Professional Documents
Culture Documents
Executive summary
This report describes the better HR practices in the Victorian Public Sector that were identified by PricewaterhouseCoopers in the course of a study of 15 medium to large Victorian Public Sector enterprises, as engaged by the Office of Public Employment (OPE), between June and August 2003. The project sought to review not only the HR practices of the organisations involved, but also to: consider the role of the HR function within the organisation, particularly in relation to strategic aspects; and understand the level of influence of the Victorian Public Sector Employment and Conduct principles on the HR policy-making processes and the practical application of the organisations HR policies. In examining the role of the HR function, we utilised Ulrichs widely acclaimed framework which categorises the differing roles of the function in terms of employee champion, strategic partner, change agent and administrative expert. Within the organisations reviewed, HR commonly fulfilled the role of administrative expert and employee champion well. Our review suggested that although there is a significant level of awareness of the potential for HR to undertake strategic partnering and change agent roles in organisations, most HR functions within the organisations did not fulfil these roles to a significant extent. Despite the diverse nature of the sample organisations, the review uncovered some common themes and findings which are outlined below: 1. An excellent range of HR programs are offered by organisations. These tend to be well communicated and highly formalised in policy. In particular, there were highly evolved work/life balance programs, recognition programs, recruitment and promotion policies and leadership programs. In addition, the legislative and other obligations of the sample organisations have ensured that OH&S, and anti-bullying and harassment programs are well entrenched in most organisations. 2. There is a high level of awareness of the public sector employment and conduct principles (the Principles) across most organisations. While employees may not be consciously aware of them, they generally underpin the stated values of the organisations. Also, while different words may have been used, the concepts were commonly raised in the focus groups. 3. Each of the twelve organisations that participated in the benchmarking survey had an official written HR strategy. A number of these have been developed by HR in close collaboration with other parts of the organisation in order to ensure that the HR strategy engages with the rest of the organisation. The better HR strategies clearly allocate responsibilities, introduce measures to indicate success and link with the organisations strategic objectives. 4. Consistent with emerging best practice in HR, people management activities are often devolved to other areas of the organisation within the framework of policies developed by HR. While in some organisations this was supported with appropriate management development initiatives, in other organisations there was a lack of training in relation to people management skills. It was often stated in focus groups that the implementation of policies and procedures depends on the manager. As the role of the manager evolves and increasingly expands into people management areas, these employees should be supported by HR on an ongoing basis and such support should be easily obtainable during the transition period with an increased emphasis on how managers do their job, not just what they do.
Introduction
Methodology
Stage One Preparation and framework finalisation Following the selection of a representative sample group of fifteen Victorian public sector entities to participate in the project, PricewaterhouseCoopers established a tailored framework based on theoretical models (in conjunction with the reference group) to assist in the identification of best HRM practices in each organisation. The reference group consisted of three representatives from the 15 sample organisations, the Commissioner, Assistant Commissioner and the project manager from the Office of Public Employment. The construction of the framework took into account: a review of information previously obtained by OPE; and PricewaterhouseCoopers proprietary data from global sources. Relying on these sources, an analysis of the extent to which the differences between the environments of public and private sector organisations impact on the role of the human resource management function was undertaken. Following this, the PricewaterhouseCoopers project team performed site visits to each of the sample organisation. These entailed interviews with key senior executives and members of the human resource function and a focus group with a cross-section of employees. The focus groups were a vital part of the methodology as it enabled PwC to gain a better understanding of the extent to which practices and policies were embedded within the organisation and were valued by employees. It was the employee perceptions of these HR policies and practices which, to a large extent, informed the identification of the better practices for this report. PricewaterhouseCoopers also provided each of the sample organisations with an HR benchmarking survey in order to perform an analysis of quantitative data. In addition, the sample organisation data was analysed and compared against Australasian data (all sectors) and Global data (public sector).
Stage Two Data collection and analysis PricewaterhouseCoopers conducted research into the background and operations of each member of the sample group with the objective of: establishing a broad understanding of the legislative framework within which each of the sample organisations operates; compiling summary data from the existing OPE sources in relation to each of the samples organisations; and highlighting initial areas to examine in each sample organisation.
Stage Three Draft report and feedback A draft report was compiled to address the terms of reference outlined in the original request for quotation and feedback sessions were arranged at which PricewaterhouseCoopers communicated relevant review findings to the sample organisations and invited their response.
Methodology (continued)
Stage Four Final report and presentation Using data collected at the feedback sessions in stage three and the draft report, a final project report was compiled for presentation to OPE. As part of the delivery of the final report to OPE, PricewaterhouseCoopers facilitated a knowledge sharing session which comprised: an outline of the key findings of the project; a review of PricewaterhouseCoopers major recommendations for future initiatives by OPE in relation to better HRM practices as they relate to the public sector principles (and other aspects); and a recommended model for OPE to extend the research to other organisations.
