Aug 14, 2024 09:14 PM IST
Adopting an up or out policy for the Indian bureaucracy can augment its efficiency by ensuring more capable individuals advance to higher ranks
Prime Minister (PM) Narendra Modi promised that his third term will see big decisions. The challenge now shifts from mere political determination to the bureaucracy’s ability to manage the effective implementation of reforms. The question remains: Is the bureaucracy up to the task? The success of Modi’s third term hinges on his ability to overhaul the civil service itself.
In 2023, approximately 1.3 million individuals sat for the Civil Services Examination conducted by the Union Public Service Commission (UPSC). About 1% qualified for the mains, and less than 0.1% eventually became civil servants. This fiercely competitive process highlights the allure of senior bureaucratic roles, marked by significant power, prestige, and unparalleled job security.
However, the system is plagued by inefficiencies, including few performance-linked incentives, and even fewer disincentives, with promotions based on length of service rather than merit. This fosters complacency and demotivation amongst high performers, with performance left to individual self-actualisation rather than systemic inducements. The recruitment system has bred a culture where the sense of having ‘arrived’ often diminishes the drive for personal or professional development.
In contrast, highly competitive industries follow an ‘up or out’ policy, where individuals need to either secure promotions within a certain timeframe or exit the organisation. This ensures a dynamic and younger workforce, pushes employees to achieve targets, and helps eliminate stagnation.
Adopting an up or out policy for the Indian bureaucracy can augment its efficiency by ensuring more capable individuals advance to higher ranks. It will reward doers by making promotions merit-based and nudge bureaucrats to acquire new skills. New-age areas requiring complex and specialised knowledge could benefit from an infusion of fresh, skilled talent. Evidence suggests that the prospect of promotion spurs better performance among bureaucrats. Scholar Anusha Nath’s research has found that Union government officers perform better in years when they are up for promotion, particularly where performance is screened, such as their 16th year of service compared to other years. Creating regular, formalised performance-based incentives (promotion) and disincentives (exit) could help motivate bureaucrats.
Anecdotal evidence suggests that bureaucrats with temporary positions often exhibit better performance in the hope of becoming permanent. This practice underpins the frequent use of looking after charges for key postings, although it can dampen morale. Instituting a formal system that encourages a regular cycle of promotions and exits could maintain morale, enhance functioning, while shielding bureaucrats from undue political pressures.
The criteria for promotions must be clear and incorporate innovation, integrity, efficiency, and facilitate strategic initiatives, with additional rewards for upskilling and technological proficiency. To avoid creating excessive competition between officers, collaborative ability must be included. The current Annual Performance Appraisal Report system, even with the 2017 reforms like objective grading and 360-degree feedback, still falls short in reducing non-performance.
Further protections may also be needed to establish guardrails against political interference in promotion decisions, and avoid the creation of a ‘committed bureaucracy’. Moreover, evidence indicates that high-skilled officers are 47% less likely to be transferred by new governments, signalling that competency is valued (Lakshmi Iyer and Anandi Mani). This suggests that high-performing officers are likely to be retained under an up or out policy. Mechanisms should also be established for officers who are normally transferred for political reasons under the current system from getting fired under the new one. Shunting should not become culling.
This policy has been long used in the US military. Officers must meet certain benchmarks to qualify for promotion, and those who fail are often encouraged to exit. This helps maintain a dynamic and competent leadership. In recent years, the military has tweaked this policy to retain talent, which could be instructive for India. Retention of talent is unlikely to be an issue in India, given the cut-throat competition to get into the services. Currently, there are very few resignations (less than 100 annually as per government data), and mostly at the early or late stages in the bureaucrats’ career. The possible increase in attrition can also be managed by increasing the intake, accounting for those who might leave. This can also open the doors for lateral entry, which the government has sought to introduce.
In the BBC series, Yes Minister, minister Jim Hacker introduces a radical proposal of giving honours only to those civil servants who achieved budget cuts. Secretary Humphrey Appleby calls this a dangerous precedent. The up or out policy is also likely to face similar opposition. By introducing it gradually or as part of broader reforms, the government can truly strengthen India’s famed steel frame.
Chetan Aggarwal is a public policy professional who has recently graduated from the Harvard Kennedy School. The views expressed are personal
