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MERIT AND ACCESS TO APS EMPLOYMENT

Merit as the basis for employment decisions is a fundamental principle of the Westminster system of government since the Northcote-Trevelyan report of 150 years ago. Indeed, one of the key APS Values is that ‘the APS is a public service in which employment decisions are based on merit’. Associated with the ‘merit’ Value is the Value that ‘the APS provides a reasonable opportunity to all eligible members of the community to apply for APS employment’.

The practical application of these Values in selection for engagement or promotion requires processes to be in place to ensure that:

• all eligible applicants have a reasonable opportunity to put forward their claims
• the selection process is transparent and is applied fairly to all applicants
• an assessment is made of the relative suitability of the candidates for the duties, using a competitive selection process
• the assessment is based on the relationship between the applicants’ work-related qualities and the workrelated qualities required for the duties
• the assessment focuses on the relative capacity of the candidates to achieve outcomes related to the duties
• the assessment is the primary consideration in making the decision.

The scope of the Value that employment decisions are based on merit varies for various types of employment decisions. For example, while merit in relation to engagements and promotions must involve a fair and transparent competitive selection process that assesses the relative suitability of applicants for the duties, other employment decisions (such as the assignment of duty at level (referred to as ‘transfers’ in this report) and the temporary assignment of ‘higher duties’) do not require competitive selection processes in order to be based on merit but must involve an assessment of the applicant’s work-related qualities against the work-related qualities required for efficient and effective organisational performance.

SES APPOINTMENTS

Selection processes leading to a promotion or engagement to the SES operate under a tighter framework than those for non-SES staff, to ensure the effective reflection of core leadership capabilities and the transparent selection of the senior leadership group across the APS. Within this tighter framework there remains scope for agencies to use a variety of processes, including executive search, assessment centres and recruitment agencies to assist them.

The framework includes the requirement for the PS Commissioner to ratify a promotion or engagement process. This involves a representative of the Commissioner being on the selection panel, open advertising of the position and the use of Commission-endorsed selection criteria (including five leadership capabilities). In addition, the provisions of s.19 of the PS Act preclude ministerial directions about employment decisions regarding individual APS employees, both SES and non-SES.

These arrangements do not preclude consultation with a Minister about a senior appointment, though care is needed to ensure this does not impinge on the merit process. The Minister may have pertinent information on the merits of candidates that add to the merit assessment against the selection criteria. On occasions, a legitimate issue may be raised about a candidate’s political activity that gives cause for concern about possible conflict of interest if not direct incapacity to act in line with the APS Value of ‘apolitical professionalism’ (this issue is canvassed in the Commission’s APS Values and Code of Conduct in Practice: A guide to official conduct for APS employees and Agency Heads). It is reasonable to expect a senior official to have the necessary qualities to work with a Minister. It would not be consistent with the merit principle, or with the intent of s.19 of the PS Act, however, for a Minister to press a particular appointment or take action that effectively discourages a candidate from pursuing their claims. The PS Commissioner has queried the approach taken in relation to one selection process in the last year.

Overall, the arrangements for the SES in the APS appear to be substantially more robust than those applying in a number of other Australian jurisdictions. Public Service Commissioners (and their equivalents) recently canvassed arrangements in each jurisdiction: their findings are set out at Appendix 4. In some jurisdictions appointments include explicit consideration at the political level, and in some others there is no explicit prohibition on political direction. In nearly all other jurisdictions, most SES employees are on term appointments which may increase the risk of political influence. Interestingly, despite the flexibilities available to APS agency heads regarding SES employment arrangements, the vast majority of our SES are ongoing employees and are not on term contracts.

APS arrangements, including the requirement that the PS Commissioner must ratify each selection process, have proven generally to be highly successful in delivering merit-based decisions for SES appointments. It is the Commissioner’s view that the criticism made on occasion in the last year about political interference in SES appointments has generally been misplaced.