Section I
Findings and Analysis
- HR strategy - Role of HR - Structure of the HR function - Prescription and devolution of HR practice
HR strategy
General observations Most of the sample organisations take a strategic planning approach to determining HR programs and activities. This was demonstrated by the fact that all sample organisations have documented HR plans in place, with the majority of HR plans identifying actions, deliverables and timeframes, and assigning responsibilities for carrying out HR strategies. However, the level of clarity and succinctness of HR plans varied considerably, with plans that were clearer and more succinct generally being more effective in communicating how HR intends to add strategic value to the organisation. Some of the HR plans of sample organisations (54 percent) identify objectives that perceptibly support and align to organisation strategy, and 53 percent were strongly or somewhat based on organisation competency or values frameworks. Greater alignment of HR strategy to organisation strategy tended to reflect the quality or importance of strategic planning at an organisation level, with some organisations commenting that any lack of strategic approach by HR was due to a lack of a strategic planning approach organisation-wide. Another factor impacting on the alignment of HR and organisation strategy was the proximity of the head of HR to the chief executive and/or whether the head of HR sat on the most senior executive team. These issues are discussed further under the section, Structure of the HR function. Only a few organisations demonstrated a fully inclusive approach to developing HR strategies. Those that did applied approaches that ranged from discussing the issues important to executive and other management staff in the organisation, to workshopping issues with a cross section of staff. In developing its new strategic directions document, Gordon Institute of TAFE had consulted 90 people at the time of our discussions with them and was planning to also incorporate input from a range of external stakeholders. This approach increases the likelihood of success of new strategies as employee and other stakeholder buy-in is obtained prior to their introduction. Better HR practices VicRoads VicRoads adopted an innovative process to develop and implement the people strategies for the organisation. Prominent aspects of the process included a high level of engagement and involvement of management across different parts of the business to develop and implement people initiatives. The planning process culminated in the succinct and pragmatic document entitled Great People Smart Services 2002-2004. This planning document clearly allocates actions between HR and executive and line management, demonstrates an alignment of people strategies to the business needs and issues, and identifies measurable success indicators to determine whether or not objectives under the plan have been achieved. Department of Treasury and Finance Nine behavioural accountabilities form the foundation of DTFs HR strategy, with the behaviours underpinning many peoplerelated programs and activities. The behaviours identified under DTFs Behavioural Accountabilities Framework are intended to support the articulation of the vision and aspirations for the organisation, and form the basis
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HR strategy (continued)
of key HR programs such as leadership and development, performance management, attraction and retention, and leadership. DTF consulted with approximately 100 staff in order to determine the behaviours which would be most suitable for the organisation. Focus group participants commented that in a relatively short time DTF has been effective in beginning to embed the behavioural accountabilities in the language of staff, resulting in a shift in the culture and typical behaviours seen throughout the organisation. HR Benchmark Data
100 percent of Victorian Public Sector participants in the HR benchmarking survey have an HR strategy that exists in an official written document. This is greater than for all Australasian respondents with 75% having an official HR strategy document, and the Global Public Sector respondents, with 71% having an official HR strategy document. The majority of HR plans for Victorian Public Sector respondents span a 2-3 year timeframe (75%). Two Victorian Public Sector respondent organisations have an HR plan that span a 1-year timeframe; one Public Sector respondents plan spanned longer than 5 years. 100% of Victorian Public Sector respondents were either very satisfied or reasonably satisfied with the influence of HR on the organisation strategy. Again, this is higher than for all Australasian respondents (with 96% being very or reasonably satisfied) and for Global Public Sector respondents (with 88% being very or reasonably satisfied).
Northeast Health The Northeast Health HR Strategic Directions Plan 2002/2003 provides a clear example of a HR plan that aligns to organisation strategy. The four key objectives outlined in the 2002/2003 HR plan mirror those in the organisations Strategic Plan & Values Statement 2002-2005. The HR plan is also very succinct (as is the organisations strategic plan) while outlining activities to support the achievement of objectives, outcomes, responsibilities, targeted completion dates, and progress against targets.
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Role of HR
General observations Role framework A widely used framework commonly used to describe the various roles that HR can play within an organisation is described by Dave Ulrich in his book, Human Resource Champions. This framework is outlined below.
Strategic partner - As a strategic partner, HR participates in the process of defining organisation strategy and supports the achievement of organisation-wide strategic objectives by identifying and designing strategically-aligned HR practices. In the public sector, this may equate to designing cost-effective HR programs that support the delivery of government policy and directives and the meeting of customer needs. Employee champion - As an employee champion, HR increases organisation success by working to optimise the contribution of employees through enhancing employee commitment and competence. To do this, HR needs to understand the people, communities and cultures within the organisation, and devise HR practices that address the issues that arise from these. HR also needs to seek continually to understand the issues of importance to employees as well as their needs and concerns, and ensure that they are effectively addressed. Change agent - As a change agent, HR helps to identify and implement processes to support organisation change while also facilitating and improving the organisations capacity for change. HR does this by continually identifying, framing and solving problems, proactively managing organisation culture and promoting cultural change. Administrative expert - As an administrative expert, HR delivers efficient and cost-effective processes for managing staff, often looking to be able to do more with less. To be effective as administrative experts, HR professionals need to undertake activities leading to continual reengineering of the work processes they administer.
