The Honourable John Howard MP Prime Minister Parliament House Canberra ACT 2600   Dear Prime Minister In accordance with the provisions of section 44 of the Public Service Act 1999, I present to you the component of my annual report reporting on the state of the Australian Public Service for the year 2004–05. The report incorporates the annual report on workplace diversity required under clause 3.5(2) of the Public Service Commissioner’s Directions. The Australian Public Service Commission will be separately publishing supporting statistical documents, the State of the Service 2004–05 At a Glance, the State of the Service Employee Survey Results 2004–05 and the Australian Public Service Statistical Bulletin 2004–05. The Joint Committee of Public Accounts and Audit agreed in 2003 to extend the tabling deadline of the state of the service component of my annual report to one calendar month after the tabling date for agencies’ annual reports. Section 34C of the Acts Interpretation Act 1901 requires that you lay a copy of the Report before each House of Parliament within 15 sitting days after the day on which you receive the Report. Yours sincerely   Lynelle Briggs 30 November 2005 Preface Section 44 of the Public Service Act 1999 (the Act) provides that the Public Service Commissioner (the Commissioner) must provide a report each year to the Prime Minister (as the relevant agency Minister) for presentation to the Parliament. The report must include a report on the state of the Australian Public Service (APS) during the year. The State of the Service report draws on a range of information sources. One of its main sources is a survey sent to all APS agencies employing at least 20 staff under the Act. Eighty-two APS agencies, or semi-autonomous parts of agencies, were sent the agency survey in June 2005 for completion. All 82 agencies responded to the online survey. They are listed at Appendix 1. To assist with analysis of data from the agency survey in this year’s report, agencies have been grouped according to size. Of the 82 responding agencies, 21 were classified as large (>1000 APS employees), 26 as medium (251–1000 APS employees) and 35 as small (20–250 APS employees). These size categories are generally consistent with those used by the Australian National Audit Office (ANAO).1 Appendix 1 provides information on agencies’ APS employee numbers. The results of an annual APS employee survey provide another main information source used for the report. The employee survey involved a stratified random sample of 6160 APS employees from APS agencies with at least 100 APS employees. A total of 3654 valid responses were received, representing a response rate of 59%. The sample size and number of valid responses allows a number of cross-tabulations with a degree of confidence. Generally, only individual agency results are reported to indicate agencies with good practice; however, as foreshadowed last year, agencies with poor results in some areas have been identified. Portfolio departments and other large agencies are provided with their own individual agency results for internal management purposes. While the size groupings for large and medium agencies are the same for the agency and employee surveys, it should be noted that for the purposes of the employee survey ‘small’ refers to agencies with between 100 and 250 APS employees. Appendix 2 provides information on the employee and agency survey methodologies. The Commission engaged the services of ORIMA Research to assist with the design, delivery and statistical outputs of both surveys. The Commission also engaged the services of the Australian Bureau of Statistics (ABS) to advise on aspects of survey methodology. Assistance in the development and pilot testing of the agency survey was provided by employees in a number of agencies including the Australian Taxation Office (ATO), the Australian Customs Service (Customs), Centrelink, the Department of Defence (Defence), the Department of Finance and Administration (Finance) and IP Australia. The report also draws on the results of the evaluation conducted by the Commission during 2004–05 on agencies’ workplace diversity programmes. Appendix 3 provides information on the methodology used for this evaluation. The report has also relied heavily on published reports from parliamentary committees and the ANAO. Input has been sought from central agencies, particularly Finance, the Department of Employment and Workplace Relations (DEWR) and the ANAO, and their assistance is gratefully acknowledged. Contributions were also appreciated from Customs, the ATO, the Australian War Memorial (AWM), Centrelink, Comcare, the Child Support Agency (CSA), the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA), the Department of Industry, Tourism and Resources (DITR), the Department of the House of Representatives, the Department of the Senate, the Department of Veterans’ Affairs (DVA), the National Archives of Australia (NAA) and the Commonwealth Ombudsman (Ombudsman). Associated with the State of the Service Report 2004–05 are two other publications— the Australian Public Service Statistical Bulletin 2004–05 and the State of the Service Employee Survey Results 2004–05. A summary pamphlet, State of the Service 2004–05 At a Glance, has also been prepared. These publications are available on the Commission website at . 1 ANAO, Staff Reductions in the Australian Public Service, Performance Audit Report No. 49, June 1999, Chapter 1 : Overview As Public Service Commissioner, one of my key roles is to respond to issues of public trust in the bureaucracy. Any such response should include fostering the right kind of leadership, providing credible evaluation and benchmarking to underpin strategic responses, and celebrating public sector achievements. The public service’s identity and its reputation are matters of substance. They affect how public servants feel about working in the APS and about their agencies. They affect the readiness of the community to embrace government programmes and initiatives and to trust that government tax-funded services will be delivered fairly. They affect our international reputation. And, in the long run, they affect our ability to recruit quality people into the public service. Public servants should take pride in being part of an important national institution that supports Australia’s democratic system of government, in which we are bound by a common ethos of public service. The work we do makes a significant contribution to the social and economic health of Australia and to the well-being of the Australian community. The environment public servants operate in is complex and challenging. Nevertheless, the Government, the Parliament and the Australian people have high expectations of us. They expect that we will do our duty properly, exercise good judgment, and work efficiently and effectively for outcomes that are in the national interest. In doing so, public servants are supported by the APS Values (the Values) and are required by law to behave at all times in ways that uphold the Values and the integrity and good reputation of the APS. Our Values are fundamental to our identity and to how we are perceived by the community and internationally, and are important in building trust in the APS as an institution. The annual State of the Service report is part of a process of understanding our identity and of building trust in the APS. The evaluation process is not simply about providing realistic data and analysis concerning the state of the APS: the review process itself should become part of building public servants’ trust in the APS and internalising its values. This is because trust is linked intrinsically to how organisations and people behave—their competence, honesty, whether or not they work in the public interest, act on undertakings, listen to others’ views and learn from their mistakes. It is critical that we all listen to what Government, agencies and other APS employees have to say and consider the implications of the data collected each year. Eighty-two agencies provided responses to our survey in 2004–05, and heads of nearly all of the agencies large enough to participate in the State of the Service employee survey (those with at least 100 employees) actively supported the survey process. Public servants have provided us with a more than credible response rate (59%) to confirm the reliability of our data. This level of responsiveness across the public service gives us ground to hope that this annual evaluation process itself is becoming part of the larger picture, building commitment to the APS and its goals, ensuring that the goals themselves are clear and widely understood, and that the public service is accountable. Beyond this, it is important for all of us to increase our understanding of how the APS and individual agencies sit in terms of broader inter-jurisdictional and international benchmarks of organisational performance. This year we have introduced inter- jurisdictional comparisons based on a limited set of shared data items agreed through the Public Service Commissioners’ conference. I am hoping that the number of comparable data items will be able to be extended in future. We have also introduced a practice of referring in the course of our analysis to relevant international developments, in order to present developments in the APS within a broader framework of continuous public administration reform. The intention here is not to suggest that developments either in Australia or overseas should be taken as a template for reform in other jurisdictions. That would be to ignore the different composition of the public services in different jurisdictions, as well as different government philosophies and approaches to public sector management (such as the more devolved and agency-focused arrangements in the APS). Nevertheless, there is value in understanding Australian developments, such as the recent emphasis on whole of government collaboration and e-government, in the context of responses to similar issues by other jurisdictions. While this is far from being a formal benchmarking exercise, and while Australia is often and fairly judged to be a leader in public sector reform, it is worth observing that we appear to be trailing other jurisdictions in a few areas. There may of course be lags between articulated policy and actual implementation in other jurisdictions, just as there are such lags here, but I suspect that in some areas our progress is simply constrained by the resources available to fund it. A significant part of building trust—both public trust and trust in ourselves—is that we recognise the achievements of public sector agencies in the State of the Service report. While many people cite the Palmer report, how many Australians know of our achievements? How many Australians know that the Department of Communications, Information Technology and the Arts (DCITA) has driven the development of the world’s anti-doping code in sport; that DIMIA delivered the biggest migration programme since the 1980s; that Customs has been involved in some of the largest ever detections of illicit drugs and prohibited and restricted goods; or that the DVA is the second biggest insurer of medical services in the country? As part of our State of the Service data collection, we have asked Management Advisory Committee (MAC)1 member agencies to provide us with their own assessment of their major achievements for 2004–05. A number of these are cited throughout this report as case studies; an overview is provided at Chapter 13, ‘Agency Achievements’. 1 The Management Advisory Committee (MAC) is a forum of Secretaries and Agency Heads established under section 64 of the Act to advise the Australian Government on matters relating to the management of the APS. It is chaired by the Secretary of the Department of the Prime Minister and Cabinet (PM&C), with the Commissioner as executive officer. Key findings for 2004–05 Thanks to the annual surveys, we now have the foundations of significant time series data sets for both the employee and agency surveys to consider alongside the Australian Public Service Employment Database (APSED) data on trends in demographic and structural change in APS employment. Read together, the trend data sheds considerable light on critical workforce planning requirements in the public service and how to go about addressing them. Maintaining and sustaining the APS workforce It is clear that, following two decades of reform, the nature of APS work has changed. There has been a major reduction in opportunities for low-skilled employment in response to factors such as technological change, corporatisation, outsourcing and the transfer of some functions to other jurisdictions. The APS 1–2 equivalent classifications—52% of the APS workforce in 1980—have fallen to only 5.2% today. The streamlining and broadbanding of classification structures in the APS and the opening-up of APS employment to external competition have seen new recruits to the public service, many with skills and experience in other sectors, typically commencing at the APS 3–4 classifications or higher and advancing fairly rapidly to higher levels. The APS is now a graduate workplace, with APS employees at all levels increasingly likely to hold tertiary qualifications, regardless of whether they are recruited through graduate entry programmes or general recruitment processes—almost half of our workforce has graduate qualifications, as do around two-thirds of new recruits.2 The skills requirements of APS agencies are growing at a time that the labour force is contracting. Older workers are leaving and there are fewer young workers to replace them. It is not surprising, therefore, that the most common workforce challenge identified by agencies in response to our survey was difficulties in recruiting people with required skills, and the second most common challenge was ensuring that employees’ skills and/or knowledge meet agency requirements (see Chapter 8, ‘Managing, Sustaining and Engaging the APS Workforce’). While our skills requirements are expanding against a contracting labour market, many agencies are operating within tight resource constraints. The overall productivity gains required to be made by APS agencies by the current funding arrangements are quite substantial (see Chapter 5, ‘The Values and Workplace Relationships’). A number of small agencies have raised individual concerns about their capacity to maintain competitive pay rates. We tested these concerns through our agency survey against agency quartile rankings for base salary and total reward, and found that while small agencies are consistently at the lower end of the salary scale for most classifications, the pattern is not clear-cut. Nevertheless, it is reasonable to assume that in a tightening labour market small agencies may begin to experience difficulties in matching the market rates for the skills they need. These constraints mean that agencies will have to be more strategic about the measures they adopt to attract and retain the skills they require. We know from a range of sources that agency progress towards systematic and long-term workforce planning has so far been patchy. In its most recent report, Managing and Sustaining the APS Workforce, MAC called for agencies to focus more urgently on the work they have been doing to establish processes for systematic workforce planning—including identifying new skill requirements for policy and programme development—and how they intend to respond to their longer-term resource requirements. Agencies should also be paying attention to how they are going with the employment of those groups now shrinking as a proportion of the APS workforce—younger people without post-school qualifications, Indigenous people and people with a disability. Where it would be of use, agencies should be exploring base-level recruitment pathways such as apprenticeships, traineeships and/or other recruitment strategies targeted at increasing our recruitment of these groups, including looking at how we can improve the diversity of our workforce—especially Indigenous people and people with a disability. However, this is not just about individual agencies. MAC has established an agenda that will engage a number of agencies and the Commission working in their areas of expertise to map out recruitment, retention and development strategies for use by all APS agencies.3 MAC itself will monitor agency progress in implementing effective workforce planning and strategic resourcing initiatives. It is critically important to ensure that we are developing the next generation of leaders to replace the large number of baby boomers who are leaving the public service and will continue to do so over the next two decades. People are getting to senior public service positions much sooner than they once did, and may not necessarily have had the experience and development opportunities that their predecessors did. I am particularly concerned by the relatively low proportion of public servants who felt able to rate their supervisor highly in the area of ‘shapes strategic thinking’ (47% of APS, 52% of Executive Level (EL)1s and 58% of EL2s and above—overall, 48% in 2004–05, similar to the 2003–04 result) (see Chapter 10, ‘Leadership, Learning and Development in the APS’). This is an area on which agencies, members of the Senior Executive Service (SES) and those who want to enter the SES should focus, through, for example, more concentrated policy development work and training. I am worried by our declining rates of interagency mobility. APS-wide workforce data shows that the new generation of public