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Review of 'Towards A Best Practice Australian Public Service'
Steve O'Neill
Economics, Commerce and Industrial Relations Group
Contents
Major Issues
Introduction
Perceived Frustrations of Working in a Public Service
Environment
Reforms to Date.
The Slow Pace of Reform
The Government's Reform Agenda
Objects of a New Public Service Act
A New Public Service Act
Charter of Government Performance
Role of Chief Executive Officers
The Senior Executive Service
Government Service Charters
Industrial Relations
Agency Functions
Productivity Options - A New APS Enterprise Agreement?
Team Based v. Executive Control
Performance Pay Revisited - Team Based Performance
Pay?
The Higher Duties Allowance (HDA) problem
Personnel Transactions and Costs
Conclusion
Endnotes
- The Government released a Discussion Paper on reform of the Australian
Public Service (APS) titled Towards a Best Practice Australian Public
Service on 25 November 1996. The paper was released by the Hon.
Peter Reith, Minister for Industrial Relations and Minister Assisting
the Prime Minister for the Public Service
- The paper is styled as a blueprint for reforming the delivery of government
services. Importantly, it challenges the view that the APS should continue
as a monopoly supplier of advice suggesting that other sources (such
as from academia and State governments) should be involved. The Government
is looking at more effective ways of serving the Australian public.
It is no longer appropriate for the APS to have a monopoly. Therefore
the APS will have to prove it can deliver its services as effectively
as the private and non profit sectors.
- The Discussion Paper will form the basis of a reform process and is
intended to be discussed by public servants, academics, unions and others
in the community. It is critical of an overly-regulated Public Service
in which red tape and over reliance on procedures inhibits creativity
of staff.
- Private sector practices are to be emulated, thus secretaries of departments
are to be called chief executive officers (CEOs). The paper poses the
question as to why public sector employment practices should be different
from those of the private sector. Accordingly, the transfer of staff
between the APS and universities, the state Public Services and the
private sector will be encouraged.
- It is proposed that employment responsibilities including those of
determining pay levels and classifications should be devolved to the
level of the agency, and that the central agencies (eg the Department
of Finance, the Department of Industrial Relations and the Public Service
and Merit Protection Commission) should 'let go'; in other words allow
agencies the autonomy to determine their own personnel and pay practices.
Paid rate awards applying in the APS are to be phased-out. A continuing
role for certified agreements as the main pay instrument is supported.
However, there is a possibility that moves to devolution will represent
an additional burden especially for smaller agencies.
- A number of pay options are therefore canvassed. Agencies might be
able to set broader performance levels than was possible under the regimes
operating since 1992. Also, the possibility of rewarding team performance
is included as an option. As to the precise remuneration structure chosen
in a given agency, this responsibility falls with the CEO.
- It is proposed to introduce a Charter for Government Performance.
This will set out the targets and aims of the Government as a whole.
Agencies will set out how each has met this charter through its Performance
Plan. It is expected that agencies will report on how each has utilised
the new employment framework made available under the Workplace Relations
legislation.
- For consumers of government services, Government Service Charters
are proposed. These will set out the availability and quality of services
which can be expected from each agency.
- The Discussion Paper is critical of the types of leave current in
the APS and will seek to implement some recent Management Advisory Board
- Management Improvement Advisory Committee (MAB-MIAC) reports on streamlining
the costs of personnel administration. The notion that there is a uniform
labour market operating within the APS is also challenged.
- The role of the senior executive service is criticised for not being
able to cement a vision of APS as a whole. Moves to team-based work
are supported and encouraged, although there does not appear to be endorsement
of 'flattening out' current hierarchical structures.
A Discussion Paper Towards a Best Practice Australian Public Service
was released by the Minister for Industrial Relations and Minister
Assisting the Prime Minister for the Public Service, the Hon. Peter Reith
MP on 25 November 1996. The paper takes the form of a broad ranging review
of Public Service functions and the delivery of services to the Australian
people.
The Discussion Paper shares similar themes to those expressed in the
National Commission of Audit's Report to the Commonwealth Government
(1996).(1) And while comparisons to the previous Government's Report
of the Public Service Act Review Group (the McLeod Report, 1994) will
be drawn, this Discussion Paper has a broader brief than providing a draft
of a new Public Service Act. The McLeod Report's recommendations were
considered by the previous Government although some recommendations were
not accepted by the previous Government as noted in an earlier PRS Research
Paper (No.3 1995-96 Report of the Public Service Act Review Group:
Summary and Comments). The previous Government commissioned an inter-departmental
task force to draft a new Public Service Act, but a bill was not presented
to Parliament prior to the March 1996 federal election.