Ideally, HR should play an holistic business partner role by carrying out the multiple roles in order to maximise the impact of HR on the business. Employee champion In terms of the Ulrich framework, the participant organisations were strongest in the role of employee champion. All of the sample organisations displayed a strong focus on supporting the rights and needs of employee. This focus was evidenced by rigorous and innovative policies and programs in the areas of occupational health and safety, grievances, work-life balance, diversity, and employee assistance (amongst others). The high level attention given by HR to the rights and needs of employees and the need to provide fair and reasonable treatment seems to be influenced by factors such as the high degree of unionisation and union involvement in sample organisations, the fishbowl aspect of the public sector resulting in a concern around being seen to be doing the right thing, and a focus in legislation (such as in the form of the employment principles set out by the Public Sector Management and Employment Act) on employee rights. However, in some focus groups employees expressed a desire to be better understood by HR. Aspects limiting HRs capacity for a greater understanding of employees included a limited ability for regular face-to-face contact with staff. This may be due to insufficient numbers of HR staff, HR structures that centralise HR staff and limit the connection to the business units, a disconnect between the working hours of HR and other staff (e.g. where there are high numbers of shift workers), and the location of employees over a large geographical area.
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Role of HR (continued)
HR benchmark data HR benchmarking data (number of HR staff (FTE) by HR process) indicates that Victorian public Sector organisations spend a significantly greater amount of time on employee issues such as:
Strategic partner HR and senior executives in many sample organisations demonstrated an awareness of the strategic partner role and expressed a strong desire to increase the capacity of HR to play this role. However, few organisations indicated that HR has already achieved (or are close to achieving) their potential as strategic partners in the organisation. Organisations that were moving towards the strategic partner role typically had heads of HR with a strong strategic mindset coupled with a chief executive who has a good understanding of HR practice and who understands the value of HR in terms of its actual and potential contribution to the organisation. Aspects limiting the ability of HR in sample organisations to carry out the strategic partner role include a need to catch up on more basic aspects of HR (e.g. in providing or improving the standard of necessary HR processes and programs), resulting in a lack of time or resources to focus on creating a more strategic approach to the HR and people management capabilities within their organisational management population. Other limiting factors include a lack of effectiveness of organisation-wide strategic planning processes, a generalist mindset adopted by the head of HR, and a lack of proximity of the head of HR to the leadership of the organisation.
Victorian public sector Health and safety Training planning, admin and delivery Employee counselling 16%
17%
14%
14%
4%
2%
1%
HR benchmarking data HR benchmarking data indicates that Public Sector respondents apply approximately 12% of HR staff time on HR strategy. This is very similar to the Global Public Sector (13%), but significantly less than Australasian respondents (21%).
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Role of HR (continued)
Change agent Few HR functions sample organisations demonstrated effectiveness as change agents. HR generally plays a limited role in promoting or directing change in the sample organisations, while the level of support for organisational change provided by HR varied. Some organisations played an active role in supporting organisation change initiatives such as restructures and culture change, while other organisations carried out major organisation change without the significant involvement of HR. A perception of insufficient HR funding in the sample organisations creates an impetus for HR to provide costeffective HR programs. (However, we note that HR benchmarking data indicates similar mean and median HR budgets across the Victorian Public Sector, Global Public Sector, and Australasian all sectors.) Some organisations in the sample group address this issue by increasing the skills of HR to enable the internal provision of programs (e.g. in training and development). Many organisations use HR portals and intranet sites to disseminate and manage HR-related information, and the majority of organisations used HR information systems (such as the CHRIS system) to manage employee data. To enhance administrative efficiency, some organisations use shared services (e.g. in relation to payroll), while others outsource aspects of the HR function. In one organisation, focus group participants expressed concerns in relation to the outsourcing of key HR processes. Employees felt that the outsourced service provider did not have a sufficient understanding of the needs of employees and managers, nor of the culture and business objectives of the organisation, limiting its ability to provide effective and responsive service.
Administrative expert The focus on process in public sector organisations appears to result in a strong emphasis on the administrative expert role being carried out by HR in the majority of sample organisations. This emphasis appears to be encouraged by the following: The interpretation by public sector organisations of the requirements of the Public Sector Management and Employment Act 1988 (PSMEA) employment principles (e.g. in relation to selection and recruitment and requirements around advertising roles) appears to create an additional workload for HR and for line management. The high level of prescription of employment processes in industrial agreements (e.g. in relation to pay and performance management), also often creates greater process needs.
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Role of HR (continued)
In summary In sample organisations, the ability of the HR function in sample organisations to play the various HR roles, being the strategic partner, employee champion, change agent, and administrative expert roles, is influenced by the following factors: The competencies, capabilities and focus of the head of the HR function. The interest, knowledge, and roles attributed to the HR function by the organisations chief executive. The history of the HR function and whether or not HR is still working on primary HR activities for example, it is more difficult for an HR function that has traditionally played a personnel role or is playing catch up, still needing to create fundamental HR policies, to act as a strategic partner. The HR function structure for example, in relation to the proximity of the head of HR to the chief executive, and also in relation to the proximity of HR staff to the business units or divisions and the employees. The budget and resources available to HR.