APPOINTMENTS OF SECRETARIES AND OTHER AGENCY HEADS

The processes for appointing Secretaries are aimed at both ensuring the Prime Minister has full confidence in the ability of Secretaries to implement the Government’s policies and programs, and ensuring the Prime Minister is properly informed of the merits of potential candidates. The statutory process for appointment includes the provision of formal advice to the Prime Minister from the Secretary of PM&C, who must first consult the person who is expected to be the agency Minister at the time of the appointment (in the case of filling the position of the Secretary of PM&C, the PS Commissioner provides the advice). These statutory arrangements are supplemented in practice by informal advice from the PS Commissioner to the Secretary of PM&C. That advice draws in turn on wider discussion of succession management issues with current Secretaries and major agency heads.

While there will always be debate about the processes, and about particular appointments, these arrangements should provide some public assurance that Secretary appointment decisions are well founded and include meritbased assessments put to the Prime Minister.

Appointment processes for various statutory positions in the UK and Canada have recently been strengthened to reinforce the principle of merit, and processes in New Zealand are uniquely based on an independent assessment of merit.

In all Australian jurisdictions, the Premier or Chief Minister (or Prime Minister) retains the power to make the decision, and only in Western Australia is there a more robust formal process than in the Commonwealth for advising the first Minister. While there may be arguments for strengthening the arrangements in the APS, for example to formalise the arrangements now generally followed in practice, no Australian jurisdiction has arrangements comparable to those in NZ or the UK. The arrangements across Australian jurisdictions, collated recently by Public Service Commissioners (and their equivalents), are set out at Appendix 4.

EMPLOYEES’ PERCEPTIONS OF MERIT

The employee survey questions about perceptions of merit distinguished between employment decisions resulting from a competitive selection process and those employment decisions not resulting from or requiring a competitive selection process. This section examines the results of these questions.

The employee survey asked respondents to indicate their level of agreement with a statement that asked whether, in their experience, their agency routinely applies merit (as defined in the PS Act) in a number of types of employment decisions. The results of these questions are presented in Table 5.1.

Table 5.1: Employees’ perceptions of merit about various types of employment decisions

Source: Employee survey

Note: CSP–competitive selection process to assess the relative suitability of applicants for the duties of a job.

Table 5.1 indicates that employees are most confident that merit is routinely applied in engagement and promotion decisions involving a competitive selection process. A majority of employees (59%) agreed while 18% disagreed. Employees are less likely to have agreed that their agency routinely applies merit to other employment decisions resulting from competitive selection processes (i.e. transfers from within (44%) and outside (42%) the agency and temporary assignment of higher duties (42%)). Employees were even less likely to have agreed that merit is routinely applied in these latter types of employment decisions if a competitive selection process is not involved (33%, 26% and 35% respectively) while higher proportions reported not knowing if merit is routinely applied in these types of decisions. It is interesting to note, however, that the proportion of employees who disagreed that merit is routinely applied to these three types of employment decisions did not vary significantly according to whether there has been a competitive selection process or not.

The reasons for the differences in employees’ views on competitive selection processes for decisions involving movement at level and temporary higher duties compared to promotion and engagement is not clear. It may be that agencies use different types of competitive selection processes for the former types of decisions–this is likely to be the case in the assignment of temporary higher duties. However, a significant proportion of employment decisions resulting from competitive selection processes involving transfers are likely to be the outcome of the same selection processes that at other times lead to engagements or promotions. The approaches taken by agencies in their selection processes are examined in detail in the following section. Another possible reason is that some APS employees may not fully understand the flexibility available under the PS Act in filling vacancies at level or for temporary opportunities at a higher level, with or without a competitive selection process, that is employees may not fully understand what ‘merit’ actually entails under the regulatory framework.¹ There may also be misunderstandings about what constitutes a ‘competitive selection process’.²

While no direct comparisons can be made with the results from the employee survey from last year on employees’ perceptions of merit (as the questions were modified in this year’s survey to explore the effect of competitive selection processes on merit perceptions), it does seem that perceptions of merit appear to have been stable in the period between the two surveys. Last year the percentage of employees who agreed with the statement ‘my agency consistently applies merit to engagement/transfer/promotion resulting from a competitive selection process’ was 59% while the percentage that disagreed was 21%. As indicated above, this year the percentage of employees who agreed with the statement ‘in my experience, my agency routinely applies merit (as defined in the PS Act) in engagement and promotion resulting from a competitive process’ was also 59% with the percentage that disagreed being 18%.

