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Chapter 1: Commissioner's overview
In this overview, I wish to highlight some of the key findings in this year’s State of the Service report, and provide my own perspective on some of the issues identified.
An important perspective has been added in this year’s report, which is that of APS employees. In May–June this year a representative sample of APS employees was surveyed on a range of topics. While the APS Commission has drawn on agency employee surveys in the past, this is the first time the Commission has conducted a survey itself of APS employees. While the results need to be analysed with care, and as a first survey they provide no direct evidence of trends, they do add significant weight to the analysis presented in this report. The views of employees also provide something of a reality check against the perspective of managers necessarily reflected in the agency survey we have conducted each year for these reports.
Apart from providing an important perspective to each of the issues canvassed in this report, the employee survey also provides an indication of overall job satisfaction on a range of factors employees considered important, including good working relationships, flexible work arrangements, interesting work, using and developing their skills, and salary. The vast majority of APS employees (76%) reported that, on average, they were satisfied with the factors they nominated as most important to them.
The high levels of overall job satisfaction reported by APS employees is good news, as is the fact that the two workplace factors that were rated as most important in terms of impacting on job satisfaction (i.e. good working relationships and flexible working arrangements) received the highest satisfaction ratings (over 80%).
The changing APS
This year’s State of the Service report is the fourth prepared under the PS Act. It examines an APS that looks remarkably different from the APS of ten years ago. The structure of the APS, for example, has changed considerably over the past decade. A period of restructure and reduction in size and function has been followed by a recent period of significant growth (Chapter 2). The growth experienced in 2002–03 reflects the Government’s priorities in such areas as security and border protection, but also increased workloads in some agencies.
Over the last year there has been a general consolidation of trends towards an older and more skilled workforce. This is shown, for example, in the continuing falls in recruitment at the APS 1 and 2 levels of the APS, a focus on the APS 3–4 levels as the principal level for recruitment into the APS and the high proportion of recruits who have tertiary qualifications. The ‘typical’ new starter in the APS is now a 31 year old with tertiary qualifications who is at the APS 4 level and more likely to be a woman than a man.
Workforce planning
These demographic changes continue to pose challenges for the APS in managing for its future capability (Chapter 9). The primary responsibility for workforce planning and succession management rests with each agency head, to ensure their agency’s business outcomes will continue to be achieved into the future. It is also important to address the capability of the APS as a whole, given the growing importance of whole of government business outcomes, and the need to ensure there is a strong pool available to take on APS leadership roles into the future.
It is pleasing to note that there is evidence of concerted effort by agencies to improve capability and to address the demographic challenge of the impending ‘changing of the guard’. Progress is being made in relation to managing people for business outcomes, with evidence of better integration of strategies and increasing attention to workforce planning. Many of these improvements have, however, come from a relatively low base, and agencies will need to sustain priority effort to ensure continued improvement.
Diversity
The report emphasises the importance of diversity to the effectiveness of APS agencies (Chapter 8). Consideration of workforce diversity is critical to the attraction and retention of the skills agencies need, and is also important in improving the responsiveness of client services to an increasingly demanding and informed Australian community. Increased workforce diversity can also underpin agency efforts to create a more broad-based, agile and innovative organisational culture.
We are also required directly under the PS Act to promote equity in employment and, consistent with the Directions, ensure that employment disadvantage for particular groups is eliminated. Unfortunately, while the proportion of women has continued to grow, with steady improvement in representation at more senior levels, the proportion of staff in the other equal employment opportunity (EEO) groups (Indigenous Australians, people with a disability and people from a non-English speaking background) declined slightly during 2002–03. There is now a long-term decline in representation of people with a disability and people from a non-English speaking background in the APS, and the earlier growth in Indigenous employment has clearly stalled. A number of agencies are working closely with the APS Commission to improve Indigenous employment, but work is also needed to analyse and respond to the other growing concerns.
Embedding the APS Values and the Code of Conduct
The Commission’s work on Embedding the APS Values as well as the results of the agency survey indicate that agencies are working to hardwire the APS Values into management policies, instructions and guidance. This is also reflected in the results of the employee survey, which show that almost all APS employees had heard of the Values or the Code of Conduct and a very high proportion of APS employees being at least moderately familiar with them. Values-based management will, however, require further sustained effort.