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Role of HR (continued)
Better HR practice We have provided some case study examples below regarding some of the positive ways in which sample organisations are performing the various HR roles in the Ulrich framework. We note that the case studies provided are only some of the ways in which the different HR roles are illustrated and that other good examples, although not cited in this report, also exist. Department of Treasury and Finance The structure of HR at this organisation encourages HR to play a strategic partner role in the following ways: HR is led by the Deputy Secretary for Strategic Management who has a direct reporting relationship to the Secretary of DTF. This results in HR issues being high on the agenda at the executive level, regularly discussed at their meetings. The operational or housekeeping functions of HR are fully outsourced, enabling the core HR team to focus on strategic issues. There are regular meetings of the senior executive team with senior HR personnel to discuss strategic initiatives and people related activities.
Strategic partner Northeast Health HR in this organisation demonstrated many competencies which indicate that the function is stepping into the role of a strategic partner. The head of HR is a highly valued member of the senior management team, and despite not being ranked at the executive level, participates in all executive meetings. The chief executive and other senior employees in the organisation indicated a strong reliance on the views of the head of HR when making key organisation decisions it was stated we dont move without her. The degree of influence of the head of HR is illustrated in the organisations strategic plan, which focuses heavily on strategies relating to the contribution and competency of people in the organisation. The organisations HR plan also demonstrates the support of HR strategies for organisational strategy, with each of the HR strategies having been designed to assist in the achievement of one of the organisations four strategic goals.
Employee champion Northeast Health HR in this organisation demonstrates its strength in the role of employee champion in several ways. Upon arriving at the organisation, the head of HR instigated a comprehensive audit of all people practices and issues, with a view to gaining a full understanding of the concerns of employees and managers. (This audit is planned to be repeated in late 2003.) Since the audit, eighty-eight HR policies have been re-drafted. However, the processes adopted by HR to design and implement the new policies reflect HRs view that effective HR practice does not result from stringent policies alone these policies need to be brought to life by managers throughout the organisation who understand why these policies exist, know them inside-out, and embrace them as their own. HR has been able to encourage this by:
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Role of HR (continued)
Encouraging and supporting managers who were willing to undertake a Graduate Certificate in HR Management to improve their general understanding of HR theory and practice. Extensively consulting managers when revising HR policies. Conducting numerous workshops, once policies were designed, where managers were encouraged to share their previous experiences with carrying out HR policies and voice their frustrations, and HR engaged with managers in relation to their concerns and questions about new HR policies. Melbourne Health Melbourne Health has several programs that are specifically designed to meet the needs of employees. One that stands out is the feedback program, Melbourne Health Staff Comments, Suggestions, Compliments and Complaints. A brochure, which is visibly available throughout the organisations premises, explains this program to staff in a clear and concise manner, and sets out the ways in which staff can recognise each others contributions, make suggestions or comments, and lodge complaints or grievances through the appropriate avenue of redress. This plan is innovative as it wraps together the various aspects of employee feedback, communicating the importance to the organisation of employee feedback and lessening the stigma that is typically placed on giving negative feedback or lodging grievances. The program is also effective in highlighting the relevant Melbourne Health HR policies and where relevant, legislative references, and recognising the importance of involving line management as a first port of call. Another excellent program initiated by Melbourne Health is its Peer Support Program. This program is similar to others operated by other health and emergency-related organisations and recognises the stressful nature of the work of Melbourne Health staff. The program provides an opportunity for fullytrained volunteer peers to support employees with personal and work related issues within a confidential framework.
Each of these actions by HR resulted in a greater understanding, knowledge and acceptance of HR policies by management, as well as a strong desire to take responsibility for HR themselves, leading to significantly improved HR practices and levels of employee satisfaction throughout the organisation.
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Role of HR (continued)
Other programs Other programs that are supportive of employees needs and rights and contribute to the improvement of employees competencies and skills, demonstrating the role of employee champion played by HR, are described in later sections of this report. MAS is seeking to develop leaders at all levels and in all areas of the business. It has recently launched a pilot Mentoring Program that is aimed at developing non-management staff that have an interest in leadership and demonstrate values that are aligned with those of the organisation. A Mt Eliza Business School leadership program has been opened to nonmanagement paramedics.
Change agent Melbourne Ambulance Service In this organisation, HR has been successful in influencing the organisation in relation to the importance of people and cultural issues to the success of the organisation. As a result, the organisation is aiming to become a learning organisation and is seeking to achieve this by encouraging more innovation, knowledge-sharing and a culture that is less hierarchical and silo-based. The view of the CEO and of HR is that to achieve a learning mindset, employees need to be aware and informed not only of the customers needs but also of the organisations economic needs. One way MAS is seeking to break down silos is by hosting fortnightly CEO lunches where staff from different departments are invited to come and meet employees from other parts of the organisation, thereby expanding their networks and learning about the issues that affect others. The organisation is also promoting greater innovation through a new Employee Innovation reward program which aims to motivate and inspire employees to put forward new ideas, and reward them for those that are original and constructive.
