evaluating a simple public policy

TERM PAPER [PUBLIC POLICY]

SUBJECT : PUBLIC POLICY
PROFESSOR : DR. NOBUHISA TAIRA
Student : Cyl Bryan A. Bagadiong, Philippines

BIO-METRIC SYSTEM: A Human Resource E-management Project
Province of Catanduanes, Philippines

BACKGROUND:

The Province of Catanduanes is an island-province of the Philippines lying along the easternmost
part of the Philippines facing the Pacific Ocean. It is serving a 300,000 plus inhabitants in an area of 1,511
square kilometer. Its terrain is generally mountainous and isolated by the Pacific Ocean and the Lagonoy
Gulf from mainland Philippines. Due to its isolation, it took advantage of the new and emerging
communication technologies to build electronic bridge to the rest of the Philippines and the world. In the
entire Philippines, it proud itself as the most advance province in terms of communication and information
technology using the most advanced wireless platforms such as microwaves and satellite-based
transmitters. All areas of the province have cellular coverage even at the remotest mountain and the
farthest sea. Household in rural areas utilizes broadband internet technology and subscribe to satellite
cable televisions. Ordinary farmers and fishermen use cellular phones to conduct their trade and
communicate with the government.

The provincial government of Catanduanes has 688 permanent employees serving all the needs of
its constituents scattered along the 11 municipalities. It is reinforced by 300 plus contractual employees.

CYL BRYAN A. BAGADIONG, Philippines | MUGS² 1


All personnel affairs are supervised and managed by the Provincial Government’s Human Resource
Management Office (HRMO).

THE PROJECT:

I. RATIONALE:
Previously, all employees, regardless of their employment status, use the traditional punch card
system in logging in and out of the workplace. The punch card system uses a prescribe card which the
employees insert in a Bundy clock whenever they log in and out for work. Fieldworks are covered by
permission slip manually filed by employees and approved by the supervisors by fixing his signature in the
slip. A second copy of the permission slip is forwarded to the HRMO who files the same for reference in the
computation of the number of days and hours the employees worked. Habitual lateness, under time and
absenteeism are acts punishable by the Civil Service Commission rules which covers all government
employees. All employees are required to work eight (8) hours a day. Lateness, under time, and absences
are deducted from their leave credits and from their salaries. Salaries are given every 15 days (10th and
25th of every month) based on the computation of the number of hours and days they had worked and
their position or nature of work. The following are the usual process of punch card utilization:

1. The employee submits the used punch card to their own office’s administrative officer together with
a manually filled Daily Time Record.



2. The administrative officer verifies the time reflected by checking the print in the card and their file of
leave of absences and field work permission forms. Upon verification, the administrative officer
affixed his counter signature.
3. The administrative officer forwards the employee/s’ punch card to the department head for
certification that the hours reflected therein are the true number of hours that the employee had
rendered his services.
4. After the certification, the punch card is submitted to the HRMO for computation of salaries for the
period, and reflecting the amount into the payroll and prints the same.
5. The HRM Officer shall affix his signature to the payroll certifying therein that the person whose name
is reflected in the payroll had indeed rendered services and that the amount reflected opposite the
employees name is the correct amount due to the employee.
6. The payroll is then forwarded to the Accounting Office, the Budget Office, the Office of the Governor,
and the finally the Treasurer’s Office for payment.

II. ISSUES:
1. The whole process takes three to four days to complete and requires additional manpower to speed
up the process, thus, the Provincial Government is forced to hire additional contractual employees to
speed up the processing of payroll and Daily Time Record verification. However, due to this
manpower requirement, additional jobs are generated absorbing some people in the unemployed
sector.



