8 National Personnel Authority, Annual Report 2022 Digest version. There were 37 new dispatches and 378 new appointments in FY2022. https://www.jinji.go.jp/kisya/2303/R4kanmin.html16(5) Total personnel expenses reform When public service reform was stalled, the Junichiro Koizumi administration undertook total personnel expenses reform as a pillar of the integrated expenditure and revenue reform to restore fiscal soundness. This reform aimed to reduce total personnel expenses by focusing on a net reduction in the number of national and local government employees and reforming the salary structure over a five-year period starting in 2006. In terms of downsizing, a net reduction target of at least 5% was set for national public employees, and this target was achieved with a reduction of 5.3%. In addition, the number of public employees was also drastically reduced by the incorporation of all national universities in 2004 and the privatization of Japan Post in 2007, both of which were to create a “small government”.(1) Establishing a Personnel Evaluation System to Ensure a Merit-Based System The thorough implementation of the merit system has always been a central issue in the reform discussions of the 1990s. Following the trend of performance-based evaluation in the private sector, it was thought that the public service system should also manage appointments and salaries based on strict personnel evaluation and limit seniority-based personnel cost increases.(2) Revision of Re-employment Regulations Under the revised National Public Service Act, the NPA’s prior approval was abolished and re-employment mediation by individual ministries and agencies was prohibited. Instead, the Center for Personnel Interchanges between the Government and Private Entities was established within the Cabinet Office to provide outplacement services. The new rules prohibit public employees at the assistant director level and above from seeking re-employment with interested companies while in office, but flexibility in appointments. The reform of the remuneration structure reduced the average salary level by 4.8% and introduced a new regional allowance of 3-18% (currently 20%) to better reflect regional private sector wages. Moreover, starting with the NPA recommendations in 2006, the size of the private enterprises surveyed was changed from 100 or more to 50 or more employees, and salary levels were more restrained than in the past. The salary schedules were also revised to flatten the seniority-based salary increase curve, strengthen the character of salaries for duties and abilities, and reflect performance in salary increases and bonuses. Several changes were made, including the creation of a new Headquarters Duty Adjustment Allowance for busy HQ employees. Then, the old performance evaluation system, which had become a formality, was abolished, and a new personnel evaluation system was introduced in 2009, consisting of a performance evaluation twice a year and a competency evaluation once a year. The previous practices of regular salary increases and bonuses based on the length of service was abolished and replaced by a system of salary increases and bonuses based on the results of evaluations. The results of personnel evaluations were to be used not only in salaries, but also in promotions, other appointments, and human resource developments etc. With the introduction of the personnel evaluation system, the National Public Service Act officially abolished the job classification system, which had been prescribed but not implemented.4� 2007 Revision of the National Public Service Act With the reform of the public service system at a standstill, the National Public Service Act was revised in 2007 to introduce a personnel evaluation system and to revise regulations on re-employment, based on the policy of“implementing reforms as soon as possible”.
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