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Last updated: 15 April 1996

Achieving cost effective personnel services

Please note: This document is for reference purposes only and is no longer considered by the APS Commission to be current. It may contain good practice advice and/or advice on the transitional arrangements between the 1922 and 1999 Public Service Acts.

The following are extracts from the MAB-MIAC document 'Achieving Cost Effective Personnel Services'

Background

The Achieving Cost Effective Personnel Services project was commissioned by MAB and commenced in November 1994.

Terms of Reference

MAB's full Terms of Reference for the project are at Attachment A of the full document. In summary, they were:

To assist in the equitable, effective and efficient administration of the APS by gathering and analysing information for the Management Advisory Board on:

• service standards in personnel practices and services across the APS;
• the costs of personnel practices and services, and
• whether agencies cost their personnel practices and services and, if they do, how they do this.

". . . The project would aim to communicate and share good practice . . . and would include managerial time in making personnel-related decisions so that there is a recognition of the extent of devolution within agencies and the usefulness of the support systems that are available and used."

Definition of 'Personnel Services'

In this report, personnel services is defined as encompassing all aspects of the Human Resource Management (HRM) function. Wherever the report refers to personnel rules or entitlements within the HRM environment, it is referring to the administration of those entitlements, not to the associated level of payment.

The report does not seek to differentiate between Senior Executive Service (SES) and non-SES costs and processes.

Methodology

In December 1994 MIAC and MAB agreed to the scope and strategy for this project. In summary this was:

• An analysis of existing data. This showed that certain HR functions tend to be more resource intensive than others, and that more resources are used in delivering HR services in the APS than have been reported in earlier benchmarking studies for the pul)lic sector as a whole. The detailed analysis is at Attachment B.
• The collection and analysis of detailed information from a representative subset of agencies. The aim of this element of the project was to provide comprehensive, uncontestable and comparable data on the costs of key personnel/HR services and the major factors affecting their delivery.

Some 23 APS agencies (covering about 70% of APS staff), two non-APS Government Authorities, and a number of private sector organisations were surveyed. Information was collected on the costs and effectiveness of HR services overall, and a more detailed analysis done on number of key HR functions. The survey was carried out with the assistance of a firm of consultants. The survey report is at Attachment C.

• A program of structured consultation with all APS agencies. All APS agencies were invited to participate in focus groups at a number of levels to develop a comprehensive qualitative picture of the key issues. The focus group outcomes are summarised at Attachment D of the document.

The scope of the project was later expanded to include a review of the level of checking of personnel transactions and a high level review of process design for some personnel functions (Attachment E), an analysis of the time that line managers spend on HR functions (Attachment F), and a review of international developments in the personnel/HR area (Attachment C).

Best Practice for the APS

There are frequent references in this report to Best Practice. These references are to the performance of one of the private sector organisations surveyed which, on the basis of a range of criteria, was judged to have effective, efficient and fair HR practices which are an integral part of its overall success. This organisation was not the cheapest in terms of resources devoted to HR.

Where the report refers to better practice it is drawing information from a number of sources, which may include the Best Practice organisation.

The purpose of identifying Best Practice is to provide a reference point against which the APS can review its performance. This is not to suggest that the APS should attempt to simply adopt private sector HR Best Practice, but the practices and differences in outcomes of leading organisations do provide comparative approaches which could be creatively adapted by APS organisations to significantly improve performance.

There is a need to acknowledge that to the extent that APS costs are higher than those of Best Practice, this may be partly attributable to the need for due process in public administration, and the systems that have evolved over time to give effect to this requirement This emphasis on due process is aimed at ensuring that employees are treated consistently and equitably, and that no individual receives an entitlement in circumstances not seen to justify it. These considerations have often been pursued without regard to either the administrative costs involved or the principles of risk management.

The various rules and processes are the result of a history of some 80 years of personnel administration in the APS and a culture which has developed over a long period of time. Much of the existing administrative framework reflects an environment and a time in which APS staff were managed centrally, with individual agencies having relatively limited discretion in how they managed their people and other structures.