servants at the executive level contains more and more people who have either come straight into the APS from somewhere else, or who have spent 5–10 years working in only one agency. These people often will not have achieved the depth and breadth of understanding of the Values and the Cabinet, judicial, legislative, finance and parliamentary processes, agency-specific cultures, styles of working, people management and other arrangements that make for effective whole of government collaboration. How can they fully appreciate the work demands, issues and requirements of other agencies? Again, I would exhort both agencies and relevant individuals to attend closely to the mobility initiatives being sponsored as part of the MAC strategy. Employee engagement data It is also important to look inwardly as well as outwardly in order to ensure that we are making the best use of the people we have and those we are looking to recruit. Time series data suggests that there has been a slight downward trend in employee data in a number of indicators that cluster around workplace relationships. Compared to 2003–04, public servants were somewhat less likely to feel that merit processes have been applied; less satisfied with the consultative mechanisms in their workplaces; less satisfied with their overall say in decisions that impacted on their work; and less likely to agree with most of the effectiveness indicators describing the impact of their agency’s performance pay system. Situations outside the control of agencies may also have influenced these results, for example machinery of government changes following the election, and the public debate on relationships between the public service and Executive government on several fronts. However, these remain important indicators because, real or otherwise, perceptions have an impact on the level of our employees’ engagement with their work and, through that, with their longer-term productivity. Employee engagement gives us a good understanding of employees’ commitment to their agency, and is an indicator of how hard they work and how long they will stay with their organisation. Overseas research as well as our own State of the Service data suggests that organisational culture and leadership have a much greater impact on employee engagement and productivity than do other factors. This year we introduced a series of questions aimed at establishing employees’ commitment to working in their agencies and for the APS. Most APS employees (60%) identified themselves primarily with their agencies and 40% with the APS as a whole. Most (two-thirds) agreed that they were proud to work in their current agency and significantly more were proud to work in the APS. This is a good result. Not surprisingly, we found that APS employees’ pride in their agency was positively correlated with their views on whether the agency itself had achieved its stated objectives over the last 12 months, and overall, two-thirds agreed that it had. Importantly, the meeting of agency objectives and growth in personal productivity were also positively correlated: those APS employees who thought their productivity had increased markedly or somewhat over the last year were also more likely to agree that their agency had achieved its stated objectives. Those employees who indicated that their productivity had increased in the last 12 months also identified the five key factors that increased their productivity. Most indicated that they had been helped by increased experience on the job. Good working relationships were also very important to them (this result is confirmed in the job satisfaction results). Beyond these two factors, employee data suggests that the manager is a critical conduit in the process of engaging and retaining employees and increasing productivity. APS employees pointed to good working relationships with their managers; access to the information, resources and/or technology they needed to do their jobs; and working to realistic performance expectations—all managerial responsibilities—and to having a manager who encourages and manages innovation. Conversely, poor management was among the top reasons that employees intended to leave the APS. One of the more interesting findings in the area of employee engagement is that only 4% of employees who felt their productivity had improved, rated access to performance-related pay as one of the top five factors that helped to bring about that improvement. Combined with the other results, this result indicates that there are other more important factors than pay motivating APS staff. International research (summarised in Chapter 8) has reproduced this finding though it is important to point out that the research also found financial incentives to be linked to the attraction and retention of employees. A number of critical indicators of employee engagement that have been identified and defined through research are considered at length in different parts of this report, including: * communication * a reputation for integrity * equity and recognition * diversity * access to learning and development.4 As noted above, our data has indicated that there has been a small, but statistically significant, fall in some of these measures. Each of the measures is closely linked to one or more of the Values. I intend to continue to focus on these areas in future reports. 2 The method used to calculate the proportion of employees with graduate or tertiary qualifications includes those with qualifications at bachelor degree and above. It excludes from the denominator those for whom no data was provided by agencies, and those who chose not to provide details of their highest educational qualification. 3 Management Advisory Committee 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra. See Chapter 6. 4 The Corporate Leadership Council surveyed 50,000 employees worldwide (including in Centrelink) to identify the cultural traits that have the maximum impact on employees’ engagement with their organisations (see Chapter 8). Developments in 2004–05 The 2004–05 financial year has been mixed. The Palmer Inquiry into the circumstances of the immigration detention of Cornelia Rau,5 which was conducted during the period covered by this report and which reported in July 2005, raised a number of serious concerns about the integrity of systems and processes in use in one APS agency. The Comrie Inquiry into the circumstances of the Vivian Alvarez matter,6 which reported in October 2005, opened further issues related to decision-making processes in the application of regulations and after the discovery of errors. It would be a mistake to quarantine the lessons coming out of these reports to a single agency. There are lessons for all of us. We know from the findings of the Palmer report that to establish a culture of integrity and accountability organisations need sound systems and effective processes. This includes administrative systems around information and communications technology (ICT) and finances, but also extends to governance arrangements and human resources (HR) management systems and processes. It is important that these are designed to avoid a silo mentality, that agencies establish meaningful consultation mechanisms, draw on comprehensive and reliable employee surveys, and emphasise performance management arrangements that link back to the business goals in their corporate plans. Where agencies or parts of agencies are turned in on themselves, it is easy to miss a change in the external environment or an opportunity to collaborate for an improved outcome. The findings of the Comrie report take us directly to the dilemma inherent in all regulation. The exercise of regulatory authority has to balance the burdens regulation imposes (taxation, censorship, the denial of liberty, opportunity costs) and the policy outcome sought, and it has to do this within the broader framework of our national institutions. It is one thing to give officials the authority to make decisions that affect peoples’ lives—in Centrelink, ATO and DIMIA, to name a few—but those officials also have to understand the nature of their authority: the broad legislative and constitutional framework from which it derives, its limits, the scope of any discretion and how to exercise it. We are far more likely to get the balance right, especially in hard cases, if individual decision-makers are working within a coherent system of regulatory oversight. Decision-makers in the APS also need to think seriously about the personal responsibility that goes with the authority to make decisions; what the community regards as a public servant’s ‘duty’. What is duty? It is more than just exercising regulatory authority systematically. Duty is about the judgments and actions of individual public servants as they apply their decision-making to individual people. This means that it is a public servant’s duty to alert people in authority, including politicians, if something goes wrong. It is also a public servant’s duty to seek to correct errors and to undo wrong decisions as soon as possible. Senior managers have a vital role to play in establishing a supportive and professional culture and showing decision-makers how to balance Values like fairness and effectiveness, impartiality and courtesy, responsiveness and apolitical professionalism. We know from our data that public servants who believe that senior managers act in accordance with the Values and lead by example in ethical behaviour, report higher overall levels of job satisfaction and higher levels of pride in working for their agency and for the APS. It is imperative that all of us in the APS, and especially its senior leadership, pay attention to what the data in this report and from other sources is telling us, that we recognise that there are complex relationships between seemingly unconnected aspects of our business, and that we work together to achieve the best outcomes that we can for the Government and for the Australian community. I am keen to ensure that our leadership, and in particular the SES, understand their role in promoting a strong common identity across the APS and a confident approach to the duties of public service. To this end, the MAC has recently released a statement for the SES called One APS—One SES.7 I am giving priority to redeveloping our leadership, learning and development programmes. I will be unveiling a new suite of leadership programmes for the SES over the next few months. In 2005–06 the Commission will reinvigorate its EL programmes, focusing on the public service’s core business areas of programme management, regulatory activity, service delivery and policy development. While there have been disappointments this year, with inevitable room for improvement, this report demonstrates that on many fronts the APS is continuing to strengthen its performance. I believe that, as a sector, we need to be reminded of our strengths. In 2004, the APS received a United Nations award for Improvement of the Quality of Public Service Process in the Asia-Pacific region, in recognition of the reforms and achievements of the public service in recent years. We have an enviable record of policy development and service delivery and in minimising corruption. We are innovative and reforming—and we need to keep vigilantly to that. We remain a significant national asset, in both economic and social terms. As we go forward, we need to build on these strengths—to keep challenging ourselves to make further improvements to our organisations, our relationships and our collaborative skills—if we are to remain a world leader in public sector reform. 5 M.J. Palmer, Inquiry into the Circumstances of the Immigration Detention of Cornelia Rau: Report, July 2005, 6 Commonwealth Ombudsman, Inquiry into the Circumstances of the Vivian Alvarez Matter, (Report by the Commonwealth Ombudsman of an inquiry undertaken by Mr Neil Comrie), September 2005, 7 Management Advisory Committee 2005, Senior Executive Service of the Australian Public Service: One APS—One SES, Australian Government, Canberra. Chapter 2: Statistical snapshot The past decade has seen considerable change in the structure of the APS. A period of restructure and reduction in size has been followed by some growth. In addition to this, there have been changes in the profile of the APS, with fewer jobs at lower levels, an ageing workforce and an increasing proportion of women. These trends have been evident for some years and, based on the latest data available, are likely to continue. This chapter explores current demographic and labour force patterns of people employed under the Act. The main source of data is APSED, maintained by the Commission.1 APSED contains information about recruitment, mobility and separations for all ongoing and non-ongoing employees. Further detail on the size and composition of the APS can be found in the Australian Public Service Statistical Bulletin 2004–05.2 1 While every effort is made to ensure the integrity of APSED data, the Commission cannot be held responsible for inaccuracies in the data provided by agencies. The Commission undertakes extensive audits of the data, and as a result of these audits, some errors in historical data have been corrected. For this reason, caution should be exercised when comparing data presented in this report with that from earlier years. Most significantly, previously published data on employee numbers may have been revised and therefore may not be directly comparable. Due to different data sources and definitions, there may be variations between the data published here and that published by individual agencies. 2 Conceptual definitions used in workforce analysis are set out in the Introduction and Explanatory Notes to the Australian Public Service Statistical Bulletin 2004–05. Size of the APS Overall employee numbers increased by 1.7% during 2004–05, following a slight decrease of 0.2% the previous year. The increase indicates a return to the growth trend of the four years prior to 2003–04. At June 2005, there were 133,596 employees, compared with 131,396 at June 2004. Figure 2.1 shows the change in total employee numbers from 1990 to 2005. The adjusted line takes account of coverage changes in the APS over the period, by showing the number of employees in those functions that remained in the APS at June 2005. Adjusted for coverage changes, the APS is now larger than it was in 1997, but still smaller than in 1996 before the period of structural change and reduction in size. Figure 2.1: APS employees, 1990 to 2005 Source: APSED Diversity trends Workplace diversity makes a major contribution to capability in the APS, as well as being important to equity in employment. Trends in diversity in terms of sex, race and ethnicity, Indigenous status or having a disability, are particularly relevant to monitoring employment-related disadvantage. Apart from sex, employees in these categories have the option of identifying themselves as belonging to these groups by reporting their status to their agency’s HR area. It is important that employees are given the opportunity to update their personal information, and that agencies then provide that data to the Commission. Last year’s employee survey results showed that only 10% of those employees who were offered the opportunity to provide equal employment opportunity (EEO) data actively chose not to do so. At June 2005, women accounted for 54.9% of total employee numbers. This was a relatively large increase over the previous year (53.8% at June 2004). Figure 2.2 shows changes in the proportion of ongoing employees in the other equal employment opportunity (EEO) groups over the past 10 years. Figure 2.2: Trends in diversity for ongoing employee, 1996 to 2005 Source: APSED The decline in employment for Indigenous Australians and people with a disability, noted in previous years’ reports, has continued this year. Indeed, the proportion of Indigenous Australians fell to 2.2% (down from 2.4% in 2004). During the past year, 48 Indigenous employees moved out of coverage of the Act, but remained in Commonwealth employment. If these employees were still in the APS, the representation rate for Indigenous employees would have been 2.3% at June 2005, rather than 2.2%. Last year we reported that 2.3% of ongoing employees at June 2004 were Indigenous. This year, that proportion has been revised upwards, due to an improvement in the quality of historical data on Indigenous status. As part of the APS Employment and Capability Strategy for Aboriginal and Torres Strait Islanders, Indigenous employees have been encouraged to identify themselves to their agency’s HR system and many have done so. Taking this new data into account has meant that numbers for previous years have been revised upwards. Representation of people with a disability fell from 3.9% to 3.8% over the year. Both these groups declined in actual numbers as well as proportionately, despite an increase in overall ongoing employee numbers. For non-English speaking background (NESB1) employees,3 there was growth in both actual and proportional representation (up from 5.2% at June 2004 to 5.3% at June 2005).4 A detailed analysis of diversity in the APS can be found in Chapter 9, ‘Workplace Diversity’. 