Outlined in the Discussion Paper are principles for providing better
Public Service to the Australian people. These principles will include
- the introduction of a Charter of Budget Honesty
- including the move to an integrated accrual accounting framework,
with financial reports that provide the Parliament, and the taxpayer,
with a clear understanding of how the business of Government is performing
- a new planning and performance accountability mechanism to be known
as the Charter of Government Performance
- A 'Guide on Key Elements of Ministerial Responsibility' making explicit
the obligations and responsibilities of Ministers for the ethical performance
of their jobs
- the introduction of Government Service Charters across the Commonwealth
public sector, and
- the revitalisation of the Australian Public Service (APS).(2)
The Discussion Paper's starting point for revitalising the APS is to
look at the current straitjacketed, cumbersome APS as perceived by new
starters in the service:
The overwhelming majority of young women and men in the Service-the leaders
of the future-want to see further change in the way their work is performed
and managed. They want the freedom to be more innovative, to manage risks
effectively and to achieve and to be recognised for higher levels of performance.
They want the process-driven hierarchies to be replaced by more flexible
working arrangements. In particular they want more direct relationships
with their employers and to be treated with greater respect.(3)
According to the Discussion Paper, the matters for concern are
- the lack of recognition for work undertaken, which too often sees
senior managers claiming the credit for the work of others;
- the inertia which makes it difficult to get new ideas heard or accepted,
especially for those without the status that comes from seniority;
- the unwillingness or inability of supervisors to provide constructive
performance feedback on a regular basis;
- the slowness which too often characterises the processes of selection
and promotion;
- the perception that, in spite of considerable process and paperwork,
those selected for promotion tend to be clones of those who select them;
- the lack of effective mentoring, leadership training or successor
planning; and
- the inability to exert any real control over the way in which work
is performed, so that commitments to work and family are unnecessarily
placed in conflict.(4)
Thus, the Discussion Paper considers that the APS remains
bound in red-tape; too ready to control the workplace through process
and regulations rather than managing people as individuals and treating
them with respect. It seeks performance through compliance. The Government
is determined to provide the flexibility in the workplace that is required
to promote innovation and to recognise creativity.(5)
The focus of APS staff of the APS being procedure ridden and bound in
red tape is a departure from the approach of the McLeod Report. While
the 1994 review was conducted by ascertaining the views of senior managers
in the APS, the report did not highlight, nor appear to ascertain, the
views of APS staff. Equally, it might be inferred that the Discussion
Paper has not indicated the extent to which 'staff views' have been canvassed
before making its assessments of these views.
The concern for the good treatment of staff is interesting. The Public
Service Commission issued guidelines Managing our People: Eliminating
Workplace Harassment in 1994, to be followed by managers and staff
in the conduct of their relations. These represent a useful code of conduct
and a benchmark in the event that staff perceive they have not been treated
reasonably.
However, in a Federal Court determination on, in part, staff grievances
against certain managers of the Australian War Memorial, Justice Paul
Finn reminded the public that pressures of Government cost cutting may
have created a context for firm management decisions to be seen by staff
as unreasonable and in some cases, as discriminatory. Some firmness in
decision-making on staff matters could be expected because of the search
for efficiencies which public sector managers now had to secure. Justice
Finn did not find that the grievances against the managers could be sustained.(6)
Nevertheless, a link between the pressures of Government cost cutting
and staff perceptions of maltreatment was recognised. These can be expected
not to dissipate in the current cost-conscious times.
The Discussion Paper notes the progress which has been made by the APS
over the last decade.
It has moved from an emphasis on process to a stronger focus on results.
The employment framework has become less rigid and job classification
structures have been revamped. Responsibility for day-to-day operational
matters has been devolved to individual Agency Heads. There has been growing
commitment to customer service and productivity has risen.(7)
This paragraph recognises recent APS reforms while not claiming these
to be sufficient. Observers within and outside the APS are more likely
to recognise the significant financial and managerial reforms which have
taken place.(8) Clearly, the major issues of three successive APS-wide
enterprise agreements (since 1991) have been directed toward managing
inefficiency in the APS, reducing absenteeism and the most recent agreement,
Continuous Improvement in the APS Enterprise Agreement 1995-96 had
specific provisions for introducing McLeod Report reforms (eg agreement
to the concept of the abolition of 'office' pending replacement provisions
being incorporated into awards). Other measures included reducing the
incidence and cost of stress related compensation claims and simplifying
personnel and transaction processing among other efficiency measures.
The Discussion Paper contends that this change has not been sufficient.
It considers that the commitment of the APS to change has been hampered
by successive Governments unwilling to take the hard decisions.
The principal legislation covering APS employment remains a major impediment
to managerial flexibility. So, too, do many of the industrial agreements.