Goulburn-Murray Rural Water Authority In order to improve the negotiation process with unions, this organisation has created a central consultative committee comprising approximately ten employee representatives and six management representatives. HR convenes the committee meetings, which are jointly chaired by one manager and one employee, during which problems are presented to the group and solved using a joint approach. Although the committee was created initially to address strained relationships between employees and management and to improve a employee relations environment, it has also developed into an innovative forum to regularly engage employees in relation to the current issues faced by the business that impact on employees. The creation of the committee has resulted in a more collaborative environment in which there is greater sharing of ideas and where mutually satisfactory outcomes can be agreed upon and sensitive issues dealt with in light of employee input.
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Role of HR (continued)
Administrative expert University of Ballarat The University of Ballarat was identified in the course of the project as exhibiting strong administrative expert characteristics. However, this organisation is also one in which the role of HR is changing. Its mission and structure are in the process of undergoing significant redesign in order to effect change on the basic culture of the organisation. Conscious planning and strategy creation such as this will assist organisations to move away from a purely administrative role for HR. Peninsula Health Peninsula Health delivers efficient and cost-effective training programs for staff, often looking to be able to do more with less. In particular, in order to decrease the costs of providing training, members of the HR department have completed a Certificate IV in Workplace Training and Education, enabling the organisation to provide a wider range of training without the expense of an external provider.
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OH&S
IR
Special Projects
Remuneration
Employment Services
Pastoral Care
EEO
HR Officer
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Recruitment
Executive Services
HR IS
OH&S
Centres of Excellence
BU or Regional HR
BU or Regional HR
BU or Regional HR
BU or Regional HR
BU or Regional HR
Note. There may or may not be dotted line reporting between BU / Regional HR and central HR.
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Staff Reward HR Recruitment People and Operations Services strategy and support services recognition business planning
ER/ IR OH&S
Divisional Head Divisional Head Divisional Head Divisional Head Divisional Head Divisional Head Divisional Head
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Department of Human Services DHS is an example of an organisation in which HR issues are considered important and very influential, although the head of HR does not report to the chief executive. HR staff will have a significant amount of air time with the chief executive and others on the executive team during regular meetings between various members of HR and the chief executive in relation to key HR projects. The Department Secretary attributes the influential nature of the HR function to the strong professional relationships that the head of HR has built with executives.
OH&S
Return to Work
HR benchmarking data
The HR benchmarking survey data indicated that for Victorian Public Sector respondents, HR budgets ranged from US$188 per FTE to $2,100 per FTE, with a median HR budget of US$666 per FTE. This was higher than the median HR budget of US $558 per FTE for Australasia all sectors respondents, but lower than the median budget of US$725 per FTE global public sector respondents. HR benchmarking data indicated that, at the median, for Public Sector respondents each HR staff member supports 69 FTEs. This compares with 92 FTEs in Australasia all sectors and 58 FTEs in the global public sector.
HR hotline This small, centralised HR function has been restructured several times over the last couple of years in order to improve its alignment with the people needs of the organisation. To maximise the output of the HR function, each of the HR managers reporting to the head of HR have a specialist focus and responsibility (e.g. in relation to training and development or occupational health and safety). At the same time, staff within the HR function work very closely as a team, supporting each other carrying out their responsibilities. In order to provide accessibility to HR and enable efficient delivery of HR service, the structure includes a support person who acts as a gateway to the HR team. Calls to an HR hotline are firstly directed to this support staff member who has a sufficient understanding of HR issues to be able to respond to simple queries. The caller will be directed to the appropriate HR specialist where queries are more complicated.
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Highly prescribed
EEO policies Occupational H&S Diversity policies Recruitment Promotions Performance management Recognition
[NA]
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Section II
Findings and analysis The principles and HR practice
- Performance management - Training and development - Reward and recognition - Recruitment and selection - HR policies Employment rights - HR metrics - Legislative framework and organisation characteristics - Differences between public and private sector human resource services
creating Value for your Business through People
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Middle
Management
The following areas were considered to be part of the performance management process. Areas of review % of Public Sector organisations 100% 92% 92% 42% 50% 92%
Responsibilities taken Results achieved Professional / technical competencies Personal characteristics Living company values
HR Benchmark Data Some of the above observations were supported by the HR benchmark data. For example: The majority of organisations emphasise the completion of a performance review. Interestingly, there was perceived 100% completion at senior and middle management levels, but not at staff levels.
