administration,
• a review and an assessment of the allocation of human resources seen in
the light of existing and future tasks and responsibilities of ministries,
• as a short-term activity to assist in the improvement of the procedures for
assessment of applicants,
• a review and assessment of the State Administration Exam set-up,
• to further develop the training needs analyses based on mapping of the indi-
vidual training needs,
• to collect and assess the experiences (advantages and drawbacks) from re-
publican institutions applying the (new) Labour Law,
• to study details of civil servant laws of e.g. Austria, Hungary and Sweden.

Based on the study - our ‘diagnosis’ – our overall conclusion is,

that the ‘patient’ is in a shape which certainly enables it to carry out duties of
today; during the interviews we met only committed and persuasive high rank
officials; however to prepare for future challenges, the public administration
should embark on a long-term development programme based on an explicit
setting of goals and strategies.

Provided that interventions are launched in proper doses over the next decade, -
and sufficiently supported by the international donor society - such an initiative will
make the public administration ‘fit for fight’ – ready to meet the challenges of tomor-
row.

9
6. Selected HRM Focus Points
In this chapter we present our findings from a focus on 10 particular HRM issues,
which we found to be of a specific relevance. The selected issues are the following,

• formal (legal) framework on HRM (6.1);

• HRM functions (6.2);
• public employees (6.3);
• public employees’ register (6.4);
• applied HRM procedures and practices (6.5);
• development of competencies (training) (6.6);
• salaries and benefits (6.7);
• certain organisational issues (6.8);
• public sector employment attractiveness (6.9);
• respondents’ proposals, initiatives and ideas (6.10).

6.1 Formal (Legal) Framework on HRM

6.1.1 Legal Acts

The survey included a review of the enforcement of the existing legal framework on
HRM. The results are shown in Annex A2.

Two most important laws define the legal framework for the HRM: Law on Labour
Relations in State Bodies (LRSB) and Labour Law (LL). There are no provisions in
the Serbian Constitution regarding public employees.

RIs like ministries, special government bodies, Service of the President of the Re-
public, Service of the Parliament in their activities apply the LRSB as the main legal
framework. Other institutions such as the Agency for the Development of Small and
Medium Size Entrepreneurship, the Republican Fund for Health Insurance, the Re-
public Office for Informatics and Statistics and other apply LL. Whenever there are
some open legal issues in RI, which could not be resolved with the LRSB, LL as the
more general one is applied.

10
 As an exception, HRM in the Ministry of Interior is regulated by particular Law on
Internal Affairs, and other decrees and rulebooks such as the ”Decree on Job As-
sessment and Upgrading and Loss of the Rank of Ministry of Interiors Members”,
”Rulebook on Compensations to Ministry on Interiors’ Employees Directed to Official
Duties” etc.

For more detailed review of the most important laws in the field of HRM applied in
the RIs please refer to Annex A1 and A2.

6.1.1.1 Provisions of the Law on Labour Relations in State Bodies (LRSB)

The LRSB in the Article 1 “sets out the rights, obligations and responsibilities result-
ing from employment of persons employed in ministries, special organizations,
courts of law, public prosecutor’s office, public attorney office, magistrate bodies,
and services of the assembly, President of the Republic, the Government and the
Constitutional Court... and persons appointed by the Government”. Its provisions
apply to all employees as well as elected and appointed persons (Article 2). It regu-
lates the promotion based on demonstrated and apprised working capacity (Article
3). It explicitly forbids membership of executive bodies of political organizations (Ar-
ticle 4).

It defines the general conditions for employment (Article 6). It introduces the trial
work institute which should be specified in the rulebook (Article 7).

A person could be employed as elected, appointed, or chosen among the applicants

or taken-over from another state body (Article 8). The advertisement on vacancy
should be publicly announced (Article 8) and the final decision on chosen person
should be made by the official in charge after maximum 15 days (Article 10).

Apprentices are employed for their first job for six months period (high school di-
ploma) and a year (university degree). During this time they are trained to perform
certain work in accordance to the programme written in a form of a document. Af-
terwards they should pass the exam. If they do not pass the exam, the engagement
is terminated. Those who pass the exam could work permanently on the adequate
position (Article 11). Volunteer work is also allowed for apprentices but their work is
not remunerated (Article 12).

11
Assignation of the employees from one to another post is allowed (Article 14).
Transfer between the state bodies is possible if agreed between heads of state bod-
ies and the employee’s willingness (Article 15). An employee could be temporarily
transferred to another state body for up to a one year period even without his/her
approval due to increased volume of work (Article 16). An employee could be trans-
ferred without his/her approval to another region up to six months (Article 17).

Underperformance of an employee longer than three months brings to termination of

employment. A special commission will assess the performance (Article 19).

Inadequate work of an employee could be rejected in case of force major, to prevent

material damage, risk on human health and lives (Article 21).

Employees are obliged to follow orders of the officials that are in accordance with
the law. If the legality of the orders is in doubt, this should be pointed out and the
execution could be delayed. Repeated order in written form must be executed. Em-
ployees are responsible for executing illegal orders if they do not warn their superi-
ors (Article 22).

Employees are obliged to keep the secrecy of information (Article 23).

All employees are obliged to increase professional qualifications and to attend

professional trainings (Article 24).

Titles depend on the education and for university degree employees are: e.g. advi-
sor to the minister, advisor to the official in charge, independent professional asso-
ciate, senior professional associate, and professional associate. College degree
employees are titled as senior associate and associate and for high school employ-
ees senior officer and officer (Article 27).

Employees could be promoted after the job assessment (which is done once a
year). Government decree covers this field (Article 33). Automatic promotion is after
two consecutive years with highest marks (Article 34). Automatic degradation comes
after two consecutive years with lowest marks (Article 35). Appraisal marks are re-
corded in the work list (Article 36).

The articles covering salaries for work, vacation and for non-working holidays are
out of the power. The “Decree on the Coefficients for Accounting and Salaries Pay-

12
 ment of Elected, Appointed and Employees in the State Bodies“ covers these is-
sues.

Responsibility of employees is determined as the material and the disciplinary one

(Article 53). Disciplinary liability is for violating of working obligations and responsi-
bilities and could be minor and major (Article 59). The Disciplinary Commission ap-
pointed by the official in charge carries out the disciplinary procedures (Article 61).

Employees could be transferred to another state body due to reduced scope of work
or reorganization. If the employee does not accept new post, the termination of the
employment follows (Article 65).

The Administrative Inspection supervises the rights of the employees (Article 72).

6.1.1.2 Implementation of the Law on Labour Relations in State Bodies (LRSB)

The research has shown that not all legal provisions were applied in the RIs. More-
over, there are some contradictions between the information provided in written re-
ports made by the RIs themselves and the information they delivered orally during
the interview. For instance more than 50% of the RIs stated that they do not apply
the “Decree about Appraising the Performance of Employees in State Bodies” (Oc-
tober 1992). The rest of the RIs responded that the Decree is in force, but during the
interview they stated that they do not apply the Decree.

Based on the “Decree on the Principles for the Internal Organisation and Job
Classification in the Ministries and Special Organisations” internal organization and
jobs classification are implemented in all RIs. They are particularly defined in a
rulebook (on internal organization and job systematisation) which each of the RIs
has.
Most of the RIs apply the departmental organization. As the rule, organizational
units are established according to the division of labour: the organizational structure
consists of a few departments including a general administration department. De-
partments are in charge for the main fields of responsibility of the RI and a secre-
tariat is in charge for legal position, communication with citizens/companies/entities,
other external and internal administration and the logistics for the RI. In the rulebook
the services rendered by a RI and particular processes are stated. It also enlists
positions and describes jobs of permanently employed staff that carry out particular
processes.

13
 Although the existing organization of the RIs makes it able performing of the particu-
lar services, it is neither flexible enough nor adaptable to give the proper answers to
new project’s challenges. In most of the RIs restructuring based on the revision of
rendered services and processes is needed. It is obvious that the new organization
structure should be based on identification of all of the processes needed to carry
out a RI responsibility effectively. In accordance with the future role, their functions
and principles of the new organization of a republican institution, reengineering of
the existing processes and the introduction of the new ones should be done.

In practice, rulebooks were written in an old-fashioned manner and do not strictly

define job profiles, key processes and the results expected, as well as the profile of
an employee. Although some of the requirements could be found in existing job de-
scriptions, the whole approach in existing rulebooks does not cover this topic prop-
erly.

However, there is an encouraging effort detected in a certain ministry to prepare a

new rulebook which would be defined properly, specifying job profile, key processes
carried out, results and employee profile for existing and new jobs.

The Government has started the procedure to harmonize LRSB and LL. The draft
amendments already went into the parliamentary procedure.

A draft Law on Conflicts of Interest is already in the pipeline in the Parliament.

6.1.2 Organigrams

Organizational structures which are designed in rulebooks of each RI are presented

in form of organigrams.

Top management positions are normally reserved for political appointees. Posts like
assistant minister, general secretary of the ministry or director of the institution are
occupied often by members or delegates of political parties and appointed by the
Government for a four years period. In institutions like the General Secretariat of the
Government and the Ministry of Finance top employees cover some of these posts.
Need to provide continuity in public administration is recognized in some RIs.

An example of an organisational chart (Ministry for Transport and Telecommunica-

tions) is shown below. Positions held by political appointees are shaded.

14
15
Figure No.1. Example Extract of the Scheme of the Organization of the Ministry for Transport and Telecommunications)

Council of the MINISTER

of Transport and
Minister
Telecommunications

Deputy Minister Executives

Unit of Legal,
Administrative
GENERAL
SECRETARY Procedures and Common
SECRETARIAT
Administration

Head of the Unit

Department of Department of Roads Department of Department of Air Department of Water

Telecommunication and and Road Traffic Railways Traffic Traffic and Airports Transport and Safety of

ASSISTANT ASSISTANT ASSISTANT ASSISTANT

MINISTER MINISTER MINISTER MINISTER

Unite of Unit of Studies and Unit of Statistics, Unit of Statistical, Unit of Statistical, Ana-
Telecommunication and Analysis Analysis and Admini- Analytical and Admini- lytical and Administra-
Postal Traffic strative Tasks strative Procedures tive Procedures

Head of the Unit Head of the Unit Head of the Unit Head of the Unit Head of the Unit

Shaded boxes – functions carried out by political appointees

16
6.1.3 Job Descriptions

General conclusion about the structure and content of job descriptions within RIs is that
there are variations regarding task specifications and job requirements. Except the Min-
istry of Interior there are no other institutions with overall description of the role and re-
sponsibility of the posts.

Personal profile is not defined except in the job description created in the General Se-
cretariat of the President of The Republic of Serbia. Education and experience are the
main requirements mentioned in all documents and in particular cases language skills
or PC literacy is requested. There are no other requirements like management skills,
project management, resource management, willingness for teamwork etc.

In Serbian administration term “condition for work” (“uslov za rad”) is used as a term for
“job requirements”.