Arrangements for agreement-making have been complex and have lacked the
incentives for comprehensive reforms at the agency level; and leadership
has been deficient.(9)
The Discussion Paper canvasses the intense scrutiny which Governments,
local and overseas are under, and also canvasses the more widespread application
of user-pays principles, increased market testing and greater contracting-out
of functions that are better or more appropriately performed by other
sectors or other levels of Government. Such developments have been raised
in an OECD report on the future role of Government services. The Discussion
Paper quotes this report:
Creating environments in the public sector which promote a culture of
continual improvement, foster innovation in pursuing public policy goals,
and make individual and team performance count, is an essential and ongoing
task. But efforts must be woven into a framework where the central capacity
to govern is retained; where a just balance is struck between centralised
direction and local discretionary action; where democratic accountability
is protected; and where traditional values of integrity, probity, and
equity are meshed with new values of concern for cost-effectiveness and
quality of service.(10)
However, the OECD's Governance in Transition reveals many of the
machinery changes reviewed in the report have been initiated in the APS.
The OECD report for example, highlights the advantages of financial devolution
between central agencies to agencies, allowing agencies to better manage
their resources through mechanisms such as the 'carry-over', a practice
now used extensively in the APS. APS reforms are highlighted in the OECD
report, for example:
The success of the measure can be judged by the fact that some countries
have moved to increase the percentage of budget that can be carried over
from one year to the next (eg Australia 3 per cent originally, now 6 per
cent).(11)
and
... reforms to the Budget process have partly been aimed at eliminating
discussion about detailed input requirements to focus on strategic issues
of programme priorities and effectiveness (Australia).(12)
and
A related and significant approach adopted by some OECD countries (eg
Australia, Canada, Denmark) has been to establish expenditure norms or
frames for individual ministries and agencies. This approach lightens
the burden of identifying expenditure trade-offs on the Budget Ministers
.. .(13)
The Government position on employment arrangements starts from the fundamental
proposition that the industrial and staffing arrangements for the Public
Service should be essentially the same as those of the private sector.
In general, the employment framework for Commonwealth employees should
ensure that industrial relations and employment arrangements similar to
those in the wider Australian workforce apply to the APS. That will require
significant reform. The current APS employment framework remains a complex
array of regulation through various statutes and associated delegated
legislation; APS-wide and agency-specific industrial awards; and certified
agreements, reached on both an APS-wide and agency basis.(14)
A likely area of contention among the proposals advanced in the Discussion
Paper relates to those which would allow individual agencies to determine
their own employment and remuneration structures. This could be seen as
an invitation to develop separate classification structures across agencies.
In any case, the creation of the Government Employment Conditions Award
1995 which replaced over one hundred separate awards has helped streamline
employment practices, thus assisting in reducing the complexity and duplication
of APS employment conditions. In a service as diverse as the APS, there
may be situations which are not amenable to mainstream industrial regulation,
and therefore some form of exception to mainstream regulation may be warranted.
The McLeod Report noted this matter in relation to special case situations
involving employment of foreign nationals in Australian overseas embassies
and posts, and the need for a reserve ministerial determination making
power.
The Discussion Paper states that a principal object of the APS reform
process is to provide a framework for co-operative workplace relations
and encourage higher productivity.
Consistent with wider industrial reforms, the focus will be to ensure
that the primary responsibility for determining matters affecting the
relationship between employers and employees rests with the employer and
employees at the workplace or enterprise level with a role for responsible
union participation; and enable employers and employees to choose the
most appropriate form of agreement for their particular circumstances.
As for other sectors, this will involve in the APS a move to simplified
awards (including the phasing out of paid rates awards, over time, under
the auspices of the Australian Industrial Relations Commission), emphasis
on resolving grievances at the agency level, and greater emphasis on agreement-making.
In conjunction with a new Public Service Act, managers will have the necessary
flexibilities and opportunities to stimulate and recognise high performance
and provide a more rewarding professional environment for the women and
men who seek to spend part or all of their careers in the Public Service.
In addition, the Government's new 'fair go all round' approach to termination
of employment provides scope for the APS to adopt less legalistic internal
processes for dealing with matters such as inefficiency, redundancy and
misconduct while still satisfying principles of fairness to staff. Current
provisions relating to participative practices also need to be revamped
to reflect the new emphasis on freedom of association and fostering more
direct relationships between employers and employees at the workplace
level.(15)
Heads of agencies are required under current provisions of the Act to
implement industrial democracy practices by consulting with relevant staff
organisations and agreeing on a consultative format to suit the agency.
The above quotation suggests that recognition and facilities given for
this function to such organisations may no longer apply. Both the current
Public Service Act and the McLeod Report recognise the role of a peak
consultative process with staff organisations, ie a role for a Joint Council
(or similar structure). This concern appears to have been replaced by
a focus on 'direct relationships between employers and employees at the
workplace'.
Termination matters are addressed in the Discussion Paper later. Note,
however, that the McLeod Report also commented that access to tribunals
for review of termination matters had been made widely available (with
the federal terminations provisions introduced in 1994 and other developments),
whereas in previous times, access to tribunals on termination matters
was generally less available, hence the earlier need to build review mechanisms
specific to the APS.
