streamlining the philippine bureaucracy thru entrepreneurship development

A 2-in-1 Approach to Streamline the

Bureaucracy while Stimulating more

Economic Activities in the Provinces

Hilario P. Martinez

Motivating Entrepreneurship in Government Workforce to

Streamline the Bureaucracy

1

The CHALLENGE

Hilario P. Martinez 2

Recommending a Strategy

Develop Entrepreneurship among Government Employees for an Innovation-

Inspired Corps of Civil Servants and a Productive Post-Service Citizenry


Vision Statement

It is the vision of the State

to enhance the human

and intellectual capital of

the bureaucracy to ensure

delivery of quality public

service and a healthier

and more productive life

of its employees after

their tour of duty


Goal and Objective

The strategic goal shall be to ensure the continuous flow

of innovations and development-oriented

government programs and projects

The strategic objective shall be to ensure the

maintenance of highly competitive government

employees and the creative employ of such resources,

in-service and beyond


Hilario P. Martinez

HUMAN RESOURCE SITUATION IN PHILIPPINE PUBLIC SERVICE

6

Competitive government employees shift to private employment upon the instance of better opportunities while the majority opt to pursue

public service until retirement

Hilario P. Martinez

OVERSEAS

PRIVATE SECTOR

SOME GOVERNMENT

EMPLOYEES

7

Mandatory retirement at age 65, optional at 60 years old

Nearing 60

Hilario P. Martinez

Will there be another salary

increase? ...getting tired...

What will I do after? How

will I do this?

Will I have enough to tide me over? My

medicines . . .

8

The Government is the single biggest employer of over 1.5 million workers

Number of Personnel Fund for Personal Services

Hilario P. Martinez

too

little

MOOE

& CO

9

Qualification standards for employment and promotion

Private Enterprises Government Agencies

Hilario P. Martinez

Education & Eligibility

CSC-protected

security of tenure

HRD

10

How did it get to this situation?

Hilario P. Martinez

Tour of duty policy in

government service: at

least 20 years in the

service

Qualification standards, hiring and promotion practices in government employment

are not at par with the

best HR practices in the private

sector

Patronage often times

is the general rule rather than the

exemption

Security of tenure and

eligibility rule in govern-

ment employment,

apparently breeds

complacency and

promotes incom-

petence

Many government

agencies have

overlapping functions,

roles, jurisdictions,

and lacks inter-agency coordination in planning

and execution

Some socio-economic

and management assumptions are no longer

valid, or at least,

conflicting with evolving

realities in the global and local market

11

CONCERNS OF WOULD-BE 60- AND 65-YEAR OLD RETIREES

Hilario P. Martinez

What if I get

sick?

Can I get my

money ASAP?

What will I do

when I retire?

Will my pension

be enough?

Can I

still work?

How shall I

live?

# ! ? Self-

respect?

12

Retiring at 60 or 65! that’s old...

Hilario P. Martinez

Rest and

Recreation? Can I still

get a job?

Can I still

afford these?

13

Health Issues upon retirement

Hilario P. Martinez

Cost of

Hospitalization

Cost of Good Health

and Stamina

Cost of Medicine &

Professional Help

Will my retirement

benefits afford

these needs?

14

Can I still put up my own business after retirement?


STRATEGIC OPTIONS

Finding the Option that cost the least but the most multiplier effect


Strategic Options

Hilario P. Martinez

1 2 3

4 5

17

Option # 1: Maintain status quo: Retire at age 60 (Optional), or at age 65 (Mandatory) Advantages:

will not create heightened tensions among government employees

Disadvantages:

will not decrease PS1 spending

may not improve stimulus to professionalize to higher

levels of service and performance

does not assure productivity of employees

after retirement

Hilario P. Martinez

1 – Personal Services

Business as usual

18

Option # 2: Pursue legislation to re-engineer the bureaucracy

Advantages:

may decrease the number of departments and agencies, and lessen redundancy

may facilitate coordination among departments and agencies

Disadvantages:

may increase tension in the bureaucracy

may not decrease PS spending in the short term

may increase pressure on GSIS to fund greater than normal number of early retirees

may tend to be too big to manage even in the medium term

Hilario P. Martinez

Mr. SPEAKER!!!

One Minute recess!

19

Option # 3: Pursue legislation in privatizing more public agencies

Advantages:

may attract more private sector participation in public service

may accelerate professional development of government employees

may accelerate decentralization

Disadvantages:

may

incr

ease

ten

sio

n in

th

e b

ure

aucr

acy

may

incr

ease

pre

ssu

re

on

GSI

S to

fu

nd

gre

ater

th

an n

orm

al n

um

ber

of

earl

y re

tire

es

Imp

lem

enta

tio

n m

ay

take

gre

ater

tim

e d

ue

to s

oci

al, e

con

om

ic a

nd

p

olit

ical

co

nsi

der

atio

ns

Hilario P. Martinez

NOTED!!!

