By W.A Wijewardena –

A mega salary increase to public servants

A mega giveaway offered in the Interim Budget 2015, presented to Parliament last week, has been the proposal to increase the salaries of public servants across the board. In terms of this proposal, the salary increase of Rs. 3000 given in the Budget 2015 presented in November last year is to be topped up by a further Rs. 7000 in two stages – Rs. 5000 from February 2015 and the balance Rs. 2000 from June.

A physician diagnosing a patient at Dompe Hospital

This top-up proposal is estimated to cost an additional Rs. 88 billion. A salary increase of this magnitude has been justified on the grounds that it would produce a team of satisfied public servants who have been agitated by a marked erosion of real purchasing power due to increases in the cost of living not matched by a compensating salary increase in the past.

There is an element of truth in this argument. For instance, a typical basket of goods consumed by a family and contained in the Colombo Consumers’ Price Index had cost Rs. 27,972 in 2007. The same basket has nearly doubled to slightly more than Rs. 50,000 by the end 2014 when the public servants’ salaries on average had increased by less than 50% during this period according to the Central Bank’s nominal wage rate indices. Hence, a need has arisen, it has been argued, for a mega salary increase.

Salary increase is given by the public in the expectation of better services

There is a general belief that this salary increase was given by the Government, but it was not. On the contrary, it was given by the public who will ultimately bear the bill as taxpayers. They will have to make available the needed funds by paying taxes or agreeing to forego some of the existing public services or handing their savings to the Government as loans or a combination of some or all. Whatever the method, it amounts to a sacrifice of their consumption. Why should they choose to make such a sacrifice on behalf of the country’s public servants? That is because the public servants have to give back what has been sacrificed by the public by way of improved public services.

These improved public services come from an increase in productivity and increased productivity comes from inventions and innovations. Inventions and innovations come from the acquisition of knowledge, skills, talents and competencies by public servants.

An increase in productivity in the public sector is a must

The increased salaries will place public servants in a comfortable, worry-free and satisfying position. But it also inflicts a new obligation on them. That obligation is to improve their productivity and provide a better service to the public.

For instance, a teacher who gets the salary increase should acquire new knowledge, provide higher wisdom to students and help produce a more talented citizen to the country. It, therefore, comes from teacher’s learning, training and knowledge acquisition. Hence, the improvement in productivity is on the other side of the balance sheet that has recorded the increase in the salaries of the public servants. Recognising this vital requirement, the Minister of Finance, Ravi Karunanayake, put it in the Interim Budget 2015 as follows: “I call upon the unions, public servants and all stakeholders of the public sector to improve the productivity to be on par with the standards in the Asian region.” (available here ).

A conscious public policy to improve productivity is needed

But the improvement in the productivity of public service does not come automatically in response to a request made by a political authority. It comes from a conscious public policy program which aims at improving the productivity of public service at all levels.

It is therefore a matter for the Ministry of Public Administration to formulate such a public policy supported by the new Ministry of Policy Planning and funded by the Ministry of Finance. In formulating such a policy it is necessary to identify the distinction between invention and innovation. Invention means ‘creating something anew’; innovation means ‘making use of those inventions in a practical situation to ease the life of the public’.

Hence, inventions are the work of true creators. Innovations are the work of entrepreneurs who will put them into commercial use. Accordingly, in the case of public service, those who are engaged in innovations should act like real entrepreneurs.

Private entrepreneurs have incentives for introducing innovations

In the case of the private sector, an entrepreneur is a person who takes risk in using financial, human and physical resources to produce an output with a view to selling in the market for profit. His survival and sustainability depend on his ability to continue to make profits.

He faces competition from his competitors and therefore he has to introduce innovations continuously to remain ahead of them. It requires on his part the abandonment of old systems and introduction of new systems. He has no particular love for any system. If the prevailing system does not serve him, he does not grumble about abandoning it for a better system. Thus, the movement from old unusable systems to new usable systems should take place as a continuous process.

Public sector innovation efforts should come from the political machinery

In the case of the public sector, there is no profit element and therefore there is no incentive for public servants to introduce innovations for personal gain. Besides, they have permanency in employment and do not face the problem of survival as in the case of private sector entrepreneurs.

However, the politicians who are elected for a given period are different from public servants. They have a personal interest in introducing innovations because if the innovations are successful, they can go before the electorate with a strong claim for re-election. Hence, the initial initiative for introducing innovations to improve productivity in the public service should come from the political machinery. Yet, the political machinery cannot implement them on the ground because it has to be done by public servants who are dispersed all over the administrative system. As a result, to motivate the public servants to introduce innovations and through them, improve productivity, a proper incentive system has to be set up by the political machinery.

Such incentives can take the form of accelerated promotional prospects and special salary increases on the basis of the success of the innovations introduced. After such a system has been put in place, it is necessary to appoint some selected public servants who have to function as catalysts or change agents in introducing innovations and ensure that they will be continued till the final goal of improving productivity in the public sector is reached.

CIO experiment by PIM not used

A nucleus of such a team of catalysts has already been trained by the Postgraduate Institute of Management of the University of Sri Jayewardenepura drawing public officers from all the ministries and departments.

These officers, numbering 130, and designated Chief Innovation Officers or CIOs, have completed a Diploma in eGovernment at PIM funded by the Information and Communication Technology Agency or ICTA.