6.2 HRM Functions

6.2.1 The Existence of Personnel Units

The existence of personnel units have been reported in 8 out of 30 interviewed RI, as
shown in annex B1. On the other hand, during the interviews it was clarified that most
of reported units are performing not only personnel issues but general administration,
legal and other issues as well. Since most of the RIs do not have a personnel unit, the
personnel function is carried out by an employee who is usually located in the general
administration of the secretariat/general administration department. Other HRM func-
tions are carried out by heads and very often by collegiums (consisting of minis-
ter/director, deputy minister/deputy director, assistant minister/assistant director, secre-
tary general, and sometimes heads of the units) of the RIs.

The whole HRM function is in fact dispersed over the RI and as the rule the smallest of
its part is dedicated to those executives formally in charge. Formally the head of the RI
(minister/director) is responsible for the activities of the institution including HRM. Prac-
tically some of the key HRM functions are located in the collegiums. The collegium
usually approves the incentives for new employment and the changes of the Rulebook.
In such a manner the collegium is in charge for personnel planning. A kind of long-term
approach to HRM in a sense of explicit defining the HRM long-term goals, strategy, and
politics is not applied. These strategic issues are covered more intuitively.

18
In the eight RIs, which reported the existence of the personnel units, the total number
of employed was 97.

The educational background of the personnel affiliated to the personnel units is as fol-
lows:

• law: 38;
• economy: 3;
• technical science: 1;
• social sciences: 3;
• psychology: 2;
• management: 2;
• other: 48.

It appears that 40% of them are lawyers (please see Annex B1).

From the same annex it can be seen that 76 computer/work stations are installed in
these units and that only four of them have access to the Internet.

The main functions of the personnel units are shown in Annex B2. Apparently the main-
tenance of the personnel records and the development of statistics are the most fre-
quent functions. Finally, the study has shown that the role of personnel unites is more
advisory than decision making, more operational than strategic. Only one republican
institution reported that their staff unit makes strategic decisions (Annex B1).

19
6.2.2 The Handling of HRM Functions

The following table shows the organizational units and individuals involved in various HRM functions.

Table No. 1 Organizational Units and Individual involved in various HRM Functions

Service of the Parliament ;

Ministries Special organizations General Secretariat of the Republican bureaus
President of the Republic of
Serbia
1 2 1 2 1 2 1 2
HRM function Formally Informally Formally Informally Formally Informally Formally Informally
1 2 3 4 5 6 7 8 9
Development Minister Collegium General di- Deputy direc- Secretary Secretary General di- General di-
of personnel rector tor and assis- general general with rector/Board rector/Board
policies tant directors assistants of directors of directors

Making the Minister Collegium General di- Deputy direc- Secretary Secretary General di- General di-
personnel rector tor and assis- general general with rector/Board rector/Board
planning tant directors assistants of directors of directors

Shaded boxes – functions carried by political appointees

Partly shaded - functions carried by political appointees and civil servants

1
According to the low or other regulations
2
In practice

20
 Service of the Parliament ;
Ministries Special organizations General Secretariat of the Republican bureaus
President of the Republic of
Serbia
Drafting of Head of the Head of the Head of the Head of the Secretary Secretariat Heads of the Heads of the
staff regula- unit/Secretary unit/Secretary unit unit General units with as- units with as-
tions General General sistant direc- sistant direc-
tor tor
Drafting of
hand-
books/manua
ls3
(see Chapter
6.5.13 )
Organizing Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of
examina- Justice Justice Justice Justice Justice Justice Justice Justice
tions4

3
Handbooks do not exist in most of the interviewed institutions
4
State exam is organizing and performing in the Ministry of Justice for all employees in Public Administration

21
 1 2 3 4 5 6 7 8 9
Making the Personnel Personnel Personnel Personnel Deputy of Deputy of Personnel Personnel
announce- officer officer officer officer Secretary Secretary officer officer
ment Gen- Gen-
(Ch. 6.5.3 ) eral/Personne eral/Personne
l officer l officer
Setting up Col- Col- Col- Col- Selection Selection Personnel Personnel
criteria for legium/Selecti legium/Selecti legium/Selecti legium/Selecti panel panel unit unit
5
selection on panel on panel on panel on panel
Interviewing Selection Selection Selection Selection Secretary Secretary Selection Selection
of applicants panel panel panel panel General Gen- panel panel
(Ch. 6.5.4 ) eral/Selection
panel
Testing of
6
applicants
(Ch. 6.5.4 )
Final selec- Minister Selection Secretary Selection Secretary Secretary General di- Selection
tion panel Gen- panel General Gen- rector panel
(Ch. 6.5.6 ) eral/Director eral/Selection
panel

5
General criteria for selection are provided in Law and in the Rulebook on the Internal Organization and Systematization of the Job Places. Selection
panels are setting up preferable criteria
6
Testing is not a part of the selection process

22
 1 2 3 4 5 6 7 8 9
Introduction Assistant Employees in Assistant Employees in Secretary Employees in Assistant di- Employees in
of newcom- minister that unit direc- that unit General that unit rector that unit
ers tor/Assistant
(Ch. 6.5.7 ) Secretary
Conducting Immediate Immediate Immediate Immediate Immediate Immediate Immediate Immediate
staff apprais- superior superior superior superior superior superior supe- supe-
7
als rior/Panel rior/Panel
(Ch. 6.5.9)
Making deci- Minister Assistant General Assistant Secretary Assistant General Di- Assistant di-
sions on Minister Direc- direc- General Secre- rector rectors
promotions tor/Secretary tor/Assistant tary/Secretary
(Ch. 6.6.10) General Secretary General

7
Staff appraisals are not formally conducting ( see chapter 6.6.9 )

23
 1 2 3 4 5 6 7 8 9
Organizing Republican Republican Republican Republican Republican Republican Own initiative Own initiative
training of General Af- General Af- General Af- General Af- General Af- General Af-
8
staff (Ch. 6.6 fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini-
) stration/Own stration/Own stration stration stration stration
initiative initiative
Maintenance Personnel Personnel Personnel Personnel Personnel Personnel Personnel Personnel
of staff re- officer officer officer officer offi- offi- officer officer
cords cer/Assistant cer/Assistant
(Ch. 6.4 ) Secretary Secretary
Development Personnel Personnel Personnel Personnel Personnel Personnel Personnel Personnel
of statistics officer officer officer officer offi- offi- officer officer
cer/Assistant cer/Assistant
Secretary Secretary
Calculating of Secretary Secretary General General Secretary Secretary General Di- General Di-
budget for General General with Direc- Direc- General General with rector rector with
9
salaries financial unit tor/Secretary tor/Secretary financial unit financial unit
General General with
financial unit
Monitoring Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of Ministry of
the costs for Finance Finance Finance Finance Finance Finance Finance Finance
salaries

8
Only few institutions reported that they organized trainings on their own ( English and computer skills )
9
Budget for salaries is a part of the total budget of each institution

24
 1 2 3 4 5 6 7 8 9
Making the Republican Republican Republican Republican Republican Republican Republican Republican
accounting General Af- General Af- General Af- General Af- General Af- General Af- General Af- General Af-
for salaries fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini-
stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac-
counting de- counting de- counting de- counting de- counting de- counting de- counting de- counting de-
partment) partment) partment) partment) partment) partment) part- partment)/
ment)/Own Own account-
accounting ing depart-
department ment

25
 1 2 3 4 5 6 7 8 9
Administra- Republican Republican Republican Republican Republican Republican Republican Republican
tion of sala- General Af- General Af- General Af- General Af- General Af- General Af- General Af- General Af-
ries fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini- fairs Admini-
stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac- stration (ac-
counting de- counting de- counting de- counting de- counting de- counting de- counting de- counting de-
partment) partment) partment) partment) partment) partment) partment)/ partment)/
Own account- Own account-
ing depart- ing depart-
ment ment
Internal in-
formation
(Ch. 6.5.15 )
Cooperation
with the trade
unions
(Ch. 6.5.14)

26
6.3 Public Employees – Facts and Figures

In March 2002 the number of employees in the RI in which the research was conducted
was amounting to 54,804*) **).

The highest number of employees was in the Ministry of Interior (36,645) and in the
Republic Revenue Agency (7,696) followed by the Republican Pension and Disability
Insurance Fund (2,664) etc.

The number of employees in ministries is presented in the following breakdown:

Table No. 2 Number of Employees in Republican Ministries (March 2002)

Number of
No. ICNo Ministry employees
1 1.01 Ministry of Transport and Telecommunications 114
2 1.02 Ministry of Social Affairs 111
3 1.041 Ministry of Agriculture, Forestry and Water Management 835
4 1.05 Ministry of International Economic Relations 23
5 1.07 Ministry of Health and Environmental Protection 369
6 1.08 Ministry of Economy and Privatisation 57
7 1.09 Ministry of Interior 36,645
8 1.10 Ministry of Education and Sport 395
9 1.11 Ministry of Energy and Mining -
10 1.13 Ministry of Construction and Urban Planning 71
11 1.14 Ministry of Religions 7
12 1.15 Ministry of Science, Technology and Development 38
13 1.16 Ministry of Trade, Tourism and Services 745
14 1.17 Ministry of Labour and Employment 290
15 1.19 Ministry of Culture 35
16 1.20 Ministry of Justice and Local Self-government 115
17 1.22 Ministry of Finance and Economy 103

Total number 39,953

_____________________
*) Number includes all the employees to whom the coefficient/classes system of salaries is applied and includes the
minor number of those employed temporarily.

**) Data for the Ministry of Energy and Mining and Republican Agency for the Development of Small and Medium Sized
Entrepreneurs are not included.

In the year 2001 the number on the payroll in RI interviewed was 54,482***). This num-
ber includes 1,346 temporarily employed.

28
Among those at the highest positions in RI (minister, deputy minister, assistant minis-
ter, general secretaries, for government institutions and director, deputy director, assis-
tant director for public services) there were 242 elected, appointed and nominated per-
sons. Compared to total number on the payroll their share was 0.4%.

Concerning the education structure 11,732 persons (22.2%) had a university degree.
6,774 persons (12.8%) graduated from a college. The great majority amounting to
31,799 (60.0%) finished high school. The number of employees having other qualifica-
tions was 2,654 (5.0%).

Figure No. 2 Public Employees - Educational Level (2001)

5%
22%
University
degree
College degree

High school
degree
Others
13%
60%

Lawyers (amounting to 3,525) and economists (3,438) represent the biggest share
of university degree holders. Following are technical (1,407), social sciences (846)
and other.

29
 Figure No. 3 University Educated Employees – Educational Background (2001)

Law
2415
42 3525 Economy

55 Technical
Sciences
Social Sciences

Psychology
846
Management
1407
Other
3438

The total number of males employed in RI was 35,502 or 69.6% and females 15,503 or
30.4%.

The average age of employees, calculated as the average of RI averages, was 43.4
years. Among them the average age for males was 45.1 and for females 40.3 years.

Excluding the employees of the Ministry of Interior, as a very numerous and a relatively
young staffed RI, the number of employed males in the rest of RI comes to 7,161
(42.5%) and 9,702 (57.5%) of females. The average age for RI now becomes 43.9,
whereas 46.8 for males and 40.7 for females.

For more detailed breakdown please see Annexes C1, C2, and C3.

__________________
***) Number includes all the employees to whom the coefficient/classes system of salaries is applied and includes those
employed temporarily by the contract.