The data examined in the remainder of this section relates to employees’ perceptions of merit regarding engagements and promotions resulting from a competitive selection process.

Figure 5.1 clearly indicates that employees who had applied for a position in the APS in the previous 12 months and were not offered the position had significantly lower agreement rates that merit was routinely applied in their agency (46%). Not surprisingly, those employees who applied for a position and were offered the position had higher rates of agreement that merit was routinely applied (69%) than employees who had not applied for any APS positions (61%) and those who had been unsuccessful.

Figure 5.1: Employees’ perceptions of merit by recent experience in selection processes

Source: Employee survey

It is worthwhile noting that employees who had not applied for any APS positions in the past 12 months were a majority (62%) of all APS employees as opposed to the employees who had applied for a position and been offered it (12%) and those employees who had applied for a position and not been offered it (16%). The remaining 10% of employees fell into a variety of categories (e.g. they withdrew their applications, the vacant position was withdrawn or the selection process was incomplete at the time of the survey).

While employees who have been unsuccessful in applying for a job clearly have less favourable merit perceptions, their effect on the overall data is relatively small given that they are a minority of employees (16%). The overall percentage of employees that agree that merit is routinely applied was 59%, only slightly lower than the 61% of people who had not applied for any APS positions who agreed that merit is routinely applied.

Perceptions of merit varied markedly amongst employees in the 22 large agencies for which statistically valid results are available–from 42% to 81% having agreed that merit is routinely applied. Five large agencies had agreement rates that were statistically significantly higher than the APS average: BOM, FaCS, DVA, DFAT and DITR. Five agencies had less than half of their employees agreeing that merit is routinely applied. Two of these five agencies had similarly poor results in last year’s survey.

Employees in large agencies had slightly less positive merit perceptions (58% agreement rate in large agencies compared with 62% and 66% in small and medium agencies respectively) as did employees working outside the ACT (57%) compared with those in the ACT (64%). A very strong relationship was apparent between merit perception and classification, with the SES (92%) recording significantly higher perceptions of merit than EL (73%) and APS 1—6 (55%) groups.

Perceptions of merit were strongly related to employees’ job satisfaction and their views on the integrity of their immediate supervisor. Employees with the highest level of job satisfaction were much more likely to have agreed that merit was routinely applied (78%) compared with those with the lowest level of job satisfaction (17%).³ Those employees that agreed that generally speaking their immediate manager acts in accordance with the APS Values were nearly twice as likely to have agreed that merit is routinely applied (62%) compared to those that disagreed that their manager acted in accordance with the Values (32%).

In summary, the results from the employee survey indicate that there has been stability in the broadest measure of APS employees’ perceptions of merit. Around three in five APS employees agreed that merit is routinely applied while around one in five disagreed and another one in five was ambivalent.

As discussed in last year’s report this result appears to be broadly consistent with other Australian jurisdictions and international survey results. The Victorian Office of Public Employment’s People Matter Survey for 2002—03 asked a range of questions about employees’ confidence in the application of the merit principle.⁴ In response to the question ‘I am confident that selection decisions in this organisation are fair’ 54% of employees agreed while 59% agreed that ‘in this organisation selection decisions are always based on the requirements of the job’. The Office for the Commissioner for Public Employment (OCPE) in South Australia has published selected findings from the OCPE Workforce Perspective Survey 2003.⁵ Employees were asked ‘do you think the selection process was conducted according to personnel management standards?’ (which incorporate a merit principle) and 56% of employees agreed that they had.

While only one in five employees disagreed that merit is routinely applied, this may still present a serious concern–the best of the large agencies had only one in 17 employees disagreeing, while the worst had as many as two in five. In the worst cases, the problem may be more than perception, and the agencies concerned should explore further the factors underlying their employees’ perceptions. In other cases, it may well be that some public servants have unrealistically high expectations (or unrealistically negative perceptions of management). In this context, there are benefits in ensuring feedback is offered at least to all internal candidates after each selection process and that all employees’ know and understand how merit is applied in the selection processes they participate in.

It is worthwhile noting the results of Victorian public sector research that found that employee confidence that merit is applied is largely dependent on their level of knowledge and understanding of relevant merit and selection processes, and that organisations may underestimate the need to ensure that employee knowledge of merit and selection processes is improved and maintained.⁶ This is reinforced by the results of the employee survey that relatively high proportions of employees report not knowing if merit is routinely applied in their agency in relation to some types of employment decisions.