3 In the absence of alternative measures, the concept ‘NESB’, representing people from a non-English speaking background, is used with APSED. This captures information about first language spoken, place of birth and parents’ language. NESB1, the measure used here, includes people born overseas whose first language was not English. NESB2 has previously been reported in addition to NESB1 and includes children of migrants, including those who were born overseas and arrived in Australia before the age of five and did not speak English as a first language, those who were Australian born but did not speak English as a first language and had at least one NESB1 parent, and those who were Australian born and neither of whose parents spoke English as a first language. Analysis of APSED data has found that this group does not have a substantial disadvantage compared to other workers, and it is therefore not reported on here. 4 The representation of NESB1 employees has increased compared with the level reported last year. This is due to a revision in the calculation of this group’s representation. Previous years’ data has also been revised, so any longitudinal movement is not due to the change in methodology. Ongoing and non-ongoing employees Most of the growth in employee numbers this year was due to the large increase in the number of non-ongoing employees. Ongoing employees At June 2005, there were 123,242 ongoing employees in the APS, a slight increase of 0.8% from June 2004. This increase extended the growth of the previous five years. It was, however, the lowest proportional increase since the return to growth following the period of downsizing in the late 1990s. The growth was entirely due to an increase in the number of women from 65,001 to 66,760, a rise of 2.7% on their representation at June 2004. The number of men dropped from 57,304 to 56,482—a fall of 1.4%. These trends are shown in Figure 2.3. Figure 2.3: Ongoing employees by sex, 1996 to 2005 Source: APSED During 2004–05, women’s representation increased from 53.1% to 54.2%. This was the first year since 2000–01 that women’s representation grew by more than one percentage point in a year. There is wide variation between agencies in the proportional representation of men and women. Further analysis can be found in Chapter 9. The representation of women at higher classification levels also continued to rise: at June 2005, women comprised 33.0% of the SES (an increase from 31.5% at June 2004) and 40.3% of EL employees (up from 39.3% the previous year). The largest increases in ongoing employee numbers were in ATO (up by 1094 or 5.3%) and DIMIA (up by 971 or 22.7%). Part of the increase in DIMIA was due to movement of employees from the Aboriginal and Torres Strait Islander Services (ATSIS). Smaller agencies that increased in size were the Australian Transaction Reports and Analysis Centre (AUSTRAC) (51 or 79.7%), the Office of National Assessments (ONA) (23 or 43.4%), the Federal Magistrates Court of Australia (20 or 35.7%) and the Ombudsman (18 or 22.0%). The largest decreases in ongoing employee numbers were in Defence (641 or 3.5%) and Centrelink (513 or 2.1%). This was the second successive year that ongoing employee numbers fell substantially in Centrelink, after that agency grew by 8.1% in 2002–03. Non-ongoing employees Non-ongoing employee numbers rose significantly this year, from 9091 at June 2004 to 10,354 at June 2005, an increase of 13.9%. This followed a sharp decline during the previous year of 20.4%. Non-ongoing employee numbers increased for both men and women; however, the proportional increase was greater for women (15.7%) than for men (10.9%). Despite this increase, there is still a long-term trend decline in non-ongoing employee numbers. Almost all of the increase in non-ongoing employment was concentrated in the three largest agencies—ATO (up by 605 or 49.4%), Centrelink (up by 384 or 71.2%) and Defence (up by 179 or 22.7%). In 2003–04, ATO and Centrelink accounted for most of the decline in non-ongoing employment when the number of non-ongoing employees fell by 20.4%. Figure 2.4 provides details of non-ongoing employees as a proportion of total employees from 1996 to 2005. It shows that the proportion of non-ongoing employment has generally declined over the decade, despite the growth this year. The representation rate for women has been consistently higher than that for men. Figure 2.4: Non-ongoing employees as a proportion of total employees, 1996 to 2005 Source: APSED As a proportion of total employees, non-ongoing employment rose from 6.9% to 7.7% in the year to June 2005. The proportion of men rose to 6.3% and that of women to 8.9%. Non-ongoing employees are concentrated at lower classification levels, with 71.0% at the APS 1–4 levels, compared with only 41.0% of ongoing staff. Well over half of all APS 1 employees (57.9%) are non-ongoing, as are a quarter of APS 2s (25.4%). The concentration of lower classification employees in the non-ongoing employment category has increased this year, with 34.0% of all APS 1–2 employees employed as non-ongoing, compared with 29.1% last year. The concentration was due mostly to a decline in the number of ongoing employees at these classification levels rather than to strong growth in non-ongoing numbers. It will be interesting to see if this trend persists in future years. As Figure 2.5 shows, the representation of non-ongoing employees at higher classifications is much lower. Figure 2.5: Proportion of total employees at each classification who are non-ongoing by sex, June 2005 Source: APSED While non-ongoing employment grew by 13.1% overall, there was considerable variation across the classification groups, with an increase of 28.8% in the number of non-ongoing APS 3–4s, and 13.8% in the number of non-ongoing SES employees. Women accounted for 63.2% of non-ongoing employees, but are particularly concentrated at lower classification levels. At least 60% of all non-ongoing employees are women at all the APS 1–6 classification levels, with fewer than 50% of non-ongoing employees being women among ELs or the SES. In general, smaller agencies engage a greater proportion of their employees on a non-ongoing basis than do large agencies. The Equal Opportunity for Women in the Workplace Agency (EOWA) (60.7%), the Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) (51.7%), the Australian Institute of Family Studies (AIFS) (42.4%) and the Federal Court (40.4%) had the highest proportion of non-ongoing employees at June 2005. Part-time employees At June 2005, 11.3% of ongoing employees were working part-time. This continued the long-term trend towards part-time employment. While part-time work has been growing in the APS, its incidence is well below that for equivalent occupations in the broader public sector (31%) and the private sector (33%).5 Women are still much more likely to work part-time, with 18.0% of women employed part-time compared with 3.3% of men. This year was the first for some time where there was a greater proportional increase in the number of ongoing women working part-time (11.9%) than of men (11.7%), although the difference was very slight. These trends are shown in Figure 2.6. Figure 2.6: Proportion of ongoing employees working part-time by sex, 1996 to 2005 Source: APSED During 2004–05, there was actually a decline in the number of ongoing employees working full-time—a drop from 109,889 to 109,350 (or 0.5%). Female non-ongoing employees are more likely to work part-time than any other group, with over one quarter (26.7%) of non-ongoing women working part-time. For non-ongoing men the proportion was 19.1%. Overall, 23.9% of non-ongoing employees were working part-time at June 2005. Part-time employment for both ongoing and non-ongoing employees is concentrated at lower classification levels, for both men and women. Centrelink continues to be the largest employer of part-time employees in the APS employing 36.3% of all part-time ongoing employees at June 2005. This group accounted for 20.7% of Centrelink’s ongoing employees. Centrelink accounted for most of the growth in part-time employment with 869 more ongoing part-time employees out of an overall increase in the APS of 1476. Part-time work by age Part-time work for women is highest in the 30–44 age group, with 24.5% of ongoing women in this age group working part-time. The proportion is much lower for men in this age group (3.7%) but still somewhat higher than the overall male average of 3.3%. Older workers (i.e. those aged 45 years and over) are less likely to work part-time, with only 2.8% of men aged 45 years and over working part-time, and 13.0% of women. Older workers, however, are more likely to work part-time as they get older (as shown in Figure 2.7). Figure 2.7: Proportion of ongoing employees working part-time by age group and sex, June 2005 Source: APSED The trend towards part-time employment for older workers, highlighted in last year’s report, has continued. During 2004–05, the proportion of ongoing employees aged over 60 who were working part-time rose from 7.1% to 8.2%. This trend suggests a growing awareness within agencies of the importance of providing more flexible working arrangements for older workers. 5 ABS 2002, Census of Population and Housing 2001, ABS, Canberra. Classification structures Table 2.1 compares ongoing employee numbers by classification level as at June 2004 and June 2005. The substantial decrease in the number of ongoing APS 1–2 employees (from 7713 at June 2004 to 6353 at June 2005) indicates a return to the very significant long-term decline at those levels, despite a slight reversal last year. There were increases in both Graduate APS and other trainee classifications, as well as at all classification levels at the APS 6 level and above. Table 2.1: Ongoing employees by classification, 2004 and 2005 Classification 2004 % 2005 % APS 1 1434 1.2 1064 0.9 APS 2 6279 5.1 5289 4.3 APS 3 17344 14.2 17453 14.2 APS 4 27479 22.5 26727 21.7 APS 5 16286 13.3 16168 13.1 APS 6 24806 20.3 25641 20.8 EL1 16527 13.5 17847 14.5 EL 2 9458 7.7 9880 8.0 SES 1899 1.6 2025 1.6 Trainee 271 0.2 379 0.3 Graduate APS 522 0.4 769 0.6 Total 122305 100.0 123242 100.0 Source: APSED In past years, this report has noted the long-term reduction in the number of ongoing employees at the APS 1–2 levels, and the increasing number of employees at higher levels. This is broadly due to changes in the nature of the work undertaken in the APS, changes in job design and the need for a more highly-skilled workforce. This year there is evidence of stronger growth at more senior levels. Compared to June 2004, there was a net reduction in the number of employees at the APS 1–5 levels of 2121 employees. Over the same period, there was a net increase in the number of employees at the APS 6 and EL 1 classifications of 2155.6 When proportions are used to eliminate variation due to changes in the size of the APS over the past 15 years, 2004–05 appears as the first year in which there has been a reduction at every level from APS 1 to APS 5 in comparison with the previous year. Despite the continued growth in women’s representation in the APS, there is still a considerable difference between the classification profiles of men and women, particularly at higher classification levels. Figure 2.8 shows the proportion of men and women at selected classifications. Women outnumber men at all APS 1–6 classification levels, with the proportion of women falling sharply at higher levels. Figure 2.8: Ongoing employees by classification and sex, June 2005 Source: APSED The increase in female representation among ELs and in the SES continues at a faster rate than at lower classifications, as shown in Figure 2.9. In this graph, each number is weighted using the June 1996 total ongoing staff numbers as a base. Weighting eliminates the effects that the change in the overall size of the APS has on representation. The index is given a value of 100 at June 1996, and rises and falls proportionally with the particular group’s change in the weighted number over time. Trends in women’s employment by classification are discussed in detail in Chapter 9. Figure 2.9: Change in the number of women at selected classifications, weighted and indexed, 1996 to 2005 Source: APSED 6 These numbers have not been adjusted to take into account the change in the size of the APS; however, as there was only a very slight increase in the total number of ongoing employees during 2004–05, the shift is still substantial. Mobility within the APS Figure 2.10 sets out how mobility between agencies has varied over the past 10 years. It shows that there was some decline between 1998–99 and 2003–04, before a rise in 2004–05. The transfer rate has mostly been higher than the promotion rate between agencies.7 Indeed, the increase in mobility this year was much stronger for transfers than for promotions. During 2004–05, the transfer rate between agencies was 1.3%, and the promotion rate was 0.7%, compared with 1.0% and 0.5%, respectively, in the previous twelve months. Overall, promotions rose from 12,368 in 2003–04 to 13,044 in 2004–05. Promotions between agencies increased at a higher rate than promotions within agencies, rising from 5.3% of all promotions in 2003–04 to 6.3% in 2004–05. Further details on mobility can be found in the MAC report, Managing and Sustaining the APS Workforce.8 Mobility between agencies is generally higher for women than for men. During 2004–05, the overall mobility rate (including both promotions and transfers) was 2.2% for women and 1.7% for men. Mobility rates are highest for the SES, followed by those for EL employees. In 2004–05, mobility increased in all classification groups. Figure 2.10: Ongoing employees—promotion and transfer rates between agencies, 1995–96 to 2004–05 Source: APSED 7 Transfer and promotion rates are calculated as the number of movements during a financial year, divided by the average of the number of employees at the beginning and end of the period. The terminology of ‘transfer’ and ‘promotion’ have been used in this chapter because they are commonly understood by most APS employees. The terminology adopted under the Act is ‘movement at level’ for transfer between agencies. Promotion is defined as ‘the assignment to the employee of duties at a higher classification than the employee’s current classification (whether or not the employee moves to another agency)’. 8 Management Advisory Committee 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra. Age profile The decline in employment of young people, noted in last year’s report, has continued this year. The number of ongoing APS employees aged less than 25 years dropped to 4967 at June 2005. This was a decrease of 306 (or 5.8%) on the previous year. In absolute terms, there were decreases in all age groups under 45 years, except for the 30–34 age group, with strongest growth in the 55 and over age group. Table 2.2 shows the proportion of employees in 10 year age groups, at June 1996, 1999, 2002 and 2005. Over the decade, the largest increase has been in the 45–54 age group, which increased by 5.3 percentage points. This age group is now almost as large in number as the 35–44 group, and will outnumber it in the next year if current trends continue. This trend has major implications for workforce planning and succession management in agencies. The 55 and over age group has grown steadily over the past decade, particularly in the past few years, rising to over 10% of all ongoing staff at June 2005. Table 2.2: Ongoing employees—proportion by age, 1996, 1999, 2002 and 2005   1996 (%) 1999 (%) 2002 (%) 2005 (%) Under 25 6.3 4.1 4.6 4.0 25-34 29.4 26.6 25.8 25.1 35-44 33.7 33.9 32.3 30.5 45-54 25.0 29.1 29.7 30.3 55 and over 5.6 6.3 7.6 10.1 Median age 39 40 41 42 Source: APSED Figure 2.11 shows how young people’s representation in the APS has changed over the past decade. In the 20–24 age group, the improvement between 2001 and 2003 has completely reversed in the past two years, and the representation of this group is at its lowest level since regular data collection began. For the under 20 years age group, the number of employees is much smaller, and there has been little change in their representation over the decade. Figure 2.11: Ongoing employees—representation of young people, 1996 to 2005 Source: APSED Figure 2.12 shows that, in general, the APS has an older age profile than the Australian labour force, with a significantly lower proportion of young people, and more in the 35–54 age group: 60.8% of ongoing APS employees were aged 35–54 compared with only 45.2% of the labour force. The APS has a lower proportion in the 55 years and over age group, although the gap in the 55–59 age group has narrowed this year. Figure 2.12: Age profile of ongoing APS employees and labour force, 2005 Source: APSED and ABS Employees in the 45 and over age group, who will be eligible for retirement in the next 10 years, account for 40.4% of ongoing employees. In 1996, this group accounted for only 30.5% of ongoing employees. Older workers are more likely to be in higher classifications and, in general, have longer length of service than average. The ageing of more senior ongoing employees over the past 10 years is particularly pronounced; for example, 26.2% of the SES and 17.7% of EL employees were in the 50–54 age group at June 2005, compared with 24.2% and 13.7% at June 1996. The 55 and over age group shows a similar pattern, with the proportion of SES employees in this age group increasing from 10.7% to 17.7% over the decade. The proportion of EL employees aged 55 and over increased from 6.3% to 10.4%. Thus, 43.9% of the SES and 28.1% of EL employees could, if they wished, retire with superannuation benefits within five years. Agencies’ age profiles vary widely. This reflects, in part, the nature of an agency’s functions and classification structures. Those agencies with a relatively high proportion of staff aged over 45 years may face more critical and different workforce planning and knowledge management issues than those with a younger age profile. Figure 2.13 shows