Ferdelji: Salaries Are Not Too High, But the Government’s Timing Is Not the Best

The current salary policy for managers in the public sector is counterproductive and is one of the reasons why public companies and institutions are not progressing, assesses the president of the Croatian Association of Managers and Entrepreneurs CROMA, Vladimir Ferdelji.

The earnings of members of management in the public sector are lower than those in the private sector, contributing to capable managers avoiding the public sector, which opens space for less capable individuals, Ferdelji stated in an interview with Hina.

He adds that suboptimal staffing solutions result in much greater damage than would be caused by higher managerial salaries.

Ferdelji believes that salaries for managers in the public sector are not too high, but that there are better solutions than the government’s proposal for their increase, and he agrees that the government did not choose the best timing for its proposal.

The government has put forward a proposal to increase salaries (for some officials in public services) after months of negotiations with unions that resulted in a reduction of material rights for employees in the public sector, so the revolt of the unions is understandable, says Ferdelji.

He maintains that salary increases for managers must be linked to clear goals and their achievement, as well as to set deadlines, and it seems to him that this was lacking in the government’s proposal.

Commenting on one of the government’s explanations for the salary increase, according to which managers in the public sector are expected to face increased efforts in the reform of the organizations they lead, he says that a bonus system would be more appropriate for rewarding that increased effort, which is applied to reward managerial success in a specific project.

No matter how long it takes, restructuring is a one-time job and a bonus system can be applied to it, with clear goals and reward amounts needing to be defined, Ferdelji believes.

The president of CROMA believes that salaries in the public sector are influenced by an organizational structure that is not optimal and is accompanied by low productivity. He is of the opinion that the total amount for salaries in the public sector should be reduced, while individual salary amounts should be increased, which is crucial for raising productivity, which can be achieved not only by reducing the number of employees but also by increasing the scope of their jobs.

The reason for the conversation with the head of CROMA is yesterday’s government bill proposing to increase the coefficient for calculating salaries for directors of health and pension insurance institutes and their deputies and assistants. According to the government’s proposal, directors of the Employment Agency, the Central Register of Insured Persons, and the Central Agency for Financing and Contracting EU Programs and Projects, as well as their deputies and assistants, would become officials of the same rank.

The Minister of Labor and Pension System, Mirando Mrsić, explained that the salary increase and alignment of the status of officials is proposed due to the significant role of the institutions they lead and the increased scope of work in the upcoming reforms and obligations related to Croatia’s entry into the EU.

The government’s proposal and Mrsić’s explanation have faced fierce condemnation from some unions, which remind that the salaries of managers would be increased alongside the reduction of salaries for the majority of employees.