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Public Recruitment needs Reformation; Contract mode is the way forward

Public recruitment requires reformation. It must be more competitive, and transparent and be based on the contract module.
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By Muhammad Zubair


The public sector has been facing the challenging task of human resource management. The permanent and regular mode of appointments has created an administrative and financial challenge to the government. The resolution of these challenges has the core policy priorities. Therefore, all governments adopted the contractual mode of appointment. The reference of the contract policy of Punjab is being dissected to understand the dynamics, issues, and solutions to public human resource management. The Government of Punjab notified the Contract Appointment Policy on December 29, 2004, after realizing that the regular mode of appointment is not suitable for most of the Government sector assignments. Certain administrative and financial factors were quoted to justify this paradigm shift. The change to contract mode called for a legal and Policy framework to govern contract appointments. Thus, to clarify the legal position of contract appointments and provide detailed policy guidelines, the Contract Appointment Policy 2004 was issued. 

Scope of this review

This review will provide plenty of food for thought as to whether or not the Contract Appointment Policy is a perfect policy intervention. Whether it was doomed to fail due to deficiencies inherent in it or poor implementation or lack of political will did not let the Policy succeed? This review will be the first research attempt on the subject, which will help future researchers to build upon the corpus. It analyses the primary policy intervention aimed at institutionalizing the contract regime. An effort has been made to draw the correct conclusions and suggest a future course of action. The methodology employed is descriptive, critical and analytical. Qualitatively, this report incorporates information from primary data collection gleaned from the Regulations Wing of S&GAD and based on interviews with relevant Government authorities and personnel. The senior officers who have remained directly involved in framing, implementing and amending Contract Appointment Policy 2004 were interviewed and consulted. Change management and policy cycle perspectives have been invoked to show that change is not only to be introduced but also managed and reinforced through policy evaluation and mid-course corrections. The whole issue has been boiled down to a trade-off between two values, i.e. administrative and fiscal concerns and political feasibility. 

The criteria commonly used in Policy Analysis involving effectiveness, efficiency, equity, political acceptability, administrative operability, robustness and improvability, etc. have been kept in view.https://republicpolicy.com/implementing-the-writ-of-the-state-is-critical-for-good-governance/

1.1.Overall Context and Historical Background 

Before Contract Appointment Policy, there was no institutional arrangement for determining categories of posts to be filled on a contract or regular basis. There needed to be guiding principles for fixing contract pay packages. Marked disparities were observed for similar categories of posts in terms of pay packages. Various governments made contract appointments in multiple departments without service rules or eligibility criteria. As for contract appointments of regular government servants, numerous issues emerged regarding retention of lien, treatment of period spent on contract, pension, etc. Thus the Contract Appointment Policy put in place an institutional arrangement. 

Contract appointments were used to be made against very few posts. For instance, re-employments and appointments in development projects and against tenure posts (Member PPSC, Ombudsman, etc.) were made on a contract. The Health Department resorted to contract appointments from 1996-97 onwards. The Education Department also shifted to the contract mode from the year 2000-2001 onwards[1]. In June 2003, the Finance Department issued a circular letter No. E&A (FD) 12-7/2003(P), dated 02.06.2003, requires government departments to make all appointments on the contract unless otherwise allowed. Consequently, the Government made almost all appointments in government departments on contract.

1.1.1. Features of Contract Appointment Policy

Following are some salient features which aimed at making the Contract Appointment Policy a perfect instrument: 

i. Although contract appointments are to be made through notified selection committees, the PPSC channel has also been recommended as preferable. 

ii. Contract appointments are to be made under relevant service rules or prescribed eligibility criteria and shall be governed by their terms and conditions. 

iii. The Policy incorporates detailed guidelines and safeguards to ensure merit. 

iv. Routine contract appointees are allowed 30 per cent of the minimum pay scale as social security benefit instead of a pension. 

v. A policy framework has been provided for regular government servants who are appointed on a contract basis in the government sector. 

2. Following questions have been framed to draw the right conclusions: 

  1. Has the outcome of the Policy created equity? 
  2. Has the Policy proved effective?
  3. Is Policy efficient?
  4. Is Policy politically acceptable?
  5. Has Policy enhanced the Government’s credibility?
  6. Does the Policy have the support of administrative operability?
  7. Does the Policy contain robustness and improvability? 

Now the questions mentioned earlier are addressed as under: 

2.1. Equity

The outcome of the Policy should create equity among the individuals. Equity calls for fair distribution of resources and is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person[2]. Inequalities in relationships will cause those within them to be unhappy to a degree proportional to the amount of inequality[3]. People value fair treatment, which motivates them. Much like other prevalent theories of motivation, such as Maslow’s hierarchy of needs, equity theory acknowledges that subtle and variable individual factors affect each person’s assessment and perception of their relationship with their relational partners (Guerrero et al., 2005). According to Adams (1965), anger is induced by underpayment. In most cases, payment is the primary concern and, therefore, the cause of equity or inequity.  

