In a long-awaited report on management reform, Kofi Annan on Tuesday sought more financial oversight, simplified hiring and reporting procedures, staff buyouts and a modern information system.
The reforms are estimated to cost $500 million.
Annan said the shake-up was necessary because the UN had to cope with 80,000 peacekeepers and civilian staff in the field and its "regulations and rules do not respond to current needs".
His report is a direct result of scandals in the oil-for-food programme in Iraq and fraud in awarding contracts.
"Just as this building, after 56 years of ad hoc repair and maintenance, now needs to be fully refurbished from top to bottom, so our organization, after decades of piecemeal reform, now needs a thorough strategic refit," Annan told the 191-member General Assembly in introducing the 33-page report.
The exercise, demanded by world leaders at a UN summit in September, would cost about $510 million: $280 million for improving staff conditions in the field; $120 million for information technology; $10 million for training and a possible $100 million for buyouts.
In turn, UN officials believe they can save nearly as much through streamlining contract procurement and farming out projects, but gave few details.
While UN diplomats were cautious in their first response, UN staff met in a raucous session with Annan asking for accountability for previous failed reforms.
Rosemary Waters, the American head of UN staff committee, said 700 employees would campaign "to halt the constant effort of the management to erode the rights and benefits of staff" and management's attempts to eradicate jobs.
Staff want accountability for
Annan is responsible for some 13,000 staff in the field and elsewhere, with some 4200 in New York, UN officials say.
Moving part of the world body's six-language translation services, now done by 312 people, out of New York, perhaps to Asian nations, could save $35 million annually.
Many of the reform proposals are controversial, including one that would give the secretary-general more power to allocate and consolidate jobs without asking the General Assembly.
John Bolton, the US ambassador, warned that "this work is too important to be caught up in procedural wrangles in this body".