These CIOs were expected to go back to their work places and function as catalysts in change management. However, without support from the political machinery, these CIOs still remain totally unutilised and consequently have ended up as a frustrated lot over their inability to use the training they have received specifically for effecting change management. Therefore, they can be mobilised at anytime as catalysts in change management in the public service if there is commitment by the political machinery for introducing innovations and improving productivity in the public service.

Digitisation of Dompe Hospital as a private initiative

But, there is an exception. One such CIO with the support of the hospital administration has on his own initiated a real change management exercise in the Government District Hospital at Dompe.

In this exercise, the hospital, which had been operating on the basis of manual records for decades, has been transformed into a fully digitised hospital;

Dubbed eHospital, the project has been supported by many: ICTA with funding for computers, undergraduates of the University of Moratuwa who have volunteered to train the staff and the hospital administration which has carried the project on its shoulders until it has reached its success. Financially, the project has cost ICTA less than Rs. 5 million. But when the cost of the voluntary work is also added, the cost of the entire eHospital Project at Dompe has been less than Rs. 10 million. But the benefits to the patients, hospital, community and finally the Health Ministry have been enormous.

The success story of the eHospital Project at Dompe Hospital

This writer, who has been a facilitator of the CIO training program at PIM, had followed the progress of the eHospital Project closely. In order to assess whether the project has been sustainable and identify what action is being contemplated by the Project Management to improve its services further, he visited the Dompe District Hospital last week. What he found was evidence of a success story which could be replicated throughout the public service in order to improve its productivity at a relatively low cost provided that it has the blessings of the political machinery and there is a dedicated change agent to carry it forward.

The first could come as response to the call by the Minister of Finance and steered by the Ministry of Policy Planning. The second can be filled by the 130 odd trained CIOs presently scattered all over the public service without being utilised.

Digitisation of operations from beginning to end

When a patient visits the hospital for the first time, his particulars are captured into the server and he is issued with a barcode identity generated by the system containing his particulars which he has to produce every time he visits the hospital.

If for some reason the barcode is lost or misplaced, his particulars could still be accessed by using other options: Name, NIC No., place of residence or date of birth. Another officer scans the barcode identity and issues the patient with a computer generated number for the day’s service. It also specifies the room of the physician whom the patient should consult for receiving the treatment.

The physician scans the barcode and accesses the file pertaining to the patient stored in the server. It gives the full particulars of the patient. After examining the patient, the physician enters in the relevant fields of the file the diagnosis made, lab tests if necessary, prescription of medicines, injections or immunisations prescribed or if it is a physical injury, the treatments to be given in the dressing room.

To minimise the data entry, which takes time, a readymade menu listing all options pops up on the screen automatically. All these are instantly transmitted to the respective units of the hospital through an intranet. The officers at the respective units are also able to access the patient’s file by scanning the barcode and provide the necessary treatment for him. If it is a lab test, the results of the test are added to the patient’s file and the physician could access it when the patient visits the hospital subsequently. The pharmacist, having accessed the file of the patient from the server, issues the medicines prescribed by the physician with the necessary instructions. When he enters the drugs issued, the system automatically takes them out of the stocks enabling the hospital to make a drug requisition order promptly.

For in-patients, the discharge sheet and diagnostic cards are also generated through the system and added to the patient’s file. When the patient revisits the hospital, his complete medical history is thus available to the physician to make a holistic assessment of the patient’s status and decide on the curative treatment.

The process has completely done away with the paperwork. A system has now been introduced to get appointments by using mobile phones thereby cutting down the waiting time of the patients significantly. This is indeed a revolutionary innovation introduced to a local hospital in the country. What it has achieved with its limited resources ranks on par with the excellently digitised practices being used by modernised private healthcare institutions in emerging countries like Thailand as presented by this writer in a previous article (available here ). By any standard, Dompe eHospital ranks higher than any of the private sector healthcare institution in Sri Lanka.

Dompe eHospital project can be replicated

All the staff, including sanitary workers and ambulance drivers, has been trained in the use of the computers. It is amazing that old officers who had had the fear of even touching a computer have become proficient in even accessing information from the internet today. It has in fact improved their self-value, dignity and confidence.

Patients too have now become familiar with the use of IT in delivering an efficient service to them at the hospital. Its side benefit is that the local community has now become IT savvy, especially in the use of the social media and email communications. The Dompe eHospital project is a success and could easily be replicated in all the hospitals in the country. The costs involved could be accommodated under the Government’s enhanced budget for health services at 3% of GDP.

Learning lessons from eHospital Project

There are a number of lessons that can be learnt from the solitary eHospital project at Dompe Hospital. First, officers in the public service are trainable provided they are given right types of incentives.

Second, one catalyst can effectively implement an innovation project. Third, costs of introducing innovations are not that high. Fourth, every rupee spent on innovations brings back more than one rupee’s worth to the public. Fifth, there is no need for reinventing the wheel and the existing knowledge can be tapped for introducing innovations and improving productivity.

Spend money on capacity building of public servants

However, the campaign for improving productivity requires funding for training and capacity building of public servants. This can be accommodated under the current plan of the Government to increase the education budget to 6% of GDP. At the current GDP level, this amounts to about Rs. 600 billion. Education involves improvement of human knowledge, talents, skills, capacities and competencies. It should be done through formal education, research and training. Hence, the training of public servants could be accommodated under the current education budget of the Government.

Public servants have now been given a thumping salary increase. It can be vindicated if and only if there is a commensurate improvement in the productivity in the public sector.

*W.A Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com