1. Why the World Bank Supports Retrenchment
Gary J. Reid
The World Bank
May 4, 2004

2. Three typical reasons Fiscal soundness imperative
“Attract and retain good staff” imperative
The Bank’s legal mandate: Productive investment
and

3. Fiscal soundness
To meet the fiscal soundness imperative, retrenchment needs to be accompanied by institutional capacity to control employment and the wage bill on an ongoing basis.
Effective establishment control
Post authorization
Hiring authorization
Effective salary-setting control
Salary structure, including all components of remuneration
Individual remuneration decisions

4. Attract and retain good staff
Enhance competitiveness of public sector salaries ( and )

5. Attract and retain good staff
Improve conditions of public service employment ( )
Depolitiziced, merit-based personnel management
Fairness in exercise of personnel management discretion
Reasonable career growth prospects
Effective redress mechanisms

6. Attract and retain good staff
Improve intrinsic rewards of public service employment
Complementary inputs sufficient to enable public servants to be effective and productive (so that a public servant can “make a difference”)
Respected reputation of the civil service or public administration as a body.

7. Productive investment
To meet the legal mandate, retrenchment needs to be part of a reform effort that yields a net improvement in productivity, not just of the public sector, but also of the resources released from the public sector.