6.4 Public Employees Register

All of the RIs are keeping records on employees (“the work list”, LRSB, Article 36).
Usually these records are connected to the basic employee data such as name, birth
date, qualification, copies of diplomas, certificates, resolutions on vacancies, etc. How-
ever, qualitative data such as additional skills, employee’s profile etc. is not included.

30
As shown in Annex D, all records of staff are kept in hard form. Personal dossiers and
Register Books of employees are usually the forms, which are circulated among all of
the RIs. All documents concerning the qualifications needed, decrees concerning pro-
motion, annual vacation, etc. are in the personal dossier.

Some institutions made an individual effort making a soft copy of the record. Usually
the soft copy of the contents of personal file does not differ from hard copies. However,
in case of variations, hard copy prevails. Data are mainly recorded as text files.

Some RIs developed an improvised database adapted from external sources. Others
developed their own (“home-made”) database. However, none of them were satisfied
with their solutions.

The executives in charge for personnel functions perform all the records and statistics
manually.

The data recorded in the Ministry of Finance cover all persons listed on the payroll,
which records basic attributes of the employees in connection with the salary.

An employees’ central register has not yet been developed. Organizing a unique data-
base with all relevant data recorded including the personal profile data is a matter of
urgency.

31
6.5 Applied HRM Procedures and Practices

6.5.1 Employment

Department heads (managers or assistant ministers) take the initiative at new employ-
ment – and it is usually approved by the collegium (consisting of the minister, deputy
minister, assistant minister and secretary general). In special RIs, the director, in co-
operation with the deputy director and assistant directors, is responsible for this func-
tion (please see table no. 1).

In accordance with the rulebook, where all jobs are enlisted, the collegium refers to the
vacancy and to the employment criteria. In the rulebook the employment criteria are
those stated in the LRSB (Article 6).

If there is a need to create a post, which is not already included in the rulebook, a pro-
posal in a form of change of the book is submitted to the Ministry of Justice, Ministry of
Finance and Economy, and to Republican Secretariat for Legislation for their approval.
Based on these approvals, the Government makes the final decision on establishing a
new post.

The criteria applied are usually the general criteria (see chapter 6.5.2 below), and the
specific ones, related to the specific job, such as particular education, professional ex-
perience, additional requirements such as drivers license, PC literacy, or foreign lan-
guage. No other personal profile is requested.

An Employment Commission or an ad hoc selection panel in the RI, usually consisting

of a manager in charge, assistant minister, and a general administration representative
carries out the employment procedure.

6.5.2 Conditions for Access to Public Administration

In practice the access to the public administration is based on formalized criterions and
procedures.

Basically, the employment criteria are reduced to:

32
 • general criteria, prescribed by the LRSB, such as citizenship, no criminal re-
cord, not put under criminal law trial, health criterion, older than 18 years and
younger than 65 (men) or 60 (women) years, education, etc. (LRSB, Article 6),

and

• specific criteria, prescribed by the rulebook, such as education, work experi-

ence, State Administration Exam (SAE) or “Bar examination”. In some of the
rulebooks computer literacy and foreign language is looked for, in others spe-
cialized computer skills needed for IT positions.

Despite the fact that the upper limit of age is 65 (60) years, in some institutions they
introduced a HRM policy according to which they prioritise the employment of younger
persons out of more candidates with similar qualifications. The reason is because of a
relatively high average age of the existing corps of employees of 43.4 years (Annex
C3). It is found that younger staff is more open for learning and applying new skills, and
that new working methods therefore easier could be introduced.

In Ministry of Interior, specific age limits are introduced, in accordance with the particu-
lar regulations applied. For example in the police force the age of 30 years is pre-
scribed as the maximum age for first employment.

Additional training before or after the employment is not usually required. However all
employees in ministries and most of the other RIs are obliged to pass the SAE (LRSB,
Article 11). In case the candidate has not passed this exam previously, after getting
employed he/she has to pass it within six months (high school education) or a year (B.
Sc, B.A, M. Sc, Ph. D). In ministries it is an invariable rule, that all employees pass the
exam. In other RIs, SAE is compulsory because of the administrative procedures ap-
plied in their work. Newly employed who did not pass the exam, must fulfil this obliga-
tion within certain time limits.

The SAE is compulsory both for apprentices and seniors. It is organized and held by a
commission in Ministry of Justice. It consists of several subjects like Constitution, Law
on Public Administration, administrative procedures, and office administration. As a
part of this exam, there are particular regulations concerning the activity, which the
employee will carry out. For this part of examination each republican institution dele-
gates an expert to the commission. Candidates are preparing for the exam on their own

33
 using a handbook edited by the Ministry of Justice. The institution in which the candi-
date is working, covers the costs of the examination.

6.5.3 Announcement

After the approval by the collegium, the public announcement text is prepared by the
personnel unit or by the General Administration Sector.

LRSB and LL are the two basic regulations applied. Ministries, General Secretariat of
the Government, and certain other RIs apply the former law. The employment proce-
dure defined in this law is through the public announcement of the vacant positions
(LRSB, Article 9).

According to the LL, which is applied in other state institutions such as the Republican
Fund for Health Insurance, a public announcement is not required.

In collaboration with the Republican Labour Market Bureau, the public announcement
appears in daily “Borba” and, if so desired by the RI, additionally in other newspapers.

Normally, preparatory activities for urging of potential candidates are not held. As an
exception in one ministry a kind of “headhunting” practice is used. Potential candidates
are searched for at the universities, specialized fairs, and within business entities and
asked to apply when a public announcement appears.

6.5.4 Evaluation of the Candidates

The personnel executive or an employee from the general administration sector draft
the list of candidates complying with the general and specific conditions.

The evaluation process is based on the applicant’s fulfilment of general and specific
criterions, additional skills, professional profile and the general impression presented at
the interview.

The Employment Commission or the ad hoc interview panel conducts the interviews
with the candidates.

Testing of skills and expertise is rarely applied as part of the selection procedure and is
mainly done for IT experts and typists. In the Ministry of Interior and the Republic

34
 Revenue Agency, particular testing of psychophysical, health and other personal
characteristics, due to the particular regulations, are carried out.

A new practice started recently. In a certain ministry the selection procedure is done
checking some skills through problem solving tests.

Selection criteria applied in the RI are not unified because no specific procedures have
been set up.

6.5.5 Shortcuts in Employment and Competitiveness

Apart from the standard employment procedure through public announcement as de-
scribed in the previous chapter 6.5.4, the following ways of employment were ob-
served:

• employment without the announcement;

• transfer;
• illegal employment.

Those RIs which apply employment procedure according to the new LL, could employ
without public announcement. This practice has started up enabling fast employment of
appropriate candidates as the main advantage.

The possibility to transfer employees from other RIs (LRSB, Articles 15-16) is the legal
option which is used in practice as well. Obtaining the approvals from both of the RI
and the willingness of an employee to switch to another institution ensures a fast pro-
cedure and the employment of a professional with well known capabilities, already trai-
ned for work in state administration.

It is reported, that in some ministries, during the mandate of the previous government,
illegal engagement was done. Some people have been employed without vacant posi-
tions and/or without having adequate education and professional background. The
Administrative Inspection under the Ministry of Justice, instructed the ministries in
question to terminate the engagement of these employees.

6.5.6 Decision Taking

After the interviews with the short-listed candidates, a draft decision is made usually by
the Commission in the form of the suggestion that recommends one candidate per post

35
 with the overview of other short-listed candidates and forwarded to the minister/director
who is then taking the final decision.

The head of the RI is authorized to take the final decision about the choice of the can-
didate (LRSB, article 10). In some RIs it is practice that the head himself/herself takes
part in the (final) interview and thus directly takes the employment decision.

6.5.7 Job Introduction

In almost all of the RIs, there are no written programs for the introduction of new em-
ployees. In some RI there are few exceptions for apprentices. In practice the method
used for job introduction of senior newcomers is a mentorship. A newcomer works and
learns with assistant ministers/assistant directors and senior colleague in their depart-
ment and unit. During their practice apprentices usually get acquainted with the work of
all departments and finally spends most of the time in the department and sector con-
cerned. The method used for introducing apprentices is mentorship as well.

6.5.8 Probation Period

Probation period is applied in following entities:

• in entities applying only LL (Republican Fund for the Health Insurance etc.) in
accordance to the legislative solutions;
• in entities which applies LRSB in State Bodies (ministries, General secretariat
of the Government etc.) only for apprentices;
• in entities which applies LRSB (ministries, General secretariat of the Govern-
ment etc.) through the institute of limited period engagement.

In entities applying only LL, practice of probation work just started to bee applied. New
employees are signing the employment contract in which three months period is stated
as a trial work.

In those entities applying LRSB, apprentices have to become employed for limited pe-
riods only, six months for people having a high school education and twelve months for
those having a college or faculty education. During this period apprentices are ob-
served while they are taught particular skills and perform some duties and jobs.

Regarding specific professions (such as Health Inspectors, Veterinary Inspectors, Wa-

ter Resources Inspectors etc.) the provision regarding probation is not applied due to

36
 the fact that it is difficult to recruit people having this professional background. How-
ever, all agree that probation periods should become compulsory.

6.5.9 Staff Appraisal

The LRSB (Articles 3 and 33) as well as the Decree on Appraising Employments in
State Bodies (Decree no. 11-6131/83-18, 1992) introduce the system of staff appraisal.

However, in most of the RIs staff appraisals are not carried out according to these
regulations. Marks are not recorded on annual bases. Superiors on the occasion of
promotion make appraisals intuitively.

When in a ministry where efforts to introduce a system of objectified criteria was done,
the management did not accept such initiative. In another ministry, the minister in char-
ge did not approve the defined criteria.

In the republican bureaus, the assessment is made in a descriptive way, and in one
bureau, a panel for the assessment is established. In most of the RIs the prescribed
working-sheet is not applied.

The Ministry for Interior, because of its unique activities, has an internal Rulebook on
Performance Assessment, Obtaining and Loosing the Rank in Ministry of Interior Mem-
bers.

6.5.10 Promotion

Promotion (LRSB, Article 34) is usually based on the knowledge of the superiors on the
achievements and capabilities of employees. Apart from fulfilling the conditions pre-
scribed by law (educational background and years of working experience), decision on
promotion is rarely based on records on the achievements which should be registered
in the working list. Minister/director is making the decision on promotion, based on rec-
ommendation of the assistant minister/head of the unit.

In some cases all employees that fulfilled the formal criteria were promoted to a higher
position. This was made as an incentive, because of relatively low salaries.

6.5.11 Mobility

Mobility of the staff within the RI and between RIs is being practiced. However, this
practice is not widespread. There are different examples of mobility within a depart-
ment and between departments of RI. There are also examples of switching the em-

37
 ployees between the RIs. From a legal point of view, transfer between different RIs re-
quires formal approval of both the RIs and the person concerned.

As a regular practice in some RIs, like in the Ministry of Interior, due to the service
needs, there are temporary regional transfers, which are obligatory.

One reason of limited mobility is unawareness of the importance in a sense of positive

global effects. Another reason is high specialization of particular position. Mobility is
seen rather as a partial – individual solution that resolves a single personal problem
switching an employee to another department, section (another region) or entity.