In recent years, the community and the Government have changed their expectations of public sector practice. The reasons for change include:

• Demands for better value for money in government services;
• Pressures for greater effectiveness and responsiveness, improved performance, competitiveness and greater efficiency;
• Changes in technology which allow different ways of delivering services; and
• The increasing devolution of responsibility for various functions from central agencies, and within agencies to line areas.

These changing requirements and the need for continuing improvement in management practices in the APS were identified in the June 1993 MAB-MIAC publication Building a Better Public Service.

The agencies covered in the survey vary in size from around 130 staff to over 20,000, centralised or in a variety of locations, and with different systems and staffing profiles. The particular circumstances of all agencies differ, and the cost of HR service delivery between APS organisations varies by as much as 176%. Small agencies in particular face unique problems in personnel administration (this is covered in more detail in the body of the report). However, the analysis on which this report is based demonstrates convincingly that there is significant overall capacity for APS organisations to improve their performance.

This report is part of an ongoing process of change in personnel administration which began in the 1980's. It builds on the APS Human Resource Management Framework, and identifies clearly where further improvements in human resource management can be made.

The APS Human Resource Management Framework

In 1992 the Public Service Commission published an overall framework for human resource management in the APS, to:

• Emphasise the importance of effective human resource management, and effective individual performance, in the setting and achievement of corporate goals;
• Provide the strategic framework of values and principles which underlie Commonwealth public administration, and explain how they relate to the various elements of human resource management;
• Demonstrate the linkages between the different and often apparently discrete elements of human resource management and the ways in which they can be utilised by managers for effective performance management; and
• Describe the ways in which the Public Service Commission and other central agencies can advise and assist in the effective implementation of human resource management.

The Framework brings together the various elements of human resource management and their relationship with each other, and provides a rationale for the existence of these elements.

The challenge now is to identify and achieve the highest possible level of performance. The questions which need to be addressed are:

• Do the costs of managing our people need to be as high as they are?
• Have the processes which have been put in place lost sight of the original objectives which they sought to serve?
• Are we too pre-occupied with the routine elements of human resource management, and not focussing enough on the more strategic elements of how to make the most effective use of people employed in the APS?

Summary of Key Findings and Conclusions

MAB believes there is a need for fundamental change in the way personnel services are designed and delivered. It is the characteristics of the system as a whole which are driving costs and inhibiting effectiveness.

While the main conclusions are that current services in many areas are inefficient when compared with Best Practice, these inefficiencies are driven by both the rules and the administrative systems within which HR staff operate, and don't relate to the diligence and effort which staff bring to their role.

The key findings and conclusions are as follows:

• The direct cost of delivering HR services in the APS agencies surveyed varied by as much as 176% and is, on average, two and a half times that of Best Practice;
• A significant proportion of HR resources (almost 60%) is invested in administrative and processing tasks rather than in more strategic HR activities. This is virtually the opposite of Best Practice, and contrary to the priorities set for the APS in Building a Better Public Service;
• The key cost drivers are:
  • Devolution hasn't delivered improved efficiency and effectiveness in the APS because, generally, activity and not authority has been devolved to line managers; authority has been largely retained by HR staff regardless of whether they are local or in central areas;
  • The model of HR service delivery based on the philosophy of locating processing and advisory functions with the organisational units they serve has led to duplication of effort and resources and has spread expertise too thinly; and
  • The complexity of personnel rules, the way they're applied, and the volume of processing work generated by them, are significant causes of the high costs of personnel services in the APS;
• HR planning processes aren't linked to other corporate planning processes. Such linkages are a central feature of Best Practice. There needs to be a shift in emphasis from interpreting conditions and processing entitlements to supporting managers in achieving corporate objectives;
• There is limited use of process measurement and review as a means of promoting efficiency and effectiveness;
• The APS invests considerable resources in administering competitive selection processes. However, there are a number of significant issues regarding both the efficiency and effectiveness of the current arrangements;
• There is a high turnover of staff in personnel sections. HR staff, particularly at processing levels, are relarively inexperienced, and receive limited formal tralning;
• The cost of HRM Information Systems (HRMIS) in the agencies surveyed is substantially higher than that of Best Practice. The systems are struggling to provide automated solutions to new conditions of service and, in general, aren't meeting management information needs;
• Smaller agencies face particular problems as a result of the increasing levels of complexity in personnel work. They generally lack the critical mass to be able to deliver services in a cost effective manner. Different models of service delivery need to be considered for small agencies