Objection, Mr. Speaker!

20

Option # 4: Abolish security of tenure for levels 2 and 3, replacing it with annually renewable service-contract based on performance and merit

Advantages:

May accelerate professional development and greater

responsiveness of public servants

May pave the way the establishment of a competency-based system for public service

May accelerate decentralization and streamlining of operations

May provide greater impetus for a better system of performance

measurement

Disadvantages:

Hilario P. Martinez

Our study indicates . . .

No valid basis . . .

No legal basis, Your

Horror!

21

Option # 5: Implement mandatory entrepreneurship development of government employees in preparation for early retirement Advantages:

An executive order may be issued to implement a bureaucracy-wide entrepreneurship development program

may encourage early retirement while giving way to competency standards development and workforce replenishment

may improve “life after public service” outlook of government employees

may spur greater banking activity, better economy of communities and ensure livelihood of would-be retirees

Disadvantages:

May not decrease PS spending in the short

term

May increase document

processing activity in GSIS due to lending banks’ verification


Comparative Analysis of Sector Impact

Hilario P. Martinez

N – negative tendencies

Y – positive tendencies

1 – includes GSIS & local banks

2 – professional service providers Legend :

Employee Acceptance

NGA/LGU Support

Financing Institutions 1

Training Institutions 2

Local Economy

Option 1 (Status Quo)

I M P A C T / E F F E C T Strategic Options

Option 2 (Re-engineering)

Option 3 (Privatization)

Option 4 (Service Contract)

Option 5 (Entrepreneurship)

23

Recommendation . . .

Comparatively, Option #5 is the option that may encounter the least resistance

It is the option that may cost the least

but may result in greater outcome

mutually beneficial to all sectors

concerned

It encourages greater participation from concerned sectors: employees, NGAs/ LGUs, banks, NGOs, training institutions and business

It may be implemented on a massive scale with

minimum disruption in government

operations


KEY PLAYERS IN OPTION #5


The Government Service Insurance System (GSIS)

Building the Fund

Member-Employees premium

contribution with

government counterpart

Interest earnings

from membership

loans and property insurance

Investments in Financial

Markets

Providing for Benefits and Privileges

Salary, policy, education, provident, calamity and

housing loans

Insurance proceeds

Retirement/pension proceeds


ORGANIZATIONS ENGAGE IN CAPABILITY BUILDING PROGRAMS:

Government Agencies

Private Professional Corporations

Industry-specific Training

Institutions

Non-Government Organizations

Civic Organizations


FINANCING INSTITUTIONS

Social Service-Oriented Public and Private Institutions •Government Agencies

•Non-Government Organizations

Government Banks

Commercial Banks

Rural Banks


The Department of Trade and Industry (DTI)

Trade and Industry

Regulator

The government agency in-charge of entrepreneurship training programs

Undertakes Small and Medium Enterprises

Development assistance and trade fairs

Maintains economic databases on business activities and enterprises,

including trade and investment statistics


The Provincial Government

Responsible for the formulation, update and implementation of the Provincial Medium-term Development Plan (PMTDP)

It shall disseminate to all agencies concerned a compedium of all priority industries and economic activities identified in the PMTDP

Responsible for coordination of nominees for entrepreneurship training of government agencies within the province

The Provincial Government shall establish the schedule of the training programs in coordination with all nominating government units in the province

In coordination with the DTI-recommended training institutions, it shall cause the conduct of the entrepreneurship training programs

It shall ensure that all financing institutions in the province for this project are legitimate and duly recognized by Government

Hilario P. Martinez

PROVINCIAL CAPITOL

30

SELECTED SEGMENT OF GOVERNMENT EMPLOYEES’ MARKET:

male and female

approaching the age of 50 years old

holding a regular permanent

appointment

in any agency in the NGAs, LGUs, GOCCs, and GFIs

with valid GSIS Insurance Policy


GENERAL FEATURES OF OPTION # 5

The pursuit of the program to develop the entrepreneurial skills of government employees in preparation for early retirement while a workforce development program is being implemented on a parallel stream


An Insurance Policy as a Collateral for Investment

All regular government employees are insured under the GSIS where premiums are paid through mandatory monthly salary deductions

Such instrument is mainly for retirement gratuity purposes and for a specific term and period of coverage

With an Insurance Policy in force, regular employees may avail of policy and salary loans until maturity or retirement, whichever comes first

Aside from interest earned from loans made by regular employees, GSIS invest the Fund to generate more funds to pay the retirement pensions of retirees

Hilario P. Martinez

GSIS Insurance

Policy

33

Conceptogram . . .

