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Internal Initiatives

Human Resources

Human Resources Strategy

The Human Resources Strategy, approved in 2004, is a critical component of ADB’s Reform Agenda. ADB made significant progress implementing several initiatives under the strategy in 2005. The initiatives, by improving management of human resources, help ADB work toward achieving results.

The new performance development plan provides better alignment between staff work plans and ADB’s key results

The ADB-wide competency framework was implemented through the new performance management system and learning and development programs. Subsequent implementation of the ADB-wide competency framework will continue in 2006 through enhancements to the recruitment, selection, and promotion systems.

Among the initiatives, the new performance management system clearly defines individual staff responsibilities and accountabilities in annual work plans agreed between staff and managers. The Performance and Development Plan provides better alignment between an individual staff member's work plan and the organization’s key results. It is a framework that provides the needed structure to manage performance on a daily basis through timely, continuous, and constructive feedback as well as more objective performance distinctions and recognition. The Performance and Development Plan will allow ADB to efficiently manage staff development and personnel decisions. Improvements will continue to be made to the performance management system during the 2006 cycle.

Recruitment and selection initiatives were improved through the delegation of some oversight functions to the Vice President (Finance and Administration) and through the use of external specialized recruitment firms for senior positions in the Private Sector Operations Department and the new Risk Management Unit. Panel interviews for professional staff and greater participation of the hiring divisions were sought to screen and interview external candidates.

To facilitate implementation of the strategy, ADB was required to first attain the flexibility to adjust the composition of its workforce to ensure that staff possess the appropriate competencies, motivation, and potential to perform. Implementation of the Enhanced Separation Program started in 2005 and will be completed in 2006. The program encourages selected staff members who have reached a plateau in their careers to take the opportunity to separate from ADB earlier than their normal retirement date.

New Unit Formed to Focus on Learning

The Learning and Development Unit was established in 2005 to optimize the use of learning and development resources, support a more efficient approach to learning and development, and adopt a more strategic approach toward identifying learning needs within the business environment. The focus is primarily on promoting institutional efficiency and effectiveness, redesigning leadership programs, and improving technical programs. To determine ADB’s learning needs, an ADB-wide training needs assessment was implemented as part of the new performance management system. Several new workshops were introduced in 2005, and broad training programs on technical and operations skills development as well as leadership coaching to strengthen leadership and accountability were conducted. A job rotation pilot was implemented for resident mission national officers.

Initiatives that continue to support the objective of creating an inclusive and women-friendly environment were implemented, including diversity and gender sensitivity sessions.

Staffing

At the end of 2005, ADB had a staff of 2,456 coming from 53 of its 64 member countries. The total comprised 887 professional staff members and 1,569 local staff members, of whom 342 or about 17.2% are located in field offices. During the year, there were 95 appointments and 68 departures of professional staff members, while 137 local staff joined ADB, and 102 left. Women professional staff members increased in number but decreased as a percentage of total professional staff. Women professional staff members totaled 255 (29.8% of total professional staff) at the end of 2004 and 259 (29.3% of total professional staff) at the end of 2005.

Compensation

Consistent with ADB’s market-driven compensation system, the Board approved a 3.4% weighted average salary increase for professional staff and a 0.9% salary budget for nonrecurring, non-pensionable bonus for 2006. It also approved a weighted average salary increase of 10.9% for national officers and administrative staff at headquarters for 2006, while an overall weighted average salary increase of 10.8% for the national officers and administrative staff in 25 field offices was implemented for 2006.

The Board discussed the Comprehensive Review of Compensation and Benefits for professional staff in November 2005. It approved a change in the methodology for setting professional staff salaries. The European Bank for Reconstruction and Development has been added as a comparator, in addition to the World Bank. The salary budget increase has been split into two components: a salary increase to be distributed based on performance; and a nonrecurring, non-pensionable bonus to be given to staff rated exceptional under the Performance and Development Plan. Some benefit changes that were discussed with the Board and approved by Management included changes to the Staff Retirement Plan and the Group Medical Insurance Plan for pensioners, as well as minor changes to the expatriate benefits on housing, home country travel, and education assistance.