SELECTION PROCESSES USED BY AGENCIES

The current devolved framework means that, subject to satisfying the requirements of the PS Act and Directions, agencies are able to adopt a variety of processes for employment decisions depending on their individual needs and circumstances.

Around three-quarters of all agencies reported that they routinely require competitive selection processes to be used for non-SES movements at level (i.e. transfers) from another agency even though this is not required under the statutory framework. This fell to 55% of agencies in relation to processes for movements at level within the agency. Small agencies were more likely to have such requirements for both external and internal transfers (90% and 59% respectively) while large agencies had the lowest rates of having such requirements for external transfers and internal transfers (62% and 48% respectively).⁷

Not surprisingly, the routine requirement to use competitive selection processes was most commonly set out in recruitment and selection policies and formal recruitment and selection guidelines, although in large agencies nearly half of such agencies that had a requirement also set it out in their certified agreement (CA). There was no clear relationship between employees’ perceptions of merit in relation to internal and external transfers with and without a competitive selection process and whether their agency had a routine requirement for competitive selection processes in relation to these employment decisions.

Just over three-quarters of agencies reported having a routine requirement for competitive selection processes for the assignment of long-term (e.g. more than 3 months) temporary higher duties despite this not being required under the statutory framework. While data from last year’s agency survey is not directly comparable, it appears that this proportion has been fairly steady–in 2002—03 71% of agencies reported having formal measures for employment decisions involving the assignment of long-term temporary higher duties with eight per cent of agencies reporting that they were developing such measures. Again, in 2004 small agencies were more likely to have such a requirement (85%). The requirement was also most commonly set out in recruitment and selection policies and guidelines for all agencies, and in certified agreements for large agencies (57% of large agencies). Where agencies routinely required a competitive selection process for the assignment of longterm temporary higher duties, it appears that employees are slightly more likely to agree that merit is applied to such processes compared to employees in agencies without such a requirement.

While agencies report using a wide range of selection processes for the engagement, promotion, and transfer of employees, some processes are used much more commonly than others. Results from the agency survey indicated that there was relative constancy in the five measures most commonly used by agencies, regardless of agency size and for all classifications.

The most common selection process clearly remains face-to-face interviews with the second most common process being the inclusion on the selection panel of at least one member from outside the general work area. This is true for selection exercises, regardless of agency size and for all classification levels.

Around three-quarters of all agencies used recruitment agencies for assistance with routine administration (e.g. scribing). This was one of the top five most commonly used processes for all classification levels. Internal reassignment of duties of existing employees to fill employment opportunities was also common but was more prevalent in large agencies and for APS 1—6 selection exercises.

The other measure commonly used was orders of merit to fill subsequent or reoccurring vacancies within 12 months of Gazette notification. This was most prevalent in APS 1—6 selection exercises and in large agencies.

The use of assessment centres, psychometric testing and other direct testing exercises to assess required workplace skills has remained fairly constant over the year. The proportion of agencies using such processes decreases substantially as classification increases (they are used by 10% or fewer agencies for SES selection exercises) and are generally used more by large agencies. For example, 67% of large agencies used direct testing to assess required workplace skills in some APS 1—6 selection exercises compared to around 45% of small and medium agencies. However, such direct testing is one of the five most commonly used measures (in only 5% of large, 7% of medium and 18% of small agencies for APS 1—6 selection exercises).

The use of recruitment agencies for the entire selection process up to the recommendation is still relatively uncommon but has increased somewhat compared to last year for EL (from 6% to 11% of agencies) and APS 1—6 selection processes (from around 10% to 14% of agencies). Small agencies hardly use recruitment agencies for such purposes at all, while one-third of large agencies report using recruitment agencies for the whole process in some APS 1—6 selections.