Report on Focus Group Discussions

Consultation Methodology

• All APS agencies were invited to participate in a total of thirty focus groups held in Canberra, Sydney, Melbourne, Brisbane and Perth during March and April 1995.
• Separate focus groups were run for SES officers responsible for HR functions, Regional Directors, HR managers, and personnel staff, as well as for line managers as clients of personnel services. Specific focus groups were also run to pick up the views and concerns of small agencies, and brief discussions were also held with managers of the more common HR systems.
• The focus groups were loosely structured to draw out
  • What people saw as the main issues driving both the costs and effectiveness of personnel services
  • What they believed the characteristics of an effective and cost-efficient service would be
  • What elements of the current personnel environment they thought would have to change in order to achieve an effective and cost-efficient service.
• Within this context, people were free to raise issues as they saw fit, and free-flowing discussion was encouraged. No two focus groups were the same, although the same key issues tended to come up in a number of focus groups and some consistent themes did emerge. The main issues are outlined in the following report.

The views reflected in this report are those of the focus group participants.

Summary of Focus Group Participant Comments

Focus group participants put a broad range of views to the Project Team. The following summarises the themes that emerged.

• HR processes should be linked more effectively to other corporate goals and planning processes. Personnel staff spend more time processing transactions and interpreting rules -turning wheels -than supporting managers in achieving their organisational objectives.
• The rules for various personnel functions are perceived to be overly complex, and have increased in complexity in recent years. An inordinate amount of time is spent on managing the processes, rather than achieving outcomes. Participants perceive that in many areas of personnel administration, the processes have taken over.
• The administrative arrangements for agency bargaining have created further work for personnel areas. The downstream effects of implementing change should be taken more into account when they're being negotiated.
• The complexity and diversity of personnel terms and conditions is compounded by the lack of consolidated information to support decision-making, and the inability of current HR systems to effectively automate many personnel processes.
• Turnover, particularly at the lower levels, is high in personnel areas. There are increasing difficulties in attracting and retaining staff, particularly at the personnel operative (ASO 3) level. Personnel staff consider their work to be undervalued and accorded low status.
• There is still some confusion concerning devolution and decentralisation often the processing has been devolved, rather than the power to make decisions. Where there have been problems with the devolution of decision-making power, it has been because some of the necessary support structures weren't in place. Education of line managers is critical in this respect.
• Managers consider they should be able to make the key decisions in staffing matters within their area of responsibility. However, many managers are neither interested nor skilled in people management. For managers to be able to take greater responsibility, they need to see human resource management as a fundamental part of their role.
• The principle of merit selection is important, but people consider that the existing process designed to apply the principle is flawed in a number of respects. They perceive an emphasis on process to be driven by the threat of appeals.
• Participants believe too much time is spent on the processes associated with inefficiency and under-performance, grievances, investigations, appeals, stress cases, etc. The management of inefficiency and under-performance is still considered to be a problem. People perceive that the processes are weighted heavily in favour of the individual.
• To improve the effectiveness of personnel services, a fundamental shift in emphasis is required from interpreting conditions, processing entitlements, auditing processes and system tracking to supporting/ enabling/empowering/advising line managers on people management issues. The emphasis should be on supporting managers, not regulating outputs.
• Small agencies should co-operate more closely with each other to meet their respective needs, not only with respect to the provision of personnel services but also regarding the best way to meet their overall corporate management requirements .

