Section 3: The APS employment framework

A modern employment framework for the APS includes hiring, termination and everything in between.

The Hon John Lloyd PSM
AHRI speech
25 August 2015

Key points

• The objectives of the Government's bargaining policy are to facilitate balancing forward budgets, and improve workforce flexibility, productivity
  and efficiency.
• The majority of APS employees remain satisfied with their monetary and non-monetary conditions of service.
• Modernising the APS employment framework includes improving recruitment and performance management processes and enabling increased mobility between the public and private sectors.
• The Commission is developing guidance material for HR practitioners and managers to help equip them to have effective performance discussions.

It is important that the APS employment framework enables effective management actions. Recruitment processes should ensure fair treatment of all candidates. They should also occur more quickly than today. The APS workforce comprises a growing number of non-ongoing staff. Employment practices should ensure the mix between these workers as well as contractors, labour hires, part-time and casual employees is right for a given agency's workforce needs. Equally, improved staff mobility and the use of effective employment termination arrangements are areas that require further reform. Current practices including those which require improvement are discussed below.

The overarching objective of the Government's bargaining policy is to improve workforce flexibility, productivity and efficiency. It is also to assist to balance forward budgets. The latest bargaining round has been tough. Most agencies are yet to conclude new agreements. APS employers have offered modest remuneration increases. Employee representatives have maintained an inflexible bargaining position.

The Government recently changed its policy for APS bargaining. It now allows for higher remuneration increases. Enterprise agreements are not to contain clauses that are restrictive and unduly constrain managerial prerogative. The objectives of wage restraint and a need to facilitate more agile, flexible APS workplaces remain unchanged. It is hoped that new agreements will be finalised across the APS in the coming months.

Results from the APS employee census show a decline in the proportion of people who believe they are fairly paid for the work they do ―from 67% in 2014 to 59% in 2015. Seventy-six per cent of employees reported they were satisfied with their non-monetary conditions of service. This was a moderate four percentage point fall compared to 2014 results. Seventy-two per cent of APS employees remain satisfied with their work-life balance and access to flexible work arrangements.

Contestability Review

An Australian Public Sector Workforce Management Review (the Review) is being undertaken as part of the Commonwealth-wide contestability program led by the Department of Finance. The review will examine ways to improve workforce management so that the APS can best serve the government and community into the future.

A more flexible APS employment framework is vital if the APS is to respond effectively and efficiently to increasingly complex policy challenges and a workforce environment that is changing rapidly.

A report recommending options to achieve improvements in workforce management is scheduled to be provided to the Government in late 2015.

Recruitment

The APS needs to be able to attract and retain the best and brightest people for all roles. Current recruitment and selection processes tend to be lengthy and convoluted. In a competitive market, slow recruitment may mean the loss of the best candidates. Only 34% of APS employees agree their agency applies merit appropriately.

The current legislative environment also creates constraints, particularly in relation to engaging people for specified terms.

Agencies require the flexibility to change staffing profiles in response to their needs. For the APS to secure the most talented candidates, it must:

• be more agile and able to bring in the best people quickly
• remove self-imposed red tape
• support a cultural shift to focus on business needs
• encourage innovative approaches to getting the right people.

In 2016, this is an area that will attract focused attention.

Workforce mobility

Increased staff mobility in all its forms is needed to broaden perspectives, make new policy linkages and improve collaboration. This includes mobility across industry sectors, across APS agencies and between government jurisdictions.
A greater exchange of personnel between the public, private and not for profit sectors will assist the APS to improve its capability and relevance by:

• being more familiar with private sector operating environments and current challenges
• learning about new ways of problem solving through the better use of technology
• identifying contemporary workforce management practices that ensure the most capable people fill all roles and perform to their full potential.

In 2015, 27% of new employees in entry surveys reported they came from the private sector. By comparison, 45% were from not for profit or other public sector organisations.

Eighty per cent of APS level employees have only worked in one agency. A number of barriers exist to the movement of staff between agencies, other government jurisdictions and the private sector. Several are based on perceptions, while others are more structural. In 2015, only 1.6% of APS employees moved between agencies.

The planned movement of employees to gain new and varied job experiences is a common strategy in capability development. In the APS, this is often left to the initiative of the employee. Predictably, the number of agencies in which an employee has worked increases at higher classification levels. The proportion of staff at level who have worked in only one agency is:

• 36.6% of SES officers
• 59.9% of EL employees
• 80% of APS 1–6 employees.

