The government has conducted a separate evaluation of public institution heads for the first time in 13 years, revealing that three out of ten received a rating of 'unsatisfactory' or lower. Among the seven heads rated 'very unsatisfactory,' two currently serving are under consideration for dismissal. This shift in evaluation methodology, which now emphasizes individual accountability over institutional performance, is expected to have significant implications for public institution leadership.
On June 19, the Ministry of Finance and Economy held the 7th Public Institution Operation Committee meeting, chaired by Deputy Prime Minister Koo Yun-cheol, to review and approve the '2025 Public Institution Management Performance Evaluation Results and Follow-up Measures.'
The evaluation assessed the management performance of 88 public enterprises and quasi-government agencies from the previous year, as well as the compliance of 82 heads with their management contracts. This year, to enhance accountability for management innovation and performance, a separate evaluation for heads was introduced. The ratings are categorized into four levels: excellent, satisfactory, unsatisfactory, and very unsatisfactory, with results linked to performance bonuses and personnel actions.
Only six heads received an excellent rating, while 52 were rated satisfactory, 17 unsatisfactory, and seven very unsatisfactory. In total, 24 heads, or 29.3% of those evaluated, received a rating of unsatisfactory or lower, indicating that nearly one in three failed the accountability assessment.
The government plans to recommend the dismissal of heads who received a very unsatisfactory rating while issuing warnings to those rated unsatisfactory. Performance bonuses will also be distributed based on evaluation ratings, with heads of institutions rated unsatisfactory or lower receiving no bonuses.
No institutions received an excellent (S) rating this year. The breakdown of ratings included 15 excellent (A), 29 satisfactory (B), 28 unsatisfactory (C), 13 very unsatisfactory (D), and three extremely unsatisfactory (E). The total number of institutions rated unsatisfactory or lower increased from 13 last year to 16 this year. While the number of excellent institutions remained at 15, the number of satisfactory institutions decreased from 31 to 28, and unsatisfactory institutions rose from nine to 13.
By institution type, the number of public enterprises rated unsatisfactory or lower decreased from seven to five, while quasi-government agencies saw an increase from six to 11. This overall rise in unsatisfactory ratings is attributed to the poor performance of quasi-government agencies. The number of extremely unsatisfactory institutions decreased from four to three.
Institutions rated excellent were recognized for effectively implementing key projects and actively fulfilling national agenda tasks. Achievements in preventing workplace accidents and innovative efforts utilizing artificial intelligence (AI) were also significant evaluation factors. Conversely, institutions with poor project outcomes or inadequate financial and safety management received lower ratings.
In response to the evaluation results, the government will implement differentiated performance bonuses and require institutions rated unsatisfactory or lower to submit management improvement plans for consulting. Additionally, these institutions will face a 0.5% to 1% reduction in operational expenses for 2027. Institutions where serious accidents occurred will also be required to submit separate safety improvement plans.
In the evaluation of the performance of internal auditors and audit committee members, no excellent or very unsatisfactory ratings were recorded. The results included three excellent, 23 satisfactory, 26 unsatisfactory, and six very unsatisfactory ratings. Auditors rated unsatisfactory will also be subject to warning actions.
The Ministry of Finance and Economy explained that this evaluation placed greater emphasis on the performance of key projects and national agenda implementation while strengthening assessments of social responsibility, including safety and environmental considerations. Efforts to enhance operational efficiency through financial soundness and productivity, as well as innovations utilizing AI, were also comprehensively reflected.
* This article has been translated by AI.
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