The contract employees, from day one, believe that regular employees have more job security and have pensionable service. In contrast, the Government can terminate the service of contract employees without assigning any reason. Thus they hanker after the regularization of their contract appointment and take their contract appointment as a springboard to regular appointment. They are also burdened with more work by regular employees who treat them as second-rate employees. Considering themselves privileged, regular employees shift tedious jobs to contract employees who have to perform such tasks because they fear losing their job. Such a discriminatory climate demoralizes contract employees, and they feel themselves justified in lobbying for regularization of their services. Thus the principle of equity was compromised by the Contract Appointment Policy 2004. 

2.2 Efficiency

Ideally, a policy should achieve its objective at the lowest possible cost reducing the waste of government resources to the minimum. The rationale is given for the intervention of the Contract Appointment Policy mainly includes financial and economic reasons. The Government was finding it hard to foot the bill of salaries, let alone the pension bill. 

The Contract Appointment Policy 2004 could have significantly reduced the pension liabilities had the Government not subsequently regularized the services of the contract employees. The Government has yet to maintain or consolidate the data of contract employees whose services have been regularized in bulks since 2009. According to factual data regarding contract employees converted to regular employees, as many as 9,730 contract employees were regularized up to 16.10.2016. [4] Thus, these employees now enjoy the status of civil servants and are entitled to pension benefits. 

According to a recent news report, the pay and pension bills have become almost equivalent in Pakistan as these two heads are consuming Rs 431 billion and Rs 421 billion, respectively, in the outgoing fiscal year 2019-20. [5] Thus the efficiency envisaged in the Contract Appointment Policy 2004 has been compromised, which might otherwise have been secured if the Government had strictly implemented the Policy. 

2.3 Credibility

The policy decision should enhance the Government’s credibility in the eyes of the public at large. For a government, losing credibility means losing legitimacy. As for the Contract Appointment Policy 2004, the people, especially the contract employees, took the paradigm shift of contract appointments with a pinch of salt. They take contract mode discrimination against contract employees, vis-à-vis regular employees. 

As many as 45 contract employees recruited in S&GAD whose services were subsequently regularized said during the interview that such policies cannot earn the Government any credibility, being against the principles of justice and fair play. They called the contract regime, besides the regular dispensation, double standards. They said that influential departments obtain approval from the Government for filling their posts on a regular basis on the recommendations of the Contract Appointment Regulation Committee. [6] Hence, the Policy from the very beginning lacked credibility.  

2.4. Political acceptability

The Policy should have political acceptability. The actions of politicians are strongly influenced by how they are likely to affect their popularity and re-election chances. They, therefore, have an almost instinctive preference for popular policies. Low public acceptability is one of the significant barriers to consistently implementing the Policy. Public solid resistance may inhibit implementation, as political parties fear consequences for their next election. 

Contrary to the provisions of the Contract Appointment Policy, the political Government in Punjab, on October 14 2009, allowed its departments to convert their contract appointments up to BS 15 into regular ones against the posts presently held by them. Simultaneously all Autonomous/Semi-Autonomous Bodies/Special Institutions in Punjab were also allowed to make appointments regularly of the contract appointees. The Government did not extend only the contract employees working against posts in various projects/ programmes/PMUs/PMOs and the facility’s time-bound (one-time) development activities. Subsequently, the Chief Minister approved guidelines for the appointment of contract employees in BS-16 and above regularly vide notification dated 10.11.2010. Thus the Government initiated a process to regularize almost all the contract employees recruited since the issuance of the Contract Appointment Policy in 2004, who have three years of contract service to their credit. 

Again the contract employees had another opportunity for regularization when the provincial Government in 2013, vide notification No.DS (O&M) (S&GAD) 5-3/2013, dated March 1 2013, ordered the regularization of contract employees in BS-1 to 15 against the posts held by them in various Departments. Autonomous / Semi-Autonomous Bodies / Special Institutions were also allowed to avail of the opportunity. 

Yet again, the political Government, which remained in office from 2013 to 2018 and recruited several contract employees, promulgated the Punjab Regularization of Service Act 2018 to provide for appointments regularly. It was a bid to regularize the contract services of all employees recruited by that last Government. It was a one-time dispensation meant to regularize the services of certain employees. The promulgation of this law by the outgoing political Government was a significant departure from the Contract Appointment Policy 2004. The next provincial Government maintained its provisions and enhanced its scope and application through further amendments. It made the law an all-embracing instrument through which any contract employee who completes three years in service is eligible for regularization of their services. 