Nevertheless, in a few RIs, the awareness of possible positive effects was stated.

6.5.12 Termination

General impression in RIs is that most employees are leaving their positions in state
administration mainly for two reasons: switching to the private sector or retire.

Those employees who have switched to the private sector did it because of the better
salaries and other benefits. No matter the average salaries in the business sector are
relatively lower in comparison to the state administration, particular material position of
the ex state administration employee switched to private sector is improved. The rea-
son is better valuation of the value of their knowledge, in particular good understanding
of the state administration processes.

Dismissals for political reasons are seldom, and if they happen, formal reasons such as
reorganization of RIs are used as justification.

6.5.13 Documentation of HRM Procedures

According to the survey, applied HRM procedures are not recorded as processes in the
sense of quality management. Manuals on various personnel issues are not developed.
The procedures are defined in regulations. Only minor number of procedures is re-
corded in a written form. Existing handbooks are just internal manuals, not regulated by
laws. Generally they refer to some inspections or to some particular working proce-
dures. However, due to the help of an international donor, in one ministry there is an
activity for organizational restructuring and introduction of quality management based
on the documentation of internal procedures.

38
6.5.14 Internal Information

Generally speaking, well organized, applied and maintained systems of internal infor-
mation has not yet been introduced in the RIs. The institutions are not connected to the
Government intranet and some of them even have only limited access to the Internet
(staff units in only four out of 30 RI is connected to the Internet and about 50% of the
30 institutions have a web site). However, some of the existing information systems
could only partially support the state administrative procedures, and in particular the
HRM function.

Administrative information is usually passed through the institution hierarchy, through

its vertical connections and flows. Information from collegium is passed to employees
and vice versa.

In some RIs, the first steps for improvement of internal information have been taken
and the practice of a weekly newsletter was established. Some other institutions use
boards for dissemination of internal information. Communication concerning common
issues is made through circular letters as well. In a few RIs printing of their own bulle-
tins and brochures has begun. The use of intranet for distribution of minutes, memos
and other documents has also started.

6.5.15 Labour Unions

State administration employees’ union and other unions were reported in eight RIs.
Where existing, their role is limited mainly to solidarity actions for colleagues who got ill
or disabled and to participation in disciplinary processes to employees actively. It
seems that the position and role of the unions in the RI is not clear and has to be re-
considered.

6.5.16 Discipline, Corruption, and Conflict of Interest

Most of the RIs reported the ethical standards, professional morality and work disci-
pline, at quite acceptable level. It was stated that even relatively low salaries and lack
of fringe benefits were not the source of the mayor dissatisfaction. No matter, further
improvement was reported desirable and code of ethics should be drafted.

Consequences of disobeying of the legislation, other rules and work discipline ranges
from fines paid to the termination of work. When the event happens, the rules from the
LRSB are applied (from Article 56 to Article 63).

39
 As the rule of thumb, the lower staff number in the RIs the better discipline. In entities
with higher number of employees different disciplinary problems has been registered.
Closer relationships between management and employees in former ones are obvi-
ously the reason for the preventive action avoiding the final consequences. However, in
all RIs different forms of undisciplined behaviour are recorded: from small violations of
working discipline to more serious cases: from getting late to job to the consummation
of alcohol during work process, or failure to appear. Strict procedures and practice are
applied in the Ministry of Interior, based on the specific Decree on Discipline Responsi-
bility.

Internally, corruption was reported rarely, although there are some doubts of its exis-
tence, particularly in those RIs dealing with licenses, approvals or other decisions con-
nected to the material position of a legal/physical entity. In the situation when grey
economy is present, high unemployment, unsatisfactory salaries and high prices of ne-
cessities, the corruption could not be easily avoided. In some RIs rare - sporadic cor-
ruption cases have been detected, most of them detected externally.

In 2001 the Government strategy for the struggle against the corruption has been ap-
proved and is now being implemented by the Ministry of Finance and Ministry of Inte-
rior.

In most RIs existence of conflict of interest was not reported. Engagement of the em-
ployees in external economic activities is practically allowed only to those who were
engaged previously at universities. However, in practice more employees undertake a
second job (for cash). Relatively low salaries and high prices of necessities are fertile
grounds for moonlighting.

Fully aware of problems concerning conflict of interest, the Government has prepared a
draft law on avoidance of conflicts of interest, which is already in the pipeline in Parlia-
ment.

6.5.17 Conclusions – Applied HRM Procedures

The general opinion of the applied HRM procedures in the RIs is that there is not suffi-
cient understanding of the importance of HRM. The attitude of most of the top officials
is a normative one. Despite the fact that in certain areas sufficient legal provisions for
the improvement of HRM were set up, they were not applied.

40
For instance staff appraisals are not implemented according to the regulations. In quite
a few of the records on employees, achievements are described and kept. In most of
the RIs, the superiors do performance assessment on the basis of their personal im-
pression and intuition. It was reported that in one case ministry superiors turned down
an initiative to introduce an assessment system based on objective criteria. Conse-
quently, the motivation due to the material position is not evolved.

However, more top officials are aware that the existing practice is unsatisfactory, and
that improvements are necessary.

Through training, the interview skills should be improved. Usually the interviews are not
planned, prepared and implemented – by the interview panel - according to modern
practices and principles. Furthermore, mainly formal selection criteria - as stated in the
‘Rulebook on Internal Organisation and Job Systematisation’ - are applied. One result
of insufficient interviewing skills and a rather formal approach is a sub-optimal selection
of candidates. Only basic information and a general impression are achieved. How-
ever, some respondents have already taken the initiative to improve the interviewing
process.

In addition, in some RIs there exist sporadic examples of the introduction of new and
modern practices applying professional interview techniques, psychological testing (in-
telligence and personal tests) and testing through problem solving.

In those of the RIs, that apply LL (e.g. the Republican Fund on Health Insurance), the
employment and other procedures are simplified: No public announcement procedure
is necessary, and it is possible to get rid of non-qualified, non-committed or non-
disciplined employees. These ‘liberal’ procedures are reported to result in a quick and
effective approach to potential candidates and in higher quality and a faster employ-
ment.

The challenge is now to combine procedures, which ensures ‘law and order’ and at the
same time allows for efficient procedures.

Based on the information provided, we conclude that the legal framework and the ap-
plied HRM procedures lead to the following drawbacks,

• the employment procedure is too slow;

• the basis for the final selection is not sufficient;

41
 • there is no subsequent management of the career planning;
• too specific job profiles (‘Rulebook’) limits the possibilities for internal mobility.

These and other public administration characteristics (a salary level, which is reported
to be unattractive, unsatisfactory working conditions, as well as rigid and slow promo-
tion possibilities) may result in lack of qualified applicants and or the selection among
the applicants based on insufficient insight in on the candidate’s knowledge, skills and
personal attitudes.

The government has started the procedure to harmonize the LRSB and the LL. Ac-
cording to our information, the draft amendments already went into the parliamentary
procedure.

6.6 Development of Competencies (Training)

6.6.1 Funding of Training

According to the law (LRSB, Article 24), an employee is obliged during his employment
to increase his professional qualification and to take part in all forms of professional
training organised in his or her institution, or to all forms of training to which the em-
ployee is sent.

In the thorough regulated and strictly hierarchy-established system of state administra-

tion not many additional skills or further development of particular skills were needed.
During the previous ten years period computer literacy and foreign languages have
been trained and in some specific RIs the particular trainings like IT has been held.
Practice of individual academic education was supported through the partial cover of
expenses and days off for exams.

Nowadays, it is regular practice that all the employees are welcome to attend courses
for computer literacy and foreign languages. Seniors could attend local and interna-
tional professional courses and seminars. In some institutions, efforts by the employ-
ees for obtaining a higher academic degree are stimulated too. Most employees attend
courses organized by the Republican General Affairs Administration, but in some RIs
they organize training themselves.

In some cases professional courses are obligatory. However, in most of the RIs the
budget does not provide funds these activities. On the other hand, not all of those who

42
 have financial sources for training use it, even when they could use these funds inde-
pendently, without permission from the Ministry of Finance.

Foreign donated programs are more than welcome. Donations in the form of training
have started introducing new skills and techniques that was received very well. Some
trainings concerning practical knowledge are going on. The training organized through
the Agency for Public Administration Development is warmly welcomed. One example
shows that participants in training successfully applied new skills just after a few
weeks.

In practice all the employees are willing to upgrade their knowledge and skills. One of
the problems is the limited time for courses and learning because of the day-to-day du-
ties.

6.6.2 A preliminary Training Needs Analyses

At the interviews the respondents were asked to rank the most important training needs
for the following target groups

• public employees in general,

• public managers in general,
• heads of personnel units.

It was underlined that the ranking should include the most important real (not only de-
sirable) needs based on the current day-to-day as well as the future knowledge and
skills requirements.

A list, containing nearly 50 training topics, formed the basis for the needs assessment.
Each of the topics were placed in one of the following main categories:

• European Integration
• Law
• Budgeting and Finance
• Communication
• General Management
• HRM
• Service/Operations Management

43
 • Organisation
• Various Techniques
• Information Technology
• Other.

The 10 topics, which were given the highest priority, are shown below.

Table No. 3 Ranking of the 15 most Important Training Needs – from a List of in total 49 Topics

Priority Public Employees in General Public Managers in Gen- Heads of Personnel Units
no. eral

01 Law drafting techniques Strategic Planning Personnel planning

02 Foreign language Performance Appraisal Time management
02 EU Law Motivation of staff Performance appraisal
04 Office management Leadership styles Job analyses/Descriptions
05 Access to the Internet EU law Motivation of staff
06 Computer – Advanced Personnel planning Organisation structures
07 Computer – Basics Negotiation techniques Foreign languages
08 Motivation of staff Time management Computer skills - Basics
09 Internal communication Management of meetings Interview techniques
10 Communication The roles of the manager Conflict resolving
11 Ethics and Corruption EU Inst/Decision making Office management
12 EU Inst/Decision making Foreign language EU law
13 EU Information sources Financial administration Leadership styles
14 Interpersonal skills Change management Access to the Internet
15 Dealing with the mass media Organisation culture Strategic Planning

Regarding the category ‘Public Employees in General’ it can be seen that training in
law drafting, foreign language, IT and the EU was ranked as especially important.

The following table shows the joint high priority needs:

Table No. 4 Joint Training Needs Assessment for 2 or more of the Target Groups.

Public Public Heads of

Employees managers Personnel
in General In General Units

Foreign language x x X
EU law x x X
Motivation of staff x x X
EU Institutions - EU decision-making procedures x x
Personnel planning x X
Performance appraisal x X
Time management x X
Strategic planning x X
Leadership styles x X
Computer skills – Basics x X
Access to the Internet x X

44
 It should be observed that the reported results exclusively reflect the views of the inter-
viewed (high rank) officials.

For further details, including the list of 49 training topics, please see Annex E1 and E2.