The Government sees an important role for a Public Service Act. Legislation
can play a pivotal role in describing and establishing the core principles,
values and characteristics which create the distinctive culture and ethos
of the APS.
It should provide:
- a legal basis for the Parliament to express the important values and
culture it wants in the APS; a mechanism by which Government decisions
on Machinery of Government matters can be implemented;
- a framework for setting out the role and powers of Agency Heads, and
their relationship to Ministers, in a clear and public way; and
- an unambiguous statement to those within the APS, and to the Australian
people, of what is expected of public servants.
- Public Service standards and ethical values and how they should be
applied;
- the framework of public accountability;
- employment principles, covering such areas as merit selection, equity,
recognition of family responsibilities, participative work practices,
fair decision making; and
- the basis upon which employment powers are vested in Agency Heads.(16)
The Discussion Paper proposes that the new Public Service Act would place
a specific legislative responsibility on Agency Heads for maintaining
ethical standards, ensuring public accountability, and promoting employment
principles within their own organisations. The new Act would also reinforce
the political independence of the APS by ensuring that Agency Heads cannot
be subject to any direction by a Minister in relation to staffing decisions.
Standards will be set by the Public Service Commissioner-but the manner
in which they are implemented will not be prescribed. Agency Heads will
be encouraged to develop approaches which meet the needs of their own
organisation. The Public Service Commissioner will provide guidance, promote
good practice and report to Parliament on the maintenance of APS values
... Much of what is in the Act is no longer appropriate (eg. the concept
of office), does not require legislative force (eg. job classification,
performance management and reporting) or can be considerably simplified
... The new Public Service Act should not unnecessarily constrain the
employment framework compared with organisations in other sectors or jurisdictions.
For instance, the extensive mobility arrangements set out in the present
Act, which currently guarantee return rights to those who leave the APS
to work with other Government organisations, need to be revisited ...
The new Act will confirm that the provision of apolitical policy advice
in an impartial and objective manner remains a key responsibility of a
core Public Service. The capacity to give independent advice (and the
capacity to administer legislation impartially) is a characteristic which
the Government is fully committed to preserving.
Responsiveness to Governments and public accountability are equally important.
The APS will continue to be responsible for ensuring that the delivery
of programs and services accords with the public purpose set by Government.
To this end the APS will retain the role of oversighting service delivery
whether it is undertaken by specialised APS agencies (such as the proposed
Department of Social Security/Department of Employment, Education and
Youth Affairs Shopfront), new authorities outside the Public Service Act
(such as the Public Employment Placement Enterprise) or under contract
by private or non-profit organisations. This continuing role is central
to the maintenance of accountability to the Government, Parliament and
the Australian public.
The Government places equal importance on traditional ethical values and
believes it important that they should be stated clearly in legislation.
They ensure that public servants are accountable for the way they exercise
power on behalf of the Government and that they will perform their public
office in accordance with accepted principles. They impose an obligation
on public servants not to abuse the position of trust, power and privilege
which they hold ... To this end the Government intends to strengthen the
traditional ethos of Public Service. The Public Service Commissioner,
as an independent statutory office-holder, will be given the powers to
set standards for public administration and to evaluate people management
across the Service. In this and other regards, the Commissioner will play
an important role in ensuring the APS remains independent from political
interference and that appointments and promotions are based on merit.(17)
The role of the Public Service Commissioner in setting those ethical
standards to be adopted by APS agencies is similar to recommendations
of the McLeod Report. The statements to include Public Service values
in a new Act are important and to be expected. Equally, it would be reasonable
to expect a grievance process to be defined where APS staff perceive that
APS values have been compromised or jettisoned. The balance of meeting
the demands of an employer, or fulfilling a public servant's duty to the
public would seem to require further explanation.
Under proposals contained in the Discussion Paper, there will be a new,
integrated planning and accountability mechanism known as the Charter
of Government Performance. This is said to be consistent with the
recently introduced Charter of Budget Honesty. The adoption of charters
of performance for government services appears to be modelled on the public
administration arrangements of the United Kingdom which were introduced
over the late 1980s. The outcomes sought by Government would be clearly
set out and the APS held publicly accountable for their achievement; in
other words, this will take the form of a central plan, with agencies
reporting as to how each has met the Charter.
The Charter will provide a common approach to business planning and performance/output
reporting. It will serve as a powerful tool for defining purpose and function
across the APS. It will assist benchmarking and instil the appropriate
incentives across the Service. It will provide the basis for effective
performance appraisal. Under the Charter all Ministers will be required
to prepare and publish the performance plan for their portfolios. Collectively
these plans will provide a cohesive and comprehensive overview of the
Government's priorities. Performance plans-business plans-will include
such matters as how the employment framework is being applied (and adapted)
to ensure that Government priorities are achieved.(18)
A Charter of Government performance had not been recommended in the McLeod
Report and is a new direction of the Coalition Government. Similarly,
the proposed obligation of CEOs to report as to how their agency has complied
with the charter will also be a new responsibility. It would appear that
such a charter would form the binding structure for a new APS, given the
direction for CEOs to adopt practices and structures suitable for their
agency's particular functions.