2. The offices which are scattered in the entire province have to provide travel allowance to and fro
twice a month for the administrative officer in charge of the salary in that office. The Provincial
Treasurer’s Office is also forced to release the salaries to the same administrative officer acting as
agent of the treasury. The Administrative Officer, upon his return to the satellite office from the
Provincial Capitol, dispenses the salary to the employees stationed in the said satellite offices.
3. Due to the two previously mentioned reasons, the HRMO is required to allocate additional funds for
the wages of the contractual employees involve in the process and the travel allowances of the
administrative officers.
4. Field work permission slips are not reliable as employees can easily opt not to fill the same with
collusions from their supervisors or even fill up the same but renege on the actual field work.
5. There are some cases that employees card are punched but the employees are actually not in the
office but somewhere else.
6. There is also a noted high increase of perfect attendance or zero lateness coupled with increase of
complains from clients of long queue to avail services which based on study is highly statistically
improbable.
7. Records of leave credits and period of services rendered, which is highly critical in the computation
of terminal, retirement, insurance and some other benefits, are manually inputted and recorded in a
card which can be easily manipulated, lost or destroyed.
8. The Civil Service Commission, the national constitutional commission in charge of formulating all
personnel laws raised their concern over the system used by the Provincial Government due to its
unreliability and non-verifiability. The Government Service Insurance System, the national



government insurance system for all government sector employees, and the Philippine Health
Insurance System Corporation, a quasi-government corporation in charge of all government sector
employees medical insurance, also raised their concerns on the matter of the integrity of records
and accuracy from the Provincial Government.

III. PROPOSED SOLUTION
To answer the problem and in deference to the recommendation of a multi-sectoral study headed by
the HRMO, the Provincial Government decided to use the advance technology prevailing in the community.
A system requirement was published in 2003, bid out in 2004 and won by Electronic Data System
incorporated (EDS) in 2005. By early 2006, the system began to be implemented. The system has the
following feature:
1. Instead of punch card, the employee has to use his fingerprint to log-in and log-out for work. The
finger print reader is a laser scanner that takes 2-3 seconds to verify.
2. After the reading, the system automatically records the time of log-in and log-out in the database
and opens the rotating rails to admit the employee in their office.
3. Finger print readers and rotating rails were installed in every exit and entrance of a certain office
and all of them were connected to the main system through a wireless broadband as the main
information transmitter and Bluetooth technology as back up.
4. Electronic pass slips are filed by sending a Short Message System (SMS) message through cell or
email message by the employee at any time of the day. The system will send a notification to the



supervisor in charge of the approval and shall be approved by the supervisor either through email or
SMS using any of the assigned coded set of digital signatures.
5. To exit, an employee shall use again his fingerprint to open the rotating rail, if a duly approved Pass
Slip had been filed, the system shall reflect that the said employee is on permissible official or
personal pass slip otherwise, the same shall reflect an under time or unauthorized leave.
6. The system will print a slip of paper for signature confirmation of the destination of the field work or
pass slip.
7. On the midnight of the 9th day and the 14th day of every month, all system will wirelessly transmit
the data on the central database and compute the salary.
8. The officials involved in the verification shall attach its digital signature on the system through email.
SMS message may be sent by the system to an official who have not yet attached its digital
signature and ask for reason, thus, the whole process took 1 day only.
9. After all digital signature had been attached; an online printer in the treasurer’s office generates the
payroll, pay slip, and earned leave credit for the month. The system also store data on the individual
employee’s data base.
10. Said data base can be accessed by the public through SMS and employees through e-mails
and SMS.
11. Records of attendance and whereabouts of the employees can also be requested by the public
through SMS.
12. Additional income by the provincial government is also generated by charging a minimal fee
for inquiry through SMS and printing of records from the system.



IV. RAISED ISSUES TO THE PROPOSED SOLUTION:
1. The Provincial Government has to invest 15 million pesos (39,988,421.20 Yen) to install the system
on a five year implementation phase.
2. Some employees are complaining on the use of information in the system and the union is asking
legal assurance that the information will be protected against some possible misuse of the
government and the public.
3. Employees are complaining that the system dehumanized public sector delivery and personnel
management.
4. The system is vulnerable to virus and worm attack that can be sent through emails.
5. Some taxpayers argue that the amount should have been better spent to other public service
requirements/project such as social service delivery or infrastructure development.
6. Some taxpayers are also complaining that they will be made again to shoulder the burden of
additional government expenditures through raised fees and charges in exchange of a more efficient
HRM System of their provincial government.

