Performance management in the APS: A strategic framework

MAC

The Management Advisory Committee (MAC) is a forum of Secretaries and Agency Heads established under the Public Service Act 1999 to advise the Australian Government on matters relating to the management of the Australian Public Service

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Implications for the APS environment and APS Values

A number of issues in performance management have specific implications for the APS, in particular the compatibility of performance management systems with, and their impact on, APS values.

5.1 Getting the balance right - managing the performance of behaviours or outcomes?

While effective planning and evaluation processes targeted at producing value for money are important components of performance management, people are the real key to high-performing organisations, and the provision of a rewarding workplace is both a major benefit of effective performance management and a fundamental plank in any successful framework.'

The 'how' you do it has an impact on future sustainability as well as an immediate effect'.

For performance management to work in a sustainable manner it is important that the right balance be struck between managing resources and achieving outcomes, and managing individual behaviour through a values-based system.

In the APS the degree to which performance management systems are valuesbased varies significantly. This is the result of the flexibility that agencies have in the current environment to adopt the most suitable means of integrating performance management systems into their particular organisational cultures.

One policy-making department has a system for assessing individual performance against exclusively values-based criteria.

Several agencies at the other end of the scale focus very strongly on key tasks and outcomes, with less structured assessment against values and behaviours.

The focus is on results, expectations and achievements'.

The majority of agencies surveyed, however, considered values to be important and use a combination of behavioural and task-oriented criteria to assess individual performance.

Values and principles are as important as outcomes and outputs. Outcomes and outputs may be achieved in the short term without values and principles but not in the medium term'.

It was not expected that values would feature as strongly in the private sector. The APS has a long tradition of adherence to a widely accepted set of standards, including acting in the public interest, while private-sector companies are supposed to be principally driven by the need to generate a profit. Nonetheless values were clearly in focus for the same reasons for several of the privatesector CEOs we interviewed.

One organisation had developed leadership competencies that 'cut across all parts of the organisation' and were one of three elements used in performance reviews. Assessment against the competencies was conducted by way of 360 degree feedback.

Another company had a variety of systems in place, and was currently attempting to standardise them. It measured performance according to roles in the organisation but also included behaviours because it wanted 'quality outcomes that may lead to repeat business'. Individual performance plans included a combination of tasks and behaviours, but the degree of importance of each was variable depending on the role and level of a person in the organisation.

A third was in the process of building organisational capabilities. It thought that at present performance management was not driving behaviour, although it was providing some employees with positive reinforcement.

One private sector organisation articulated a set of values very similar to the APS values but their use of values and measurement was more rigorous, including a 360 degree feedback process to assess behaviour.

One issue, which APS CEOs are now confronting, is the issue of managers who are high achievers in relation to delivery of outputs but poor at dealing with their colleagues or staff in behavioral terms. This illustrates the importance of taking account of both outputs and values (leadership behaviour).

There are four types of managers. There's the type of manager that has the values, is open, is boundless, et cetera, and makes the numbers. That's easy. You promote him, up and onward. There's the type of person who doesn't make the numbers and has all the values. You give him a second chance and a third chance. Then you have the person that's also easy, who doesn't have the values and doesn't make the numbers - they go out the door.
And then you have the toughest one of all in corporations - the fourth guy - the manager who makes the numbers and doesn't have the values. And that's the one people have hung on to over the years too long, because if you're trying to talk values and you don't walk the talk because you've got somebody making the numbers, you lose the confidence of the people.
Jack Welch, CEO General Electric - AFR's BOSS, October 2000

5.2 A career-based service?

Those interviewed generally regard the diversity of performance management systems in the APS as a good thing; agencies believe that a framework allowing them to adapt performance management to their individual needs is preferable than applying a generic or uniform approach to performance management in the APS.

Individual agencies in the APS have always had to compete with the private sector and, to a certain extent, with other agencies for the available pool of talent. In the current environment, however, there are indications that due to the variety of pay and performance regimes, the competition between APS agencies to attract and retain valuable staff has increased.'

Indeed, the development of a labour market within the devolved APS will ensure the public interest ethos is maintained, including a career service, at a very high standard - rather than tending towards a lowest common denominator.'

A number of agencies are employing various strategies, including the use of performance bonuses and Australian Workplace Agreements (AWAs), to help them retain high performing employees. While there are obvious benefits for individuals through these arrangements, such as acknowledgment of their value to the organisation and increased remuneration or other benefits, we encountered some concern about the negative implications in terms of career development, particularly in regard to mobility.

This said, there are also financial and accountability issues which may constrain too great a divergence.'

I do see divergence with agencies, particularly small ones. Within the broad church of the Service, I don't detect great fragmentation. We will be moving at the same sort of pace - there may be greater diversity but we will tic-tac. There will not be any great breakouts because we don't have the money or inclination. Some agencies have been able to downsize significantly so they can be more creative - but there are some tensions here'.

5.3 Service-wide values

For much of its history, the ethos of the APS was defined by a set of unwritten public service values that employees across the whole spectrum of Commonwealth employment were taken to share. It is only comparatively recently that a set of APS values have been articulated and included in legislation; initially in the Public Service Regulations in 1998 and now in the Public Service Act 1999. The Public Service Act not only codifies these values; it makes it a requirement that all APS employees, including Agency Heads, uphold them. It also requires Agency Heads to promote them.

The notion of a common APS ethos is reinforced by the APS Value that states that 'the APS is a career-based service to enhance the effectiveness and cohesion of Australia's democratic system of government'. In practice, however, the idea of a career-based service sharing a common ethos is subject to an increasing number of tensions in an environment in which individual agencies are encouraged to forge their own corporate identities. This report has not identified problems in service values or unity being precipitated by performance management.

The challenge is to ensure that the values expressed in individual agencies' corporate plans and performance management systems continue to be based on and complement the APS Values.

Out-sourcing of functions in the APS raises additional issues in performance management and its relationship to values - those of specifying and managing high performance through contracts and service agreements, rather than line accountabilities, and of maintaining a values-based service with a shared ethos in an outsourced operating environment.

5.4 Conclusion

Within an environment of devolution and diversity, the APS Values and Code of Conduct are an essential cohering force for concepts of a single service. The PS Act requires that Agency Heads must uphold and promote the APS Values and, similarly, APS employees are bound to uphold APS Values. The balance between greater flexibility on the one hand and accountability on the other hand should continue to be monitored to ensure the core public interest ethos is maintained, and in particular the concept of the SES and a career service.