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Areas influenced by performance appraisal outcomes Base salary increases Variable pay (ie bonus) Promotions Training
% of Public Sector organisations indicating some or large influence 36% 91% 91% 100%
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Better HR practices Higher provision of internal training Using limited resources and budget, Peninsula Healths HR staff members design and deliver most of the organisations corporate training on a range of core issues, including Aggression Management, Boundaries in the Workplace (e.g. to prevent bullying and harassment), Developing Business Cases, Conflict Resolution, through to more traditional HR courses relating to employment rights and occupational health and safety. In order to increase the level of training quality, all HR team members are completing a Certificate IV in Workplace Training. This will also decrease the need for HR to source training from external providers, enabling Peninsula Health to minimise its spend on training without sacrificing the provision of courses. Focus group participants noted the effectiveness of the training provided.
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Alignment of development needs to training The Department of Treasury and Finance have linked their employee development plans to a training calendar in order to ensure that employee training needs are acted upon and met.
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Succession planning and career development The principles (for example, merit and fair and reasonable treatment) in some respects appear to be inhibiting organisations in their ability to effectively plan for leadership succession, manage career development, and develop leadership capability. The issue centres around how organisations select people for additional development and maintain a perception of fairness in the way the selection process is carried out throughout the organisation. Some organisations have gone to great lengths to implement a fair process in selecting their employees (for example, through outsourced development centres), only to find that they still ended up with too large a list, and that narrowing this down appears to be too difficult given the circumstances in which they operate. In some cases, organisations are using short-term appointments and secondments to enable career development, as this is a method of getting around the administrative and fair selection issues created by public sector processes and culture. For example, if the duration of secondments and acting roles is less than 3 months, they often do not need to be advertised internally and the organisation does not have to prove they have selected the best candidate for the role in accordance with the merit principle.
Support for the principles Employee training and development Training and education is provided in most organisations on Equal Employment Opportunity, discrimination and diversity (for example, in relation to harassment and bullying), equal employment opportunity, work life balance programs, diversity, women in management, womens network and cross cultural training. Focus group feedback indicated that there are diverse opinions regarding whether training opportunities are provided objectively and fairly. Some organisations could use induction processes to better promote awareness of the principles or codes of conduct. There is limited provision of training on performance management in order to ensure employees are held accountable for results and provide responsive service. In addition, employees have generally received poor feedback throughout their appraisal year and have expressed a need for training in this area.
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Better HR practices Linking performance to the bonus The Metropolitan Ambulance Service policy on performance bonuses clearly outlines that the bonus element is to reward for performance and achievements beyond the day-to-day requirements of the role. The process supporting this requires line managers to follow a scoring mechanism that is linked to the achievement of KPIs and the performance rating. Bonus recommendations are reviewed by HR and then approved by a remuneration sub-committee.
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Support for the principles Pay increases are largely dictated by formalised Enterprise Bargaining Agreements for the majority of staff. Accordingly, employees are treated with equality in line with the agreements. There is therefore little room for managerial discretion in terms of base pay. In response to this inflexibility in pay structure some organisations are looking for ways to work around the system to enable them to be more competitive in the marketplace and attract candidates with the necessary calibre. However, this can give rise to inequality. For example, one program provides graduates with competitive pay which exceeds the salary of long-term employees. Also, there is a persistent perception communicated in focus group sessions that remuneration bands are sometimes manipulated by hiring at a higher level than required by the job in order to be able to attract the desired candidate.
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If all targets are achieved, performance pay receivable as a percentage of base pay Category (Mean) Victorian public sector Australasia all sectors Global public sector Senior management 10% 20% 8% Middle Management 5% 10% 4% General Staff 2% 4% 3%
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Innovative recruitment practices to attract candidates Melbourne Health and Northeast Health places a significant effort on developing recruitment campaigns which attract employees to careers in nursing within the hospital. This includes building an employer brand through a proactive PR campaign which differentiates them (in terms of the type of people they employ or by placing an emphasis on the benefits of their location) in addition to providing good training and potential career paths. Peninsula Health seeks out alternative talent pools overseas to fill skill shortages and has developed a cross cultural awareness program to assist overseas recruits in integrating into the hospital environment.
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Putting significant effort into educating Managers Northeast Health has recently revised their recruitment and selection process based on feedback they received from the OPE People Matter Survey. The feedback identified that there was bias in selection decisions. As a result of this the HR manager revised the policy, outlined what was required at each step of the process, and then conducted educational sessions with managers to explain the process and encourage discussion of what used to happen and why. The approach taken appeared to combine integrity and honesty (e.g. explaining the issue, saying things how they are and enabling an environment where managers felt comfortable sharing their experiences), fun (through active participation, discussion and learning) and focused on explaining the consequences of inappropriate actions (e.g. the why).