Overview of the process mapping exercise...

A process mapping exercise was conducted following the output of review of pay processing arrangements which indicated that a high level of checking was being taken unnecessarily within the majority of transactions in the pay process. Five organisations participated in the exercise:

• Department of Employment Education and Training
• Department of Social Security
• Department of Immigration and Ethnic Affairs
• Attorney General's Department
• Australian Quarantine Inspection Service

Analysis of the processes initially involved discussions with organisation representatives, particularly in relation to their perceptions of the effectiveness and efficiency of the current processes. We then reviewed the process maps against standard characteristics which included analysis of handoffs, duplication of effort, data capture, technology utilised, decision points, sequence, number and levels of staff involved.

Each of these organisations provided a group of representatives who both administer and use the particular pay transaction processes to be reviewed. A workshop was held with these representatives to provide a common background in the concepts of process mapping and then to process map the agreed processes. Essentially all representatives had an intimate knowledge of the following processes that were reviewed:

• the Higher Duties Allowance process within the parameters of the decision to act someone at a higher level to the point where the person is paid for acting
• the Leave Management process, in particular:
  1. Special Leave process from the absence from work up to the point where processing action has been finalised
  2. Sick Leave process (as for Special Leave)
  3. Recreation Leave process from the application to take leave up to the point where processing action has been finalised the Overtime Processing process within the parameters of the Initial request by supervisor/manager for a particular employee to work overtime to the point where the individual is paid overtime.

To enable effective review of the above processes all forms associated with the process, screen prints, and policy/procedure documentation were obtained from each organisation.

The results of samples of the process maps are contained in the attached Appendices. Each individual organisation will be provided with feedback on their current processes in the form of characteristics mentioned above. It will also contain feedback on areas for consideration by each organisation that could improve the overall efficiency and effectiveness of their current processes.

Key findings....

We have found through this exercise and from other projects that we have recently conducted, that many of the processes within human resources have not been subject to rigorous review or streamlining to achieve greater efficiency and effectiveness. The key findings in relation to the output of the process mapping exercise are as follows:

there exists a diversity of processes amongst the organisations surveyed.

• the number of steps required in each of the processes varied from:
  • 9 to 17 for HDA transactions
  • 14 to 28 for Overtime transactions and
  • 10 to 29 for Recreation Leave transactions
  • 12 to 22 for Sick Leave transactions
  • 10 to 21 for Special Leave transactions.
• this diversity is brought about by many of the following key findings, in particularly utilisation or non utilisation of paper forms, utilisation or nonutilisation of remote entry input facilities and most importantly the multiple handling and multiple levels of responsibilities required within the processes.

there is significant duplication of effort and multiple handling in many of the processes which impedes the overall efficiency of the processes

• the majority of organisations utilise paper forms in each of the processes reviewed with initial information to be completed on a form and then forwarded to another area for input onto a HRIS. The paper form then parallels the electronic process. Within two of the organisations these forms are then Filed for future reference.
• this duplication of effort increases the need for staff to be involved in the process which then increases the cost to provide the service.
• one organisation utilises remote entry facilities in NOMAD which enables staff to enter pay transaction details directly onto their system. They do not use paper forms in these processes.

there exists a high degree of checking within each of the organisations. This level of checking varies from one organisation to the next

• all organisations use a similar approach to pay processing. Each Agency has built in levels of checking to the pay process. For example the level of checks varied from:
  • 2 to 5 for HDA processing
  • 3 to 5 for Overtime processing
  • 3 to 7 for Recreation leave processing
  • 3 to 5 for Sick Leave processing
  • 2 to 5 for Special Leave processing
• For example, one organisation currently prepares transactions at the AS02 level, checks, at the AS03 level and certifies at the AS04 level. This organisation has recently reviewed their processes and will soon implement delegations to allow the AS03 to check and certify. They have still incorporated two people in the process.

