In a significant overhaul aimed at enhancing the performance of the nation’s civil services, a novel performance management scheme has been introduced within the Federal Board of Revenue (FBR) for both Customs and Inland Revenue. This initiative will be extended to encompass all services and cadres of the Central Superior Services, replacing the current flawed and easily manipulated Performance Evaluation Reports (PERs) system.
Prime Minister Shehbaz Sharif has given his approval to this scheme, which, within the FBR, has already reduced the previous assessment of 98% of Customs and Inland Revenue Service (also known as the Income Tax Group) officers being rated as “outstanding” and “very good” to a mere 40%.
Under the former system, an overwhelming 99% of Customs and Income Tax officers were categorized as the best (“A” category) in terms of their integrity. The new system introduces a merit-based approach where top performers will receive higher compensation. The performance and the resulting compensation package will undergo review every six months.
The Prime Minister has directed the Establishment Division to study and implement the FBR’s novel performance management system across all other services and cadres of the Central Superior Services. It is anticipated that this system will bring about a dramatic improvement in the performance and effectiveness of the country’s civil services.
The new system is the brainchild of the current FBR Chairman, Rashid Langrial, who, with the support of his team, conceived, tested, and successfully implemented the entire scheme for the last six-month evaluation of every officer within the Customs and Inland Revenue Service.
In stark contrast to the past, where almost every officer, regardless of their reputation and performance, was assessed as “outstanding,” “very good,” and “very honest,” the new system will categorize officers from “A” to “E,” with each category comprising 20% of the officers. These officers will be evaluated based on a fully digitized performance management regime that emphasizes both their integrity and the quality of their work.
Not only has the assessment process for each officer been made impervious to potential manipulation or interference, but those achieving higher grades will also be rewarded financially based on their performance.
Within the FBR, the top 20% (“A” grade) officers have begun receiving salaries four times their usual amount, the next 20% (“B” grade) receive three times their regular salary, the following 20% (“C” grade) receive double their salary, while the “D” category (20%) officers receive one additional salary.
There is no additional compensation for officers in the “E” grade. This compensation scheme will be reviewed every six months based on the half-yearly assessment of each officer. For FBR officers, the financial implications of this scheme are estimated to be a few billion rupees.
The new performance management regime has been designed to be resistant to manipulation and interference, and not dependent on the whims or preferences of any individual, senior official, or even the ruling authority.
Under this system, already tested and implemented for over 1,500 officers of the Customs and Inland Revenue Service, each officer is reviewed every six months by 45 peers (seniors, juniors, civil service colleagues, and batchmates) through an anonymous forced-ranking system. This forced-ranking system ensures that each of the five categories is limited to 20%, meaning no service or cadre will have more than 20% “outstanding” officers.
The new system is fully digitized, employing advanced cybersecurity tools to ensure the complete anonymity of the 45 peer reviewers. Access to the system will be limited to the FBR Chairman and three FBR members, none of whom can alter or manipulate any officer’s report.
The three FBR members will have joint access to the data, and any unauthorized activity concerning the data will trigger notifications to five different individuals, preventing any single person from making changes.
A four-stage criterion, based on the likelihood of knowing the officer, is used to identify the 45 peers for each review. In addition to peer scoring on integrity, a system for evaluating the quality of work by a technical panel will be implemented.
This technical panel, comprising retired FBR officers and other tax professionals, will assess the quality of work of officers randomly selected by the digitized system.
The FBR has successfully completed the assessment of all its officers for the last six months under this new regime.