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PwC felt that the participative and educative approach taken by some organisations appeared to engender more managerial support for policy implementation and ensure that the principles in relation to equal opportunity and fair and reasonable treatment were lived within the organisation. There were also examples of where organisations which were taking a more punitive approach to policy implementation (e.g. not putting employees on payroll until the induction had been completed) and a more laissez-faire approach which focused on policy development and devolved implementation of the policies and the principles to managements discretion. However, we recognise that the organisation culture and leadership support of HR practices are important factors in terms of how things get implemented. In addition, many organisations had practices which raised employees awareness of their employment rights. Initiatives in this context included: Implementation of a thorough induction program. The Northern Melbourne Institute of TAFE has a very comprehensive induction checklist. Employee knowledge awareness programs, for example, Peninsula Health provided a variety of educative programs around harassment in the workplace etc. HR Managers operating an open door policy and actively encouraging people to come forward to enable issues to be resolved. For example Goulburn -Murray Rural Water Authority took the view that if HR did not operate an open door policy and come across as approachable and customer service oriented, who else could employees expect to be able to go to.
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Work/life balance programs The Department of Innovation Industry and Regional Development has introduced flexible work practices and has also introduced a parenting room where employees can work in the office with their children where needed. Support programs VicRoads provides the My Career, My Life program, the aim of which is to encourage all employees to take primary responsibility for their own professional development and career direction. To this end, the program: provides information and support to all employees which focuses on career enhancement but also addresses life events and employees personal issues as they arise; and encourages to managers to provide more support to their staff inrelation to career and personal concerns. Goulburn-Murray Rural Water Authority has introduced a women in management program and a womens network for development purposes. Grievance and appeals procedures North East Health has recently introduced a program to prevent harassment in the workplace encouraging people to raise issues through the grievance procedure. They set an example of how they would handle grievances raised taking an investigative, supportive and educative approach focused on developing a solution to the problem, rather than allocating blame to the people involved. They had found that the number of grievances raised had increased and the focus on seeking solutions in a supportive manner was received positively by staff.
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HR metrics
Metrics HR metrics play an important role in enabling comparison of performance and costs with other organisations and identifying areas for investigation. There was a significant focus within the sample group on HR metrics which is perhaps a reflection of the public sector approach to record keeping. All of the organisations within the sample group have maintained some HR metrics in accordance with requirements of external authorities such as the OPE People Matter Survey. However, in addition to the OPE requirements, the majority of the organisations within the sample group were obtaining additional information on data such as flexible work options, turnover and absenteeism. However, there were a number of notable omissions including, for example, the monitoring of EEO statistics for particular employees such as the disabled, training and development metrics, for example, the number of days training per employee, evaluations of training programs etc. In addition, we also noted that it could be useful for some organisations to more explicitly link an organisations strategic direction with its metrics, and ensure that the metrics focus on areas which are the key strategic value drivers for the organisation. In general, participants stated that it was time consuming and often difficult to access accurate data from HR systems, and one solution might be to set up payroll as the repository for all HR data. The organisations stated below were considered to be reporting on a selection of suitable HR metrics. Melbourne Health Melbourne Health has compiled a wealth of HR metrics. However, the information management system is of particular interest. The system enables business unit line managers to forecast and incorporates absences into the strategic plan of their departments. In addition, Melbourne Health compiles a significant amount of information regarding the graduate nurse program. In particular, Melbourne Health records qualitative data including the reasons why graduates applied to Melbourne Health and why they have stayed with the organisation. This type of information greatly assists in identifying potential causes of turnover before it is an issue. Department of Human Services Department of Human Services (DHS) compile a significant amount of information on people management matters. Through their Performance Information Management System, DHS are able to track information such as the workforce profile, workforce trends, turnover trends, organisational climate indices and general workforce statistics. A significant number of metrics are reported to the executive team, in addition to being available on the intranet for general employee access. Peninsula Health Peninsula Health report to the board bi-monthly on selected key performance indicators which are linked to major organisational issues. For example, the percentage of staff assaulted within a certain time frame. Once the issue has been adequately addressed by the organisation, the issue will be removed from the Board agenda and a new issue will be outlined for HR to address.
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Inner v outer government The experience of being part of a fishbowl seemed to be more front-of-mind for employees in government departments (as compared with employees in the public authorities). Proximity to government appeared to be a factor influencing the level of concern employees have in relation to not being seen to be doing the wrong thing, seeming to result in a greater focus on process. One way that this was expressed was through a heightened concern with misusing government funds in the area of employee recognition (e.g. when giving movie tickets as recognition for good work). Even though strict approval processes are almost always in place, managers in government organisations expressed a reluctance to give employees monetary-based rewards under recognition programs for fear of being exposed on the front page of a newspaper.
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Organisations in the TAFE sector and higher education Organisations in health and human services These organisations included the hospitals, the Department of Human Services, and the Melbourne Ambulance Service. Employees in these organisations tended to be caring individuals who are passionate about their work. These employees tend to be highly motivated to meet the needs of their individual clients but have less of a focus on the needs o f the organisation as a whole. (We note that Victorian Arts Centre Trust employees also displayed these characteristics.) Despite these common characteristics, the various health and human service organisations took very different approaches to motivating and retaining employees. HR in each of these organisations recognised the stressful nature of much of the work of employees, and focused on providing supportive HR practices in the areas of antiharassment and bullying, grievances, work-life balance and employee assistance. These organisations also tended to have sophisticated policies on occupational health and safety. HR in these organisations tended to have more of a personnel focus (although over the last couple of years, the Gordon Institute has addressed this). One issue faced by these organisations has been restrictions in funding for HR, resulting in a need for greater innovation to provide a cost-effective HR practice. The funding issue was also prevalent in the HR benchmark data, where the TAFE sector was found to have a low HR budget per employee when compared to other participants.