The Government is considering the introduction of formal performance
agreements for all Agency Heads (CEOs). The Discussion Paper states that
their role as Chief Executive Officers, responsible to the Minister for
their agency's performance, needs to be explicitly recognised.
The exercise of their wide-ranging managerial powers needs to be set in
an accountability framework which articulates criteria for the measurement
of performance. For these reasons, it is proposed that Agency Heads/Secretaries
would be re-classified commonly as Chief Executive Officers.(19)
The change of title also had been canvassed in the McLeod Report, however
a more encompassing range of duties and responsibilities for CEOs had
been canvassed in McLeod. The Discussion Paper recommends the use of performance
plans which would state how the agency has met Government priorities.
The Discussion Paper notes the value and important role of the Senior
Executive Service (created in 1984) but also criticises the SES in some
respects, eg its performance in exhibiting and communicating a collective
vision of the Service.
The Government is determined that the leadership potential of the SES
be further developed. Commitment to devolution must be balanced by shared
perspectives, effective communication, joint training and collegiality.
Without collective leadership the traditional ethos of Public Service
will be lost.
The success of the APS will increasingly depend on the ability of its
executives to adjust to new challenges. The current SES selection criteria
need review to ensure that they reflect what is needed for APS leadership
and that they - and the selection processes employed-do not limit the
ability of Agency Heads to select the executives best suited for the job.
The objective is to ensure cohesive leadership not to impose inflexible
selection methods.
The Government has not yet decided whether explicit written employment
agreements should be introduced for members of the SES. Such agreements
would bring the APS into line with arrangements applying to a number of
State and Territory Governments and to the private sector. They could
be underpinned by Australian Workplace Agreements (AWA) which link remuneration
to an annual performance agreement. Where there is a continuing need for
the work to be performed, the employment agreement could provide employment
for an indefinite term but with specified periods of notice. Fixed-term
contracts could be used where appropriate, for example, for a time-limited
project.(20)
The option of placing SES officers under contract arrangements in 'special
circumstances' (ie, for outside appointments) had been canvassed in the
1984 reforms which lead to the creation of the SES. These reforms did
lead to the loss of tenure for SES officers (for particular positions,
ie they could be transferred 'at level' to other positions including those
in other departments/agencies).(21) However, the use of an open ended
term of employment, limited by the giving of notice (possibly four weeks
notice) would appear to emulate Victorian Public Service practice.
The possibility of the SES entering into Australian Workplace Agreements
(AWAs: facilitated under the yet to be proclaimed Workplace Relations
Act) might provide a mechanism to broaden pay differentials of the
SES to the lower grades. It might be noted that the McLeod Report retained
a role for the Public Service Commissioner overseeing the deployment of
the SES (in conjunction with agency CEOs).
The Discussion Paper reveals that the Government's interest in the introduction
of Government Service Charters as part of its wider public sector reform
agenda. The Discussion Paper argues that the proposed introduction of
Government Service Charters could improve the accessibility, transparency
and responsiveness of the APS. Some of the broad objectives of this quality
initiative include:
- setting out the nature and level of service clients can expect to
receive;
- putting service quality alongside efficiency and effectiveness as
a key evaluative criterion;
- developing explicit, intelligent and verifiable information on Public
Services;
- improving transparency; and
- emphasising choice and a citizen's right to information, fair treatment,
timely service, access and specific services of an appropriate quality.(22)
The introduction of such charters appears to be an innovation of the
current Government, but, as noted, takes a lead from similar developments
in the United Kingdom.
In this area, the Discussion Paper maintains its theme that public sector
employment practices should use private sector industrial practices.
Employment conditions-including remuneration, inefficiency and termination
procedures-should be left to the same industrial relations processes that
apply in the wider community. The range of employment conditions that
are peculiar to the APS-such as 'permanent' employment, external review
of selection processes, payment of higher duties allowances and mobility
arrangements that provide public servants who leave with guaranteed return
rights-need to be examined carefully to see if there is any reason for
their preservation.
Let us take an example. One of the differences between the private and
the Public Services is that the Public Service operates within a framework
of administrative law. Australian citizens, quite appropriately, are offered
assistance and protection in their dealings with Government. Yet, for
less good reason, APS employees have access to the same administrative
law processes, resulting in a wide range of forums and review rights in
terms of employment-related matters. While some of these avenues may be
desirable, others hinder personnel management with too many layers of
review and overlap between the various jurisdictions.
One of the problem areas is that because APS employment processes are
spelt out in such detail in legislation, the APS is exposed to litigation
on the grounds that the legislation was not followed. The reduction of
legislative prescription will work to reduce unnecessary and costly litigation.