comparative age profiles for ongoing employees in selected agencies at June 2005. The graph includes all agencies with more than 1500 ongoing employees, as well as some others with particularly young or old age profiles; for example, ANAO (14.5%), Finance (10.0%) and the Department of the Treasury (Treasury) (9.0%) all have a much higher proportion of their employees aged under 25 years than the APS average of 4.0%. Similarly, some agencies have a much older age profile, with a higher proportion of employees aged 45 years or over, for example, the Australian Electoral Commission (AEC) (64.1%), the Bureau of Meterology (BoM) (55.8%) and DVA (55.1%). at June 2005, 40.4% of APS employees were aged 45 years or over. Figure 2.13: Ongoing employees in selected agencies by age group, June 2005 Source: APSED Length of service As at June 2005, the median length of service9 for ongoing employees was nine years. Men have a median length of service of eleven years, compared with seven for women. Figure 2.14 shows the profile of length of service over the 10 years to June 2005. As a proportion of total ongoing employees, the number of those with fewer than five years service has risen from less than one quarter in 1998 (23.0%) to almost one-third at June 2005 (32.7%). This rise reflects the increase in engagements over this period—in the past five years there have been 61,895 ongoing engagements, compared with 39,916 in the five years before that. A substantial proportion of those engaged this year had previously worked in the APS. Further details can be found in the ‘Prior service’ section below. Figure 2.14: Ongoing employees—length of service, 1996 to 2005 Source: APSED 9 Length of service has been calculated differently this year. In past years, only length of service on an employee’s current Australian Government Service (AGS) number has been used. Due to improvements in data quality, from this year length of service will be calculated based on an employee’s complete history (including service as a non-ongoing employee since 1999); for example, an employee who had five years of service, left the APS for two years and then returned for seven years would have a total length of service of 12 years. Previously, this employee would have been recorded as having seven years of service. The impact of this will be an overall increase in length of service, but the data will more accurately represent the relevant APS experience of employees. Location Over one-third (34.9%) of ongoing APS employees are located in Canberra. The proportion increases at higher classification levels; for example, over three-quarters (75.5%) of SES employees are in Canberra compared with only 16.2% of APS 1–2s. Over the past 10 years the proportion of APS employees in Canberra has risen from 31.8% in 1996. Engagements and separations There were 11,424 engagements and 10,482 separations of ongoing employees during 2004–05. Engagements rose by 22.6% over the previous year, and separations rose by 44.2% over the same period. Figure 2.15 shows ongoing engagements and separations as a proportion of all ongoing employees for the past 10 years. Figure 2.15: Ongoing engagements and separations as a proportion of ongoing employees, 1995–96 to 2004–05 Source: APSED Figure 2.16 compares the age profile of engagements and separations during 2004–05 with the age profile of the APS overall. As expected, the age profile for engagements is much younger than for the APS overall. For separations, there are two peaks—in the 25–34 and 50–54 age groups. During 2004–05, 20.9% of those who left were aged under 30 years. For further analysis of ageing trends, see Chapter 9. Figure 2.16: Age profile of ongoing engagements and separations, 2004–05 Source: APSED Engagements The strong growth in ongoing engagements during 2004–05 continued the fluctuating pattern of much of the past decade. The growth was from an unusually low number in 2003–04, and total engagements remained below the level of the previous few years. Figure 2.17 shows the proportion of engagements of ongoing employees by classification for the past 10 years. The long-term fall in engagements at the APS 1–2 levels has slowed, and indeed reversed very slightly. This group’s representation appears to have stabilised at around 10% of total engagements. Most ‘base-level’ ongoing recruitment is now at the APS 3–4 levels or through graduate and other trainee classifications. Engagements at APS 3–4 levels fell proportionally this year; however, engagements at the trainee classifications (including both graduate and other trainees) experienced the strongest growth of any classification level with an increase of 47.6% on the previous year. Trainee classifications rose as a proportion of total engagements from 8.9% in 2003–04 to 10.7% in 2004–05—the only classification group to increase by more than one percentage point. Despite their proportional decline, the APS 3–4 levels still accounted for almost half of all ongoing engagements during the year, more than twice the number of any other classification level. Although data on educational qualifications is incomplete, it does show that the trend for new recruits to also be graduates has increased substantially, from around 25% twenty years ago to around 67% in 2004–05.10 Women accounted for 58.0% of ongoing engagements during 2004–05, almost unchanged from the previous year (57.9% in 2003–04). In the middle management group, ongoing engagements at the APS 5–6 levels experienced relatively less growth (up by only 10.2% compared with the APS average of 22.6%). In contrast, the number of ongoing engagements at EL classifications grew by 31.3%. Engagements to the SES grew by the smallest amount, with an increase of 6.4% over the previous year, with most growth in the SES being through promotion within and between agencies. Figure 2.17: Ongoing engagements by classification, 1995–96 to 2004–05 Source: APSED Mobility between the APS and the wider labour market can be gauged by the proportion of employment opportunities filled by engagements (i.e. from outside the APS) as a percentage of opportunities filled by engagements and promotions. Over the past decade there has been an increase in the proportion of opportunities filled by engagements, from 33.7% in 1995–96 to 47.6% in 2004–05. There has, however, been some variation between classification levels in this trend towards engagement rather than promotion. As noted above, this year there has been an increase in the total number of employees in the APS 6 and EL classifications, and a decline at lower levels. The trend towards filling employment opportunities by engagement rather than promotion is no longer evident at these levels—indeed, the proportion of employment opportunities at the APS 6 and EL classifications filled by engagement has fallen over the past three years. During 2004–05, the number of promotions to the APS 6 and EL 1 classifications rose by 1358. In contrast, the number of engagements at these levels increased by only 285. Ongoing engagements rose in all age groups this year. Figure 2.18 shows changes in the age profile of engagements to the APS over the past 10 years. After several years of decline, engagements in the under 25 years age group seem to have stabilised at just over 20% of all engagements. During 2004–05, the age groups that fell in proportional terms were the under 25 and 45–54 age groups. The latter group had experienced above average growth during 2003–04. By far, the greatest growth in engagements this year was in the 55 years and over age group, which grew by more than a third. This continues a long-term trend which has strengthened since the removal of compulsory age retirement in 1999. Figure 2.18: Ongoing engagements by age group, 1995–96 to 2004–05 Source: APSED During 2004–05, ongoing engagements were concentrated in the three largest agencies: ATO (1913), Centrelink (1458) and Defence (1130). The growth in engagements during the year was due mainly to large increases in ATO (867 or an 82.9% increase on the previous year) and Customs (up by 376 or 432.2%). Other agencies which increased numbers of engagements were Centrelink (229), CSA (197) and DIMIA (167). Prior service Of the 11,424 ongoing engagements during 2004–05, 1584 had previously worked in the APS as ongoing employees. Of these, over one-quarter (428) were re-engaged by the same agency in which they had previously worked. The median length of service prior to re-engagement as ongoing employees was 7.6 years. A total of 4052 people who were engaged as ongoing employees during 2004–05 had previously worked as non-ongoing employees in the APS. Of these, 3504 were engaged as ongoing employees by the same agency in which they were previously non-ongoing. The median length of service as a non-ongoing employee prior to their ongoing engagement was 1.0 years. These two totals include 684 people who had both non-ongoing and ongoing previous service. A total of 6472 of the ongoing engagements during 2004–05 had no prior experience in the APS.11 Put another way, close to half of those people engaged as ongoing employees during 2004–05 (43.3%) had previously worked in the APS. Separations There were 10,482 separations of ongoing employees during 2004–05, an increase of 44.2% on the 7270 the previous year. This was the largest number of separations since 1999–00. There were increases in most separation types, except for termination of employment. Retrenchments more than doubled, from 604 to 1715, after falling the previous year. Age retirements12 fell proportionally after rising for the past two years. Figure 2.19 shows how the different separation types have varied over the past 10 years. Figure 2.19: Ongoing separations, 1995–96 to 2004–05 Source: APSED Women represented 46.3% of separations during 2004–05, down from 53.0% last year. They were particularly over-represented in resignations (56.4%) and under-represented in retrenchments (36.8%). Variation in the number of retrenchments has been the major factor influencing overall trends in separations during the past decade. During 2004–05, Defence (698) and Centrelink (463) accounted for two-thirds of all retrenchments. Compulsory moves to non-APS agencies were also high this year, with 1236 ongoing employees transferred with the movement of the Australian Protective Service out of coverage of the Act. In total, there were 1361 compulsory moves of ongoing employees to non-APS agencies. Separations by age group for 2003–04 and 2004–05, and the change over the two years, are shown in Table 2.3. The proportion of ongoing employees in each age group at June 2005 is included for comparison. Table 2.3: Separations of ongoing employees by age group, 2003–04 and 2004–05   2003–04 2004–05 % change 2003–04 to 2004–05 Ongoing employees at June 2005   No. % No. %   % Under 20 24 0.3 19 0.2 -20.8 0.1 20-24 476 6.5 602 5.7 26.5 3.9 25-29 1081 14.9 1569 15.0 45.1 10.9 30-34 1106 15.2 1549 14.8 40.1 14.3 35-39 794 10.9 1204 11.5 51.6 14.2 40-44 751 10.3 1183 11.3 57.5 16.3 45-49 645 8.9 950 9.1 47.3 16.2 50-54 1065 14.6 1502 14.3 41.0 14.1 55-59 824 11.3 1133 10.8 37.5 7.3 60 & Over 504 6.9 771 7.4 53.0 2.8 Total 7270 100.0 10482 100.0 44.2 100.0 Source: APSED While the number of separations increased in most age groups, the rise was generally greater for older employees. This is consistent with the continuing ageing of the APS. Interestingly, the largest proportional increase was for those in the 40–44 age group. Figure 2.20 shows the proportion of ongoing employees in the 50–65 years age range that separated through resignation or retirement, for the past 10 years. The sharp rise for 54 year-olds since 1996–97 is most likely linked to the overall reduction in retrenchments since then and to the financial incentive for some members of the Commonwealth Superannuation Scheme (CSS) to resign just before their 55th birthday (the 54/11 effect). The relative decline in age 54 resignations during 2002–03 and the plateau during 2003–04 may be related to the lower exit rates from the CSS during some eighteen months of that period. The number of resignations for age 54 rose again during 2004–05 (as did the CSS exit rates). Figure 2.20: Resignation/retirement rate for selected ages, 1995–96 to 2004–05 Source: APSED 10 The method used to calculate the proportion of employees with graduate or tertiary qualifications includes those with qualifications at bachelor degree and above. It excludes from the denominator those for whom no data was provided by agencies, and those who chose not to provide details for their highest educational qualification. 11 As previous service is, in part, linked through an employee’s name, it is possible that a small proportion of these people who may have changed their name had some prior experience that is not included here. 12 Age retirements includes resignations after age 55. Demography of the SES leadership group The SES constitutes the senior management and leadership group of the APS, and comprised 1.6% of total ongoing APS employment at June 2005.13 This was a very slight increase, compared with the previous year.14 The size of the SES has fluctuated over the past decade, decreasing from 1766 in 1996 to 1561 in 1998. The number at June 2005, 2025, is the largest since the SES was established in 1984. Band 1 SES employees make up the largest proportion at 75.5% of all ongoing SES employees, Band 2 comprise 19.9% and Band 3 comprise 4.7%. Most of the growth in the SES this year was at Band 1 which grew by 102 or 7.2%. The agencies with the largest net increases in Band 1 employees were ATO (up by 34 or 20.2%), DEWR (up by 33 or 73.3%) and DIMIA (up by 16 or 39.0%). The net increase of 33 SES Band 1s in DEWR consisted of 44 new Band 1s and 11 who left or were promoted. Of the 44, 23 were promoted within the department, and nine transferred in due to machinery of government changes. For DIMIA, eight were transferred in due to machinery of government changes and there was one internal promotion. The proportion of women in the SES has increased steadily over the past decade, from 19.3% in 1996 to 33.0% in 2005. As is the case for the overall APS, women are concentrated at lower levels: 81.3% of SES women are at Band 1 compared with 72.6% of men, 15.7% are at Band 2 compared with 21.9% of men, and 3.0% are at Band 3 compared with 5.5% of men. Figure 2.21 shows the changing age profile for the SES over the past 10 years. The shift indicates an ageing of the SES workforce, consistent with the ageing of the APS overall. Since 1996, the proportion of ongoing SES employees aged less than 45 years has fallen from 32.8% to 28.1%, while the proportion aged over 50 years has risen from 34.9% to 43.9%. Figure 2.21: Age profile for ongoing SES employees, 1996 and 2005 Source: APSED The age profile for female SES is younger than for males: 35.8% of female SES are aged less than 45 years compared with 24.3% of male SES. Table 2.4 indicates that over one-third of SES Band 1s (38.5%) are aged 50 years or over. For Band 2s, over half are in that age group (55.5%). Band 3s have an even older age profile, with over three quarters (80.0%) being over 50. Currently, 78 SES employees (comprising 3.9% of the SES cohort) are aged 60 and over. This compares with 61 or 3.2% at June 2004. In line with their younger age profile, women comprise a substantially lower proportion of the SES in older age groups. Table 2.4: Ongoing SES employees by age group, sex and level, June 2005   SES 1 SES 2 SES 3 Total % who are female   M F Total M F Total M F Total No. %   30-34 24 13 37 1 0 1 0 0 0 38 1.9 34.2 35-39 89 64 153 7 2 9 0 0 0 162 8.0 40.7 40-44 172 133 305 31 25 56 6 2 8 369 18.2 43.4 45-49 293 151 444 77 36 113 7 4 11 568 28.0 33.6 50-54 250 127 377 91 23 114 30 9 39 530 26.2 30.0 55-59 124 49 173 65 15 80 24 3 27 280 13.8 23.9 60 & Over 33 6 39 25 4 29 8 2 10 78 3.9 15.4 Total 985 543 1528 297 105 402 75 20 95 2025 100.0 33.0 Source: APSED 13 Data for the SES includes employees grouped with the equivalent SES bands under the Public Service Classification Rules 2000. Data also includes inoperative SES. 14 The increase was from 1.55% to 1.64%, and when rounded to one decimal place there is no change. Key chapter findings The APS returned to a period of growth this year, with much of the increase due to a rise in non-ongoing employees. In the past few years, variation has been due mostly to growth or contraction in the three largest agencies—Centrelink, ATO and Defence. The feminisation of the APS, evident for many years, appears to be accelerating. Despite this growth, women are still concentrated at lower classification levels. The ‘typical’ new starter in the APS is now a 32 year-old with graduate qualifications,15 who is at the APS 3 level and more likely to be a woman than a man. The decline in employment of young people, noted in last year’s report, continues to be of concern. In contrast, the trend towards increased employment of older workers seems to be growing each year. With an ageing workforce, especially in the SES leadership group, and a projected tightening of the labour market, agencies still face the challenge of succession management and planning for the future workforce. 