V. CONCLUSION:
The multi-sectoral panel that studied the project is convinced that the project’s benefit will over run
the cost in the long term. During the planning workshop that had been conducted by the panel to study
the program, they used a simple T-Account comparison enumerating therein the various advantage and
disadvantages if the program will be implemented. There are many benefits that may be derived, albeit



some of them cannot be measured or expressed through monetary terms, by the local government. These
benefits are usually qualitative in nature rather than quantitative. Examples are fostering of
professionalism and discipline within the ranks of employees, increased integrity of the generated records,
accuracy of the information supplied to various stakeholders, etc. The panel has also factored in the
adverse reaction from various sectors if the system will be implemented, thus, information dissemination
and dialogue will be conducted by the HRMO to the various sectors involved to enlighten them of the long
term benefits.

There are basically five parties that will be directly involved and affected by the project
implementation. These are the employees in general; other agencies that has direct interests on the
record of the employees; Tax Payers; the Provincial Government especially the Human Resource
Development Office (HRMO); and the Software and Hardware Company who won the bidding.

One change that will be affected after the implementation of the project is the diminishment of
humanitarian consideration. This will be however a benefit for the employees in general since that would
mean a uniform and fair application of rules and guidelines regardless of justification. This will too benefit
the taxpayers since they will be ensured that benefits and restrictions in their local government are
applied, with blind eyes of justice so to speak, to all employees, which salaries are drawn from their taxes.
This too will be a benefit in the part of the Government since there will be less complications for them in
implementing the rules and guidelines on personnel administration, especially whenever they are being
beseech for consideration, as they can always adjure that their hands are tied since the system



automatically generates data and they are powerless to change them. Thus, in the matrix, all fields will
have a positive sign on this specific item of change.

Another change that will occur is the reduction of error of the records being used and that will be
generated due to the use of the system. Again, this will have positive signs across the various
stakeholders’ column as seen in the matrix. This is because the system will be generating a real time and
accurate data without human intervention, thus, error will be minimized to the least or will be non-
existent at best.

Due to the computerization of the system, less manpower will be required since the system will
perform the work of several people that is usually involve in the usual manual system. With less
manpower required, that means, funds usually spent for the additional manpower can be saved and can
be re-aligned for employees’ cash benefits at the end of the year such as year-end bonus, cash-gifts, etc.
Conversely, this will be positive for the government because it can generate financial savings from the
non-availment of additional manpower and corollary a benefit to the taxpayer as they will have a leaner
government that uses their taxes efficiently. With this after effects, this will too be a positive sign for the
computer Software and Hardware Company as their claim of merit will be further fortified.

With decreased man-hours as an effect of the implementation of the system, delays in the release of
salaries and benefits of the employees will be further reduced. Also, bureaucratic red-tape will be removed
in the application of field works and monitoring thereof. This will also be a benefit on the side of the tax-



payers since services can be readily delivered by the employees especially the field workers as service
availment will now be automated and just an SMS-short away. Also, it will be a benefit to the government
if the system is fast and response time is efficient to the needs of the taxpayers; thus, will be resulting to
service satisfaction.

One more change that will takes place is the building of complex communication and information
technology infrastructure for the system. Infrastructure here means the installations of the biometric
machines, rotating rails, wireless and Bluetooth receivers and transmitters, and the reconfiguration of the
Management Information System (MIS) which manages the computer networks of each office. This
change will be a benefit to the Computer Software and Hardware Company since the government has to
buy it from them as part of the contract. However, on the government side, this means expenses or fund
outflow thus the negative sign on the matrix. This change item will create a strain on the government
funds. Thus, absent a more detailed computation, a question mark will be reflected in the matrix in sum.