A second problem area is that the existence of internal statutory appeal
rights in areas such as promotions, discipline and redeployment and retirement
has led to a defensive, process-oriented style of personnel management,
aimed at minimising the risk of decisions being reversed on appeal or
as a result of litigation. There is a need to reduce the level of defensiveness
and legalism in APS personnel management, while at the same time reassessing
the appropriateness and effectiveness of internal statutory appeal rights.
Current employment arrangements derive from a legislative and procedural
framework which envisaged a Commonwealth-wide Public Service with strong
centralised control, regulation of uniform conditions and permanent appointment
to a lifetime career. As a result there exist complicated and convoluted
processes for dealing with inefficiency or poor performance and discouragement
of the development of skills which are marketable outside the APS.
The current APS employment framework continues to be dominated by process-oriented
activities. It is based on a number of unrealistic presumptions: that
the APS is a uniform labour market; that equity necessitates identical
treatment of individuals and situations; and that there is an underlying
commitment to the universal and detailed prescription of the rights of
employees.
Merit, for example, should be a system which is a mandatory alternative
to patronage. It should not be expanded into the notion of a compulsory
universal search for the perfect employee. Conversely it is not acceptable
for organisations to have closed staffing systems, selecting managerial
'clones' who are safe. It is essential to seek out and bring into organisations
staff with new ideas and who can invigorate the performance of the management
team.(23)
Thus the Government would remove a number of inhibitors to best practice
in the APS including:
- the complexity of rules governing personnel management in the APS;
- the failure to devolve authority with operational activity to line
managers;
- unnecessary duplication of processing activity in decentralised environments;
- ineffectual performance management practices and lack of a supporting
performance culture;
- imbalance between concern for individual rights and need for organisational
efficiency;
- failure to adopt appropriate risk management approaches; and
- lack of strategic focus in people management practices.
The focus of the Government's broad reform agenda is to sharply reduce
unnecessary process and rigidities. In part this will involve rewriting
the legislative framework; in part simplifying the APS awards; and in
part transforming management culture. The Government seeks action on all
three fronts.(24)
The three pronged approach (ie, legislative re-write, simplifying APS
awards and transforming the management culture) would need to be more
clearly defined to ascertain which provisions the Government seeks to
change. The approach of the McLeod Report to termination in the APS was
to prescribe termination procedures in a new Public Service Act, but not
recommend that the Merit Protection and Review Agency (now the Public
Service and Merit Protection Commission) to hear termination matters.
These were to be heard by the Australian Industrial Relations Commission.
As with the Discussion Paper, the McLeod Report also favoured the removal
of access to the Administrative Decisions (Judicial Review) Act
by public servants on personnel matters, however this was not supported
by the former Government.(25) The McLeod Report did acknowledge the role
of the source of authority in Public Service matters and repeated the
adage: In private law, the rule is 'what is not prohibited is permitted',
the rule in public law is 'what is not authorised is not permitted'. hence,
public sector managers need to base their actions on an authorisation,
usually a delegated or legislative one. It is on the basis of whether
the authorisation was correct or allowable, in APS matters, which permits
a decision to be challenged, including challenges by APS staff.
The Discussion Paper proposes that the Government should devolve employment
powers and remuneration arrangements to at least the agency level, with
hiring and firing arrangements to be governed by those arrangements applying
to the rest of the workforce.
Public servants will enjoy the same protections as the rest of the workforce
under the Government's Workplace Relations legislation. Certified agreements
will be able to be reached with unions or directly with employees and
such agreements are likely to continue to be the most prevalent form of
agreement for APS agencies. It is the Government's expectation that AWAs
are likely to be a particularly favourable option for discrete categories
of employment, where this flexibility may be necessary-for example, they
may be appropriate to the employment of Senior Executives.
Just as for the rest of the community, collective agreements and AWAs
will be subject to vetting against a global no disadvantage test based
on simplified awards.
Just as a new, more flexible Public Service Act will markedly increase
the flexibility available to APS agencies, so too will the simplification
of awards and the enhanced flexibility built into these provisions.
While paid rates awards will be phased out over time, workers under paid
rates awards will not have their take home pay cut and that they will
not suffer as a result. In addition, when APS paid rates awards are converted
to simplified new awards under the legislation, the conditions of employment
in simplified awards will not be reduced in terms of their standards.(26)
This would appear to be a rendition of bargaining options prescribed
under the Workplace Relations legislation. However, the practical
aspects of finalising any new agency agreement appear not to have been
spelt out, for example there is considerable scope for Public Service
managers to negotiate a certified agreement with a union, or directly
with employees, while, perhaps, inviting individuals to sign AWAs (coercion
to sign an AWA is formally proscribed in the Workplace Relations legislation).
