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Gregor Virant and Iztok Rakar

Abstract

A major reform of the public sector salary system took place between 2003 and 2008, where public administration was included as one of the sub-sectors in a broader scheme, covering also the health care and social care sectors, the education sector and other parts of the public sector. The reform was extremely complex, and its development consisted of several phases. The reform resulted in a completely new salary system for the public sector. There are several tangible benefits of the reform; however, there are deficiencies, too, and some of them were amplified by measures inspired by the financial crisis. In our opinion, the changes should be focused on eliminating or drastically reducing de facto automatic promotion to higher salary grades, introducing more flexibility into the system without putting at risk its coherence and ensuring the budget for variable (performance-related) pay. Additionally, but with due caution, the option should also be considered and discussed to enable the government to classify certain positions in salary ranks higher than defined in the collective agreement, as a response to the situation on the labour market.