Relatively large proportions of agencies report relying only on written applications and referee reports for some selection exercises (13% for the SES, 43% for EL staff and 55% for APS 1—6 employees). These results are much the same as last year. However, only 7.5% of agencies report this measure as being in their five most commonly used measures for the SES, increasing to around 25% of agencies for EL and APS 1—6 selection processes. There appears to have been a slight increase in the percentage of agencies who report relying only on written applications in some selection exercises (from 6% to 8% for the SES, 17% to 21% for EL staff and 21% to 28% for APS 1—6 staff), although fewer than 10% of agencies report using such a partial measure in their five most commonly used measures. Whether the use of written applications and/or referee reports only in these agencies is predominately for informing decisions relating to transfers rather than promotions or engagements is not clear.

Merit selection is about getting the best applicant for the job; most importantly it is about ensuring the successful candidate can do the job competently, but it is also about getting the person who is most suitable. That said, the selection process must be efficient in terms of time and cost. The results of the agency survey suggest that, despite the flexibility available to agencies under the PS Act, many managers are continuing to rely upon traditional methods such as face-to-face interviews. It is important not to rely too heavily on such methods, and to give proper weight to candidates’ proven experience and expertise and to evidence presented by referees or gained through other assessment processes. Face-to-face interviews can also be used innovatively, for example by including specific tests of skills or by using carefully designed and testable selection criteria. The Commission’s recent Get it Right kit for recruitment and selection offers practical assistance to line managers in considering both the requirements of a job and the means of recruitment and selection.

Notwithstanding the evidence that employee perceptions of merit are improved when competitive selection processes are used, there can be drawbacks from using such processes in all situations. There are benefits in using transfers, both internal and external, for development purposes and for bringing new perspectives to different business areas, and competitive selection processes may sometimes hinder such transfers, particularly if there is the risk of bias in the competitive process in favour of internal candidates.

COMMUNITY ACCESS TO APS EMPLOYMENT OPPORTUNITIES

Under the APS Values, agencies are required to provide reasonable community access to employment opportunities. Since 1998, the practice has been, in fact, to open access to almost all positions advertised in the Public Service Gazette (the Gazette) to applicants from outside the APS, though agencies have remained selective about investing in wider advertisements for vacant positions.⁸ Since this open access policy was introduced, the APS Commission has undertaken a small annual survey of the selection outcomes of non-SES ongoing employment opportunities notified in a February Gazette to provide a snapshot of access trends. This study was undertaken again in 2004, using the Gazette of 19 February 2004.

The percentage of ongoing employment opportunities notified in the Gazette of 19 February 2004 as open to the public decreased slightly to 98% from the level of 99.5% recorded each year over the period 2000—2003.

Since 2001 there has been a continual decline in the total number of ongoing employment opportunities notified in the February Gazette. The 26% decrease in 2004 comes on top of a 22% decrease in 2003 (397 employment opportunities in 2004, compared to 536 in 2003, 691 in 2002 and 725 in 2001). The decrease in this single Gazette broadly reflects the general trend of decreasing numbers of notification of employment opportunities (there was a 10% decrease in total ongoing and non-ongoing employment opportunities in the Gazette between 2002—03 (12,592) and 2003—04 (11,303)).

Given that APS employment has generally grown over this period some of the reason for the decline may be the increasing use of existing orders of merit and movement through broadbanded classification structures. Agencies are able to use an order of merit generated from a notification in the Gazette to promote or engage people (including members of the public who are assessed as suitable for a similar employment opportunity) to similar employment opportunities for a period of 12 months from the date of the original gazette notification. As indicated earlier, the use of orders of merit was one of the five most commonly used processes by agencies regardless of agency size or classification level.

Information on the outcome of the selection process was provided by agencies on the 397 ongoing employment opportunities in the snapshot Gazette study. Eight per cent of selection exercises had not been finalised by early August 2004 (nearly six months later), over two-thirds being for reasons such as that the applicant declined the offer, there was a reorganisation within an agency, no suitable applicant was identified or because of the implementation of a machinery of government change.

Of the 92% which were finalised and where the opportunities were open to eligible members of the community, just over 29% were filled on an ongoing basis by applicants external to the APS, significantly down from the high of 51% in 2003. This is also lower than the average of 34% for the seven years of the survey. However, this figure is not surprising given that in this particular Gazette only 35% of engagements were to the APS 1—4 classifications, which are the main entry points for APS employment. Engagements to APS 1—4 classifications over the last four surveys were 71% in 2003, 63% in 2002 and 78% in 2001. Clearly the balance between base grade and lateral recruitment can vary between surveys: one-off exercises, such as a large trainee recruitment campaign in an agency, can significantly affect the survey results.