The Discussion Paper addresses ways of devolving responsibilities to
agencies while minimising the potential for the service to fragment. One
option it proposes to ensure bargaining is carried out at an agency level,
while retaining some cohesiveness to APS standards, is to develop a central
agreement for the APS, along the lines of the three APS enterprise agreements
since 1991, but make individual agency access to this agreement conditional
upon the agency having its own agency agreement.
Various options for productivity-linked bargaining exist. An APS-wide
agreement could provide a basis for pay increases which could only be
accessed through agency agreements based on genuine ongoing productivity
initiatives.
Such an agreement would not need to cover all areas staffed under the
Public Service Act, if separate arrangements were seen as desirable for
certain agencies (eg. commercial bodies). Alternatively, agencies could
operate under totally devolved arrangements although some transition period
to enable management to prepare for this approach may be appropriate.
While encouraging agencies to develop their own agreements, some APS-wide
parameters will need to be maintained in the interests of encouraging
mobility across the APS, for example, portability of leave entitlements.
In general, remuneration arrangements should be set at the individual
department or agency level, in a manner designed to attract and retain
high quality staff. This includes recognition of superior performance.(27)
While the paper elsewhere criticises the number of awards, agreements
and determinations, the proposal for agencies to determine employment
and remuneration (particularly classification structures) will most likely
be met with each agency being served with union claims to establish agency
specific awards (ie to replace or otherwise provide a link between the
agency's structures and the GECA award). Generally speaking, the proposal
would seem to require additional resources for agencies to meet the costs
of agency specific pay arrangements.
The present arrangements would appear to allow for a desirable mix of
centralised negotiations, while allowing for localised arrangements where
these are needed. As noted in APS Agency Agreements and Continuous
Improvement: A Resource Guide, some 87 per cent of public servants
are under their own agency's agreements.
The Discussion Paper also canvasses the progressive introduction of team-based
structures across the APS.
.. such approaches provide work groups with incentive and reward for high
performance but they also benefit staff by providing more effective skills
development, greater autonomy and improved job satisfaction. The new flexibilities
provided to the APS will stimulate these new, more innovative ways of
organising people.(28)
It would be fair to say that some agencies, notably the Public Service
and Merit Protection Commission, have attempted to introduce team-based
work principles and these appear to have been accepted by staff. The Commission
has assisted many agencies in adopting such practices. These commitments
to team-based work will no doubt be more widely applied. The McLeod Report
addressed people-management issues and in this context supported the notion
of appraisal and regular feedback. However the value of team-based work
was not explicitly promoted.
The Discussion Paper reports that experiments with performance pay have
been unsatisfactory, because, in part, the ability to reward outstanding
performance in pay terms in the APS has been limited. It notes the introduction
of performance appraisal and pay in 1992-93, and that the scheme has recently
been scaled down. The Discussion Paper puts a number of arguments for
the revitalisation of performance pay:
The APS currently lacks effective performance management systems for staff.
To strengthen the commitment to achieving the outcomes set by Government,
and to make best use of more flexible classification and remuneration
structures, effective performance monitoring and feedback are essential.
To do so it will be necessary to establish a clear connection between
the work of each employee or work team to the Charter of Government Performance.
Agency Heads should decide, and be publicly accountable for, the application
of performance pay arrangements within their agencies, subject to overall
budget parameters set by Government. There is a need for greater flexibility
in the way agencies recognise and reward performance, both through tangible
and non-pay rewards. The Government supports greater experimentation and
sharing of experience in how best to reward outstanding team performance
or individual goal achievement.(29)
Performance pay and appraisal processes have been subject to a number
of critical reviews including a report from the Senate Standing Committee
on Finance and Public Administration.(30) A frequently raised criticism
of the manner in which such processes have been applied in the past is
that they concentrated on an individual's performance but overlooked the
'team' into which the individual was placed, and therefore neglected the
'team' effort. The Discussion Paper avoids direct assessment of this criticism
but proposes some scope for group appraisal.
The payment of higher duties allowances is raised in the Discussion Paper.
The allowance arises, usually, when an employee is directed to perform
the duties of a higher graded position. This incurs a cost for the agency
both directly and in terms of processing. Such allowances are not peculiar
to the APS and have been common across industries as is noted by a major
industrial text.(31) Nevertheless, as a means of restructuring pay systems,
the Discussion Paper proposes that
Agencies should have the ability to link their remuneration policies more
clearly to their strategies for enhancing individual, team and organisational
performance.
One way of achieving this would be to give agencies the option to adopt
a new simplified classification structure. This alternative structure
would involve moving away from the separate identification of all classifications
and instead developing a single structure with a limited range of broad
pay bands.
The Government would provide agencies with the freedom to adapt the new
structure to best suit their needs. This would not be a mechanism to reduce
Public Service pay, but simply a means to introduce more varied work and
greater flexibility.(32)
Broadbanding pay groups has been used in a few agency agreements in the
1992-94 round. The approach goes some way to resolving the HDA problem
by encompassing a broader range of duties within the (smaller number of)
pay bands, as well as allowing 'promotion' without abolishing and creating
positions.