Therefore, judged against the criterion of political acceptability, the Contract Appointment Policy 2004 does not resonate with the political Government, the public at large or the contract personnel. 

2.5. Administrative operability

There should be the adequate authority, capability, institutional commitment, organizational support and resources of the administrative system to implement the Policy. The departments and autonomous bodies enjoy the requisite power and ability to implement the Contract Appointment Policy. They have the institutional and organizational capacity to comply with it. Its implementation may save their resources in the long run. But political interference does not let it happen. The Government instituted the contract appointment regime also due to administrative considerations. As for regular employees, there were complaints of absenteeism, deteriorating performance and substantial administrative costs on transfers/promotions. Their accountability or disciplinary procedures were not serving as deterrence against poor performance. https://republicpolicy.com/understanding-the-concept-of-good-governance-in-pakistan/

Thus the contract mode opted to tap better human resources on the analogy of private enterprises. As such, the paradigm shift to contract mode aimed at improving administrative operability. However, as this significant change from regular to contract mode could not be adequately managed, the administration could not achieve the organizational objectives. The norms of change management, monitoring, evaluation and correction, i.e. the whole policy cycle, were never followed; hence, the entire exercise failed severely. 

2.6. Robustness and Improvability

Certain features of the Contract Appointment Policy prove it as a robust document. For instance, the Policy has laid down conditions which ensure merit-based appointments, equality, consistent treatment and inclusiveness. No relaxation of prescribed qualification, experience, physical criteria etc., is allowed. A contract employee in accordance with the standard terms and conditions of contract appointment cannot claim conversion of his contract appointment into regular appointment. The Policy under review is a comprehensive document able to perform or work well across a range of situations or scenarios. But, and it is a big BUT, the instant Policy is not consistent with the existing laws, especially the Punjab Civil Servants Act 1974 and the rules framed thereunder. 

A robust policy should provide consistency to the existing laws, rules and policies and allow room for improvement besides ensuring high public participation rate. Thus the Contract Appointment Policy 2004 has not been capable of maintaining functionality and effectiveness. It does not enjoy the robustness to make sure that the Policy continues to deliver, over time, its intended functions, purposes and objectives, even under negative circumstances. It could not withstand the opposition against it or stood the test of time. 

 For more clarity; https://republicpolicy.com/constitution-democracy-governance-and-colonial-bureaucracy-in-pakistan/

2.7. Effectiveness

The Policy should result in the achievement of the valued outcome (merit). Any policy short of this outcome is ineffective and requires fundamental change to improve the matters. The contract employment involves appointing or hiring a person for a specific job under particular terms for a fixed period of time. However, the intended outcomes of financial benefits and good management practices could not be achieved through the Policy in question. Conversion of contract appointments into regular ones has maintained pension liabilities as before. The dream of improved administration or efficient service delivery could not be realized.   

3. Conclusions 

It is hard to categorically state whether or not the Contract Appointment Policy 2004 is a successful policy. Success is a moving target, which is not attainable, but if we chase success we can catch excellence. The Policy per se is not to blame, but, unfortunately, successive governments have resorted to ad-hoc and short-term measures. Introduced by a preceding government, the Contract Appointment Policy has not been owned by the subsequent governments. It failed at the implementation stage because the coming governments did not feel obligated to stick to it. The available data points finger at weak institutions and the gap between Policy and action. 

The policy implementation was not monitored or its impact evaluated. It was not determined how the Policy had fared during implementation. The results and recommendations from evaluation were not fed back into further rounds of policy process. No tinkering has been made or incremental adjustments effected to ensure smooth policy implementation. 

Ours is a populist model and public opinion is translated into public Policy. Elections serve as mandates. Politicians are re-election driven and political parties mobilize opinion. Intending public representatives win the support of people in the general election by promising them jobs. Though recruitment quotas for MPs stood abolished after a Supreme Court judgment in a human rights case[7], public representatives still influence the recruitment process, manage recruitment of some candidates and their subsequent regularization. 

The existing administrative system is capable of delivering the Contract Appointment Policy which in itself a robust document and allows room for improvements but political expediency is the major obstacle. 

The general perception is that the Contract Appointment Policy 2004 compromises the principle of equity as regular employees compared to contract employees have more job security and have pensionable service. Such a discriminatory climate demoralizes contract employees who consider themselves justified in lobbying for regularization of their services. Thus the Policy could not earn the Government any credibility, given its perception of being against equity, justice and fair play. 

The Policy could not achieve its objective of reducing financial and administrative costs to the Government. It could have significantly reduced the pension liabilities, had the Government not subsequently regularized the services of the contract employees. Thus the efficiency envisaged in the Contract Appointment Policy 2004 has been totally undermined for want of its strict implementation. As the intended outcomes of financial benefits and good management practices could not be achieved, so is the improved administration or efficient service delivery.  