Increasingly employers who recognise the need to develop and retain high-performing staff are using the movement of employees as a talent optimisation strategy to 'skill up' employees. It can help prepare them for senior leadership roles.

Examples demonstrating two approaches to APS mobility are the Jawun Indigenous Community APS Secondment Program (Jawun) and a recent pilot engagement with the Business Council of Australia.

APS placements in Indigenous communities and the private sector

The Jawun program is run by the Jawun organisation in partnership with the public and private sectors. It allows EL employees from across the APS to be seconded for short periods (usually six weeks) to Indigenous organisations across Australia. In addition to progressing key projects for these organisations, seconded employees report the program is a catalyst for personal and professional development. Participating agencies also report continued benefits such as improved cultural awareness.

Recent engagement with the Business Council of Australia (BCA) to second high potential SES officers to BCA-member companies is designed to improve senior public servants' understanding of Australian business pressures and the impact of government policy and regulation on them. This work is in its early stages, but promises a mutual exchange of ideas and greater understanding of the operating environments and constraints experienced in both sectors.

Employee performance

Government and community expectations of the APS have changed. In an environment of increased fiscal pressure and rapid change, APS employees are expected to be more agile, innovative, risk savvy and responsive. Effectively managing and continuously improving employee performance is critical if the APS is to meet these demands. Agencies must be equipped to ensure they do performance management well, both in terms of system design and manager capability.

Performance management systems must be fit-for-purpose. They must work to clearly align business priorities and corporate culture with the duties and behaviours expected of individual employees. Regular and constructive manager-employee feedback loops are critical. Performance management systems should impose minimal compliance burden, collect useful HR metrics and be flexible and adaptable over time.

A general appetite for change in the way performance management is delivered among private sector firms is evident. A PricewaterhouseCoopers research report published in March 2015 found 96% of Australian firms surveyed have changed, or plan to change, their performance management systems¹. This appetite extends to the APS, where a number of agencies are revisiting their performance management systems in parallel with enterprise bargaining. The Commission is partnering with a best practice insight and technology company to develop and refine APS performance management system design choices. This will make it easier for agencies to enhance or reform the systems currently in place.

Agency survey data suggests that most agencies require further development of their performance management capability. Two thirds of agencies reported they need to improve the way they evaluate the effectiveness of current systems.

Supervisors and the policies they administer determine whether performance management is effective or not. Results from the 2015 APS employee census suggest that while supervisors may be confident in their ability to manage performance, they are less confident about the policies that govern their actions.

Only 54% of APS supervisors agree their agency's performance management policies provide them with clear guidelines for measuring employee performance. Similarly, 53% of APS supervisors agree their performance management policies are transparent and promote fair and equitable processes. Furthermore, 59% of supervisors agree that the requirements necessary to rate an employee as performing at an acceptable level were clear. These results highlight the need for improved guidance for supervisors.

It is encouraging that 85% of APS supervisors provide performance feedback in a timely manner and that 84% articulate clear performance expectations. Both aspects are integral to the performance management process. Another positive result is the confidence of supervisors when dealing with a staff member who appears unable to achieve their performance goals. In this situation, 86% of supervisors agree they proactively deal with the issue. When asked about managing underperformance, over 75% of supervisors believe they could rely on their manager for guidance and support to address underperformance.

Performance management guidance

The Commission is developing guidance material for HR practitioners and managers to assist with the day-to-day challenges of performance management. In accordance with contemporary thinking, a key focus of the guidance will be to equip managers to have effective performance discussions. The Commission will also be developing an online application as the primary delivery vehicle for this guidance.

Over 3,000 managers have already completed core skills programs that focus on performance and development conversations.

The Commission's focus on high performance continues as a key pillar of its work in this area, building on the findings of the². Just as the APS must continue to address and eradicate underperformance, efforts must also be made to lift the performance of all employees by embedding an expectation of high performance in the culture of the APS.

1 PricewaterhouseCoopers (PWC) 2015, 'Performance management: Change is on the way but will it be enough?', Performance management effectiveness in the ASX 150, PricewaterhouseCoopers (PWC), viewed 2 November 2015, <http://www.pwc.com.au/people-business/assets/publications/performance-m…;.

2 Blackman, D, Buick, F, O'Donnell, M, O'Flynn, J & West, D 2013, Strengthening the Performance Framework: Towards a High Performing Australian Public Service, Australian Public Service Commission, Commonwealth of Australia, Canberra, viewed 2 November 2015.