Institutional Reform and Incentive Mechanisms

Capacity Development Strategies Mini-Retreat

IstanbulAugust 2008

From a capacity assessment to institutional change

Usual findings..No resources

..Not enough human resources; need trips + scholarships

..No equipment and vehicles; no computers

..No financial management capacities

=>A need to look at the issues a little more systematically

• Institutional arrangements set up for most efficient and effective delivery on mandate

The Framework of Institutional ChangeStage1. Diagnosing & Assessing Institutional

Framework & Capacities

Capacity Assessments & Scopings

Apply Distinction

sAssess

Winners & Losers

Report on early successes as well as on the longer-term

impact of the change

intervention

Assess Political

Implications

Technical, Functional, Core Issues

Policy & Systems

CulturalHierarchy Issues Collectivism

Stage 2. Creating the

Momentum

Find ChampionsCountry OfficesDonor Partners Governments

Seek CoalitionsFind like-minded agencies

Stage 3. Executing the

Change

Technical, Functional, Core Issues

Human ResourcesM&E

Enhanced Coordination

Functional Clarity Stakeholder Engagement

VisioningStrategic Planning

LeadershipIncentives

Policy & Systems

Policy Advocacy

CulturalProcessesCoaching/Mentoring

Soft aspects of organisational

culture

Stage 4. Communicating the

Change

Quick

Wins

Long-term Strategies

Communicat

e

- Celebrating wins & early successes

- Ways of motivating people to adopt the new

behaviours, processes, &

systems

Illustrative ActionsScoping Missions;

Capacity Assessments; RGDs with key stakeholders

Illustrative ActionsIdentifying the challenges and

priorities for improvement, setting measurable targets;

Agreeing with some key agencies/individuals

Illustrative ActionsInstituting a unified HRM Framework; Instituting a unified M&E Framework, Instituting coordination mechanisms; Process facilitation

Illustrative ActionsReinforcing progress &

allow for corrections where needed, rather than

envisage a linear process

Understanding why, for who and for whatFor Why? Leakages in institutions by dint of how they are set up and how they functionLeads to efficiency gains and generate quick winsKey is diagnose the issue correctly and manage change processes in a manner that they are acceptable, are owned intrinsically, and therefore have a sustainable quality to them

For Whom? Institutional Reform & Incentives Mechanisms are Sector-Neutral!These apply as much to Parliaments as they do to the Office of the Ombudsperson or the Disaster Management Agency, or the Planning Ministry in a country

National Disaster Management Office (Lao PDR), General Economic Division (Bangladesh), NCED, Ministry of Planning and Finance (Sri Lanka), Centre for Ethnic Minority Affairs (Vietnam), Office of Ombudsperson (Maldives)

For What? Policies, procedures & processes for objectives to be reached!Institutional Reform & incentive strategies are directed to ensure the best possible institutional arrangements are in place for smooth functioning of the State & its interactions with citizens & non-state actorsHuman Resource Management, Coordination Arrangements; Functional clarity & Role Division; M&E Frameworks; Incentives

Distinctions….3 main areas for IRI

• Issues at capacity-policy nexus– What can be changed at pilot level but has definite policy

reform overtones

• Issues at unit level– What can be changed at the level of individual organisation

• Issues of incentives– Cuts across both levels and applies to organisations as well as

individuals

• The cultural dimension is context specific

Some illustrative actions at capacity-policy nexus

Are organisations clear about their functions? And overlaps with others? •Facilitation of a functional review to determine the responsibilities of different units of government and within public institutions and to map how they interact

1. Is there a common human resource management system that guides all personnel matters?

•Creation of a comprehensive human resource management system to include recruitment (job descriptions), incentives, skill enhancement, attitudinal change, deployment & transfers (retention of capacity) and performance criteria: HR focal points

How does it relate to overall civil service reform? •How are recruitment criteria are set, •Remuneration packages, •design of systems of assessment of training needs and how these needs are met etc.

2. Are there coordination mechanisms that guide intra-government relationships?•Improved coordination arrangements such as setting up standing sector working groups for coordination on technical issues

3. Are there comprehensive M&E frameworks that exist across government?•unified M& E framework for all of government linked to unified data sets

4. Other tests like is there a comprehensive SD system that recognises PPPs or CSOs as deliverers of services? What frameworks exist to guide these?

5. Does independent monitoring happen? Is it allowed?

Illustrative actions at unit level• Matching demand of training/skill building to various sources of supply

bearing cost-benefit in mind• Leadership capacities• Implementation capacities e.g. procurement; financial management;

programme management• Capacities for information management and analysis• Changing business processes in organisations to include regular

interactions with primary stakeholders

Illustrative actions - Incentives

Creation of a monetary and non-monetary incentive systems that promote a results-based management culture:

Individual– Awards and recognition; – salary supplementations; – work quality improvement measures

Organisational• performance based budgetary allocations;• Organisational recognition

Some examples

• National Disaster Management Office in Laos• Aceh Government Transformation Programme• Bangladesh Planning Commission• Sri Lanka CD for Local Development Management• Indonesia CD for Local development

Management• Philippines: Non-monetary Incentives• Maldives: Civil Services Commission

Platforms Approach to Change Indicative Example of a Sequence of Platforms to Shape Phasing of Capacity Development for Aceh Provincial Government

AchievesMomentum A recognition More Making Harnessingfor change that people power to better use human and Increased focus on performance

will be those who of what organ-izational. and achievement though Buy-in for differentiated implement is available effort to assessment and basing both benefits of based on and helps and making achieving rewards and allocation of resources results - acceptance remove it stick policy Enables on demonstrated performance.based of excusesplanning responsibility objectives Identification of measures of

efficiency and create improvedrewards for staff based onimproved efficiency.

Enables

Streamline the machinery of work and deependelegation and decentralisation

Enables of both resources and authority.

Reinforce responsibility and accountability including giving those who demonstrate they

Enables have earned it both greater trust and improved rewards.

Signal a change in expectationswith Capacity Assessmentand identification of quick wins.Create conditions for changethrough catalytic capacitydevelopment and restructuring.

Prior or early Actions (Such as)Improved recruitment of talent.relevant to next Platform.

Capacity development relevantto the next Platform.

RestructuringIncluding Functional Reviews relevant to next Platform. Incentives linked to additional responsibilities and milestone achiement

Platforms Approach: AGTP Approach to Capacity Strengthen

Open floor

• Are indicative actions clearly understood?• Experiences

– What works– What doesn’t

• Do we know enough? What needs more R&D?

• With who?