Reference no: EM132874742

Case 1: The Cyprus Public Service

It would be impossible for a performance appraisal system to operate in isolation. In order for such system to serve its purpose, and to be an effective management tool, it must be designed bearing in mind the environment in which it operates, and in correlation with the organization's missions and strategies. It must also be closely linked to all other human resource management policies.

Some negative situational factors are discussed below:

The structure of the public service is basically bureaucratic, with a high degree of centralization, and inflexible organizational structure and procedures. Objectives and targets, both at the department and individual level, are either absent or vague. The current payment system in the civil service is a very competitive one and a vast different exists between the level of public service pay and that of private sector pay, especially with regard to the entry-level posts (pay in the private sector is lower than that in government) addition, it does not contain any incentives elements; on the contrary, the majority of civil servants are entitled to uninterrupted salary acceleration irrespective of actual performance.

The civil service is highly unionized, with one powerful union:  Cyprus is a small country; it citizens are inevitably close to each other and this may lead, to some extent, to a culture of favouritism. Some promising changes in the recent years are as follows: Some years ago, the Council of Ministers approved a 'comprehensive plan for reforming the entire civil service', most of the provisions of which are at the implementation stage. The plan includes measures for controlling the size of the public service and improving its productivity.

Among others, it provides for:

_ Reforming the existing payment system, in order to make it more realistic, fair, and flexible.

_ Improving the public service performance appraisal system.

_ Restructuring departments and moving towards decentralization.

_ Improving the schemes of service (job descriptions) with a view to re-designing and enriching jobs and

   adhering to European Union requirements.

_ Enhancing mobility of staff within the civil service.

_ Improving the selection and recruitment procedure.

_ Simplifying procedure.

_ Introducing new technology.

The House of Parliament, political parties and the new government, elected in 2003, support the plan for reforming the civil service, and, especially, the introduction of a new performance appraisal system. The civil service trade union, seems to agree with the public service plan to improve the appraisal system.

Addressing the Problem

Early in the previous decade, it was made clear that the performance appraisal system was not succeeding in its goals; therefore, a decision had to be made to either partly change the current system, or introduce a new one. Because of the complexity of the subject and its importance with regards to the productivity of the civil service, it was decided to design and implement a new appraisal system. To achieve that, first, it should be made clear what went wrong with the current system and how the mistakes of the past could be avoided. The methodology of redesigning a new system should involve:

Collection of data from all interested parties (e.g., top-level management, PASYDY, political parties, etc.) via personal interview and questionnaires.

Careful examination of appraisal systems used in other countries, with a view to incorporating any useful elements into the new system, always taking into consideration the Cypriot civil service culture.

After a comprehensive evaluation of the data collected, as described above, a suggestion should be prepared for a new appraisal system and presented to the decision-makers to approve its implementation.

Decision-makers are: (i) The Minister of Finance who is responsible for the civil service human resource matters, (ii) The Council of Ministers, and (iii) The House of Representatives.

Top civil service managers (permanent secretaries of ministries and heads of departments) and the public service trade union, should be consulted, and they should agree on all the provisions of the proposed system.

The Public Administration and Personnel Department, in cooperation with a private consulting firm, conducted a survey and came up with a preliminary suggestion that includes, among others, the following:

Separation of the appraisal process conducted for promotion purposes, from the conducted for development purposes, in an effort to eliminate the pressure, on behalf of appraisers, to overrate employees so that they will be promoted to the next level.

At this stage, the 'criteria' for appraisal should include competencies (performance indicators).

Assessment on the basis of targets 'objectives may be incorporated into the system at a later stage, when the necessary culture prevails.

Detailed definitions of criteria for appraisal, taking into account the duties and responsibilities of each post, and setting up of departmental committees that will ensure homogeneous evaluation.

Training of appraisers to equip them with the skills, knowledge, and specially, attitudes needed for effectively appraising employees.

Incorporation of the 'appraisal interview' into the system, so as to enhance communication between the appraiser and the appraisee.

Introduction of the 'self-appraisal process' in an effort to foster critical self-examination of one's performance and areas that one needs to develop. The next step/challenge is to finalize the suggestion for a new performance appraisal system. It should be done by taking into account the views of the Attorney General of the Republic regarding the legality of certain provisions, presenting it to the Council of Ministers and the rest of the decision makers, gaining the support of all influenced parties including trade unions, and then proceeding with its implementation.

QUESTIONS

1. Critically analyze the performance appraisal system of the civil service in Cyprus.

2. Suggest method for improving the use of the performance appraisal system for the two key factor-employee development, and improving the functional efficiency of civil services in Cyprus.

3. Analyze the problems arising out of the implementation of the performance appraisal system and suggest improvements to overcome them.

4. Do you think that designing a performance appraisal system in isolation, without addressing the negative situational factors, would lead to the desired results in this case? If not, suggest an action plan.