6.7 Salaries and Benefits

6.7.1 Salary Structure

The chapter of LRSB, which regulates the salaries (Articles nos. 37-52) has been re-
placed by the “Decree on Coefficients for Accounting and Payment of Salaries of
Elected, Appointed Persons and Employees in the State Bodies”. Apart from salary
classes introduced by the LRSB, a new system of coefficients was introduced.

Accordingly, the system of salaries in the RIs is now based on three different regula-
tions:

• “Decree on Coefficients for Accounting and Payment of Salaries of Elected, Ap-

pointed Persons and Employees in the State Bodies.”, which is applied to the
public administration (ministries, special Government organizations etc...),

• Job Classes system (Ministry of Interior),

• “The General Collective Contract” and “Special Collective Contract, for other
state organizations” (the Republican Fund for Health Insurance etc.).

These salary systems are based on coefficients and classes applied for each position.
The salary for a particular position is calculated as the multiple of the basic value and
the coefficient.

The above-mentioned decree, which is applied in ministries and special Government

organizations defines the value of the coefficient for different positions. Depending on
education, work experience and management position 89 different coefficients have
been recorded in the study (please see Annex F1).

According to particular laws and regulations, salaries in the Ministry of Interior are di-
vided into 8 classes. Salaries of more than 14% of the employees belong to the first
class, and more than 50% belong to class four.

45
The coefficients from the General Collective Contract and the Special Collective Con-
tracts are applied in RIs like Republican Fund for Health Insurance, Republican Agency
for the Development of Small and Medium Sized Entrepreneurship etc. Both the
amount of coefficients and the basic value are different from the two coeffi-
cients/classes systems mentioned previously.

Employees are paid for their work, public holidays and vacation. In some RIs overtime
work is paid (maximum 240 hours a year).

Highest coefficient applied is 22.22 and the lowest 5.78, the former being 3.84 times
higher than the latter. Practically this means that gross salaries in March 2002 ranged
from 171 to 612 EUR.

On the other hand, in the Ministry for Interior the salary range is from 123 to 709 EUR,
the compression ratio being 5.78.

In the Republican Fund for Health Insurance the coefficients ranged from 13.73 to 3.54,
with the compensation ratio of 3.88. The amount of the salaries ranked from 159 to 616
EUR.

The share of the salaries of RIs in Budget of the Republic of Serbia in year 2001 was
around 1,024 million EUR or 23.9 % of overhaul budget expenditures. In the year 2002,
around 808 million EUR or 20.1% of the budget are the respective figures (Annex F 3).

The increase of the sum of salaries in the budget is due mostly to the new principles
applied to the budget for Year 2002 and the gross salaries concept applied (Annex F3).

Statistics in a seven years period show that the average gross salaries in state admini-
stration (and non-economic sector as well) compared on year-by-year bases, are be-
tween 11% (2000) and 68% (1997) higher than average gross salaries in economic
sector (Annex F2).

46
Figure No. 4 Average Gross Salaries – Absolute Figures

18.000

16.000

14.000

12.000

10.000
Dinars

Economy Sector
State Administration
8.000

6.000

4.000

2.000

0
1996 1997 1998 1999 2000 2001 2002
Year

Figure No. 5 Average Gross Salaries – Relative Figures

180,00

160,00

140,00
Percents, Economy Sector=100%

120,00

100,00
Economy Sector
State Administration
80,00

60,00

40,00

20,00

0,00
1996 1997 1998 1999 2000 2001 2002
Year

47
 It should be noticed that some of the RIs employees such as IT engineers, financial
experts and other highly skilled seniors are underpaid in comparison to the similar posi-
tions in the private sector. This leads to net outflow mainly of these professions (please
see annex C3), to the reduction of the number of employees and even to understaffing.
In 2001 the total outflow from RIs was 3,237, which is 6.25% of 54,482 employees. In
the same year (2001) 2,286 employees were newly employed covering only 70% of
those who left.

The Serbian turnover rate of 6.25% can be compared to rates in some other state ad-
ministrations such as Canada (2-3%), UK (8%), the Netherlands (4%), Sweden (8-10
%).

6.7.2 Benefits

Benefits do not exist in a form of a consistent system. Supplements are not paid for
supporting those employees who shows an outstanding performance. Although not the
case in all RIs, the existing practice of compensations for meals and vacation ex-
penses, transport-to-job compensations, attending the professional’s seminars inland
and abroad, could be considered as a kind of bonus (LRSB, Article 51). The same is
true of overtime work, which is not paid in all RIs and with the no-more-existing practice
of getting an apartment. Only few cases of obtaining the ownership of the apartments
that was provided previously were registered.

In ministries with inspectorates, salaries for the inspectors were increased by 20%
through the coefficient. As a form of benefits some RIs increased salaries by promoting
to higher positions all of those employees fulfilling formal criterions.

Since there are no funds allocated for the payment of bonuses, RIs which makes the
savings on material expenses, after approval by the Ministry of Finance, could pay bo-
nuses. In some RIs, between one half to two thirds of a monthly salary has been paid
at the end of the year as a yearly bonus. From those who paid this bonus only two RIs
paid in accordance with the performance of employees. All other made this payment
linearly (the same percent for each employee).

6.8 Certain Organisational Issues

The survey included questions regarding certain organisational issues. Please refer to
Annex G, in which the results are shown.

48
 According to our findings, the most serious issues are the following,

• lack of incentives (bonus), (17),

• brain drain (15),
• lack of possibilities for training (13),
• unclear legislation (12),
• lack of updated legislation (11),
• inexpedient organisational structures (11),
• low staff motivation and efficiency (10).

All RI are facing problems that reduce their effectiveness. The most important are tho-
se connected to low motivation and incentives due to low salaries and bonuses and the
absence of continuous staff training. In some RIs low salaries and bonuses were not
stated as a major problem. Other attractiveness drivers ensured the motivation of em-
ployees.

Other problems are connected to the inadequate organizational structure although it is

permanently upgrading. In some institutions unsatisfactory inter-ministerial collabora-
tion was emphasized due to the conflicts between sectors, some of them being tempo-
rarily or permanently.

Inadequate staff legislation has also been reported a problem. In few institutions con-
flicts in staff regulations has been stated, in particular between new Law on Labour and
Law on State Administration. However, these conflicts are not registered in other insti-
tutions. But all agree that staff legislation is obsolete and should be approved.

6.9 Public Sector Employment Attractiveness

At the interviews the respondents were asked to access the attractiveness of the public
sector. The results are reported in Annex H.

The following attractive forces were given the highest priority,

• job content (interesting job), (by 16 respondents ranked as no. 1),

• job security, (by 11 respondents ranked as no. 1 and by 9 respondents ranked
as no. 3),

49
 • influencing the development of the society and the public sector (by 9 respon-
dents ranked as no. 2),

Working closely together with politicians as well as the physical environments was not
reported high priority.

Work in state administration is generally unattractive. Private business sector is win-

ning the battle for capable individuals attracting them with higher salaries, better work-
ing environment and work away from politicians. Having the ability for higher salaries,
faster promotion and performance related salaries and appropriate training for addi-
tional skills and techniques, the private sector seems to be more attractive than work in
an RI. Net outflow of the employees from the RIs confirms this assessment.

Notwithstanding, the state administration has some attractiveness of its own. Job con-
tents and its security are considered to be the sources of attraction. In order to attract
more capable candidates and keep them working, it is necessary to activate attractive-
ness drivers, switching the negative effects opposite way. RIs should introduce appro-
priate mechanisms.

6.10 Respondents’ Proposals, Initiatives and Ideas

The respondents stated their opinion on future HRM development and their expecta-
tions on new HRM laws (Law on Civil Service and Law on Civil Servants).

There is awareness of the need to strengthen the HRM. Particular problems in

functioning of RIs are present and it is assumed that HRM development would improve
the efficiency of RIs. It is also considered that the improvement of general working
conditions, including the salaries and working premises, would strengthen HRM.

In addition it was emphasized that inter-ministerial communication and improvement of

communication channels should be strengthened.

It was emphasized that the function of the state administration could be strengthened
through the introduction and reinforcement of HRM. The existing personnel units
should become real HRM units and should carry out additional processes, beginning
with the defining of the HRM policy. HRM units in the RIs should assist in the capacity
building of employees: such as computer skills and foreign languages, and they should
introduce new tools and provide permanent training. The knowledge from more experi-

50
 enced foreign counties’ administrations should be permanently transferred to Serbia.
Standardization of processes for the whole state administration and communication
channels improvement should be done. A centralized database on human resources
has to be established. The need for establishing the code of ethics was emphasized as
well.

Quite a few of the RIs realised the link between HRM and the goals and the strategy of
the RI. More of the respondents referred only to the improvement of some particular
micro processes. The ultimate role of HRM and proactive role of staff is not well under-
stood in all RIs. Many of the RIs did not improve HRM practices and did not apply
some of main HRM procedures, which could be done already according to the existing
HRM regulations.

At the interviews, the top officials were invited to express their expectations regarding a
new Law on Civil Service and a new Law on Civil Servants. The general attitude was
that their views would not be clarified until the drafts laws appear.

7. Summary – Findings and Conclusions

7.1 Findings

The main findings are the following:

A national strategy for the development (reform) of the public administration has not yet
been published. Especially regarding the HRM system, a draft law on civil service has
been underway for some time; however a final draft has not yet entered the govern-
ment procedure. A draft Law on Civil Servants does not exist.

At present, the main laws guiding the HRM are the LRSB and the LL. The former has
been amended recently. The republican ministries apply the former law, whereas (most
of) the other RIs apply the latter.

The LRSB applies to elected persons, political appointed persons and public employ-
ees as well.

At present there are more than 200 political appointees in the state administration, in-
cluding assistant ministers and secretaries of ministry. According to the law, assistant

51
ministers, who act as head of ministry departments, will terminate their assignment
when a new government comes into power. The same applies for secretaries of minis-
try; however it has been reported that when the recent government came into power,
only some members of this latter mentioned group were replaced.

According to the existing legislative framework, public employees are engaged on a

permanent basis. As we understand, dismissals of employees are possible in very lim-
ited cases only. Some of the respondents in the interview expressed the opinion, that it
is difficult to get rid of non-qualified or non-committed employees.

A decree on staff appraisal of public employees was published in 1992; however, we

understand, that this decree is applied to a very limited extent only.

Apparently no strategic objectives are set in the RI, neither at the organisational nor at
the individual level.

The existing HRM system is based on decentralisation, according to which each of the
republican ministries is responsible for the administration of the HRM (‘a loosely cou-
pled ministerial labour market’). Apart from the setting up of the legal framework, no
overall coordination mechanism was created.

Less than 1/3 of the RIs, which participated in the survey created a particular personnel
unit. About 40% of the staff in these units are lawyers.

In ministries, special organisations, departments and republican bureaus, the responsi-

bilities for the HRM functions are normally shared among a number of actors, e.g. min-
isters, collegium, directors, secretaries of ministry, personnel officers, and commissions
(‘selection panels’). Normally, the Republican General Affairs Administration is respon-
sible for the accounting, and the Ministry of Finance for the monitoring of the salary
costs.

In accordance with the LRSB, the final selection of employees among the applicants is
done by the head of the republican institution (the minister), in most cases based on
recommendations from a commission, in which normally heads of departments (politi-
cally appointed assistant ministers) are members.