Hilario P. Martinez

Government

Employees

1

Nearing

Age 50

2

Entrepreneurship

Training Program

3

GSIS/Bank

GSIS Policy (Collateral)

4

Employees with own business part-time

5

Employee retire after 2 years for full-time business

6 New Employees Better Skills and

Fresher Ideas

7

34

young, evolving

workforce

pays

loan

develops

business

General Process Flow

Hilario P. Martinez

GSIS

staff

=< 50 yrs

old

provides training

Graduate employee

applies for bank loan

Updated

Workforce

Devt. & Mgt.

Program

declines

retires w/ pay

updated

competency

standards

Ent.Dev.P

Service Provider

Hire new talents

Promote most qualified only

Early retiree

w/ own business entrepreneurship

Insurance

policy

Re-categorized

De-prioritized

NGAs/LGUs

35

Parallel and Phased Implementation Process

Hilario P. Martinez

PAYS

LOAN

DEVELOPS

BUSINESS

NGAs/LGUs

GSIS

GRADUATE EMPLOYEE

APPLIES FOR BANK LOAN

RETIRES W/ PAY

EARLY RETIREES

W/ OWN BUSINESSENTREPRENEURSHIP

TRAINING

INSURANCE

POLICY

staff

=< 50

yrs old

En

tre

pre

ne

urs

hip Development P

ro

gr

am

s

Service

Providers

DECLINES

Re-categorized

De-prioritized

YOUNG, EVOLVING

CIVIL SERVICE

WORKFORCEUPDATED

COMPETENCY STANDARDS

HIRE NEW TALENTS

PROMOTE MOST QUALIFIED

RE-CATEGORIZED

DE-PRIORITIZED

CSC

NGAs/LGUs

Updated

Workforce

Deve

lopm

ent M

anagement

and

Program

STAFF & JOB

PROFILES

DECLINES

GSIS

NGAs/LGUs

En

tre

pre

ne

urs

hip Development P

ro

gr

am

s

Service

Providers

DTI

ECONOMIC/BUSINESS ACTIVITIES

TRAINING

AG

RE

EM

EN

T

CO

OR

DIN

AT

E

CONFIRM

PRIORITIZE

TRAINING PROGRAMS

FINANCING

INSTITUTIONS

GUARANTEES

PHASE 1 PHASE 2

PHASE 3

36

Phase 1 - Preparing the groundwork activities

Hilario P. Martinez

Coordinating with concerned government agencies

Defining provincial priority economic activities

Ensuring readiness of Training Institutions and programs GSIS

NGAs/LGUs

En

trep

rene

urs

hip

Development Pr

og

ra

ms

Service

Providers

DTI

IDENTIFY ECONOMIC ACTIVITIES

TRAINING

AG

RE

EM

EN

T

CO

OR

DIN

AT

E

CONFIRM

PRIORITIZE

FINANCING

INSTITUTIONS

GUARANTEES TRAINING

PROGRAMS

37

Phase 2 – Implementing the Entrepreneurship Development Program

Hilario P. Martinez

PAYS

LOAN

DEVELOPS

BUSINESS GSIS

GRADUATE EMPLOYEE

APPLIES FOR BANK LOAN RETIRES WITH

GRATUITY PAY

EARLY RETIREES

W/ OWN BUSINESS ENTREPRENEURSHIP

TRAINING

INSURANCE

POLICY

staff

=< 50

yrs old

En

tre

pre

ne

urs

hip

Development Pr

og

ra

ms

Service

Providers

DECLINES

Re-categorized

De-prioritized

NGAs/LGUs

38

Phase 3 – Renew the workforce

Hilario P. Martinez

YOUNG, EVOLVING

PUBLIC SERVICE

WORKFORCE

UPDATED

COMPETENCY

STANDARDS FOR

GOV’T POSITIONS

HIRE NEW TALENTS

PROMOTE MOST QUALIFIED

BASED ON COMPETENCE

RE-CATEGORIZED

DE-PRIORITIZED

CSC

Updated

Workforce

Deve

lop

me

nt M

an

ag

em

en

t

and

Program

STAFF & JOB

PROFILES

DECLINES

NGAs/LGUs

39

IMPLEMENTATION MECHANICS OF OPTION #5


Projected Trend of Competency Standards Development for Government Position Titles* while this Entrepreneurship Training cum Early Retirement

scheme is being implemented

Hilario P. Martinez

0

100

200

300

400

500

600

700

800

900

1000

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

Position Titles w/o CS Position Titles w/ CS

* Please refer to proposed “Competency-based HRD System for Public Servants”