15 The method used to calculate the proportion of employees with graduate or tertiary qualifications includes those with qualifications at bachelor degree and above. It excludes from the denominator those for whom no data was provided by agencies, and those who chose not to provide details of their highest educational qualification. Chapter 3: The Values and relations with the Government and the Parliament Public servants, Ministers and parliamentarians operate under the law within a democratic political system in which there is ultimate accountability of governments to the Australian people through the electoral process. Ministers and governments as the elected representatives of the Australian people determine and define the public interest through government programmes and policies. The APS advises the Government and implements its programmes and policies, and has clear responsibility to protect the public interest in terms of ensuring compliance with the law and promoting due process for administrative decision-making. It also has a vital role in providing a longer-term perspective to decision-making and policy development. Three of the Values are central to the relationship between the APS and the Government and the Parliament: * The APS is apolitical, performing its functions in an impartial and professional manner. * The APS is openly accountable for its actions, within the framework of ministerial responsibility to the Government, the Parliament and the Australian public. * The APS is responsive to the Government in providing frank, honest, comprehensive, accurate and timely advice and in implementing the Government’s policies and programmes. This chapter explores these Values in practice in relation to several important aspects of the accountability and governance framework underpinning the work of public servants. Specifically, the chapter examines aspects of agencies’ and employees’ interactions with the Government and the Parliament, including dealings with Ministers and ministerial offices. It also addresses employees’ experience of an important accountability issue— record keeping. Relations with the Government As mentioned above, the Values require that APS employees be responsive to the Government, and also apolitical and openly accountable. A related requirement of the Code of Conduct (the Code) is that APS employees maintain appropriate confidentiality in dealings with Ministers and their offices—a critical factor for a relationship built on trust and cooperation. Both the agency and employee surveys explored aspects of the relationship between the APS and the Government. The key results of both surveys are presented below. Responsiveness to Ministers To monitor how agencies are meeting their obligations of responsiveness to Ministers in terms of providing frank, honest, comprehensive, accurate and timely advice and services, the agency survey again asked agencies to advise on the quality control and evaluation measures they use. Most agencies providing regular services to Ministers include in their portfolio budget statements target measures of the level and quality of those services, against which they report performance in their annual reports. This report does not attempt to summarise those performance results but to assess in general terms the adequacy of the quality control and evaluation measures being used, as reported in the agency survey. Fifty-nine agencies reported providing regular (i.e. monthly or more frequent) services or advice to Ministers. Large agencies (100%) are much more likely to provide regular services or advice than medium (73%) or small (54%) agencies. These results are similar to last year’s. Consistent with last year’s results, all 59 agencies providing regular services or advice reported having at least one quality control measure1 in place, while 49 agencies indicated that they had at least one evaluation measure2 in place during 2004–05. Also consistent with last year’s results is that 90% of relevant agencies this year reported having three or more formal measures in place to ensure quality or evaluate the quality of services provided. The most common quality control measures reported were the specification of a minimum classification for signing off ministerial briefs and a central function for the quality assurance and coordination of written material to and from Ministers’ offices (both were reported by 97% of relevant agencies). Over half (61%) of relevant agencies reported having a policy in place requiring that telephone contact with ministerial advisers be limited to certain classification levels. The most common evaluation measure was some form of internal peer review to evaluate ministerial advice (64% of relevant agencies). The other measures reported were the use of a formal rating system to collect ministerial feedback (44%), a formal requirement that oral feedback is collected from ministerial staff (27%) and a formal requirement that oral feedback is collected from the Minister (22%). Agency survey responses indicate that the use of quality control and evaluation measures in the APS has varied somewhat over the last three years. While overall the use of quality control measures has remained steady, the results show that there has been an increase in the proportion of agencies having a policy in place requiring that phone contact with ministerial advisers be limited to certain classification levels (from 43% to 61% of relevant agencies). As Figure 3.1 shows, there is no clear pattern in the use of evaluation measures over the last three years. There has, for example, been a steady downward trend in the use of oral feedback from ministerial staff (from 38% to 27% of relevant agencies), yet the use of peer review has fluctuated over the three years. Figure 3.1: Quality control and evaluation measures for services to Ministers, 2002–03 to 2004–05 Source: Agency survey This year’s agency survey also asked those agencies that collected formal ministerial feedback via some form of rating system about the criteria they used and the agency’s overall rating result for 2004–05. Of the 26 agencies that used some form of rating system to seek formal ministerial feedback, the criteria these agencies were most likely to use were quality of material (88%) and timeliness (81%). When the overall satisfaction rating in 2004–05 for the 26 agencies was examined, just under half reported that their overall rating was 100% satisfactory (23%) or 95–99% satisfactory (23%). A further 23% of relevant agencies reported that they were not sure what their overall rating was, while an additional 23% outlined that an overall satisfaction rating was not applicable. The remaining 8% of relevant agencies reported that their overall satisfaction rating was either 80–89% or 70–79% satisfactory. Previous State of the Service reports suggested that more effort by agencies was needed to obtain regular feedback from Ministers and their staff. Unfortunately, this year’s results show that even fewer agencies are obtaining such feedback. It may be that the figures reflect in part greater stability amongst Ministers and senior public servants in recent years, and reduced pressure from Ministers for further service level improvements or from agencies for clarity about their assessed performance. Even if this is so, regular feedback from Ministers and their staff remains an essential element of any strategy to improve service, and there are risks in complacency. APS agencies seeking guidance in this area are encouraged to refer to the ANAO’s better practice guide on managing parliamentary workflow, which stresses the need for regular feedback.3 The guide is intended to assist agencies in managing ministerial and parliamentary support arrangements. Agency policies and protocols Most agencies also report having explicit policies on record keeping in relation to interactions with ministerial offices. Almost all (93%) relevant agencies report that they have protocols requiring that hard and/or electronic copies of significant email communication with advisers be retained on file. Seventy-one per cent of relevant agencies require that oral briefing to Ministers or advisers be followed up by written briefing where appropriate, and 69% of relevant agencies require that file notes be made after significant discussions with Ministers or advisers. Figure 3.2 shows that over the last three years there has been an overall trend toward agencies having such requirements in place. Figure 3.2: Agency record keeping requirements, 2002–03 to 2004–05 Source: Agency survey The survey also asked agencies whether they had certain measures in place to assist employees in their dealings with ministerial offices. In response, 56% of relevant agencies reported having agreed unwritten processes in place for resolving staff concerns that may arise about the nature of requests from ministerial offices. This year six agencies reported having written processes of the same kind—up from only one agency in 2003–04. In addition to these processes, 39% of relevant agencies indicated that they provide training for relevant employees in interacting with ministerial offices. Generally, these results are consistent with those reported last year. Further discussion of the level of awareness of agency protocols amongst employees is included later in this chapter. Employee contact with ministerial offices According to this year’s employee survey results, 20% of APS employees had been in direct4 contact with Ministers or their advisers in the previous 12 months.5 This is consistent with last year’s result and confirms that interaction with Ministers and their advisers throughout the APS is occurring on a wide scale. Seventy-three per cent of SES employees, 35% of EL employees and 15% of APS 1–6 employees reported having had direct contact with Ministers and/or their advisers in the last year. Contact was far higher in departments (31%) than other agencies (13%), and in the ACT (33%) than elsewhere (14%). These results are all consistent with the findings reported last year. Relevant employees were asked a question about the types of matters upon which they came into direct contact with Ministers and/or their advisers. Consistent with last year, respondents indicated that most of the contact was related to the provision of advice and factual information. It can be seen in Table 3.1 that the variation in the types of matters upon which employees came into contact with Ministers and/or their advisers has remained largely consistent over the last two years. Nevertheless, this year there was a significant decrease in the proportion of relevant employees who had come into direct contact with Ministers and/or their advisers in relation to providing advice and constituent issues. This decrease may be partially affected by the introduction of the Local Liaison Officers (LLO) programme by the Department of Human Services (DHS) in February 2005. The LLO programme was established to provide faster and more coordinated support for Senators and MPs when constituents raise issues with them concerning any DHS agency (Centrelink, Medicare Australia, CSA, CRS Australia (CRS), Australian Hearing and Health Services Australia (HSA)). Table 3.1: Types of matters upon which relevant employees came into direct contact with Ministers and/or their advisers, 2003–04 and 2004–05   Relevant employees (%) Type of matter 2003–04 2004–05 Provision of advice (e.g. policy, legal, programme delivery) 58 52 Provision of purely factual information (e.g. programme-related information) 57 54 Parliament-related functions (e.g. tabling of documents, possible parliamentary questions, correspondence) 32 28 Provision of public affairs support for the Minister (e.g. preparation of speeches, draft media releases) 30 32 Constituent issues (e.g. electorate briefing, individual constituent matters) 25 19 Administrative arrangements (e.g. arranging travel or meetings) 16 17 Source: Employee survey Overall, 34% of relevant employees had had direct contact in relation to at least three of the above types of matters; 26% had had direct contact over two types of matters and 40% over one type of matter. SES employees are much more likely to have direct contact over multiple matters (65% of relevant SES employees had had contact in relation to at least three matters compared to 47% of relevant EL employees and 23% of relevant APS 1–6 employees). These results are consistent with those reported last year. Also consistent with last year’s findings were the substantial differences in the types of matters dealt with when location was taken into account. Relevant employees in the ACT, for example, were much more likely than those outside the ACT to have come into direct contact with Ministers and/or their advisers in relation to advice (56% compared to 48%), factual information (58% compared to 49%), Parliament-related functions (47% compared to 13%) and public affairs support (40% compared to 13%). However, this year location was not related to the likelihood of relevant employees having had direct contact in relation to constituent issues (in 2003–04, relevant employees outside the ACT were much more likely to have had direct contact over constituent issues). For the second consecutive year, relevant employees working in departments were more likely than those working in other agencies to have had direct contact over all types of matters other than providing advice (both around 52%) and constituent issues (both around 19%). As outlined above, the employee survey results confirmed that SES employees were generally more likely to deal directly with Ministers and/or their advisers than APS 1–6 employees. It is worth noting, however, that direct contact in relation to advice and factual information was still high for relevant APS 1–6 employees. Just under half (44%) of relevant APS 1–6 employees who had been in direct contact with Ministers and/or their advisers in the last 12 months had done so in relation to the provision of advice (compared to 62% of relevant EL employees and 81% of relevant SES employees). This finding is consistent with that of last year. Figure 3.3 shows the variation by classification for 2004–05. Figure 3.3: Nature of relevant employee contact with Ministers and/or advisers by classification level, 2004–05 Source: Employee survey Overall, the employee survey results confirm those reported last year, and show that one in five APS employees had been in direct contact with Ministers and/or their advisers during the last 12 months. They also confirm that where direct contact had occurred it was overwhelmingly in relation to matters of substance (such as the provision of advice and factual information) rather than administrative support and, particularly for more senior employees, was more likely to be in relation to multiple types of matters than a single type of matter. Notwithstanding the lack of historical data, this level of interaction is almost certainly far greater than in the past. The extent and nature of contact between APS employees and ministerial offices is likely to be related to increased expectations from the public and the media around communication and responsiveness, with developments in ICT creating expectations in the media (and elsewhere) of an almost instantaneous access to a plethora of information. These developments, in turn, have been among the key drivers of the steady increase in the number of advisers over the last twenty years.6 The increasing reliance of government on advisers and the extent to which APS employees now interact with them requires that advisers and relevant APS employees share a common understanding of, and respect for, the necessarily different roles and responsibilities of the political and administrative arms of government. Alongside this there is a need to ensure that all APS employees are not only aware of, but understand and can readily access, any specific requirements concerning their interactions with ministerial offices including the guidelines on official conduct7 and agency protocols. Employee awareness of agency protocols Agencies apply various policies and practices to manage their interactions with Ministers and their offices to ensure the provision of quality services, to manage workload efficiently and to meet their statutory obligations, including those arising under the Act and financial legislation. These policies and practices may be set out in formal written requirements or applied in less formal ways; in both cases agencies have an obligation to ensure that employees understand their responsibilities and agency expectations. As has been highlighted in previous reports, substantial proportions of relevant employees (i.e. those who have had direct contact with Ministers and/or their advisers in the past year) were unsure of whether their agency had specified protocols in place to guide employees’ interactions with Ministers’ offices. This year, for example, 37% of relevant employees were not sure whether their own agency had a protocol in place requiring that significant email communications with advisers be retained. The level of awareness of agency protocols for relevant employees is shown in Figure 3.4. Figure 3.4: Relevant employee awareness of agency protocols, 2004–05 Source: Employee survey Clearly, some protocols by their very nature are more likely to have a reasonably high profile among employees likely to be in direct contact with Ministers and/or their advisers. Mandatory requirements around process issues, such as minimum classification level sign-offs on written briefings, for example, are more likely to be known to employees than agency protocols or practices for dealing with specific issues as they arise (e.g. processes for resolving employee concerns about the nature of requests from ministerial offices). However, as Figure 3.4 indicates, very significant proportions of relevant employees (up to 65%) were not sure whether their agency had certain protocols in place, and this is a matter of concern. It is of even greater concern that there does not appear to have been any improvement in the level of awareness