some organisations are utilising their technology more effectively than others

• three organisations utilise NOMAD as their HRIS. One utilise ADMINS which is an internally developed system and the remaining organisation utilises ORION.
• Of the three users of NOMAD, one organisation effectively utilises their system to allow applicants to enter leave, overtime requests and higher duties claims directly onto the system. The remainder do not utilise this facility.
• The ADMINS user has remote entry input but require initial claims to be submitted on paper forms. ADMINS has the advantage of automating many of the pay transactions associated with the processes reviewed.
• AQIS have an earlier version of ORION and users expressed some difficulties with the system. In fact within their overtime process they are required to input HDA information into two systems, ORION and LOTS (a standalone system) prior to forwarding salary details to DoF.
• there is obvious scope for more effective use of these systems.

Way Forward...

Significant improvements in the processes reviewed will be required if Agencies plan to move to a more effective delegation of authority to line managers and more efficient arrangements for processing personnel transactions. Essentially this will require fundamental change of the existing processes and result in a more streamlined and efficient processes. It is important that organisations recognise that by simply changing parts of the process they will not achieve the full benefits of a fundamentally reviewed process. A fundamental change is not possible without an integrated approach that will involve:

an assessment of risk of each process which would involve the review and questioning of current process steps to establish new approaches that would reduce the current level of checking.

• Essentially the outcomes of this review would be to adopt a risk management approach to transaction processing. This review would be in line with recent APS reforms to dispel prescriptive rules and create an environment which allows managers greater responsibility for the outcomes of their decisions. A framework for adopting a risk management approach is outlined in "Guidelines for Managing Risk in the Australian Public Service: A Draft Exposure".
• This would involve the thorough review of each of the processes to determine the likely risks inherent in the transactions, consequences of these risks and essentially identify the opportunities where performance could be improved and effectiveness maintained without the requirement for checking all transactions.

a review of processes and implementation of quality management systems to enable an:

• increase in the level of individual staff members' responsibility to encompass all aspects of the preparation/check/certify steps in transactions and
• reduce the number of staff required to be involved in the process. These systems should:
  • be adopted in line with the risk management principles developed above to incorporate the devolution of decisions, for example in leave processing, to line managers rather than human resource areas.
  • ensure that line managers have the skills to effectively administer the powers devolved to them and that staff involved in the processing aspect of the transactions have the level of skills to be able to effectively administer the transactions
  • include clear and concise instructions which would specify the manner in which the process is to be carried out in the form of procedures and work instructions, the levels of authority, responsibility and plans for appropriate inspection and testing.
  • ensure staff involved in the process are continuously working to improve the process.

a review of current technology.

• HRIS have a built in requirement for at least two people to be involved in the preparation of Payment Variation Advices. The DoF PAY System User Manual no longer mandates a requirement for the number of staff or checks required in this process. It is essentially the Agencies' responsibility to ensure appropriate systems are in place for correct information to be transmitted. In effect, a system modification would automatically reduce the need for more than one person to process pays.
• Many of the systems that currently exist have facilities for remote entry input in many of the personnel transactions processes, for example NOMAD. Organisations should review their technology to ascertain the cost benefit of using this available facility (combined with devolution powers with line managers.
• Organisations, particularly the ORION user, should undertake a cost benefit of current technology in light of the double entry of information, lack of integration of systems, and the resultant need of staff required to provide an effective level of service.

International Overview

Findings

• The broad directions for change in Human Resource Management appear similar in most countries examined. The front runners are generally seen as being New Zealand and Sweden, with Australia, Canada and in some instances the UK on the next level.
• Information about personnel practices at the micro level (leave processing arrangements etc) is not readily available in published form. This report therefore focuses on a case study of a particular agency in New Zealand.
• There are numerous features of the way personnel services are provided in the New Zealand Income Support Service which are worth serious consideration and possible adoption here. These include:
  • elimination of personnel sections in the normal APS sense (each region retains a HR consultant);
  • team managers (first level supervisors) have responsibility for approving leave, based on up to date information about balances;
  • limited requirement to provide leave forms (eg no leave forms required for sick leave). Leave is recorded on a weekly timesheet retained by the supervisor;
  • team managers advise payroll area of leave, HDA, etc;
  • automatically updated leave records available each month;
  • simplified conditions (eg unlimited sick leave, -Collective Employment contract covers only 1.5 pages)
  • collective employment contract written in plain English, considerably reducing the need for explanatory manuals, Toolbox etc;
  • pay processing centralised into two areas;
  • flexible requirement to advertise positions;
  • selection and recruitment delegations held by line managers (including team managers); and
  • from 1 July, team managers will also have authority to determine where on pay scale a staff member belongs.
• There has been little or no formal evaluation of these changes -most are too recent for an answer to be apparent.

