Pay policy

While the broad guidelines in government pay policy are harmonised, actual implementation is based on the specific principles, needs and applications of individual agencies. The essence of the central government pay scheme is based on new pay systems. These reforms have been at the core of government human resources policy. It was decided both in the government proposals on human resources development in central government as well as in the collective bargaining for central government that new government pay schemes would be adopted. The new schemes build on a rewarding system of incentives that are competitive and equitable.

The main areas for further development in government pay policy and the pay schemes is to consolidate them into productive instruments of management and operations, also creating means of remuneration other than the use of the pay schemes, using the employer’s development measures in pay policies in tandem with contractual policies, enhancing competitiveness to better recruit and retain competent staff, and to secure equal pay between male and female employees. As an employer, central government has placed special emphasis on improving its competitive stance for middle management and experts. Performance-related pay and other forms of remuneration in central government are being continuously enhanced.

Both the agencies themselves and especially the collective bargaining processes are used to develop the government pay scheme. It is the most significant form of government sector collective agreement in the agencies, although central level settlements also play a key role in developing pay policy and the government pay scheme. The central level collective bargaining agreements for the of period 2012-2014 include the following allocation of intra-agency pay increase items:

The wage and salary structure is geared to improving the productivity of central government and its units, facilitating the hiring and retention of competent staff, and promoting gender pay equity. Government agency supplements must not be used as universal pay rises applicable to all employees. It is important to maintain the general incentive effect of the wage and salary structure. Supplements are designed to effect structural changes in the central government wage and salary structure, particularly to create consistent criteria and scales for task-specific and personal parts of remuneration that have strong incentive effect and that are sensitive to changes in job demands and performance levels.

To enhance pay policy in this manner means that government both at the central and agency level is faced with challenges in collective bargaining practices and employer competencies. The response to these challenges has been a good one. As an employer, central government must be able to make manifest and implement the positive potential of higher productivity from the viewpoint of the staff by steering superfluous resources generated by higher productivity to more rewarding pay policy, among other things. Both the challenges and the new opportunities are topical in the effective performance functions of all agencies and in different restructuring situations in organisations.

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