Big one-time capital outlay refers to the fund that will be needed to finance the project. That means
a change of spending priorities on the part of the government, thus, a negative sign on the matrix.
However, the Computer Software and Hardware Company will gain on these as they are the recipient of
these funds. With both a plus sign and negative sign on the row, a question mark will have to be reflected
on the matrix.



As the system is implemented as explained above, the system will ensure the presence of the
employees during office hours and loafing of employees will be eradicated. This will create a sense of
rigorousness to the employees thus will be considered by them as a disadvantage. On the other hand,
with the employees presence ensured, the taxpayers are guaranteed of the attendance of the employees
to enable the former to demand service from the latter, thus a plus sign for the taxpayers column on the
matrix. This will also apply true to the other agencies which are in interest of the services of the
employees. Of course, with the presence of employees all accounted for, this will be a plus sign under the
column of the government since absenteeism and cases of loafing will no longer occur during office hours.

Alongside with the implementation of the new system, the process and work flowchart will be
overhauled. As a result of this, additional work description and revision of previous work description
assigned to the employees involve to the system will takes place. Take for example the document
(payroll) processor will no longer be necessary as the system will carry out the function by automatically
printing the required payroll and supporting documents at the Provincial Treasurer’s Office. However, with
the abolishment of these work descriptions, new work descriptions also emerged which are previously not
in existence under the previous system. For example, the system will now require Network Administrator
which necessitates a person who has a degree in computer programming or system analysis. However,
some administrative officers whose on a housekeeping function will have to be issued a new and revised
work descriptions allocating them either on jobs that has do to with the system or even to jobs that has
nothing to do with the system to supplement some areas of public service administration that requires
needed human resources. In these cases, Trainings will be dispensed by the Government to equip the



affected personnel the necessary skills for their new job descriptions. Thus, this will be considered a
disadvantage on the part of the employees hence the negative sign on the matrix. This will be true too on
the part of the government as they have to spend additional money on the trainings and reconfiguration
of the job descriptions. On the other hand, this will be a benefit on the part of the Computer Software and
Hardware Company as they will be paid for these trainings and for their technical expertise. Best case
scenario, additional human resources that is highly technical and would be needed by the government
might come from their company itself.

One critical issue that had arisen in the implementation of the new system is the issue of privacy.
The employees contend that the data being required by the system to the employees such as their
fingerprints and increased access of the public of their whereabouts violates their constitutional right to
privacy. Hence, this will be treated as a disadvantage to the employees’ side. However, on the principle of
the country’s “a public office is a public trust”, the taxpayers will reap this benefit as the taxpayers can
now regularly check the employees. This right of the taxpayers as part of their privilege to conduct audit
of public records can now be exercised even without leaving their home through the internet or SMS.
Availability of information with the whereabouts of the employees is also a plus on the part of the
government as they can easily monitor the employees, therefore, paving for increased efficiency of the
delivery of services.

With a computerized and online system of fieldwork, attendance, salaries and benefits, it will pave
way for the fostering of Professionalism among the rank and file of the government. There being a uniform



implementation of the rules and strict observance thereof, employees will not act professionally, thus only,
increasing the efficiency of the service delivery mechanisms but also will redound to the high morale
among the rank and file. Therefore, this will be positive signs across all stakeholders involved.

Under the system, records that will be generated or that will be required from the system by an
employee will now have a corresponding charge or fee. Unlike before that it is free, the government
decided to charge a fee as a self-liquidating expense scheme for the system’s maintenance and to
generate income. For example, if an employee will require a record of his monthly attendance and pay slip
which he certainly needs in his transaction to other agencies and institution such as loan contracting or
credit card application, he has to pay a fee for a printed official copy of those records. Albeit the record
can now easily be printed at any mobile and portable kiosk that had been installed within the offices’
compounds, the employee has to pay the price. With both this advantage and disadvantage, the matrix
will reflect a question mark absent specific computation of cost and benefit.

