Formalising the appointment and compensation of Chile’s senior civil servants - Centre for Public Impact (CPI)

Formalising the appointment and compensation of Chile’s senior civil servants

For many years, the process of selecting and remunerating Chile’s top civil servants was an informal one, based partly on political expediency. In 2003, the government introduced legislation to create the Senior Executive Service System (SESS). The SESS made the appointment process more formal, competitive and transparent and defined the performance criteria that determined executive compensation.

The challenge

In the early 2000s, the Chilean political authorities were faced with an informal and irregular system of civil service remuneration that generated extra pay to some senior public sector executives. These employees were those who were in “the top management category of the civil service – the levels immediately below the politically appointed minister and deputy minister, [that is] … heads of agencies, deputy heads of agencies, director generals, directors and deputy directors”. [1]

In addition to this, many of the higher-level managerial jobs in the public sector were not subject to open competition but were essentially political appointments. In practice, the selection criteria were a combination of technical ability and acceptability to politicians. The Chilean approach was typical of the prevailing Latin American approach at the time: “a high degree of discretion, with no requirement of
specific skills and competencies, no performance contract (only a political contract). They serve at the pleasure of the political authority”. [2]

The initiative

The Chilean government sought to modernise the Chilean state by implementing managerial, personnel and senior executive development policies. A major element of this reform was the creation, in 2003, of the Senior Executive Service System (SESS). “It was created after Law N° 19.882, which ‘Regulates the New Personnel Policy for Public Servants’, [and] was enacted on June 11, 2003. Its purpose is to strengthen public function and contribute to the modernisation of the Chilean state by implementing managerial, personnel and senior executive development policies, to promote better public employment and a state that serves citizens.” [3]

One major objective was to develop transparent procedures for selecting the right individuals to occupy senior managerial positions in the Chilean civil service. The selection procedure consists of the following steps:

  • The approval of a selection profile and a position description.
  • The notification of the vacancy via mass media, official web pages, etc., with a description of the functions and responsibilities.
  • The initial assessment and shortlisting of candidates who completed the online application.
  • Interviews with the shortlisted candidates, leading to appointment.

The other main objective was to formalise compensation of senior public service executives, by introducing “fixed pay as a variable associated with institutional and collective performance”. [4]

The public impact

Three out of every four positions in the senior public service now have to be recruited through this procedure, which demonstrates, and places a premium on, the candidate’s qualifications and merit.

Through the new system, the government has succeeded in establishing the practice of public office competition. Currently, approximately 90 percent of positions in the civil service as a whole are selected through competition.

Since the reforms were carried out:

  • “The time to process patents and trade requests [by INAPI] was reduced from 10 months to 4.8 months...“In 4 years, the average time of annual electric interruption decreased from 48 hours (2010) to 15 hours (2014). Number of electric generators out of standard decreased from 280 (2010) to 50 (2014).” [5]

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Weak

Prior to 2002, along with other Latin American and Caribbean countries, Chile appointed many political positions based on trust, without a transparent selection process. However, widespread public mistrust and corruption meant that this had to stop, paving the way for the creation of the SESS.

Stakeholder Engagement Strong

The main stakeholders in SESS were the president of Chile and the Chilean government, the National Directorate of the Civil Service (DNSC) and the SESS. Each of these partners supported the planning phase and participated actively. There were also the participants in the SESS, those who applied for the senior managerial posts.

The Chilean government created the political and legislative context for the SESS. The DNSC was responsible for the implementation of personnel administration policies in the public sector and therefore responsible for implementing the SESS.

The SESS Council, a pluralistic collegiate body consisting of five members, was also involved in the design. It is “responsible for conducting and regulating the selection process” for senior public executive positions. [6]

Political Commitment Good

The political actors in Chile supported the SESS by creating the new framework for personnel management, enacting Law N° 19.882, which ‘Regulates the New Personnel Policy for Public Servants’. These political-legislative agreements in 2003 enabled the creation of a new institutional structure to implement personnel management policies in the public sector.

Policy

Clear Objectives Strong

The objectives were clear and directly targeted at creating a higher-functioning, more professional civil service.

This was to be achieved by establishing:

  • A formal and transparent appointments system.
  • A formal training system for the senior level employees coming under the SESS.
  • A performance evaluation mechanism for the senior managers with a formal remuneration structure.

Evidence Fair

The creation of the SESS in Chile was a continuation of the modernisation of governance machinery that had been initiated in the 1990s and addressed the problems arising from the informal system of recruitment and compensation.

In 2015, 12 years after its creation, the SESS was evaluated in an attempt to increase its effectiveness and efficiency, including comparative analyses of other senior civil service systems in countries such as the UK and Mexico. However, there is no evidence of pilot studies or evidence based comparative analyses in 2003 when the SESS was initially introduced.

Feasibility Good

The legislative context was addressed by enacting Law no. 19.882 (see The initiative above).

To initiate the competition process it was necessary to define the job profile and the recruitment process. This was carried out by consultants with expertise in hiring senior-level staff. About 40 consulting companies specialising in personnel management were selected to participate in the SESS appointments process. This addressed the main feasibility issues associated with the SESS appointments.

Action

Management Fair

In terms of management there is limited information: only the role of DNSC is explicitly mentioned. The DNSC was in charge of the overall design and of providing implementation support to the plans and programmes for the orientation, training and development of first, second and third tier executive positions.

Measurement Fair

The effectiveness of this reform was measured by analysing the efficiency in governance and decision-making. However, these parameters were not fixed beforehand. The efficiency improvements of this program included: the time taken by INAPI to process patents and trade requests; and the average amount of annual electric interruption and the number of non-standard electric generators provided by SEC (see Public impact above).

Alignment Good

The Chilean government is the major stakeholder in the SESS programme and it has supported it over the years by progressively bringing more and more civil service positions into the ambit of SESS.

According to legislation, 48 agencies were to be incorporated into the system in 2004, and, beginning in 2006, a further 10 would join the system annually “In 2007 a decision was made to speed up the process, and that year a total of 101 services had been incorporated [into] the SESS.” [7] Up to mid-2015 the total number of public services of the central government joining the system amounted to 114. In that year, a decision was made to strengthen the SESS based on the experiences of other civil services in Europe, Latin America and North America.