52
The number of employees in the RIs in which the research was conducted, was nearly
55,000. The number of employees in republican ministries was about 40,000 persons,
including the Ministry of Interior (36,645 persons).

Regarding the educational background, 22% of the employees were university degree
educated, 12% graduated from a college, and 60% from a high school. Among the
people with an educational background from an university, 28% are educated lawyers
and 29% have an education as economists.

About the gender balance, the finding is that the share of male employees was 68%
and females 32%. The average age was 45 and 40 years, respectively.

The turnover rate of public employees is calculated to 6.23%. Compared to ‘interna-

tional standards, this figure is not unusual.

At present most of the data on public employees are kept in hard form. No central reg-
ister has been established.

The study encompassed analyses of the most urgent training needs out of nearly 50
training topics. Although a huge need for continuous training of public employees has
been reported, only few offers for training are launched - due to lack of financial means.
At present training courses are primarily funded by foreign donors. This support is very
much appreciated by the beneficiaries. Law drafting techniques, foreign language, and
EU matters (including EU law (acquis communautaire)), was reported to be among the
most important training topics.

The compression ratio for salaries was (March 2002) 3.84 with the highest salary
(gross) amounting to 612 EUR; the lowest salary was 171 EUR (for the Ministry of Inte-
rior, other figures were found). During the latest years the gap between the public sec-
tor average salary level and the business sector average salary levels has narrowed.

It is reported that increases in the yearly salary take place through a particular ‘bonus
system’: savings in running costs other than salaries are allocated to the budget line for
salaries and from there distributed among the employees upon decision by the man-
agement.

The study has shown that the most important concerns by the top officials within the
RIs are lack of incentives for employees (bonus system), risk of brain drain (IT, finan-

53
 cial experts and high-profiles lawyers), the lack of possibilities for training and – to a
certain extent – the quality of the legislative framework. In addition problems with low
staff motivation and efficiency were reported being among the ‘top 10’.

The most important public sector employment attractive forces are reported to be job
contents (interesting jobs), job security and the possibility to influence the development
of society and the public sector.

7.2 Conclusions

The study concludes that the existing HRM system is based on a tradition for a legal
framework, which implies rather detailed regulations. We think these detailed regula-
tions may foster a ‘what-was-not-prescribed, is-prohibited’ attitude.

So far, only limited initiatives for the development of the HRM system have been taken,
and a review or reform of the legislative framework is just in its early phases. Although
the new LL opened up new opportunities for liberal HRM solutions and some RIs intro-
duced new HRM tools and procedures, there is a need for a systematic and coordi-
nated approach to HRM changes or reform. At present, it is too early to assess whether
the new LL improves (part of) the public HRM system.

Despite the fact, that each ministry enjoys a high degree of autonomy regarding HRM
issues, the existing HRM system in Serbian public administration seems to be rather
unified and static. Despite some variations, in general the RIs practice within the exist-
ing legal framework in a similar and standardised manner.

Another characteristic is that political appointed persons occupy key positions. Al-
though the study is not in a position to prove that the administration is strongly
politized, the presence of political appointees in strategic positions, e.g. as heads of
ministerial departments (assistant ministers) and secretaries of ministry, leads to – at
least in theory – a ‘risk’ of political hands-on in the recruiting of employees - that deci-
sions are influenced by political preferences. It should be noticed, that (part of) the
members of commissions for the assessment of candidates are political appointees.
The study provided only anecdotal evidence that in certain cases non-qualified people
were employed based on non-objective criteria.

54
The system with political appointees in administrative top positions may lead to certain
instability of public administration. Despite the fact that more of the top officials, who
participated in the interviews ‘survived’ the recent change of government, only very few
of them have been in their present position for more than a few years. For the imple-
mentation of long-term goals and strategies, continuity at the top level is key, and we
recommend a discussion of the design of the top management system. Regarding offi-
cials at lower organisational levels, it might be the case that the administration is too
static. All officials are employed on a permanent basis and dismissals are reported to
be rare.

Regarding applied HRM procedures, we conclude that the legal framework and the ap-
plied HRM procedures lead to the following drawbacks,

• the employment procedure is too slow;

• the basis for the final selection is not sufficient;
• there is no subsequent management of the career planning;
• too specific job profiles (‘Rulebook’) limits the possibilities for internal mobility;

The level of average age in RId indicates that for each RI, the personnel policy-making
and planning should include a strengthened focus on the distribution of the age.

The lack of funds for training is a serious issue, which should be addressed with the
highest possible attention. In Western European countries, 2-3% of the salary budget is
spent for training purposes.

Regarding criteria for promotion, generally speaking it seems that criteria are not clear,
and that there in the process is a lack of transparency.

Rotation is practiced to a very limited extent. Rotation and mobility should be consid-
ered as a very valuable instrument for development of competencies, and solutions to
increase the mobility should be found.

Although the salary level for public employees in average is higher than in the business
sector, it is questionable whether the existing level is sufficient to attract and keep
much needed (top) managers operating at the strategic level and specialists working in
certain areas such as finance and information technology. Also other elements of a
personnel policy might help to solve this problem.

55
The turnover rate is not alarming. The study shows that there is a net departure from
the public administration. This study provides only suppositions on the reasons. Further
research on the reasons for leaving the public administration is required.

Unfortunately, this study do not have a sufficient background for drawing conclusions
regarding the efficiency and the effectiveness of the public administration. However, we
assume that more focus on output measurements – based on agreed objectives and
goals – would increase the efficiency, which by certain of the respondents was reported
being a serious issue. The introduction and realization of a performance evaluation
system will be an important tool in that respect.

The small – however encouraging – steps to improve professionalism in the recruit-

ment and selection process – by the introduction of new tools such as personality and
problem solving tests - should be continued and supported.

The future project on the creation of a database on public employees – based on ad-
vanced IT solutions – represents a huge step forward regarding the provision of fast,
reliable and detailed HRM information. Whenever possible, a link between this data-
base and the salary system, should be made.

Based on the study - our ‘diagnosis’ – our overall conclusion is,

that the ‘patient’ is in a shape which certainly enables it to carry out duties of to-
day; during the interviews we met only committed and persuasive high rank offi-
cials; however to prepare for future challenges, the public administration should
embark on a long-term development programme based on an explicit setting of
goals and strategies.

Provided that interventions are launched in proper doses over the next decade, - and
sufficiently supported by the international donor society - such an initiative will make
the public administration ‘fit for fight’ – ready to meet the challenges of tomorrow.

56
8. HRM Reform Trends and HRM Comparative Studies
8.1 Trends

There is not one approach to HRM reform. Reform activities fall across a wide spec-
trum with a few governments on either end showing either fundamental reforms or very
little change and the majority of countries at various points in-between.

Despite stated commitments by most governments to HRM reform, the pace of reform
has often been slow with discretion and flexibility of line management hampered by de-
tailed rules and regulations.

The balance between central HRM controls and managerial flexibility is still evolving
and views vary between countries on the extent of managerial devolution that is desir-
able. However, the majority of countries appear committed to retaining a basic common
core of conditions that apply across the public service.

Reforms are often promoted by central management agencies, with successes tied to
ongoing support from both the political level and some influential unit with overall re-
sponsibility for shepherding reforms.

International trends in HRM can be summarized as follows, *)

• Decentralisation of responsibility for HRM from central management bodies to

line departments and agencies. Among countries implementing reforms in this
area, increased flexibility and autonomy for HRM are widely perceived as being
crucial factors in promoting more efficient and effective management and or-
ganisations generally in the public sector, and in improving the overall quality of
services provided to the public.

• Devolution of responsibility for HRM within departments and agencies to line

managers. Managerial devolution has, for the most part, concerned the opera-
tional aspects of HRM, with responsibility for policies retained by central man-
agement agencies.

• Policy ‘frameworks’ and guidelines emphasizing basic standards and good

practices rather than detailed controls. While central agencies retain influence
over policy setting, the emphasis in implementation is shifting away from de-

57
 tailed central controls over HRM activities of departments and agencies, toward
looser policy frameworks, guidelines and definitions of basic standards. Within
such frameworks, departments and agencies have greater freedom to tailor
HRM practices to their own staffing needs.

• Devolved budgeting for line departments and agencies which consolidates sal-
ary and administrative costs. Devolution of financial management to line man-
agement is an essential prerequisite for meaningful devolution of HRM and
functions as a powerful incentive for effective management of people.

• More flexible pay systems. Changes affecting pay systems have figured promi-
nently in reforms, with an emphasis on gaining greater flexibility and linking pay
determination more closely to productivity, performance as well as recruitment
and retention needs. Two major contrasting approaches to pay reform appear,
1) decentralising pay determination to the department and agency level, or 2)
maintaining relatively centralised systems of pay determination while seeking
flexibility by other means.

• Training and development measures to build skills, competencies and flexibility

in the workforce to better meet programme demands

• Cost-cutting measures in the form of pay restraint, efforts to cut employment

and pressures to produce efficiency gains. Pressures to streamline and produce
efficiency gains can be a powerful spur to implementation of HRM reforms.

*) Refer to the list of references annex M, source no. 3

8.2 Comparative Studies

To set up a frame of reference, a comparative study on civil service issues was carried
out. The study includes a number of countries in Western Europe (number of inhabi-
tants in brackets)

• Austria (8,1 mill)

• the Netherlands (15,9 mill)
• Germany (82,1 mill)

58
 • Sweden (8,8 mill)
• United Kingdom (59,8 mill)

and a number of countries in transition

• Hungary (10,0 mill)

• Latvia (2,4 mill)
• Romania (22,4 mill)
• Slovakia (5,4 mill)
• Slovenia (1,9 mill)

Criteria for the selection of countries were mainly the regional location (Western
Europe countries: Anglo-American, Scandinavian, Continental management ap-
proaches) and stages in the European approximation process, respectively.

There is an Anglo-American tradition, which is different from the Nordic and the conti-
nental (and the Latin) approaches. The practical and theoretical influence of the Anglo-
American paradigm is significant and very much oriented toward performance man-
agement. The Nordic model is different from the Anglo-American model, but the history
of welfare and subsidiarity also create a focus on performance. These two models also
seem to contrast with continental (state of law) and Latin traditions, which appear to
operate under more legal-governed and rule-adhering public service cultures.

The aim was not to show ‘best practice’, but to highlight some variations and similari-
ties. The comparative study is part of the basis for the development of the points of re-
commendations, which are listed in chapter 9.

Below a comparison is made among the 10 countries – based on 7 selected parame-

ters:

• the existence of a law on civil servants;

• applied system within the civil service: career system/non career system (‘posi-
tion system’);
• mobility of public employees;
• continuous training of public employees;
• the existence of civil service training schools;
• the frequency of staff appraisals;

59
 • civil service administration units (in transition countries).

Table No. 6 Civil Servants Law.

Western Europe coun-

tries
Austria No data.
The Netherlands Law on Civil Servants (Ambtenarenwet).
Germany Law on Federal Civil Servants (Bundesbeamtengesetz).
Sweden Law on Public Employment (Lagen om offentlig anställning)
UK The Civil Service Order in Council 1995, The Civil Service (Management
Functions) Act 1992.