of agency protocols amongst relevant employees over the last two years. While Figure 3.4 provides a useful representation of APS-wide results, the data on which it is based does not enable the analysis to reflect whether or not an agency does in fact have the protocol in place. Examination of large agency results of the employee and agency surveys, however, can provide statistically reliable evidence of relevant employees’ awareness of protocols relative to whether those protocols are actually in place. As Table 3.2 highlights, there continue to be substantial proportions of relevant employees working in agencies that have protocols in place who are either not aware or unsure about the existence of such protocols. This level of uncertainty is disturbing, especially regarding the protocol requiring that oral briefing to Ministers or Ministers’ staff on key issues is confirmed in writing (including emails or follow-up minutes). Nine large agencies reported in the agency survey that they had this protocol in place and yet between 37% and 66% of relevant employees working in those nine large agencies were not sure whether their agency had such a protocol. Table 3.2: Relevant employees’ awareness of protocols to guide interactions with ministerial offices—employees in large agencies that reported the protocol(s) in place, 2003–04 and 2004–05       Employee survey results (% range) Agency Protocol Year Number of large agencies with protocol in place Aware of protocol (%) Not aware of protocol (%) Not sure (%) Requirement for a minimum classification level for signing off ministerial briefs 2004–05 15 52–96 0–8 4–48 2003–04 12 69–99 0–7 1–27 Requirement for a minimum classification level for phone contact with ministerial office advisers 2004–05 3 13–26 28–35 46–52 2003–04 2 23–32 28–33 41–44 Requirement that oral briefing to Ministers or Ministers’ staff on key issues is confirmed in writing (including emails or follow-up minutes) 2004–05 9 24–63 0–20 37–66 2003–04 3 27–39 16–23 44–55 Requirement that file notes are routinely made after significant phone calls or oral discussions with Ministers and ministerial advisers 2004–05 10 30–65 6–20 28–61 2003–04 6 31–62 9–26 25–45 Requirement that significant email communications with ministerial advisers be retained 2004–05 13 47–75 1–12 19–48 2003–04 8 43–87 5–21 8–49 Agreed unwritten processes for resolving staff concerns that may arise about the nature of requests from ministerial offices 2004–05 9 16–29 6–24 53–71 2003–04 10 21–33 0–20 48–78 Agreed written processes for resolving staff concerns that may arise about the nature of requests from ministerial offices 2004–05 2 8–32 6–32 61 2003–04 0 NA NA NA Note: The ranges provided are derived from agency-specific employee survey results of up to 15 large agencies in 2004–05 (and 12 large agencies in 2003–04) that reported the protocol(s) in place. They do not include the APS-wide results. Source: Agency and employee surveys Clearly, agencies need to do more to ensure that employees are aware of agency protocols in place to support their interactions with Ministers and their advisers. There will inevitably be situations in which employees are uncertain about how to respond to a request from the Minister or an adviser: sometimes their concerns will be entirely legitimate; and sometimes the concern may reflect a misunderstanding of the request or inappropriate protection of a previous policy or practice. Public servants must be responsive to government, but they are also required to be apolitical and accountable, and to comply with the law. Agencies should establish whether there are particular issues that present challenges to their staff from time to time and recognise that these issues might call for more specific guidance in addition to that available from the Commissioner or from the Department of the Prime Minister and Cabinet (PM&C). This is not to suggest that every agency practice or policy should be set out in detail in writing; however, relevant employees should be made aware of agency protocols (whether written or not) and where they can turn for support and advice. In 2003, the Commissioner released APS Values and Code of Conduct in Practice,8 a guide developed to assist APS employees to understand the practical application of the Values and the Code in both common and unusual circumstances, and to assist agency heads to establish policies and procedures that promote the Values and ensure compliance with the Code. The parts of that guide that bear on interactions with Ministers and their advisers should be familiar, and readily accessible, to all employees who may become involved in those interactions. To provide APS employees with further guidance in interacting with Ministers and their advisers the Commission has developed a good practice guide, ‘Supporting Ministers, Upholding the Values’. The Commission expects to release this guide in 2005–06 and anticipates examining the uptake of the better practice guidance outlined in this publication in next year’s report. More generally, relations with the Minister and their office are likely to be managed better—consistent with the Values and any agency policies and practices—if there is a culture of open discussion within the agency that can shape the approach employees take in particular situations, and give confidence that they will exercise good judgment consistent with the Values. A strong leadership role must be played by senior managers in this respect. Employees faced with difficult situations, and inexperienced employees, need to be able to discuss the problems, without fear, with more senior managers and/or a central area of expertise and support, rather than be left to make decisions on their own and feel isolated. The benefits of seeking guidance should not be underestimated; and exist for employees at every level. Some comments about agency protocols from the employee survey highlight some of the issues employees are currently facing in their agencies. Though I know of no protocols for recording dealings with advisers, I do so to protect myself. This is a growing part of the job and there needs to be a lot more done on this to protect APS officers and the APS Values we are employed to uphold. Advisers are political and often want to amend briefing to give it a political slant. Holding a good line against advisers’ requests to compromise ‘frank and fearless’ advice depends more than anything on SES being prepared to sign off on good quality briefs and resist pressure to compromise. ” “I keep records of my involvement and work for the Minister and their staff. However, I have not seen, nor been made aware of, any Departmental protocols to guide interactions with ministerial offices. ” “You can have all the protocols you want, but if the Minister’s office wants something you give it to them … In previous jobs I had been told by my SES to NOT put things on email so there was NO record of it. employee survey The evidence suggests that agencies need to put further effort into promulgating and actively supporting policies or protocols on employees’ interactions with Ministers and their offices. The consistency and strength of the survey evidence of the last three years suggests that this should be a priority for the APS. Challenges in managing the relationship Consistent with previous reports, two-thirds (67%) of employees who had been in direct contact with Ministers or their advisers in the last 12 months reported that in the job they were working in they were highly or very highly confident that they could balance the Values of being apolitical, impartial and professional, responsive to the Government and openly accountable appropriately. A further 22% of relevant employees had moderate levels of confidence, and 10% had low or very low levels of confidence. Consistent with last year’s results, relevant employees’ confidence across the APS is related to several factors, including: * classification level (confidence is high amongst the SES and APS 1–6 employees, with ELs more likely to report low levels of confidence than employees at other levels) * location (employees located in the ACT are much more likely to report low confidence and much less likely to report high confidence) * type of agency (employees working in departments are much more likely to report low confidence and much less likely to report high confidence than employees in other agencies) * level of familiarity with the Values (employees who were highly familiar with the Values were more likely to have high or very high confidence levels compared with employees who had moderate or low levels of familiarity with the Values) * views on whether their immediate manager acts in accordance with the Values (employees who disagreed that their immediate manager acts in accordance with the Values had the lowest levels of confidence) * views on whether the most senior managers in the agency act in accordance with the Values (employees who agreed that the most senior managers in the agency act in accordance with the Values were much more likely to have high levels of confidence and much less likely to have low confidence) * views on whether senior managers in the agency lead by example in ethical behaviour (employees who agreed that senior managers in the agency lead by example in ethical behaviour were much more likely to have high levels of confidence and much less likely to have low confidence) * overall job satisfaction (employees with low job satisfaction were more likely to report low confidence and vice versa) * levels of pride in working for the agency and the APS (employees who were proud to work in their agency and/or the APS were much more likely to have high levels of confidence compared to employees who were not proud to work in their agency and/or the APS—who were more likely to report low levels of confidence) * whether employees had faced a challenge in balancing the Values (employees who had faced a challenge were more likely to report low confidence and less likely to report high confidence) * awareness of agreed written and unwritten processes in place in their agency for resolving employee concerns that may arise about the nature of requests from ministerial offices (employees who were aware that such processes were in place in their agency were much more likely to have high or very high confidence levels compared with employees who reported that such processes did not exist in their agency). For the 15 large agencies with statistically valid employee survey responses, employee confidence levels varied widely (this finding is consistent with last year’s). The proportion of relevant employees in these large agencies with high or very high levels of confidence varied from 45% to 82%; and low or very low confidence ranged from 0% to 23%. Also consistent with the findings of previous reports, is that the majority of employees (61%) who reported having had contact with their Ministers or ministerial advisers indicated that they had not faced a challenge in balancing the relevant Values of being apolitical, impartial and professional, responsive to the Government and openly accountable. Thirty-three per cent (35% in 2003–04) said they had faced such a challenge in the last 12 months and 6% (5% in 2003–04) were not sure. Whether or not relevant employees had faced a challenge in balancing the relevant Values when dealing with Ministers and/or their offices was related to several factors, including: * classification level (EL and SES employees were more likely than APS 1–6 employees to have faced a challenge) * the type of matter being dealt with (employees dealing with administrative arrangements were less likely to have faced a challenge than employees dealing with other types of matters) * views on whether their immediate manager acts in accordance with the Values (employees who agreed that their immediate manager acts in accordance with the Values were less likely to have faced a challenge) * views on whether the most senior managers in the agency act in accordance with the Values (employees who agreed that the most senior managers in the agency act in accordance with the Values were less likely to have faced a challenge) * views on whether senior managers in the agency lead by example in ethical behaviour (employees who agreed that senior managers in the agency lead by example in ethical behaviour were less likely to have faced a challenge) * level of pride in working in the APS (employees who were not proud to work in the APS were much more likely to have faced a challenge compared to employees who were proud to work in the APS). Consistent with last year’s findings, of the agency-specific results available for the 15 large agencies, results varied widely. The proportion of relevant employees in these agencies that had faced a challenge ranged from 12% to 52%. Comments from the employee survey reflect a strong desire to make the relationship work well. I have received lots of information as part of induction courses … I believe balancing ‘responsiveness’ and impartiality will always be difficult. As a general rule, I feel able to refer instances where information requests seem too political to my supervisor. ” “In my experience, Ministerial advisers generally understand and respect the apolitical nature of the APS, and the advice we give. From time to time, there may be some pressure to change or ensure advice reflects the political position of the Minister, but generally this can be managed by clearly stating reasons for the advice. ” “Have had more ‘on-the-job’ training. There has been much communications of managers about dealings with the Minister’s Office and what and how it can be done better. employee survey Agencies should take an active approach to ensuring that employees likely to deal with Ministers or their advisers have the confidence to manage the challenges that inevitably arise—after all, dealing with challenges is part of managing any relationship. As indicated above, employees likely to interact with Ministers or advisers should be assured of ready and reliable support from those around them and have confidence that their immediate and most senior managers act in accordance with the Values. This is very much a leadership responsibility, requiring open engagement with employees down the line about the judgments being made by both leaders and others in the agency. In addition, clear policies on procedures and protocols support a close relationship of trust and mutual respect between senior managers and Ministers and their advisers. 1 In the agency survey, quality control measures were ‘central coordination function for the quality assurance and coordination of written material to and from the Minister’s office’, ‘policy/protocol on minimum classification level for signing off ministerial briefs’, and ‘policy/protocol on minimum classification level for phone contact with ministerial advisers’. Agencies were also asked to specify other measures in place. 2 In the agency survey, evaluation measures were ‘formal ministerial feedback is collected via some form of rating system’, ‘requirement that oral feedback is collected from Ministers’, ‘requirement that oral feedback is collected from ministerial staff’, and ‘some form of internal peer review is undertaken of written briefing material’. Agencies were also asked to specify other measures in place. 3 ANAO, Better Practice Guide on Managing Parliamentary Workflow, April 2003, 4 ‘Direct’ was defined as contact in person, by telephone or email. 5 Coding of an open-ended response option in a subsequent question about the type of matters upon which respondents had direct contact with Ministers and/or their advisers involved the removal of responses considered irrelevant (e.g. where the response was not related to the question, where comments indicated that contact was marginal such as at an all-staff meeting or non-work related such as social contact). The removal of these irrelevant responses brought the overall result down from 21% to 20%. 