Overview

The published information on human resource services generally relates to happenings at the macro level, particularly performance pay and other issues outside the terms of reference for this project.

The directions in which public services in English speaking countries are moving appear to be fairly similar. Both The Australian Public Service Reformed and the report of the Australian Public Service Act Review Group concluded that the directions in which Australia is moving are broadly similar to other Western democracies.

PUMA, the public management committee of the OECD, recently carried out a case study involving: Australia, Denmark, France, the Netherlands, New Zealand, Spain, Sweden, and the United Kingdom.

The draft report states:

"There were weaknesses in most of the organisations studied in terms of translating HRM objectives into .specific targets and strategies and in terms of the linkages between individual goal setting and performance review and organisational performance planning targets."

In their view, this is because the common focus on restructuring and downsizing has diverted HR energies into managing redeployment and redundancy. Only when organisational changes have slowed can we expect a more comprehensive, strategic approach to HRM.

Interestingly, the draft report notes that managers "are often slow to take full advantage of the new flexibilities available to them", identifying the reason as line managers being given HRM responsibilities before they have an opportunity to develop the necessary skills. "Line managers also complain of a lack of clear and easy-to-apply guidelines. They are also reluctant to accept HRM responsibilities if the delegation is only partial, they feel they cannot successfully tackle some aspects while others are outside their control." (PUMA)

The OECD study also comments on the importance of training, suggesting that "Devolution will have disappointing, if not disastrous, results if managers are not provided with adequate training and .support to take on tasks previously handled through central offices or agencies." (PUMA)

New Zealand

In New Zealand, the 1988 State Sector Act made Chief Executives Officers (CEOs) of government departments the employer, with independent authority in personnel related areas. They are required to respect certain procedures for the appointment of staff, discipline and dismissal, OH&S and minimum leave entitlements. The 1988 Act also obliges them to be good employers, requiring them, for example, to appoint staff impartially and to provide opportunities for staff development. The State Services Commission (SSC), which formerly held all HRM authorities, retains an operational role only in relation to the employment of chief executives, pay determination and contracts for the senior executive service. Since 1992, authority for negotiating pay and other conditions of employment has also been delegated to CEOs, with the SSC setting broad policy parameters, participating in negotiations and approving departmental agreements. (PUMA}

Sweden

In Sweden, the devolution of HRM is considered a lynchpin of the program for public sector reform. Agencies and boards now control most aspects of their HRM policies and operations, with very little intervention by central bodies. The Ministry of Finance fixes salaries for agency Directors-General and advises on their recruitment. A service wide system of pay and grading was abolished in 1990, leaving agencies free to determine their own pay structures and to set pay individually for their employees. Individual agencies negotiate pay increases subject only to a ceiling on the total pay bill and to centrally negotiated minimum wage increases. {PUMA}

Devolution has progressed to the stage where, from 1994, agencies are free to decide the balance between centralised and decentralised negotiations and whether they wish to be represented by the National Agency for Government employers. {PUMA)

Canada

In December 1989 the Canadian Government introduced a public service renewal initiative called Public Service 2000. It was designed to streamline administrative processes and improve organisational culture and performance to better serve Canadians. The initiative focussed heavily on the government's employment and personnel management regime, central administrative controls, the roles of central agencies and systems of personnel.

