Plan to introduce collective performance incentives in civil service

The French government wishes to introduce collective incentives in all three branches of the civil service by 2011. This measure will be available for all civil servants, based on achieving targets in each section. In a context of increased tensions related to massive job cuts, trade union concerns regarding the definition of criteria for financial performance and funding of collective incentives make it unlikely that agreement will be reached early in 2010.

By 2011, the French government wants to introduce collective incentives in all three branches of the civil service (fonction publique, FP), namely the:

• central administration (fonction publique d’État, FPE);

• local public authorities (fonction publique territoriale, FPT);

• public hospital service (fonction publique hospitalière, FPH).

Reforming civil service human resources management

Civil service human resources management (HRM) is currently undergoing major reform in France. In February 2008, the government signed new pay agreements with the Hospital Federation of France (Fédération hospitalière de France, FHF) and four trade unions, including: the National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA), the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC) and the French Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (Confédération française de l’encadrement – Confédération générale des cadres, CFE-CGC). The new agreements include a reduction in the relative importance of general pay increases, based on the civil service index point, as well as a variable pay element depending on the performance of each civil servant (individual bonuses) and each section (collective incentives).

Collective performance-related pay schemes were first used in 1959 for private sector employees (FR0405103F), and then extended in 1986–1987 to publicly-owned companies; however, they rarely exist in the civil service. This is related not only to a traditional mistrust of methods coming from the private sector, but also to the weakness – if not absence – of regulatory and legal measures defining a coherent framework for collective investment in France’s civil service.

In December 2008, Prime Minister François Fillon commissioned a report on performance-related pay schemes in the civil service; responsibility for this task was assigned to the Member of Parliament (Assemblée nationale) for the southwestern Lot-et-Garonne department (département), Michel Diefenbacher. The department is the geographical unit of local government, of which France has 100, including four overseas. The report on Collective performance incentives in the civil service (in French) was submitted in May 2009 and relaunched discussions on the issue.

Recommendations of Diefenbacher report

The report advocates incentives ‘available for the biggest number of people’, including civil servants without tenure, service workers and hospital doctors, based on meeting targets within each section. The targets should be limited in number and reflect improved quality of performance, services rendered (measured by queuing times, response times of administrations and rates of satisfaction in user polls), the financial situation and working conditions (measured by a reduction in workplace accidents, occupational illnesses and absenteeism).

Funding for collective incentives could be provided by using the budget devoted to grade-related pay. In the medium term, the bonus could be €300 annually for each civil servant and awarded to the best sections, representing between a quarter and a third of staff. According to Mr Diefenbacher, ‘it is a sum of money that is big enough to be an incentive and reasonable enough to be possible to cope with its variation’.

Legal implications

Creating a system of collective performance incentives in all three branches of the civil service requires adopting legislation. This has several advantages in terms of the following:

• filling gaps in the Public Health Code (Code de la Santé Publique) for the FPH and defining a legal framework for the FPT;

• generalising collective performance incentives in all public establishments that are not covered by the 1987 law, and involving all staff in all three branches of the civil service;

• introducing the system of exemptions of social contributions that exists in the private sector. The Social Debt Reduction Contribution (Contribution au remboursement de la dette sociale, CRDS) and the Universal Social Contribution (Contribution sociale généralisée, CSG) are not included in this system of exemptions;

• defining conditions for staff to access the collective incentive scheme, such as seniority and absenteeism.

Such a law must be combined with close bargaining with the FPE trade unions, whereas the FPT and FPH would be free to decide whether or not to use the system.

Reactions of social partners

In a context of increased tensions related to large-scale job cuts, the report advised the government to be cautious in negotiations on collective performance incentives in the civil service.

At the end of May 2009, the Secretary of State for the civil service, André Santini, and the Minister for the Budget, Public Accounts and the Civil Service, Éric Woerth, proposed to the four trade unions that had signed the pay agreements in February 2008 to start negotiations on a framework agreement for the FPE, before embarking on discussions in the other two civil service branches. The government hoped to reach agreement by early 2010. However, the talks process seems to have stalled at the moment. Although the trade unions are ready to discuss collective performance incentives, their priority remains pay and jobs.

Moreover, CFDT condemns the fact that the trade unions which did not sign the 2008 agreements have been excluded from the negotiations, namely: the General Confederation of Labour (Confédération générale du travail, CGT), the General Confederation of Labour – Force ouvrière (Confédération générale du travail – Force ouvrière, CGT-FO), the Unitary Union Federation (Fédération Syndicale Unitaire, FSU) and the independent Solidarity, Unity, Democracy (Solidaire, Unitaire, Démocratique, SUD). CFE-CGC fears that differentiated implementation of collective incentives depending on the section would threaten civil servants’ occupational mobility.

The funding and definition of criteria of collective performance incentives in the civil service are two complex aspects of this issue. According to MrSantini, collective performance incentives could be funded by savings from the policy of not replacing half of all civil servants who retire; however, the trade unions think that this proposal is shocking. Moreover, the unions are concerned that the introduction of performance criteria reflects financial considerations to the detriment of the quality of services. Thus, CGT, which is the majority trade union in the civil service, is strongly opposed to collective performance incentives, which would lead to ‘transforming the civil service into a company run mainly in line with accountancy and competitive rules’. In the opinion of CGT, ‘public service missions and the general interest would no longer guide staff actions, but the laws of profit and profitability’.

Noélie Delahaie, Institute for Economic and Social Research (IRES)