6 For more detailed information regarding the increase in adviser numbers see: Australian Public Service Commission, State of the Service Report 2003–04, 2004, 7 Australian Public Service Commission, APS Values and Code of Conduct in Practice: A Guide to Official Conduct for APS Employees and Agency Heads, 2003, 8 Australian Public Service Commission, APS Values and Code of Conduct in Practice: A Guide to Official Conduct for APS Employees and Agency Heads, 2003, Relations with the Parliament This year’s agency survey asked agencies to report on the measures they had in place to ensure that SES employees understand their rights and responsibilities in relation to the Parliament. All of the 77 agencies that reported having some or all of their SES employees appear before parliamentary committees indicated that they had at least one measure in place to ensure that SES employees understand their rights and responsibilities. The great majority (86%) of these agencies indicated that they had three or more measures in place. The most common measures reported by agencies with SES employees appearing before committees were learning through attendance and observation (96% of relevant agencies), self-nominating attendance at training courses or presentations (95%) and internal briefing of employees prior to attendance (92%). The results indicate that the APS has shifted its focus slightly over the last three years. Figure 3.5 shows that generally there has been an increase in the proportion of agencies relying on the measures outlined below to ensure SES employees understand their accountability obligations to the Parliament. Figure 3.5: Agency measures to ensure SES employees understand parliamentary accountability, 2002–03 to 2004–05 Source: Agency survey Consistent with the slight improvement this year in the proportion of agencies using training as a means of equipping their SES employees, information on overall training attendance at courses on parliamentary accountability run by the Department of the Senate, the Department of the House of Representatives and the Commission shows that attendance at such training has also improved slightly this year. Table 3.3 shows that over the last five years attendance at relevant training courses has fluctuated; however, overall attendance continues to be well below the figure recorded in 2000–01. The overall decrease in attendance since 2000–01 can be largely attributed to the high number of participants in the ‘accountability, rights and responsibilities’ course in that year. This course was designed by the Commission in 1998–99 in response to an Order of the Senate regarding the training of SES officers in their accountability, rights and responsibilities to the Parliament. The high level of uptake in 2000–01 reflects agencies’ commitment to ensure that all new SES officers and those officers who had not attended in the previous year received training in their accountability, rights and responsibilities to the Parliament. The Commission also deals with the accountability framework in its ‘Orientation to the SES’ training course but not in as much depth as in the ‘accountability, rights and responsibilities’ programme. The orientation course was redeveloped during 2004–05 as a three day ‘SES Orientation’ course specifically aligned with the capabilities identified in the ILS. It includes the governance requirements for senior executives and explores the relationships with Ministers and the executive arm of government. During 2004–05, a total of 67 participants attended the SES orientation course. Chapter 10 includes a more general discussion of leadership development. Table 3.3: Attendance at parliamentary accountability training, 2000–01 to 2004–05 Course Year Attendance Accountability, rights and responsibilities (a) 00–01 189 01–02 68 02–03 42 03–04 16 04–05 0 (not run) Preparing to appear before a parliamentary committee (b) 00–01 44 01–02 19 02–03 13 03–04 10 04–05 11 Parliament, privilege and accountability (c) 00–01 53 01–02 108 02–03 75 03–04 25 04–05 125 Senate committees (d) 00–01 58 01–02 0 (not run) 02–03 46 03–04 66 04–05 57 About committees (e) 00–01 106 01–02 30 02–03 119 03–04 99 04–05 60 Total attendance at above courses 00–01 450 01–02 225 02–03 295 03–04 216 04–05 253 Notes: Courses are generally open to APS and other Commonwealth employees. (a) The Public Servants’ Accountability, Rights and Responsibilities course run by the Commission, which is open to SES and EL employees, addresses rights and responsibilities as well as the procedures and expectations of parliamentary committee members. NB: This course was not conducted in 2004–05. (b) The Preparing to Appear Before a Parliamentary Committee course run by the Commission is open to SES and EL employees. It builds upon the Public Servants’ Accountability, Rights and Responsibilities course. (c) The Parliament, Privilege and Accountability seminar run by the Department of the Senate is open to SES employees and focuses on the accountability of public servants to the Parliament. (d) Senate Committees is a seminar run by the Department of the Senate, which provides a detailed examination of the structure and operation of the Senate committee system. It is aimed at those who may be required to write submissions for committees, to appear as witnesses before committees, or to monitor the progress of committee inquiries. NB: This seminar was not conducted in 2001–02. (e) About Committees, a seminar run by the Department of the House of Representatives, provides detailed information on all aspects of committee work, including types of committees and how they conduct their investigations. Sources: (a) and (b) Australian Public Service Commission; (c) and (d) The Department of the Senate; (e) The Department of the House of Representatives The employee survey asked SES and EL employees whether they had ever received formal training in accountability, rights and responsibilities to the Parliament. One-quarter (24%) of SES and EL employees reported that they had received training in this area at some time during their career (67% of SES). When asked about training on this issue in the last 12 months, 16% of SES and EL employees had received such training (11% of SES). To establish a clearer picture of the need for training, SES and EL employees were asked whether they had appeared before a parliamentary committee during 2004–05, with 5% indicating that they had (37% of SES had). More importantly, of those who had appeared before such a committee in 2004–05, 37% of relevant SES and ELs had not received any training in accountability, rights and responsibilities to the Parliament at any time during their career (25% of relevant SES). Those who had appeared before a parliamentary committee in 2004–05 were asked how well-equipped they felt they were to appear before the committee. Overall, three- quarters of relevant SES and EL employees felt well-equipped to perform before the committee (80% of SES). The remaining quarter of SES and EL employees felt that they were reasonably equipped to perform before the committee (20% of SES). Overall, these results are largely consistent with those reported in 2002–03.9 Previous State of the Service reports suggested that agencies have not been giving sufficient attention to training their SES employees in parliamentary accountability. Evidence outlined above points to a slight improvement in the overall focus on training by agencies and future reports will monitor whether this upwards trend continues. All new SES employees and relevant EL employees should undertake appropriate and adequate training. 9 The questions that examine parliamentary accountability were not included in the 2004 employee survey. Record keeping The Values set out in the Act provide that the APS is openly accountable for its actions, within the framework of ministerial responsibility to the Government, the Parliament and the Australian public. The maintenance of effective record keeping systems allows agencies to demonstrate that due process has been followed in actions and decisions. It also helps agencies to achieve business goals by ensuring that necessary corporate information is available and accessible as required. Furthermore, effective record keeping assists employees to meet their specific obligations to Ministers, the Government and the Parliament. Record keeping has attracted substantial attention in recent years, both in general reports such as those published by the ANAO, and in the context of specific cases of concern such as the Magnetic Resonance Imaging Services case,10 A Certain Maritime Incident,11 and this year in the Palmer report.12 Record keeping in the APS has been affected by greater public scrutiny through administrative law reform and parliamentary oversight over the past few decades, and also by increased emphasis on achieving results. While administrative law reforms, including the Freedom of Information Act 1982,13 have generally led to improvements in public administration, the risk that these reforms may inhibit formal record keeping needs to be recognised. In addition, technology has also had a major impact on record keeping practices. In September 2003, the ANAO tabled the second in a series of audits on record keeping.14 It concluded that, although all agencies audited had taken active steps to improve their record keeping frameworks and practices, their record keeping policies, systems, and procedures were at different stages of development. The following section draws on information from the 2005 employee survey, as record keeping questions were not included in the 2005 agency survey—questions examining record keeping issues are planned for inclusion in the 2006 agency survey. Unfortunately, the employee survey results for this year point to a slight decline in overall record keeping capability compared to last year. There continues to be evidence that a more strategic approach to records management and training is still required in some agencies. Record keeping capability The survey results show that most employees believed their agency placed a priority on effective record keeping, with the majority (87%) of employees agreeing that their agency considered good record keeping practices to be very important. This result is consistent with previous findings. Employees from medium (90%) and large (87%) agencies continue to be more likely to have agreed than those from small (72%) agencies. Agency-specific results available for the 21 large agencies showed considerable variation (68% to 98%) in the proportion of employees who agreed that their agency considers good record keeping practices to be very important. The three agencies with the highest level of agreement were CRS, Centrelink, and the Department of Education, Science and Training (DEST) (where results ranged from 93% to 98%). This year the proportion of employees who agreed that they had received appropriate training and/or had access to information that enabled them to meet their record keeping responsibilities was similar to last year (67% in 2004–05 compared to 69% in 2003–04). Nevertheless, this proportion in 2004–05 (67%) remains significantly lower than the proportion of employees who agreed that their agency considers good record keeping practices to be very important (87%). This disparity is consistent with previous years’ findings and was reflected in some of the comments provided by employee survey respondents, for example: My agency recognises the need to keep good records but to me does not adequately resource such ideals. Any training to date has been grossly inadequate for someone in my capacity.” “My agency takes record keeping very seriously at the level of principle, however there is insufficient training provided to meet these standards, nor is there enough emphasis placed on the criticality of this in everyday practical situations. ” “The integrity of the record keeping is also an issue of great importance and of late this has seen recent emphasis placed on it, in my section at least. ” “Record keeping is considered very important, however I have not received training in maintaining records. employee survey Employees working in medium (72%) and large (67%) agencies were more likely than those in small (59%) agencies to agree that they received appropriate training and/or had access to information that enabled them to meet their record keeping responsibilities. Agency-specific results available for the 21 large agencies showed large variation in the level of agreement (41% to 85%), with four agencies (CSA, CRS, the Department of the Environment and Heritage (DEH) and Finance) recording significantly higher levels of agreement than the APS average (where results ranged from 75% to 85% compared to the APS average of 67%). A minority (16%) of employees in 2004–05 indicated that they had not received appropriate training and/or had not had access to necessary information. This was slightly higher than last year’s result (13%). For the first time, this year’s employee survey asked employees whether their agency provided adequate equipment, facilities and/or storage to enable them to meet their record keeping responsibilities. Overall, 76% of employees agreed that their agency did provide such facilities, while 12% disagreed. Employees working in medium (79%) agencies were more likely to agree that their agency provided such facilities compared to those working in large (75%) or small (72%) agencies. The level of agreement in the 21 large agencies with agency-specific results available varied greatly from 49% to 88%. The three agencies with the highest level of agreement were CRS, DEST and ABS (where results ranged from 84% to 88%). Although the employee survey did not ask any direct questions about the actual time available and/or the resources required to maintain adequate standards of record keeping, many respondents took the opportunity to comment on this issue. Given the level of commentary provided by employees surrounding resource implications and record keeping, further examination of this issue would be worthwhile in next year’s survey. Record keeping is an important part of the APS. However, good record keeping is the first area to suffer when other work pressures are great. There needs to be a better way to store records—e.g. electronically—or the storage of records needs to become a career structure of the APS —e.g. filing clerk. ” “Sometimes work pressures make it difficult to meet record keeping responsibilities. ” “Adequate record keeping is very time consuming, and it is simply not possible to keep up with work demands and also maintain records when the phone keeps ringing and people are queuing up behind you seeking urgent input to ministerial briefings etc. employee survey 10 ANAO, Magnetic Resonance Imaging Services—Effectiveness and Probity of the Policy Development Process and Implementation, Performance Audit No. 42, May 2000, 11 Senate Select Committee on a Certain Maritime Incident, A Certain Maritime Incident, October 2002, 12 M.J. Palmer, Inquiry into the Circumstances of the Immigration Dentention of Cornelia Rau: Report, July 2005, 13 The Freedom of Information Act 1982 provides a mechanism for the public to access information about the operations of departments and government authorities. 14 ANAO, Recordkeeping in Large Commonwealth Organisations, Performance Audit Report No. 7, September 2003, Key chapter findings This year’s employee survey results confirm previous findings that a significant proportion of the APS has direct contact with Ministers and/or their advisers on a range of matters and that direct contact is occurring at levels below the SES. The results also confirm that not only is the interaction extensive, but it is also overwhelmingly in relation to matters of substance (such as the provision of advice and factual information). They also confirm that interaction is not uniform across the APS and that some APS employees are much more likely to deal with ministerial offices on certain matters than others. It is pleasing to report for the third consecutive year that, generally, confidence is quite high about upholding the Values, and relationships with Ministers and their offices would appear to generally be operating effectively and be based on trust. It is important nonetheless that agencies ensure that all their employees likely to come into contact with Ministers or their advisers have the capacity to manage the challenges that inevitably arise on occasions, and that they have available ready and reliable support from those around them. It is concerning to report for the second year in a row that substantial numbers of employees involved with Ministers and their advisers are not aware of their agency’s protocols—and they should be. The large variation between agencies in this respect is also of concern. While each agency and its employees will have particular operating circumstances and types of challenges, they should draw on the Commission’s forthcoming publication, ‘Supporting Ministers, Upholding the Values’ which also incorporates key material from the already released publication, APS Values and Code of Conduct in Practice: A Guide to Official Conduct for APS Employees and Agency Heads. Agency survey results indicate that the record keeping capability of the APS continues to improve in relation to interactions with ministerial offices, as agencies place a higher priority on record keeping systems, protocols, awareness and training. However, from a broader perspective, the employee survey results for this year indicate a slight decline in the record keeping capability of the APS compared to 2003–04. Chapter 4: The Values and relationships with the public For most members of the public, the APS is the face of the Australian Government. While the APS has played an important role in implementing policies and programmes since Federation, the nature of its relations with the public has been influenced by dramatic changes as a result of changing policy imperatives, changing expectations of the Australian community and changes in the economic, social and strategic circumstances of the country. The APS’s relations with the public are governed by the Values and the Code. These set out principles which apply to how the APS delivers services and the behaviour required of its employees. The Values, as set out in the Act, provide for an APS where APS employees deliver services to the public fairly, effectively, impartially and courteously, and are sensitive to the diversity of the Australian public. The Values also provide for an APS that has the highest ethical standards and is openly accountable. The Code requires APS employees to treat everyone with respect and courtesy and without harassment when acting in the course of employment. Employees must behave honestly and with integrity and with care and diligence in the course of APS employment and must also comply with all Australian laws. Increasingly, the focus of service delivery is on a whole of government approach— with an emphasis on a connected public service that seeks to be more responsive to the needs of the Australian public, providing seamless services and increasing efficiency and effectiveness in service delivery. Rising community expectations for easier access to government