UK

In the UK, until recently devolution occurred on an agency by agency basis. Legislation passed in 1992 enabled the delegation to departments and agencies of authority for determining terms and conditions of employment. From 1994, the responsibility for pay determination has been devolved to larger executive agencies (covering more than half the Civil Service). [PUMA]

Case Study-New Zealand Income Support Service

Discussions with staff in the New Zealand State Services Commission and Income Support Service have elicited the following picture of how one agency's personnel services are delivered in a very different way to here in the APS.

Organisational Structure

The New Zealand Income Support Service (ISS) is one of the two business arms of the Department of Social Welfare. It equates roughly to the age, invalidity and unemployment support responsibilities of the Australian Department of Social Security. There are approximately 4,500 staff spread throughout New Zealand, with a National Office in Wellington. The regional structure is four regions, each divided into districts. Within each district are several team managers, controlling up to 15 staff who do the pensions processing work, deal with clients etc. In the Christchurch District Office, there are 17 team managers. Team managers are at the grade 05 level (roughly equivalent to our ASO5 level). Prior to the beginning of the reforms there were an additional 3 or 4 levels between the team managers and the district managers. From 1 July, the 01 to 03 grades will be merged into one level called 'Customer Service Officers'.

The agency negotiates a collective employment contract with its staff that sets out details of all pay and conditions, as well as termination arrangements and grievance procedures etc. The current contract runs for the period from 1 July 1994 to 31 October 1996.

Transfer of responsibility for leave approvals from personnel sections to team managers

The ISS no longer has personnel managers or sections as we know them in the APS. Each of the four regions into which the ISS is divided has a Human Resource Consultant. Very few districts have retained any dedicated personnel officers. The driving force behind this decision was the need for the service as a whole to be competitive with private enterprise -line managers managing HR was seen as the way the private sector operates.

Discussions with staff in the ISS indicate that, while initially there was some resistance from team managers to having this extra responsibility, the system is now working well. The Payroll supervisor reports far more problems with the districts that have retained personnel officers than with the team managers. The payroll supervisor provided initial training to all team managers and still provides guidance on payroll and other HR issues.

Leave processing

Leave forms are only required for recreation leave. Rec leave forms still go to the accounting centre, but approval is given by team manager on basis of whether the applicant has the available credit. Sick leave is approved by team managers and merely noted on each person's time sheet.

Each staff member completes a timesheet for glide time provisions (flexitime). Some team managers agree an honesty approach with their team, under which team members just tick the timesheet for attendance and sign.

Each week the team manager prepares a form for the accounting centre that summarises peoples' attendance, sick leave, overtime etc. This summary sheet is then sent to the accounting centre for input of data into the computer to calculate pays.

Team managers receive a monthly report from the accounting centre showing how much leave etc team members have taken during the month, and what everyone's balances are. People's pays remain unchanged unless the accounting centre is advised of a new rate by the team manager.

From 1 July the ISS will introduce a new appraisal system, under which they will pay people for their skills, ability and performance. An annual appraisal system will identify the precise salary point at which the person will be paid. The team managers must do a minimum of four coaching sessions a year to identify needs, development opportunities etc. Performance is scored on a continuum, with 5 being the top rating. People who score 4 or 5 are eligible for superior performance payment, even if they are not at the top of the salary scale. Staff can request an appraisal during the 12 month period. If a person is recruited with some skills, they need not start at the bottom of the pay scale.

Simplified conditions

Conditions of employment (rec leave, sick leave etc) across New Zealand public sector agencies are generally fairly similar; although pay rates may differ. Generally agencies now have few allowances -the agencies that did have numerous allowances have mostly been privatised.

Approval processes for pay and conditions are generally much simpler now, because there are fewer steps. For example, if something is not specified in the Collective Employment contract, there arc only two players involved in deciding whether it is to be paid, the union and the particular department.

