Government changed public institution performance metrics nine months into evaluation year, raising fairness concerns

The government changed the management evaluation criteria that determine executive appointments and employee performance bonuses at public institutions in late September of the very year being evaluated, a new report shows.

With three-quarters of the year already elapsed, the revision raised the weighting for public service indicators while cutting the weighting for financial performance. Critics say the mid-year change undermines the predictability and fairness of the evaluation process, as institutions had already executed most of their annual management plans before the goalposts shifted.

According to the National Assembly Research Service's "2026 National Audit Issue Analysis," released Saturday, the government amended the "2025 Public Institution Management Evaluation Handbook" — originally finalized in December 2024 — through a resolution of the Public Institution Management Committee on Sept. 30 last year.

The revised handbook raised the public service score from 16.5 points to 20.5 points, a gain of 4 points, while cutting the financial performance score from 21 points to 15.5 points, a reduction of 5.5 points. The weighting for industrial accident prevention also rose from 0.5 points to 2.5 points. Bonus points of 1.5 each were newly introduced for efforts to create safe workplaces and to pursue AI innovation.

The government said the revision was intended to reflect regulatory changes and the new administration's policy direction, and to strike a better balance between public service and efficiency. Critics argue, however, that sharply adjusting the weighting of major indicators so late in the evaluation period is a separate problem altogether.

Public institutions typically use the management evaluation handbook at the start of each year to allocate staff and budgets and set operational targets. When the relative weight of financial performance shrinks mid-year while public service and safety indicators grow, institutions that have already carried out much of their planned work have little room to adapt. Conversely, institutions that happen to fare better under the revised indicators could gain an evaluation advantage without making any additional management improvements.

What makes this more than a procedural concern is that evaluation results carry direct consequences. Ratings determine the performance bonus rate for employees and have an immediate bearing on the tenure of institutional heads and executives. Institutions rated D or E receive no performance bonuses at all. They are also required to submit management improvement plans, undergo consulting, and face cuts to operating expenses the following year.

A total of 88 institutions — 31 public enterprises and 57 quasi-governmental bodies — were assessed in the 2025 evaluation covering last year's performance. No institution received the top S rating. Fifteen received A, 29 received B, 28 received C, 13 received D and three received E.

Among the A-rated institutions were six public enterprises: Korea Electric Power Corporation, Korea Hydro & Nuclear Power, Korea South-East Power (KOEN), Korea Southern Power, Korea Minting and Security Printing, and HanJeon KDN. Nine quasi-governmental bodies also earned A ratings, including the National Pension Service, Korea Workers' Compensation and Welfare Service, Health Insurance Review and Assessment Service, Korea Trade-Investment Promotion Agency and Korea Deposit Insurance.

The bottom E rating went to Korea Broadcast Advertising (KOBACO), the Korea National Park Service and the Korea International Cooperation Agency (KOICA). Institutions rated D included SR, the Jeju Free International City Development Center, Korea Mine Rehabilitation and Mineral Resources, Korea National Oil, Korea Sports Promotion Foundation, Korea Land and Geospatial Informatix, Human Resources Development Service of Korea and Korea Asset Management.

The number of D- and E-rated institutions rose from 13 in the 2024 evaluation to 16 in 2025, based on official Ministry of Finance and Economy results. SR, the Jeju Free International City Development Center and the Human Resources Development Service of Korea each received D ratings for the second consecutive year. KOBACO and KOICA each fell one notch from D to E.

However, it cannot be concluded that the rating changes at these institutions were caused by the September revision to the evaluation handbook. Score and rating comparisons applying both the pre- and post-revision criteria have not been made public, making it impossible to determine from available data alone which institutions were helped or hurt by the reweighting.

Evaluation of institutional heads was reintroduced as a separate assessment for the first time since 2013. Of 82 heads evaluated, six received an "excellent" rating, 52 "satisfactory," 17 "unsatisfactory" and seven "very unsatisfactory."

The seven heads rated "very unsatisfactory" led SR, Korea National Oil, the Government Employees Pension Service, Korea National Railway, KOICA, the Korea Energy Agency and the Human Resources Development Service of Korea. When the results were announced in June, the government recommended the dismissal of Kim Dong-geuk, then head of the Government Employees Pension Service, and Jang Won-sam, then head of KOICA, both of whom were still in office at the time. Jang subsequently submitted his resignation and was formally discharged in July.

Under the current system, the management evaluation handbook may be revised through deliberation and resolution by the Public Institution Management Committee. No clear mechanism exists to limit the timing or scale of changes to indicators or weightings during an evaluation year. That is why calls are growing for the National Assembly to scrutinize how many times the handbook has been changed, the reasons for those changes, and the impact on individual institutions' scores and ratings.

Post-evaluation follow-up is also under scrutiny. SR, the Jeju Free International City Development Center and the Human Resources Development Service of Korea have received D ratings for two consecutive years despite submitting management improvement plans and undergoing consulting, raising questions about whether the current consulting process is actually translating into improved performance.

The National Assembly Research Service warned that changing evaluation indicators in September, when a significant portion of the year's work has already been carried out, can undermine the management plans public institutions set at the start of the year and erode the predictability of the evaluation. It went on to say that an impact analysis of evaluation results before and after the revision should be conducted, and that clearer requirements and procedures for mid-year amendments to the evaluation handbook need to be established.