The rationale for which the Contract Policy 2004 was formulated has been defeated after promulgation of the Punjab Regularization of Service Act 2018. Government’s general amnesty to contract employees for regularization of their services in the years 2009 and 2013 had already ditched the Policy, which is of no consequence right now. Now all contract employees are eligible for regularization upon completion of three-year contract service. Thus the Contract Appointment Policy has badly failed in achieving its objectives on account of the reasons explained above.


4. Policy Recommendations

There is a dire need for institutionalizing policy making. Policy interventions cannot be left to the sole whims of bureaucrats or to the sweat will of politicians. In isolation, both are vulnerable to extraneous pressures and their inner temptations to “domain expansion”. The institutionalized policymaking should be introduced, which may ensure that the whole policy cycle is followed and that the results and recommendations from the evaluation of a policy intervention are fed back into further rounds of policy process. Successful implementation is to be guaranteed, followed by evaluation to determine how well a policy is working. 

The Punjab Public Service Commission should be strengthened and its capacity built to conduct the whole exercise of recruitment, be it is contract or regular. Meritorious people inducted through the filter of PPSC would be less prone to lobbying or wheeling and dealing as compared to those recruited through departmental committees which are susceptible to extraneous pressures. All cases of regularization as allowed under Punjab Regularization of Service Act 2018 should be processed and recommended by PPSC. 

Instead of first hiring people on contract and then regularizing their services after three years, new recruitments may be made under the Punjab Civil Servants Act 1974 and the persons so recruited may undergo probation period in terms of PCS (Appointment and Conditions of Service) Rules 1974. Only those persons should be confirmed whose probation service was highly satisfactory and whose retention in service would for surely be beneficial to the Government. There is a need to institutionalize probation regime through the application of strict conditions and performance appraisal. 

The scope of the Contract Appointment Policy may be restricted to the employees working against posts in various projects, programs, PMUs, PMOs, and other time-bound (one-time) activities and projects. The Policy may be adapted and updated to this end.

Now, coming to the fundamental question of contract appointments, the contract mode is the way forward. The public exchequer and functionality of the public sector require the implementation of qualitative contract regimes. The contract mode shall ensure transparency in the promotion, competition, and growth of civil servants and public sector officials. However, the standards of the contract regimes must be competitive and transparent. The tenure and extension of the contract appointment must be based on qualitative performance. The incentive should replace the existing perks and privileges. It will enhance financial and administrative capacity. However, it is achievable only if the whole process is revamped and ensures competition and transparency.

Contract Appointment is the way forward; Public Sector cannot bear Regular Appointmentshttp://Contract Appointment is the way forward; Public Sector cannot bear Regular Appointments


Guerrero, Laura K; Peter A. Andersen & Walid A. Afifi. (2014). Close Encounters: Communication in Relationships, 4th Edition. Los Angeles, CA: Sage Publications.

Adams, J.S. (1965). “Inequality in Social Exchange”, Advanced Experimental Psychology

Punjab Estacode Edition 2019, updated and compiled by Regulations Wing, Services & General Administration Department, printed by Government Printing Press, Lahore. 

Punjab Civil Servants Act 1974, Book 1, Punjab Estacode 2019

Punjab Civil Servants (Appointment & Conditions of Service) Rules 1974

The Contract Appointment Policy 2004, Book 3, Punjab Estacode-2019

The Recruitment Policy 2004 (Phase-II), Book 3, Punjab Estacode-2019

Data compiled by Regulations Wing in response to a Starred Assembly Question No. 6074. 

Report by Mehtab Haider, The News International, June 3, 2020.

Judgment dated 19.01.1993 in Human Rights Case No. 104 of 1992, the Supreme Court of Pakistan, printed in Punjab Estacode 2019. 

  [1] Para 3 (1) of Contract Appointment Policy, Book 3, Punjab Estacode 2019. 

[2] Guerrero, Laura K; Peter A. Andersen & Walid A. Afifi. (2014). Close Encounters: Communication in Relationships, 4th Edition. Los Angeles, CA: Sage Publications Inc. p. 263.

[3] Adams, J.S. (1965). “Inequality in Social Exchange”. Advanced Experimental Psychology. 62: 335–343.

[4] The said data was compiled by Regulations Wing in response to a Starred Assembly Question No. 6074. Subsequently no data was maintained or updated.  

[5] Report by Mehtab Haider, The News International, June 3, 2020

[6] This Committee is constituted in the Regulations Wing of S&GAD vide notification No. SOR.IV(S&GAD) 122/2004 dated 16.04.2004. 

[7] Judgment dated 19.01.1993 in Human Rights Case No. 104 of 1992, the Supreme Court of Pakistan.

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