The Collective Employment contract for the ISS is a relatively straight forward document, with many conditions far simpler to calculate and pay than the equivalent APS provisions. For example, recreation leave for part time workers is a simple calculation based on their average weekly wages. The service also has unlimited sick leave -after 5 consecutive days staff must produce a medical certificate if asked to do so by their team manager, but not otherwise.

The termination provisions are also straightforward, following simple natural justice provisions in clear English.

Unlimited sick leave was introduced in the latest Collective Employment contract. People with previous entitlements are still using these up, then they go onto unlimited provisions. The unlimited with pay is being interpreted as "provided you are definitely going to get well enough to come back to work" However, this is a new provision and has not really been tested yet. If someone will not be returning, it would be a matter of negotiation with the individual.

The Collective Employment contract is clearly written and easy to understand. For example, it covers sick leave provisions in less than one and a half pages.

Payroll functions

The ISS has two accounting centres, whose responsibilities include payroll and administering leave records (ie maintain computer records). The Southern Accounting Centre is in Christchurch and has 9 payroll staff (to pay approximately 2,500 people, including national office staff in the North Island). The northern accounting centre has roughly 7 payroll staff to pay 2,000 people.

New Zealand no longer has a centralised pay system for the public service. This was abandoned because it was not flexible enough. They no longer have a Continuous Record of Personnel -each Department keeps its own. The system most commonly used by Departments is known as CHRIS, and is both a pay and personnel records system.

The ISS is currently using a payroll system called PIPS, an old and inflexible Government system. They are about to change to CHRIS and expect to be able to reduce staff slightly after CHRIS is in and bedded down. They also have an information management system that they use to pay approximately 200 casual staff, and a leave package originally bought from the New Zealand Ministry of Agriculture and Fisheries and adapted to ISS needs. The leave package generates leave accruals, and can produce absentee reports by particular day easily, for varied reporting groups (whole business, or particular teams). It also has a facility to export to Excel. The accounting centre also gets a disk each month from PIPS with all pay details, which they then use to automatically update the leave system at the end of each month.

The ISS has centralised processing over a period of time. At the time that they centralised in the South Island (.July 1991), they were able to reduce staff clerk numbers from 28 to 8. They still maintain a paper file on all staff. Under CHRIS they expect to be able to become fully computerised.

The ISS did have a reasonably simple system of eligibility and allowances. This has now been complicated L)y 600 individual contracts and 3,500 on the collective contract. However, payroll staff advise that there has been no significant extra manual calculation work as a result . Although PIPS is relatively inflexible, they have been able to use the back of the leave system to update records automatically.

Payroll staff work off weekly summary sheets from team leaders, plus advice (again from team leaders) of changes to account details, rates of pay, promotions/demotions. All recreation leave is approved by team managers, based on remaining credits.

Selection process

The only rule about advertising vacant positions is: Must notify the vacancy in such a way that suitable people can apply. Some positions are advertised in the press, but most lower level positions are advertised only within Departments (on the grounds that the expense of advertising is not justified by the sort of skill level you are looking at).

They still have similar selection processes to ours -applications, interview, write ups etc., but the delegate is usually someone one level above the people on the panel, and in the relevant area. New procedures recently introduced within the ISS require the delegate to be the chairperson of the panel, as well as the team manager to whom the recruit will work.

Appeals no longer exist, but applicants can seek a review if they have applied unsuccessfully for a job within their own agency only. Advice was that the system is used far less than the previous appeal system was, although numbers were not available.

Reduced incidence of HDA

HDA is still available, although the flatter structure introduced in the ISS has reduced the incidence of HDA. The Collective Employment contract provides for a minimum qualifying period of five working days each time someone acts in a higher position.

Evaluation

Apart from the review The Australian Public Service Reformed and the Logan Report in New Zealand, there has been little formal evaluation of micro personnel changes. The draft PUMA report referred to earlier states that "There has been little systematic evaluation of HRM reforms. Australia and New Zealand have undertaken an assessment in the context of overall reviews. However, many of the reforms are too recent for a full and balanced assessment and...the impacts may not become apparent for a number of years. " {PUMA]

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