Internal Administrative Expense Budget

Internal administrative expenses for 2005 totaled $294.3 million, a saving of $5.5 million against the original budget of $299.8 million, resulting mainly from lower-than-expected staff costs, business travel, and administrative expenses, despite emergency assistance to the earthquake- and tsunami-affected areas. Savings were offset by a higher requirement for consultants and staff relocation. About $0.7 million was transferred from the general contingency to meet the unexpected increase in staff-related expenses of the Operations Evaluation Department and higher relocation expenses of the offices of the directors.

For 2006, the internal administrative expense budget is $312.9 million, including a general contingency of 1% (summarized in Appendix 10), and net of $3.8 million The new performance development plan provides better alignment between staff work plans and ADB’s key results estimated to be recoverable from administering trust funds of multilateral and bilateral institutions. The 2006 budget has been prepared under a zero real growth scenario, with no professional staff increases. The nominal budget increase over the 2005 budget estimate is 5.3%, which is fully attributable to price increases. To achieve this flat real growth budget and to ensure that resources are available to fund priority work programs for 2006, an across-the-board sequestration of 5% of the authorized professional staff complement and selected discretionary expenses was applied.

Budgetary resources in 2006 will fund a prioritized work program, including the following major initiatives: expansion of OCR lending to meet the priority needs of DMCs, including lending to subsovereign and nonsovereign entities; expanded private sector operations to reach unserved DMCs; enhanced portfolio management with increased delegation of project implementation and other functions to resident missions; strengthened credit risk assessment and management; enhanced regional and subregional cooperation and integration; Managing for Development Results and the Human Resources Strategy under the Reform Agenda; the Committee of Sponsoring Organizations of the Treadway Commission framework; knowledge management action plan; and implementation of the Public Communications Policy. Increases in budgetary resources to support these initiatives are to be met through sequestration of resources, trade-offs, productivity gains, and various efficiency measures.

In addition to internal administrative expenses, the 2006 budget also includes an annual capital budget of $4.1 million, mainly to fund cyclical capital expenditures for headquarters facilities and information technology equipment, and to meet replacement and acquisition requirements of field offices.

Administrative Services

The Office of Administrative Services worked to maintain a safer and better work environment through several major initiatives in 2005. Under the Enhanced Security Access Control Project—one of the projects under the Special Capital Budget Projects, which was approved in April 2004 by the Board of Directors—all six entrances to the headquarters building were improved and the Security Operations Center that operates 24/7 to provide timely information was established. It also led to the development of the ADB Business Continuity Strategy, approved in February 2005. The strategy, which aims to mitigate the probability of a risk occurrence and reduce the impact of a risk event, focuses on the timely response to a disruption affecting ADB’s business processes.

In November 2005, ADB passed its second year surveillance and maintained its ISO 14001 and OHSAS 18001 certification, confirming that ADB’s environment, health, and safety management systems comply with international standards.

The office also launched and managed ADB’s i-travel self-booking tool to enable personnel to make online travel reservations anytime they require. Last year’s projects also included the improvement of procurement procedures and outsourcing opportunities, and the latest printing technology upgrade.

All these bank-wide initiatives were anchored on the Balanced Scorecard and Six Sigma, which are now being used in the office as tools to measure quality for business process management improvement

Information Systems and Technology

The Office of Information Systems and Technology provides access to knowledge and information as required, in support of ADB goals in three major areas: information systems, technology infrastructure, and information technology governance.

Under information technology governance, the office recently completed a realignment, putting in place four business units: Technology Division, Solution Delivery Division, Infrastructure Unit, and Business Process Support Unit.

As part of the Information Systems and Technology Strategy Phase II, several initiatives have started to increase efficiency in information and technology areas. Foremost is the infrastructure optimization initiative to simplify and consolidate existing technology. This is expected to streamline ADB’s information and technology environment toward the desired enterprise architecture laid out against the defined business direction and to ensure greater cost-effectiveness.

In the area of information systems, the office is working closely with the Knowledge Management Center and the Regional and Sustainable Development Department to identify requirements for better information sharing in support of decision making and knowledge management.

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