Office of the Deputy Governor

Personnel Reform

Personnel reform was championed by the Chief Secretary, George McCarthy and delivered by the Deputy Head of the Civil Service, Mr. Colin Ross.

There had been a number of attempts to reform personnel by changing General Orders but nothing had fundamentally changed. There had been major dissatisfaction expressed for a number of years with the central bureaucratic control of personnel services by the Personnel Department and the Public Service Commission. In particular, managers had inadequate say in who was appointed to their posts (though they were held responsible for their performance) and the processes, especially of appointments, were very slow and inefficient.

Personnel Reform was essentially about decentralising personnel management authorities to managers to ensure better accountability and improve performance. To hold managers meaningfully accountable for outputs, they need to control their inputs; the major input is personnel.

The PMFL gave managers authority over financial inputs but not personnel inputs. Ministry managers are usually better placed to make personnel decisions than people at the centre (i.e. the Personnel Department)

The benefit of central control is (supposed) to be equity and avoidance of nepotism and favouritism. The cost is lack of responsiveness and poorer ministry performance.

The Cayman Islands Government operated General Orders which had its antecedence in the colonial system. It was a detailed rule book whose major focus was on what managers couldn’t do. There was a central Personnel Department responsible for recruitment and other personnel activity. There was an independent personnel body called the Public Service Commission which was responsible for appointing and dismissing civil servants. There was central control of wages, salaries and allowances and there was little or no flexibility for managers. There was little or no performance focus, increments and promotions based on longevity, little opportunity to reward good performers and it was hard to get rid of poor performers. There was no appeals process for civil servants who were disciplined, dismissed or who simply felt wrongly treated by the personnel system.

These arrangements were bureaucratic, slow and unresponsive. Strong candidates often didn’t apply; or if they did, they wouldn’t wait six months for a decision. It was difficult to respond to local and international market conditions especially for remuneration in specialist fields. The situation made managers very frustrated Good managers felt helpless to manage; the rest took little or no responsibility for personnel matters. This helped generate a “lethargic” civil service culture.

The Chief Secretary, George McCarthy’s vision for the Civil Service as reflected through the wider Civil Service Reform project was as follows:

"To develop a modern, respected and professional Civil Service that serves the community and positively contributes to the ongoing development of the Cayman Islands"

Civil Service Reform had four strategies:

1. Being a fair and responsible employer
2. Empowering and supporting managers
3. Supporting professional development and personal growth
4. Expecting professional performance

Delivering those strategies required:

• Establishing Public Sector Values and a Public Servants Code of Conduct
• Establishing a framework for overseeing the Civil Service
• Providing greater personnel authorities for managers
• Establishing modern employment & performance management arrangements
• Personnel authorities for managers: delegation

This required giving power to managers to:

• Appoint, promote or transfer staff
• Agree remuneration levels and terms and conditions
• Discipline or dismiss staff

It was felt by many that this would lead to nepotism and corrupt practices in the civil service. This has not happened as the following safeguards were put in place:

• Standard rules & processes established in Personnel Regulations e.g.
  • Appointment process
  • Broad remuneration bands (Not implemented)
  • Minimum terms and conditions
• Oversight by Head of the Civil Service
• Appeal processes
• Compliance Audits and possible removal of delegation

The lack of focus on performance was remedied by having new performance management arrangements which required every member of staff having a performance agreement and a performance assessment and paid a performance incentive.

Every civil servant was to be appraised on each aspect of performance assessed on 5 point scale:

• Rating 5: Achieved agreed performance in all respects and substantially better performance in most respects
• Rating 4: Achieved agreed performance in all respects and substantially better performance in some respects
• Rating 3: Achieved agreed performance in all respects
• Rating 2: Achieved agreed performance in some but not all respects
• Rating 1: Failed to achieve agreed performance in a substantial way

Incentive pay, which was never introduced, was for a Rating 5: Performance component would be equivalent 10% of base pay, Rating 4: Performance component was to be 5% of base pay.

As the new personnel regime was quite radical it was decided to implement in three stages:

Implementation Step 1: Revised General Orders

• Change focus: managers responsible for personnel subject to restrictions
• Greater personnel freedoms but still PSC
• Performance agreements and assessments

Implementation Step 2: New Legislation

• Enact legislation allowing decentralisation of appointment, dismissal and other personnel functions
• Repeal General Orders
• Abolish PSC & centralised personnel functions
• Increase remuneration flexibility – broad bands

Implementation Step 3: Performance Pay

• Only once performance management arrangements are working properly

The civil service reform was embodied in the Public Service Management Law and Personnel Regulations which came into force in January 2007. It has now been running successfully for six and half years with relatively few modifications to the law and regulations.

Last Updated 2013-09-19