Part of that effort, to provide assurance that the Values are being upheld, is to ensure that a rigorous and systematic approach to conducting investigations and dealing with breaches of the Code of Conduct. This is particularly important if agencies are to gain and maintain the commitment of employees to values-based behaviour. The agency survey results indicate that there is a large variation amongst large agencies in the number of investigations of suspected breaches as well as in the imposition of the high impact sanctions.
While I recognise that this may reflect, at least in part, the different importance of particular APS Values and elements of the Code of Conduct to the work of different agencies, I believe that the considerable differences suggests agencies are not using a sufficiently rigorous and systematic approach. The APS Commission will be doing further evaluation work in 2003–04 on the management of breaches of the Code of Conduct. I hope that the results of the evaluation will provide material for a good practice guide on this topic.
Performance management
The effective management of performance has been the subject of considerable attention over the last few years, and agencies have again reported improvements in their performance management systems, with all agencies now having performance management frameworks in place. The employee survey found that on the whole employees are generally positive about performance management, a good sign given the disputes in a number of agencies in the 1990s. However, the survey also revealed there is still widespread unease about how performance is rewarded, and about the handling of underperformance.
Part of the unease about performance pay may reflect a conservative culture in the APS that needs to change further for the modern, competitive era, but the variations across agencies suggest there may also be poor management or poor design of the processes in some agencies.
I cannot ignore the other possible conclusion, that linking pay and performance may in itself have a negative impact on team spirit and organisational performance. My own view is that the primary benefit of linking pay to performance is to ensure performance assessment is in fact managed systematically and regularly, and I am comforted that most employees in the survey agreed their performance pay system did this. The possible benefits of substantial rewards for performance, such as more effort or increased ability to match market remuneration for high performing people, need to be balanced against the risks of dissatisfaction amongst groups or teams of employees: a modest approach to performance rewards may often be wise, particularly while schemes are being bedded down and skills developed.
The appropriate balance will, of course, vary with the level of employee and the nature of the business and the agency’s culture. But as the Management Advisory Committee advised in its report two years ago, performance management systems need alignment between the outcomes sought by government, the nature of the business, the agency’s culture and history as well as where the CEO wishes to take the organisation. The Committee also noted that performance-related remuneration is only one component of performance management, and the diversity of views and approaches on the subject should be acknowledged.
Relations with Ministers and their offices
The interface between politics and administration has always been at the centre of academic and professional debate on public administration. For the APS, the relationship with the Government and the Parliament is formally defined by the Values of apolitical professionalism and impartiality, responsiveness to the elected Government and open accountability. For the most part these Values complement each other, but senior public servants have always been aware that there can be tensions between them in managing a particular issue.
A particularly interesting result from the employee survey is the scale of the interaction between public servants and Ministers and their offices (Chapter 4). Twenty-six per cent of employees reported that they have had contact with Ministers or their offices in the past two years. Contact may include the most minor of interactions and single requests for information, as well as more substantive policy advising. There is no way of directly comparing results to any past period. Nonetheless, the proportion of the APS reporting contact is very high. The proportion is highest for the Senior Executive Service (SES) (88%), but the proportion of Executive Level (EL) employees (47%) and APS level employees (20%) are both significantly larger than I had expected.
While the survey itself cannot measure trends, these results would seem to support other evidence that the APS is far more responsive to the elected Government than it is reported to have been in years gone by. The results also add considerable weight to the importance of training APS employees to understand the Values and to help them make judgments about their application and when a balance needs to be drawn between them. Control through limiting contact, say to SES, is clearly no longer feasible. Other management approaches are needed to ensure services provided to the Minister are of high quality and that accountability requirements are met, and to have confidence in the judgments staff are making.
The other results suggest that, for the most part, APS employees are managing the relationship appropriately. The proportion who said they had faced a challenge in balancing the Values was not surprising, in my view, and I was pleased that most were confident in doing so and most had found that the action they took to resolve the challenge was effective—primarily through seeking advice from supervisors or colleagues, or through discussion with advisers.
I have commented elsewhere on the important role ministerial advisers now play in Australia’s system of government, and suggested there would be benefit in a more formal articulation of their role through a set of values and a code of conduct. There are many ways this could be done, but I believe this would help to enhance the professionalism of advisers, and would complement recent APS reforms and our current efforts to improve professionalism in the APS. It could also serve to reinforce the relationship of trust that is essential between the APS and Ministers and their advisers. I believe the evidence set out in this report of wide interaction between APS employees and advisers adds weight to the views I have expressed.
A S Podger
Public Service Commissioner