However, on the part of the tax payer, it will be considered as an advantage as their government is
now involve in an income generating activity and not merely relying on the taxpayers for subsidies of its
expenses. On the government side, with a more or less 700 employees that will require two basic
documents monthly at say 50.00 Pesos (130.50 Japanese Yen) per document, then the government is
expecting at least 70,000.00 Pesos monthly income or 2,192,796.85 Japanese Yen annually. Because of
this, this will be marked as positive sign on the matrix.



As a whole, the program will be socially beneficial to all concerned except that of the employees
which cost and benefit cannot be determined precisely using this matrix. But it will be indisputable that an
increased utility had been observed among the taxpayer.

Using the Kaldor-Hicks criterion, Graph A measures the supposed increase of utility on the part of
the Tax Payers (as plotted in Y axis) versus the employees’ utility. As can be seen, the taxpayers utility
will increased from the front of Utility 1 (U1) to the curved front of Utility 2 (U2) once the change had been
implemented while the employees has to provide compensation on a slightly small scale. On this graph
therefore, we can conclude that the system will contribute to Pareto Optimality since the maximum
amount the taxpayers are prepared to pay, through additional or increased fees to subsidized the expense,
is greater than the minimum amount that the employees are prepared to accept in form of, perhaps, self
discipline in the observance of the rules.

At the same length, the activity will contribute to Pareto Optimality as the maximum amount the
employees are prepared to offer to the taxpayers is less than the minimum amount the taxpayers are
prepared to accept as a bribe to forego the change.

On Graph B, therein plotted is the utility of the employees (Y Axis) and the government (X axis). It
would show that it is the employees that will have an increased in utility as opposed to the government.
The graph shows an increase in the utility of the employees, in the form of fostering of professionalism;
error-free records; and accurate and fast processing of their benefits compared to the government who



will spend a lot of money on the new system. This will show therefore that the change is Pareto Optimal
since the maximum amount or value the employees are prepared to pay is greater than the minimum
amount that the government are prepared to accept. Conversely in the point of Hick Criterion, the system
will contribute to the Pareto Optimality as the maximum amount the government is prepared to offer to
the employees is less than the minimum amount the employees are prepared to accept as a backhander
to forego the implementation of the system.

Therefore, in summary, the implementation of the new system is more efficient as those that are
made better off could, in theory, compensate those that are made worse-off and will lead to a Pareto
Optimal outcome.



IMPLEMENTATION OF BIO-METRIC SYSTEM IN THE PROVINCIAL GOVERNMENT OF CATANDUANES, PHILIPPINES
BENEFIT INDEXES MATRIX

(a) (b) (c) (d) (f) SUM
Employees in Other Tax payer- Government/ Software and
general agencies clients HMRD Hardware
companies
BIO-METRIC SYSTEM
Allows humanitarian consideration + + + +
Error reduction + + + + + +
Decreased Manpower required + + + + +
Decreased Man-Hours(*) + + + +
Requires building of complex infrastructure - + ?
Requires big but one-time capital outlay - + ?
Ensure presence of employees - + + + +
Additional/new work description - - + -
Violation/restrict basic human rights - + + +
Fostering of Professionalism + + + + +
Increased income/New Source of income ? + + +
SUM ? + + + + +
*: refers to the process-time required
Note A: In the analysis, new job description and creation of highly-technical positions are differentiated as some employees already involved in the process
were trained to operate the system, thus, was given new job descriptions.
Note B: In the C-B analysis, cost of hardware and software package includes shipment, training of employees, SMS franchise, periodic system maintenance,
five-year spare parts and service warranty at fixed dollar exchange rate value.
Note C: Adoption of the system benefit more the government, the taxpayers, the Hardware/Software Company but less the employees.



UTILITY GRAPHS USING KALDOR-HICKS CRITERION

Graph A:

U₂ Increase of the utility due to the adoption of the system

Y
TAXPAYER’S/GEN.PUBLIC UTILITY

U₁

X Y₁

Direction of compensation

EMPLOYEES’ UTILITY



Graph B:

Direction of compensation
EMPLOYEES’ UTLITY

Y₁

X
Increase of the utility due to the adoption of the system
Y

U₁ U₂

GOVERNMENT’S UTILITY


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