Organisations with a finance or industry focus These organisations comprised the Department of Treasury and Finance and the Department of Industry, Innovation, and Regional Development. These organisations attract greater numbers of employees from the private sector than the other sample organisations but are also experiencing significant loss of employees to the private sector. This phenomenon puts these organisations at a greater risk of having high levels of employee turnover. This was reflected
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Organisations with geographically dispersed employees Organisations with employees located over large geographical areas included Parks Victoria, the Department of Human Services, Goulburn-Murray Rural Water Authority, and the Department of Justice. These organisations tended to have devolved HR practices, with varying levels of prescription by HR. Other than in DHS, HR functions tended to be centralised with no HR presence in the regions. For some organisations this posed some considerable constraints because it was felt to be more difficult to manage thorny HR issues in rural, tight knit communities, where work issues could frequently expand into the home and family lives of the people involved.
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Talent management Performance management Leading edge private sector organisations place a heavy emphasis on developing a high performance oriented culture which champions high-level performance. These organisations are generally scrupulous in setting specific goals which align with corporate and departmental goals, raising expectations every year, and enforcing performance benchmarks. In addition, managers and employees are inspired to do their best and there is a tendency to push decision making, responsibility and the ability to make a difference down the organisational ladder. Leading edge private sector organisations excelled in dedicating major resources to building and retaining an effective workforce and management team. This included personal attention from top executives, offering training and development to prepare employees for new jobs in the company, and career development initiatives such as work experience and accelerated employee development programs.
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Enhancing HR practice
Enhancing the effectiveness of the role of managers in the management of people A key finding highlighted in this report is the importance of the contribution of line managers to the effectiveness of HR practice. Although key strategies used by HR in the sample organisations are the prescription and centralisation of HR policies, these strategies are only successful to the extent that policies are embraced by management and delivered consistently. We recommend that the following initiatives be considered in order to improve the contribution of line managers to HR practice: Greater inclusion and involvement of management in setting HR policy. As noted in this report, some organisations did this through manager focus groups and surveys. Provision of guidelines (for example, in relation to behavioural interviewing techniques) as tools for applying HR policies and carrying out better people management practices. More emphasis on management training and development to create a greater awareness of the importance of the managers role in people management, and to improve both the general people skills of managers and their skills in relation to the application of specific HR policies (for example, on giving feedback, dealing with grievances, carrying out performance appraisals and interviewing techniques). Greater emphasis placed on assessing people management skills competencies when selecting for management roles. Added emphasis placed on assessing people management skills and competencies in the performance appraisal processes for line management. Initiatives to build closer working relationships between HR and line managers to enable greater support of line management in carrying out their HR responsibilities. As noted in this report, HR function structures where HR staff are assigned to business units can assist to achieve this. Creating shared responsibility for achieving peoplerelated goals between line and HR management. The shared responsibility between line and HR management needs to be encouraged and modelled from senior management.
The role of the HR function It would benefit many of the sample organisations if both senior management and HR would clarify the way in which HR can best contribute to the organisation. As mentioned in this report, many of the sample organisations are not undertaking the strategic partner and change agent roles. To do this, HR would be required to increase their level of influence in the organisation and build more of a strategic mindset and the senior executive team would need to more clearly understand the value of strategic HR.
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Managing performance An observation of the sample organisations is that there is a general reluctance to recognise and address performance issues, both in relation to distinguishing between good and acceptable performance, and in relation to managing underperformance. It appears that the key reasons for this reluctance are the culture within the public sector of fearing to be seen to do the wrong thing, and the difficulty public sector organisations have in articulating the essence of what good performance means. Initiatives to consider would include the following: Ensure that performance appraisal templates provide guidance on goal setting, enabling individual goals to align with organisational and departmental goals.
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Sharing knowledge amongst public sector organisations During the feedback sessions, HR from the sample organisations expressed a strong interest in being able to participate in forums that would enhance their knowledge of good HR practice, enable them to improve their HR practice and therefore enhance the benefit they provide to their organisations. To do this, they expressed a view that using smaller and more industry-focused OPE-initiated forums would be useful, with these forums being facilitated, at least initially, by OPE. A number of organisations stated that they would benefit from an OPE website link or database that enables organisations governed by the PSMEA to develop online relationships with each other and the OPE. This would enable organisations to network across similar industries but also develop relationships with other organisations encountering similar business issues. In addition, it was also stated that they were interested in obtaining additional assistance from OPE in terms of the practical ways in which organisations can embed the principles into their organisation through either OPE providing training or facilitating networking across the organisations. They expressed a view that while OPE may not want to dictate how the principles should be lived, they felt that this would not only encourage face-to-face networking across organisations and with OPE but also provide organisations with the examples of living the principles.
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