Public sector reform to target pay and appraisal systems

In October 2013, after an independent review of the public sector in Cyprus, the state payroll was declared unsustainable. Reforms to the current system were proposed to link performance with pay. Automatic promotion will also be abandoned in favour of a new system based on merit and penalisation for poor performance. Despite opposing the reforms, the public employees’ union is willing to negotiate with the government over the changes.


The re-examination of evaluation and pay systems in the public sector is part of a major reform of the civil service that has been in progress since 2009. There has been more intense focus on this issue since 2011, as a result of closer European economic governance. The Memorandum of Understanding on Specific Economic Policy Conditionality (230KB PDF), which was finalised on 25 March 2013, stipulates that the authorities will commission an independent external review as part of the reform of public services, with a view to introducing an appropriate system of pay and working conditions. There will also be a new performance-based appraisal system to assess career development and eligibility for promotion and to link performance with pay

Increasing productivity

The first conclusions of the expert committee that undertook a study of the structure and operation of the public service have indicated that the state payroll is not sustainable. This was the first stage of an evaluation that was completed in early October 2013. Issues of human resource management (the state payroll, evaluation system, mobility of public servants) were examined by a sub-committee whose participants included representatives of the UK School of Public Administration and the World Bank.

According to a statement from the Commissioner for Reform of the Public Service, Emmanuela Lambrianides, on 17 October 2013, the structure of the state payroll fails to promote competitiveness and cost-effectiveness. It should, therefore, no longer be based on a system of automatic pay increases and bonuses and should be re-examined on the basis of a relationship between performance and pay.

The evaluation system for public servants is currently based on a model of automatic promotion according to length of service. This will be replaced with a modern system of evaluation based on merit and the penalisation of poor performance. The Commissioner for Reform described the existing evaluation system as ‘levelling’, taking only seniority into account and removing incentives and rewards for cost-effectiveness. As stated in the Action Plan for Reform of the Public Service (in Greek, 959KB) (September 2013), similar evaluation systems will be put in place throughout the broader public sector, agreed through dialogue with the social partners.

Managing the changes

In all ministries and public sector bodies directly affected by the reform process (the Ministry of Agriculture, the Ministry of Education, the Ministry of Health, local government and the Registrar of Companies), steering committees have been created to manage the changes. Apart from providing support to the expert group, these groups will collaborate with the Press and Information Office (PIO) to create a framework for information campaigns. The Commissioner for Reform has said that the Academy of Public Administration will be asked to contribute to the process as a way of involving and consulting public servants themselves.

Because of the urgent timetables set out in the Memorandum of Understanding, the evaluation procedure is expected to be completed and the final proposals submitted by March 2014. By June 2014, the relevant draft laws should have been prepared.

Employees’ union reacts

In a statement to the Cyprus News Agency (CNA) on 17 October 2013, the General Secretary of the Pancyprian Public Employees Trade Union (PASYDY), Glafkos Hatzipetrou, admitted that public services are facing financial problems. However, he disagreed with the view that the state payroll is not sustainable, describing this as an 'arbitrary opinion'.

Without formulating alternative positions and proposals regarding the structure and operation of the public service, the PASYDY General Secretary said that the targeting of public servants and the exclusion of the union from the relevant procedures would be harmful to the country’s interests.

In an open letter to Nicos Anastasiades, the President of the Republic, PASYDY declared that it is willing and prepared to take the government project forward, as long as certain conditions that will lead to a constructive and mutually beneficial dialogue are met.

Eva Soumeli, INEK

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