Given that the snapshot consists of only one Gazette each year, it is difficult to be definitive about overall trends. However, APSED data presented in Chapter 9 (Figure 9.4) shows that there has been an increase in the proportion of ongoing employment opportunities in the APS that were filled by engagement (that is, by people from outside the APS) over the past ten years. This trend is evident at all classification levels, but especially at the APS 3—4 levels, suggesting that agencies are continuing to provide reasonable community access to APS employment opportunities and have measures in place to allow external applicants to compete on merit at all levels.

USE OF CLAUSE 4.2A OF THE PS COMMISSIONER’S DIRECTIONS–ONGOING ENGAGEMENT POWER

Clause 4.2A of the Directions permits the PS Commissioner to authorise an agency head to engage a nonongoing employee as an ongoing employee without the need for further advertising or merit competition in exceptional cases. This clause came into effect on 18 March 2003. The PS Commissioner undertook in the explanatory statement to the amending direction to report annually on the use of this authority.

In 2003—04, the PS Commissioner exercised this power on two occasions, authorising the engagement of nonongoing employees as ongoing employees in the Office of Parliamentary Counsel (OPC) and the Australian Protective Service (Protective Service).

In both instances, the PS Commissioner had regard to the following factors:

• written requests by the respective agency heads outlining the suitability of the non-ongoing employees
• evidence of compliance with the APS Values of merit and reasonable access in the original engagements as non-ongoing employees–the relevant employment opportunities in both agencies were notified in the Gazette followed by a competitive selection process
• exceptional circumstances existed that justified ongoing engagements.

In the first case, a specialist employment opportunity was notified in the Gazette as ongoing. The successful applicant was engaged as a non-ongoing employee pending meeting a condition of engagement.⁹ As it took longer than 12 months for the employee to meet the condition of engagement, the agency head was unable to use the original order of merit to engage the employee as an ongoing employee and sought the assistance of the PS Commissioner.

The second case involved a new initiative that was initially staffed on a non-ongoing basis but following confirmation of future funding was subsequently staffed on an ongoing basis. As the initial non-ongoing employees were selected using the same process as subsequent ongoing employees and the field of suitably skilled applicants is limited, the PS Commissioner considered this to be an exceptional circumstance.

1 Under the PS Act merit in relation to engagements and promotions must involve a fair and transparent competitive selection process that assesses the relative suitability of applicants for the duties. Other employment decisions (such as movements at level and the temporary assignment of ‘higher duties’) do not require competitive selection processes in order to be based on merit but must involve an assessment of the person against the work-related qualities required for efficient and effective organisational performance. In addition, in relation to the temporary assignment of higher duties, the assessment must include other factors such as the relative importance to the agency of the duties to be performed at the higher classification and the other duties to be performed in the agency and the need for APS employees to be given the opportunity to gain experience in performing duties at a higher classification (and other factors included in PS Commissioner’s direction 4.7).

2 Competitive selection processes assess the relative suitability of applicants for the duties of the job. Other than the need for Gazette notification for promotion and engagement decisions, the processes used are not specified in the regulatory framework, so for example, face-to-face interviews are not required. Rather the processes must be able to realistically match the workrelated qualities of the applicants to the work-related qualities genuinely required for the job.

3 Highest levels of job satisfaction are scores of nine or higher on the job satisfatction index discussed later in this chapter.

The lowest levels are scores of two or less on the index.

4 The results and methodology of the survey can be found at http://www.ope.vic.gov.au.

5 The results and methodology of this survey can be found at http://www.ocpe.sa.gov.au/ref_docs/workforceperspectives.pdf

6 The Office of Public Employment, Applying Merit 2000, Victorian Public Sector, 2000.

7 An ‘external transfer’ is an assignment to duties associated with movement between agencies at or below level. An ‘internal transfer’ is an assignment of new duties within an agency.

8 See <http://www.psgazetteonline.gov.au>

9 The more appropriate course of action would have been to engage an applicant as an ongoing employee and impose any appropriate conditions of engagement and a reasonable timeframe in which each condition needs to be met.