Agency Health: Monitoring agency health and improving performance

Assessing Corporate Health

Agencies already have in place a range of performance indicators to measure the quantity and quality of their performance against specified outcomes. For some measures of corporate health it will be possible to establish similar measures (for example, levels of turnover or length of service). However, by its very nature, corporate health involves a mixture of objective and subjective judgments. Making consistent judgments can be difficult due to the different circumstances faced by each agency, as well as changes over time.

Assessments of corporate health need to take account of the contextual environment in which each agency and the APS as a whole operate. Agencies vary in terms of their size, budgets, policy, public perceptions, and the types of employees. Different stakeholders will hold different views about organisational performance, sometimes coming from opposing positions. It is important to look at the whole picture rather than focusing on individual indicators in isolation.

Assessments of corporate health also need to be made at a number of levels within the agency, from the organisation as a whole, down to much smaller units. Looking at corporate health in this way helps to identify issues at the levels at which they arise, so that effective and innovative approaches can be shared, and corrective action effectively targeted, rather than unnecessarily applied at a broad level. Each agency will need to consider the best level at which to monitor each indicator. It is likely that for most agencies there will be a combination of monitoring at the organisational level and at an agreed lower level (for example, divisional). Where emerging problems are identified, agencies may choose to drill down further.

There may be a range of reasons for what seems to be poor performance against a particular indicator, not all of which require action. Assessments of corporate health require high-level judgment in deciding how serious a situation is and when preventative strategies and approaches to handling problems need to be employed.

On some issues, benchmarking across the APS may give an indication of areas where attention is needed, for example, in comparing levels of bullying and harassment or job satisfaction. However, differences in the nature of agencies and their contextual environments, means that this will not be definitive. Different agencies manage different risk profiles. Agencies need to look both at their relative performance, and at changing patterns in their agency over time. Staff survey results of 10% below the APS average will generally be a key indicator of problems.

The indicators identified in this paper can be an aid to robust agency self-assessment approaches. Nevertheless, the limits of the approach need to be acknowledged. The indicators focus on signs of corporate health associated with agency performance, and do not themselves reflect good or poor performance against agency objectives. Instead, the indicators should be viewed as an aid to identifying possible issues that may need further exploration.

Strategies to monitor agency health and identify early warning signs of performance issues include:

regularly reviewing governance arrangements in light of the issues identified in this paper
regular management meetings focusing on some of the key indicators (as outlined in Attachment A)
where agencies use a balanced scorecard approach, ensuring that the scorecard covers key elements of corporate health
use of internal auditors to pursue issues of concern in more detail
internal and external monitoring of existing relevant indicators including:
- human resources processes such as staff turnover, skills requirements, Employee Assistance Programme statistics, Occupational Health and Safety statistics and cases referred to Comcare
- finance and auditing processes
- ICT systems
- communication channels
regular strategic reviews of policies and procedures
seeking multiple sources of feedback and/or monitoring complaints and media interest from internal sources (e.g. staff feedback) and external sources (e.g. Ministers, clients, customers, interest groups and peer review)
regular use of staff surveys, and benchmarking of performance against State of the Service employee survey results
ensuring that outcomes of reviews are investigated and analysed comprehensively
ensuring corporate health issues are addressed in risk management exercises
for agencies required to respond to a Statement of Expectations by their Minister, using the preparation of a Statement of Intent as an opportunity to review the impact of corporate health on agency performance
engaging a consultant to review the impact of corporate health and culture on performance (a range of private sector companies offer different approaches to such reviews)
the agency head talking one-on-one at least annually with key stakeholders about the agency’s performance, culture and effectiveness.

These processes need to supplement the direct monitoring of the agency’s performance in terms of key business processes and results.

The extent of monitoring and measuring within an agency will need to occur within general principles outlined in the recent Management Advisory Committee report, Reducing RedTape in the Australian Public Service, where the benefits of any new processes need to outweigh their costs.³⁰

The nature and extent of any corporate health issues will determine the type and extent of action required. Sometimes solutions may be clearly linked to problems, such as improved recordkeeping or enhanced information management processes. Solutions may involve improving capability, replacing managers or, in more extreme cases, implementing machinery of government changes.

In assessing corporate health there is a place for periodic external reviews. However, it is healthier for the organisation to have an institutionalised practice of continuous improvement. The indicators of corporate health identified in this paper are designed as a tool for agency leaders in driving continuous improvements in corporate health across their organisation.

30 Management Advisory Committee 2007, Reducing Red Tape in the Australian Public Service, Commonwealth of Australia, Canberra.

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Agency Health: Monitoring agency health and improving performance

Assessing Corporate Health