The Discussion Paper does not go so far as to suggest that the APS ignores
personnel development issues, but it considers that the APS expends a
significant amount of its resources in training which it claims is not
effective.
The Government has decided that all Ministers will review current personnel
administration arrangements to ensure that the capacity for improvement
identified in the MAB/MIAC (Management Advisory Board/Management Improvement
Advisory Council) Paper, Achieving Cost Effective Personnel Services,
is realised. Individual agencies will be expected to take full advantage
of the new legislative and industrial framework to develop new workplace
practices that are more efficient and effective.
One inhibitor is the culture of the centre. It survives still. Central
agencies must learn to 'let go' in practice as well as theory. Standards
must be maintained, service-wide policies implemented, advice provided
and best practice promoted. But the culture must be one of facilitation
not regulation.
Exploiting the flexibility of the new employment framework must become
a major part of each Agency Head's role. Agency Heads must ensure that
their employment practices return the best outcome to the Government and
the community, benchmarked against alternative service delivery organisations.(33)
Importantly, the Discussion Paper canvasses the sort of career options
which future APS staff may be expected to utilise
Those who join the APS in the years to come will be expected to have an
understanding of and commitment to working in the public interest. They
will be attracted by working on matters of national importance. They will
not be obliged to choose a career for life: nor should they expect one.
The APS of the future will benefit from increased mobility not only within
the Service, but from movement in and out of State Public Services, the
private and non-profit sectors and academia.(34)
The central issue of devolution - requiring that the central agencies
'let go', is the need to ascertain how, in the absence of central control,
will the APS be cohesive and operate as a service. No doubt, the future
'guidance' role to be performed by central agencies might be included
in the provisions of a new bill.
Many of the directions for reform addressed in this Discussion Paper
have been canvassed in earlier reviews and reports on the APS, in particular,
in the McLeod Report. The increased authority of CEOs is one example,
the management of grievances 'in-house' is another instance.
The Discussion Paper does canvass broader reforms, such as questioning
the provision of Government services per se, and questioning the role
of the APS as the monopoly supplier of policy advice.
This brief review of the Discussion Paper has not sought to provide a
detailed critique. Issues such as accountability and politicisation of
the Public Service are often raised when public administration changes
of this magnitude are canvassed. Possible areas of concern might also
include those proposals which are likely to give rise to some transitional
costs at an agency level (such as the possible costs involved in creating
agency specific classifications, awards etc). The MAB-MIAC reports referred
to have sought to reduce the complexity of personnel administration. Also,
the Discussion Paper does not highlight the fact that international literature
on public sector reform ranks Australia highly (see comments under 'The
Slow Pace of Reform' above) and many innovations in APS practice over
recent years have been noted by international organisations such as the
OECD.
- For a commentary on this report see PRS Current Issues Brief No. 23
1995-96 More of the Same or Brave New World: The National Commission
of Audit by Denis James.
- Towards a Best Practice Australian Public Service (released
by the Hon. Peter Reith 22 November 1996): 1.
- ibid: 2.
- ibid: 3
- ibid.
- 'Harassment report canned' The Canberra Times 7 October 1995.
- Towards a Best Practice Australian Public Service: 4.
- Note the comment of Dr Clive Hamilton: 'Public Service that Performs':
.. in international circles the APS enjoys an exceptionally high
reputation as a professional, dedicated and efficient Public Service
organisation in The Australian, 28 November 1996.
- Towards a Best Practice Australian Public Service: 4.
- Governance in Transition, Public Management Reforms in OECD Countries
(OECD 1995)
- ibid: 30.
- ibid: 97.
- ibid: 95.
- Towards a Best Practice Australian Public Service: 5.
- ibid: 5-6.
- ibid: 7.
- ibid: 8-9.
- ibid: 10.
- ibid: 11.
- ibid: 11-12.
- Senate Standing Committee on Finance and Public Administration Development
of the Senior Executive Service (AGPS 1990): 41, 49. Note that the
Committee expressed its concern at retrenchment of SES officers brought
about by the 1987 machinery of government changes.
- Towards a Best Practice Australian Public Service: 13.
- ibid: 14-15.
- ibid: 16.
- Public Service Commission Report of the Public Service Act Review
Group: Summary of Recommendations and Government Decisions (August
1995): 12 (re Recommendation 91).
- ibid: 16-17
- ibid: 17.
- ibid: 18.
- ibid: 19.
- Senate Standing Committee on Finance and Public Administration Performance
Pay (December 1993).
- According to the CCH Australian Labour Law Reporter: ' A 'mixed
functions' clause in an award generally provides that an employee performing
work of a higher grade than his normal duties it to be paid the rate
for the higher grade for the period in which he is so engaged' (Vol.2
at 31-860).
- Towards a Best Practice Australian Public Service: 19.
- ibid: 20.
- ibid: 21.
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