41

Selecting Employees for Yearly Entrepreneurship Training

Hilario P. Martinez

* Referenced from current year

Employees approaching 50 years of age*

Employees with no promotional appointment* for the last 6 years

or more

Employees who have served for at least 15 years*

Employees with no pending administrative or criminal case

42

Training for Business/Entrepreneurship

PROVINCIAL GOVERNMENT LED

Training and coaching to be delivered by contracted professional organizations

Business project should be employees’ choice: single proprietor, group venture, or family-based

Project-based training: business plan development, implementation, evaluation

Proposed business site: preferably in employees’ residential area or birthplace


Ensuring Maximum Gains – Coordinating Training for Business/Entrepreneurship thru

the Provincial Governments

Hilario P. Martinez

Provincial Government-

Synchronized Training

Program for

Entrepreneurship

Development

Municipalities and

Cities within the

Province

Nat’l Gov’t Agencies

at Provincial Level Employee-Candidates with

Province-specific

Entrepreneurship project

Nominees

Nominees

Training

Schedules

44

Initiating and Developing the Business

Hilario P. Martinez

GSIS insurance policy as collateral to secure business loan from local banks/financing institutions

Supervised implementation of business (agency-employer, training institution and bank)

Two-years of business development and loan payment period

45

Encouraging Government Employees to Retire Early

All government agencies to allocate funds annually for entrepreneurship training of their respective workforce approaching 50 years old

Employees who have successfully completed the entrepreneurship training maybe accorded work schedule flexibility in order to ensure the success of their business project

Availing employees may get their early retirement pay/cash surrender value of their insurance (whichever is applicable at the time) staggered in annual payment as allowed by GSIS


Re-Categorizing/Re-Prioritizing 50 y/o Employees Declining Entrepreneurship Training and Early Retirement Option

Lowered priority consideration in future availment of off-site local and overseas staff development opportunities

Required to submit verifiable proofs of acceptable performance level and personally attributable accomplishments for two successive years when seeking promotion

Accorded higher priority consideration in job rotation and re-assignment as a mode of on-the-job training


EXPECTED RESULTS


Summary of Anticipated Results Gradual but progressive streamlining of the bureaucracy while deliberately preparing government employees for opportunities in the private sector after early retirement

Younger, productive retirees from government service with businesses of their own

Continuous inflow of younger and better skilled recruits in government service with fresh ideas

Progressive development of competency standards for government positions while effecting streamlining processes


Summary of Anticipated Results

Greater activities in

banking system,

especially rural banks,

servicing new entrepreneurs

Economic activities in

communities nationwide enhancing

SMEs and use of indigenous

resources

Promotes entrepreneurship

and correspondingly,

the growth of training

institutions

Value-adding of GSIS insurance policy as a valid

instrument/ collateral in

small business financing

applications by government employees


The Primary I-P-O-O

Hilario P. Martinez

+

+

INPUT P R O C E S S OUTPUT O U T C O M E

B A N K F I N A N C I N G

EARLY RETIREES

51

Chronology of Effects, particularly in the Regions

Hilario P. Martinez

MORE TRAINING

INSTITUTIONS

MORE SMALL

ENTERPRISES

SHORT TERM MEDIUM TERM LONG TERM

MORE EARLY

RETIREES

MORE PROGRESSIVE

WORKFORCE IN GOV’T

MORE TRAINING

PROGRAMS DEVELOPED

MORE and BETTER

COORDINATED

PROVINCIAL

TRAINING SESSIONS

52

The Next Steps …

•Firm up profile of government employees, to focus on age, business inclination and motivation for business of staff For NGAs/LGUs:

•Make arrangement for use of GSIS policy as collateral

•Make arrangement to facilitate payment to early retirees For GSIS:

•Firm up industry/economic priorities of cities and municipalities

•Accreditation of training institutions and enterprise development programs

For DTI in coordination with

DILG:

•Firm up guidelines for local financing institutions for micro-financing using GSIS instrument

For Bangko Sentral ng Pilipinas:

•Formulate the general guidelines for a Workforce Development Program in a Competency-based System Framework For CSC:


Action Points Discussion with GSIS re use of policy

contract as collateral for business loan purposes

Discussion with bank associations for extension of financial assistance to

government employees

Discussion with league of mayors and governors for support and identification of

entrepreneurial opportunities

Discussion with industry associations for support and linkaging

Discussion with associations of training institutions for preparation of appropriate

training packages

Consultation with government employee associations


streamlining the philippine bureaucracy thru entrepreneurship development

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