No Law on Civil Servants (Law on Labour Relations in State Bodies).

Republic of Serbia

Countries in Transition
Hungary Act XXIII of 1992.
Latvia Yes.
Romania 2001, various secondary legislation 2002.
Slovakia Yes, enter into force on 1 April 2002.
Slovenia Law on Workers in State organs (1990). Draft law on public service was
prepared in January 2002 for the second Parliamentary reading.

Table No. 7 Broad versus/opposite Restricted Concept of Civil Service

Broad concept Civil services encompass every public employee, as it is considered that
every public employee is part of the executing machinery of the state.

Restricted concept Only professionals of public management and administration, and profes-
sionals holding state powers (e.g. police, customs, etc) are civil servants).

Western Europe coun-

tries
Austria Restricted concept.
The Netherlands Broad concept.
Germany Restricted concept.
Sweden Broad concept.
UK Restricted concept.

Republic of Serbia (Broad concept).

60
Countries in Transition
Hungary Restricted concept.
Latvia Trends from a broad to a more restricted concept.
Romania Broad concept.
Slovakia No data.
Slovenia No data.

Table No. 8 Career System versus/opposite a Position System

Career System Civil Servants are promoted according to set conditions and/or regular
pay increases; a path for career is largely build into the system.

Position System In-service promotion does not take plave in a specific order.

Western Europe coun-

tries
Austria Career system.
The Netherlands Position system.
Germany Career system.
Sweden Position system.
UK Position system.

Republic of Serbia (‘Position system’).

Countries in Transition
Hungary Career system.
Latvia Mixed Career system/Position system.
Romania Career system.
Slovakia Position system.
Slovenia Promotion is not limited to ’step-by-step’. When a particular post has been
fulfilled successfully, the possibility of promotion is at hand.

61
Table No. 9 Compulsory Mobility (within departments, across ministries, and/or be-
tween regional units)

Western Europe coun-

tries
Austria Possible, if necessary in the interest of the service.
The Netherlands No (only for top managers).
Germany Yes (within the department).
Sweden No.
UK Departments and agencies are responsible for determining the extent to
which their own staff has a mobility obligation. A minimum obligation for all
staff is a possibility of moving between posts that are within reasonable
travelling distance of their home.

Republic of Serbia Yes, for a limited period of time (LoESB, article 16).

Countries in Transition
Hungary No.
Latvia Yes (though a civil servant can refuse a transfer of valid reasons).
Romania No.
Slovakia No.
Slovenia Yes. Compulsory mobility between institutions. In cases regulated by the
law, compulsory mobility within the whole administration.

Table No. 10 Public Employees’ (Civil Servants) Participation in Training

Western Europe coun-

tries
Austria Voluntary.
The Netherlands Voluntary.
Germany Compulsory (self-study courses).
Sweden Voluntary.
UK No data.

Republic of Serbia Compulsory (LRSB, article 24); however only very limited funds for training
are available.

Countries in Transition
Hungary Compulsory.
Latvia Voluntary.
Romania Voluntary.
Slovakia Compulsory (5 days) a year.

62
Slovenia Voluntary (unless a head of an administrative organ decide to send a civil
servant to training organised by the Administrative Academy, then it is
compulsory.

Table No. 11 Civil Service Training Institutions

Western Europe coun-

tries
Austria Verwaltungsakademie des Bundes.
The Netherlands Central and Local Training Institute (ROI); Netherlands School of Public
Administration (NSOB).
Germany Bundesakademie för Öffentlige Verwaltung.
Sweden National Fund for Administrative Development (SK); departments are re-
sponsible for providing suitable training.
UK The Civil Service College.

Republic of Serbia No.

s in Transition

Hungary The Hungarian Institute for Public Administration.

Latvia The Latvian School of Public Administration.
Romania An institute is in preparation.
Slovakia The Institute for Public Administration in Bratislava.
Slovenia The Administrative Academy.

Table No. 12 Staff Appraisal (Performance Evaluation)

Western Europe coun-

tries
Austria A highly formalised system is complemented by annual structured dialogue
between each member of the service and the superior (agreements on core
objectives).
The Netherlands Once a year.
Germany Different frequencies depending on the ministry.
Sweden Usually once a year.
UK Usually once a year.

Republic of Serbia Yes, according to a government decree of 1992; however in practice not
applied by the majority of the RIs.

63
Countries in Transition
Hungary Once a year (personal efficiency evaluation).
Latvia Once a year, by an Evaluation Commission established by the Head of the
Institution.
Romania Once a year.
Slovakia Once a year.
Slovenia Once a year, without exceptions. Regulated by law.

Table No. 13 Civil Service Administration Units in Republic of Serbia and in Countries in Transition

Republic of Serbia No particular unit has been created; the Ministry of Justice is in charge (in
the future the Ministry of Public Administration).

Countries in Transition
Hungary Ministry of Interior. Department for Civil Service.
Latvia Public Civil Service Administration. A legal entity reporting to the Cabinet.
Romania Civil Servants National Agency (previously an independent agency, report-
ing to the government; now sub-ordinated to the Ministry for Public Admini-
stration).
Slovakia No data.
Slovenia No data

In brief, the following conclusions can be drawn from the tables:

• that various career systems have been chosen;

• that as regards the mobility of public employees, different solutions and prac-
tices have been chosen;
• that rules regarding training obligations vary;
• that practically each country has created an institution (school, institute, acad-
emy, college) responsible for training of public employees (civil servants);
• that a (once a year) performance evaluation of public employees (civil ser-
vants) is a common feature in the countries in question.

EU member countries have adopted different approaches, usually rooted in the history
of their respective states and modified over time. Different administrative and political
cultures focus on different elements and have different institutional and procedural ar-
rangements.

64
 For more detailed information, see annex J 1-4. Unfortunately, due to copyrights, an-
nexes regarding civil service issues in Western European countries have not been in-
serted as part of the documentation from the study. To make oneself familiar with HRM
systems in Western Europe, a review of source no. 10 listed in the annex N, ‘Civil Ser-
vice in the Europe of Fifteen – Trends and New Developments’, European Institute for
Public Administration, is strongly recommended.

9. Recommendations

In this chapter are listed a number of recommendations regarding steps to be taken in

the development of the HRM system.

The list was developed on the basis of:

findings in the diagnostic study,

findings from comparative studies, and
the consultants’ experiences from work in other countries in transition.

Regarding the review/change of the HRM system, we propose certain sequences.

However, we presume that the timing will be influenced by the following circumstances:

• the contents and the time table for the overall reform, including a public admini-
stration reform;
• the ongoing transfer of functions/staff from the federal to the republican level;
• the creation of a new ministry for public administration;

The recommendations, which are listed below, are the based an the assumption that
there is a desire for changes of the HRM system in public administration in Republic of
Serbia.

65
9.1 Develop a strategy for change.

Justification:

A strategy will justify the requested change of the HRM system (human re-
sources are an extremely important strategic resource for the implementation of
reforms) and set out the overall objectives and goals.

We suggest the strategy to include the following sequences.

Figure no. 4 Proposed Sequences in HRM Reform

1.1.1.1 Elapsed Time

Clarify ambition
Integrate
Policy making
Decision-
Making
Institutional
capacity build-
ing
Pilot projects
Law Making
Enactment
Training
Implementation
1.1.1.2

9.2 Clarify the ambition - tradition versus transition?

Justification:

The first option will be to review and if need be to amend (modernise) the existing HRM
legislative framework. The changes will be limited in their character and will respect
and reflect the Serbian traditions for HRM.

66
In this case impacts of LRSB and the (new) LL on HRM should be analysed. Probably
the existing practices of a loosely coupled ministerial internal labour market, where
personnel management issues are handled by autonomous ministerial departments,
will continue. And so will the side effect: low interdepartmental mobility.

The second option will be to develop a new HRM system based on a complex of pri-
mary and secondary civil service legislation. In this case a reform integrating new phi-
losophies as part of a transitional process towards the country’s integration into Euro-
pean structures will be launched.

A sort of ‘Europeanisation’ of administrative law is occurring through the European

Court of Justice’s (ECJ) compulsory interpretation and development of general admin-
istrative law principles. These administrative law principles have been taken from well-
established administrative law tenets in EU Member States and vested with an EU-
wide enforceability as screened and reformulated by the ECJ.

Civil service regulations play a fundamental role in public administrations to implement

those administrative law principles, as they constitute mandatory standards for the civil
service. To ensure that civil services live up to these standards, a specific concept of
civil service needs to be developed. Civil servants are not mere employees of public
institutions. This means that regulations affecting civil servants should not be the same
labour regulations and individual contracts governing the relationships between em-
ployers and employees.

This is because the civil service exercises the authority of the state over citizens, thus
creating a public interest in ensuring that the public administration meets constitutional,
democratic and administrative law standards. Although the public interest is an issue of
concern in certain private labour relations, it is not the primary characteristics of these
relations.

67
9.3 Integrate the strategy for change of the HRM system into the national reform
agenda.

Justification:

We expect that a national reform agenda will include a programme for public admini-
stration reform. A reform should design the system of the future state administration
and HRM should be tailored accordingly. Timetables should be harmonized.

9.4 Policy-Making. Assuming the development of a civil service system, policy-

options should be clarified.

Justification:

As a starting point for the development of the system, the Serbian authorities should
decide on a range of fundamental alternatives, e.g.

• a broad versus a restricted concept of civil service;

• a career versus a position civil service;
• a HRM system based on performance management approach versus rule and
norm management approach (continental legal tradition) , etc.

Specific attention should be paid to the distinction between policy and administration,
including the separation between political and administrative roles and patterns of re-
cruitment and selection.

Please see chapter 8 and annex J 1-4 (comparative studies).

9.5 Decision-Making. Decisions on fundamental policy issues should be a

starting point for the development of the legislative framework.

Justification:

A broad debate on the design of the HRM system should be promoted. A participative
approach including hearing procedures is strongly recommended. Policy papers indi-

68
 cating proposed solutions should be circulated among civil service key stakeholders for
their consideration and feedback.

Early stage mutual agreements on controversial issues would probably reduce areas of
concern at the time when a legislative framework will enter into the parliamentary proc-
ess and facilitate the procedure of enactment.

9.6 Institutional Capacity Building I: Creation of a central level unit

responsible for the overall HRM system across the RIs.

Justification:

At present, the Ministry of Justice (in the future the Ministry of Public Administration) is
responsible for the public administration. However, a (independent) body with a clear
mandate and authority to establish, manage and oversee fairness of existing human
resource policies and management does not exist.

Of special significance for the establishment of a civil service system is the creating of
a special board or unit with horizontal authority responsible for implementing and coor-
dinating HRM policies within the civil service, for harmonising proposals and rules, and
for introducing organisational and performance standards for the entire public admini-
stration.

A first task will be to draft the entire complex of civil service primary and secondary leg-
islation, decrees and guidelines.

This unit will also be responsible for the establishment and maintenance of a consoli-
dated central registry for civil servants and for the salary system.

An important decision will relate to the status of the central personnel authority. Atten-
tion needs to be paid to the distribution of authority for achieving a work force that is
effective, stable and free of undue political influence. In Western Europe civil service
systems have a variety of structures, but they all share a degree of independence from
changes in the political environment. That independence has two aspects: Protection
for public employees from political pressure or personnel actions contrary to law; and
open, merit-based management of the personnel system. Without these two aspects,
there is not a merit-based civil service system.

69
 Whatever the structure of the appropriate agencies, it must provide for an appeal func-
tion (overturning any decisions to be contrary to a civil service law) and a management
function (a range of technical tasks to be handled).

Among the structural options are 1) an independent civil service board nominated by
the Prime Minister and elected by the Parliament, 2) an independent personnel director
and agency nominated by the Prime Minister and elected by the Parliament, and 3) an
independent professional personnel unit reporting to the Government or the Minister of
Public Administration.

Further work is required to elaborate on strengths and weaknesses of each of these

options.

9.7 Institutional Capacity Building II: Creation/strengthening of personnel units

in RIs responsible for HRM functions.

Justification:

The study showed that less than 1/3 of the RIs reported that personnel units were es-
tablished.

The establishment of such units are crucial. When HRM units are given the authority,
stability and resources required to exercise their functions, human resources are ma-
naged with greater vigour and the influence of political factors or personal networks is
significantly reduced.

Please see chapter 6.2 above.

9.8 Institutional Capacity Building III: Prepare for Training - Creation of a

permanent mechanism for continuous training of public employees (civil
servants).

Justification:

The creation of a system of long-term planning and funding for the continuous training
of civil servants is important. A national medium-term training plan should be develo-

70
 ped. Key elements of a training plan should be the definition of major features of the
government’s staff policy, directions for the development of the civil service and steps
to prepare for European Integration/EU membership.

The need for a Serbian training institution was emphasized by the UNDP (2002) as well
as by the EU CARDS programme (2002).

9.9 Launch of ‘pioneer’ pilot projects.

Justification:

From action to legislation: Before final legal decisions on the substance of civil service
systems are taken, pilot projects in selected RIs should be launched.

Various aspects of new HRM such as yearly management contracts (goal set-
ting/allocation of resources/managerial freedom/responsibility and accountability), per-
formance evaluation, rotation/mobility, quality management, etc. should be included.

The study shows that most of the RIs are not applying the existing decree on appraisal
talks. As a future appraisal system will be an important element - as part of the intro-
duction of a more result oriented public administration - pilot projects in this area should
be established and experiences collected and evaluated.

Subsequently the necessary legal provisions – based on the experiences from pilot
projects – could be drafted.

9.10 Law Making

Justification:

The creating at an early stage of an overall view of the entire complex of public admini-
stration legal framework – including a civil servants law – will be essential for the suc-
cess of a complete civil service reform. A piecemeal approach may lead to overlapping
and confusion.

For instance, the legislative framework for civil service may be influenced by

71
 • a law on administrative procedures
• a law against corruption
• a code of ethics
• a law on the ombudsman
• a law on access to files (law on freedom of information)

Also the complex of civil service secondary legislation should be clarified. The following
list includes examples:

• Decree on the general principles of internal organisation of the administrative

bodies;
• Decree on the description of positions in the law on civil servants;
• Decree on the organisation, procedures and functions of the Civil Servants
Agency;
• Decree on Organisation and Systematisation of Jobs;
• Decree on quality standards and uniform procedure in recruitment and selection
of civil servants;
• Regulation of the Agency on the supervision and assessment of civil servant
trainee;
• Programme of the Agency for the professional and trainee examinations.
• Code of Conduct for Civil Servants;
• Decree on official secrets;
• Programme for professional development and training;
• Administrative direction for the recording of working hours;
• Decree on supplements for risky jobs;
• Decree on allowances;
• Administrative Direction on monetary awards for extraordinary efforts and quali-
ty of performance;
• Decree of the procedure in disciplinary matters;
• Decree on assessment procedures;
• Decree on the procedure for the transitional examinations;
• Programme for the transitional examinations;

The flexibility should be ensured and before drafting of the civil service regulations, a
decision on which kind of regulation is suitable should be made. Too many details in
the primary legislation limit the freedom of a government constantly to organise the
public administration in the most efficient way.

72
 Explanatory notes giving detailed descriptions of consequences, including financial,
administrative and structural ones, should accompany every draft law.

9.11 Enactment of the legislative framework.

Justification:

Arrangements for the transformation of public employees to civil servants should be put
in place. Civil servants candidates should be identified, and conditions for transfer
should be clarified.

9.12 Start of the implementation of training.

Justification:

According to the diagnostic study only very limited possibilities for (continuous) training
of civil servants exist. For the maintenance and upgrading of qualifications training of
public employees should start. According to the results from the study, high priority
areas for training are law drafting techniques, topics on the EU, IT and foreign langua-
ge; however a wide range of training topics has been identified (see chapter 6.6.
above). As a matter of form, it should be emphasized that continuous training provided
through an institution is just one of the necessary initiatives for the development of
competencies of public employees. Examples of complementary initiatives are mobility,
job rotation, on-the-job training, project leadership, etc.

9.13 Resources needed for the implementation of the legislative framework.

Justification:

Passing laws achieves little if there is no capacity for doing detailed work and develo-
ping programmes that, step-by-step, move towards strategic objectives. In the end,
successful change depends on the commitment of those who are responsible for imple-
mentation.

73
9.14 Design of the future top management system.

Justification:

De-politicising, professionalism, stability, and continuity are among the key words in the
design of the top management system. In should be realized that a permanent and
stable top management service will be the driving force for the continuous progress in
the implementation of the strategic reform objectives

At present assistant ministers as well as secretaries of ministry are appointed by the

government/parliament when a new government takes office. Despite the fact that mo-
re of the political appointees remained in their position after the new Government re-
cently took office, it is not sure, that this will be an established future practice.

The number of political appointees should be reduced. Positions as assistant minister

and secretary of ministry could be made permanent.

9.15 Introduction of results-oriented (performance) management techniques.

Justification:

Measurement of outputs at the organisational level could be introduced in connection

with early performance contracts and at the individual level through regular perform-
ance evaluation (based on principles of management-by-objectives) as already de-
scribed in Decree about Appraising the Performance of Employees in State Bodies
(October 1992).

The introduction of a formal link between performance and pay should be considered
as part of a review of the pay system. Please see section 9.16 below.

9.16 A civil service pay-reform (as a long-term action).

Justification:

The study has shown concerns about a possible link between low salaries and low mo-
tivation in the RIs (please see the chapters 6.7-6.9). The consequences of low pay are
serious and wide ranging. Inadequate pay may lead to difficulties and recruiting and

74
 retaining staff, high levels of corruption, and poor standards of service delivery. This
adversely impacts on economic development and disproportionately affects the poor
who are most dependent on government services.

Actions to improve pay are essential if public administration reform programmes are to
succeed. Without significant improvements in pay, the government will find it increa-
singly difficult to attract, retain and motivate the staff.

International experience shows that a coherent and integrated approach is required if a

pay strategy is to support an overall reform programme and the achievement of Go-
vernment objectives. Probably in the short-term it will be difficult to provide additional
budgetary funds for an increase in public pay in general (global). However, a review of
the existing pay system should be done simultaneously with the introduction of a new
law on civil servants. In addition, to the extend results oriented management techni-
ques are introduced, it might be a good occasion to review the pay level in selected
areas.

Pay determination systems are not permanent but change over time in all countries,
including those where major reform has been undertaken. Factors, which lead coun-
tries to change their systems include budgetary constraints, the need to make the la-
bour markets more flexible, and concerns with social equity.

9.17 Awareness of the management of the process

Justification:

A successful change of the HRM system, requires the awareness of a range of critical
factors:

• Change should be designed to take account of bureaucratic resistance to chan-

ge either by overcoming it or circumventing it. Political will and pressure is ne-
cessary but not sufficient to secure the success of change. However if there is
no political commitment, change soon lose momentum.

• A strategy of change is needed to give a clear general direction to reform.

• Membership of the EU and the development of capacities to implement the Ac-

quis Communautaire provide just such a direction.

75
 • Pressure to streamline and produce efficiency gains can be a powerful spur to
implementation of HRM system change.

• Feedback and evaluation provide the flows of evidence and information, which
can be used to maintain internal and external support.

• Driving forces in terms of RIs and officials having visions, energy, power, etc.
should be identified.

The following questions should be considered:

• Pace: How important is it to achieve fast and visible results?

• Start of which level: Top/down or bottom/up?

• Comprehensive or incremental changes (‘selective radicalism’)?

• Could an already existing public administration/HRM ‘model’ be copied?

Even if there are some common trends in the European principles for public administra-
tion, no one and only ‘authorized’ model for public administration/civil service exists.
For a decision on the direction and orientation for the development of a future Serbian
public administration/civil service, comparative studies might be appropriate.

Based on surveys, Serbian authorities might pick-and-choose from various public ad-
ministration/civil service models and adapt to Serbian traditions. An alternative ap-
proach would be, more or less to copy/duplicate one specific model from abroad. Aus-
tria or Hungary might be considered as options. Both of the countries are located in the
region not far from the Republic of Serbia, both of the countries has about 10 mill in-
habitants, Austria is a federal state, has already offered certain assistance for the de-
velopment of the Serbian civil service, and has an continental management approach.

An alternative model from a country (e.g. Sweden) applying a performance manage-

ment approach might be considered.

In the table below are shown the implications by copying from one of the model coun-
tries, Austria, Hungary or Sweden.

76
 Table No. 5 HRM Characteristics of Model Countries of Austria, Hungary and Sweden

Austria Hungary Sweden

Concept of Civil Service Restricted Restricted Broad

System Career Career Position
Compulsory Mobility Possible No No
Participation in training Voluntary Compulsory Voluntary

Management approach Mixed management (Rule and norm man- Performance manage-
agement) ment

Inspiration and inputs from external sources would probably be very valuable for the
success of the process. We recommend (already established) membership of internati-
onal working groups on HRM (e.g. OECD/PUMA) and networks (e.g. NISPACEE). Offi-
cials involved in project work would probably also benefit from comparative studies,
participation in international conferences, study trips etc.

9.18 Further work required.

Much further work and research in the area of HRM is needed in the future - including,

• an appropriate design of the future top management system (de-politization);

• a review and assessment of the appropriateness of the existing HRM control
system (the Rulebook on Internal Organisation and Job Systematisation and
the appropriateness, efficiency and effectiveness of the Administrative Inspec-
tion set-up);
• a review and an assessment of the salary budget preparation and monitoring
system;
• a review and an assessment of the appropriateness, efficiency and effective-
ness of the Republican General Affairs Administration;
• a review and an assessment of the allocation of human resources seen in the
light of existing and future tasks and responsibilities of ministries;
• as a short-term activity to assist in the improvement of the procedures for as-
sessment of applicants;
• a review and assessment of the State Administration Exam set-up;
• to further develop the training needs analyses based on mapping of the individ-
ual training needs;

77
 • to collect and assess the experiences (advantages and drawbacks) from repub-
lican institutions applying the (new) Labour Law;
• to study details of civil servant laws of Austria, Hungary and Sweden.

78