in terms of prompt, efficient and effective customer service and the integration of service delivery (accessible and provided at a time and in ways that suit the way citizens live their lives) are a key driver for this new approach. It is not feasible for the State of the Service report to assess the overall quality of services provided to the public: each agency is responsible for reporting on its performance in this regard. This chapter instead focuses on the commitment and capacity of the APS to provide high-quality services, and effective means of ongoing service delivery. In doing so, it includes some material on the quality of key services, and evidence on the quality of administrative decision-making as it affects the public. This chapter covers the issues of public consultation and the extent to which consultation on government regulation and policy and programme development is used in the APS. It also addresses how agencies are improving service delivery—particularly through feedback mechanisms available to service users, employee training and the implementation of service charters—and how service delivery is being measured. Changes in service delivery as a result of new technology are considered, together with the progress made in implementing the Australian Government’s e-government agenda. The chapter also highlights issues of administrative decision-making and service delivery raised by independent review agencies. The chapter draws on data from the agency and employee surveys, specific agencies’ own service user surveys, international developments, data from the Australian Government Information Management Office (AGIMO), from ANAO performance audits, and from published and unpublished material provided by the Ombudsman. International developments A study released by Accenture in April 2005, Leadership in Customer Service: New Expectations, New Experiences,1 has concluded that, despite having invested billions of dollars moving services and information resources online, governments around the world (22 countries are covered in the report) are still struggling to meet citizens’ growing expectations of better customer service. In a departure from its previous reports, Accenture has gone beyond measuring the extent to which governments offer services online to investigating their ‘leadership in delivering real and expanded customer service’, namely, the value they bring to their citizens through four key aspects of ‘leadership in customer service’: a citizen-centred perspective; cohesive multi-channel services; fluid cross-government services; and proactive communications and education. Key findings were that, although most citizens are eager to embrace a new generation of services, governments are falling short in delivering them. Fifty-five per cent of citizens, for instance, believe government is being effective when it acts as a single, seamless entity that can remember all the details of a citizen’s previous contact with it. The study found that e-government offerings across the board are well-advanced, with an average service maturity breadth of 91%. Service maturity breadth focused on services online which identified that countries are approaching saturation point in terms of services they could put online and that to make future advances governments will need to focus on a much broader vision. However, the study also found that all countries could do more to realise the broader goal of ‘leadership in customer service’. In fact, the overall average customer service maturity score was just 39%, when the four key aspects of ‘leadership in customer service’ are considered. Only Canada had an overall customer service maturity score of more than 50%. All countries surveyed experienced a drop from the previous year’s overall e-government maturity scores, which measured solely the level to which the government had developed an online service delivery presence. 1 Accenture, Leadership in Customer Service: New Expectations, New Experiences, April 2005, Public consultation and communication The MAC report, Connecting Government, put a strong emphasis on the importance of public consultation. It argued that the very nature of Australia’s participatory democracy means that meeting the APS’s responsibilities for comprehensive policy advising and effective implementation of government policies and programmes is a two-way exercise, which requires the APS to have increasingly sophisticated professional skills and techniques in communication and consultation.2 The MAC report also emphasised that APS agencies need to recognise that the engagement of people and organisations is an increasing feature of whole of government work. International developments For many years, the Canadians have been leaders in cultivating relationships with stakeholders (mainly, the public) to better determine what services they want and need and how effectively (or otherwise) the government is delivering these. A conference on government-citizen ‘Dialogue and Deliberation’, held in October 2005, aimed: to establish means of regularly discussing public sector- citizen dialogue, both inside Canada and with other jurisdictions; to devise new frameworks for assessing and evaluating the policy impacts of ‘deliberative’ engagement; and to formulate a research agenda and plans for taking government-citizen interaction further, including in the area of service delivery. The Service Canada objectives place particular stress on the need to serve Canadians better in service delivery terms while building ‘a citizen-centred government’. The Government of Canada is also committed through the Office of Client Satisfaction to regular assessment of citizen concerns (positive and negative) about the level and quality of service provision The UK House of Commons Public Administration Select Committee’s report, Choice, Voice and Public Services (17 March 2005) stressed the need for greater government preparedness to consult the public about the services it wants and how happy or unhappy citizens are with service provision. The Committee recommended that access to services and service information be simplified and that more attention should be devoted to measuring public satisfaction with public services. However, in its 18 July 2005 response to the report, the Government rejected this recommendation on the ground that Directgov, the UK government’s flagship website and primary channel for the delivery of electronic or online service provision, is more than sufficient for the task of ensuring a good level of service delivery of this kind, especially since Directgov is designed around people’s needs rather than the complex structures of government . In the lead-up to the third European Union e-government summit, an online discussion group, ‘Ideal Government: Europe’, has been established by Kable’s Government Computing Group (http://www.kablenet.com) to discuss what Europeans really want from e-enabled public services and to find out to what extent this view is being sought by governments. It also aims to assess how well citizen expectations are being reflected in these services, and to determine if this represents value for money. international evidence Community engagement can take many forms, such as surveys and market research; however, more formal consultation through open processes, web-based interactions, advisory bodies, consultative committees, taskforces and consultants permits more sophisticated and interactive participation. In 2002, the Australian Government launched the Better Services, Better Government Strategy (2002)3 with an objective of enhancing citizen engagement, so that government agencies can use the Internet to improve the transparency of government processes and to provide an opportunity for wider public engagement. The strategy provides for government to connect more closely with its citizens and improve aspects of engagement such as online policy formulation, feedback and consultation. In late 2004, AGIMO organised a number of events that brought together key international and domestic experts in the area of governments engaging with citizens electronically. An E-Democracy Community of Practice, with membership from several jurisdictions in Australia, is developing cross-jurisdictional principles on online engagement. The International Conference on Engaging Communities, (coordinated by the United Nations and the Queensland Government) and the Enabling Government, Engaging Communities: An Online Perspective event strengthened linkages and opened dialogue on electronic engagement issues between jurisdictions, academia and the community, building on earlier work in the area of governments engaging with citizens electronically. Consultation with stakeholders—Government policy, programmes and regulation The 2005 agency survey enhanced the 2004 question that explored the extent to which APS agencies are conducting formal consultations on the development of government policy and programme delivery to look at agency use of formal consultation during the development of government regulation. Agencies were asked how often they consulted with the following groups: non-government agencies, industry stakeholders, tertiary education and research groups, agencies from state/territory and/or local governments, unions and members of the public about government regulation, government policy and programme delivery. For each option, agencies could respond usually, sometimes, no, or not applicable. Thirty-five per cent of all agencies indicated that formal consultation in relation to the development of government policy with any of the identified groups was not applicable to their agency compared to 26% of agencies last year. In relation to programme delivery only 13% of all agencies indicated that consultation was not applicable (similar to last year’s 14%) and 39% of all agencies indicated that consultation was not applicable in regard to government regulation. When agencies that indicated consultation was not applicable to them are excluded from the following analysis, the remaining agencies are identified as ‘relevant’. The reasons why agencies responded that consultation was not applicable were not explored in the 2005 agency survey but may relate to the nature of policy and programme development in the year and/or government confidentiality requirements. Consultation in the making of policy and programme decisions is widespread among APS agencies, although overall there has been a decline in the level of consultation reported since last year. The survey results show that 62% of all agencies usually or sometimes consulted with one or more of the specified groups about government policy, and 76% of these agencies consulted five or more groups. The former figure (one or more specified groups) increases to 96% when only relevant agencies are considered. Programme delivery appears to trigger greater consultation than policy development, with 85% of all agencies indicating that they usually or sometimes consult one or more of the specified groups on this issue, and 73% of these agencies consulted five or more groups. The former figure (one or more specified groups) increases to 99% when only relevant agencies are considered. Consultation in the making of government regulation is not as widespread as for policy and programme decisions. Fifty-five per cent of all agencies usually or sometimes consulted with one or more of the specified groups about government regulation, and 56% of these agencies consulted five or more groups. The former figure (one or more specified groups) increases to 90% when only relevant agencies are considered. ‘Industry stakeholders’ was the key group usually consulted by relevant agencies for the development of government policy (77%), the delivery of government programmes (73%) and government regulation (66%) (see Figures 4.1, 4.2 and 4.3). The percentage of relevant agencies consulting with ‘industry stakeholders’ increases to 92%, 97% and 87%, respectively, for the three activities above when those agencies that sometimes use this group are also included. Findings were similar to last year for engaging this group in formal consultation for both the development of government policy and the delivery of government programmes. The percentage of relevant agencies usually consulting the public about the development of government policy is 43%, rising to 81% when those agencies that sometimes consult this group are included (see Figure 4.1). Figure 4.1: Formal consultation with stakeholders on government policy development, 2004–05 Source: Agency survey ‘Members of the public’ are usually consulted by 52% of relevant agencies in relation to programme delivery; this percentage increases to 88% when those agencies that sometimes consult this group are included (see Figure 4.2). Figure 4.2: Formal consultation with stakeholders on government programme delivery, 2004–05 Source: Agency survey Consultation with the public is low for government regulation with only 24% of relevant agencies usually consulting the public about the development of government regulation. This rises to 67% when those agencies that sometimes consult are included and is comparable with other stakeholder groups (see Figure 4.3). Figure 4.3: Formal consultation with stakeholders on government regulation, 2004–05 Source: Agency survey The government has also put in place a mechanism for informing the community and stakeholders about why and how particular regulatory decisions were taken, including any community consultation that preceded the decision itself. Regulation Impact Statement (RIS) A RIS formalises and documents the steps taken in developing good regulation. It is prepared by a regulatory department and/or agency and seeks to ensure that regulation achieves its objectives in the most effective and efficient way. It identifies the problem, outlines objectives and assesses the economic, social and environmental impacts of a range of feasible options for addressing the problem. The level of analysis of each option should be commensurate with the impacts of the proposal, and departments and agencies are encouraged to use quantitative cost/benefit analysis when appropriate. The RIS then documents community consultation, proposes a recommended approach and outlines implementation and review mechanisms. RISs are intended to provide a basis for more informed decision-making and to enhance accountability and transparency by informing the community and stakeholders about why and how particular regulatory decisions were taken. RISs are integrated with—and reinforce—other regulatory quality control systems, such as regulatory plans. regulation guidance Overall, the agency survey result suggests that there is more consultation with a wider variety of groups occurring among relevant large agencies than among relevant small and medium agencies. This is consistent with last year’s results when relevant agencies are considered. Examples of consultation processes undertaken by relevant agencies include: The Australian Government, in partnership with the states and territories, has undertaken an extensive programme of investigation, evaluation and trials to find the best model for the health information network. This has been done in consultation with stakeholder groups and members of the community. Work on a staged national implementation of HealthConnect has begun in coordination with the states and territories and in full consultation with consumer and health care provider groups. Area Consultative Committees (ACCs) work in partnership with the Department of Transport and Regional Services (DoTARS) to provide advice to government on important issues facing Australia’s communities and to identify opportunities, priorities and development strategies for their regions. ACCs are uniquely placed to respond to issues in their regions and provide a vital conduit to government on local, social and economic conditions. AGIMO is seeking public comment on the Australian Government review of Government Information Technology and Communications contract arrangements. agency case study There is scope for some agencies to increase the amount of consultation occurring, particularly with members of the public. One means of obtaining the general public’s view on policy and programme delivery issues is through the use of representative surveys in addition to surveys of the agency’s direct service users. As Connecting Government4 pointed out, in some circumstances there can be considerable benefits from agencies taking a more effective approach to consultation, by identifying areas where greater consultation and communication would be appropriate and developing targeted processes to ensure that consultation and communication occurs. There may, for example, be areas where agencies could be more proactive in community consultation. 2 Management Advisory Committee 2004, Connecting Government: Whole of Government Responses to Australia’s Priority Challenges, Commonwealth of Australia, Canberra. 3 AGIMO, Better Services, Better Government (2002), 4 Management Advisory Committee 2004, Connecting Government: Whole of Government Responses to Australia’s Priority Challenges Level of involvement in service delivery The employee survey found that 55% of APS employees are either directly involved in the delivery of services to the general public or manage employees who are. This is a similar result to last year (57%), but represented a drop from 2003 (61%). This may be due in part to the decline in the number of ongoing employees for the second successive year in Centrelink. Employees directly involved in delivering services to the public are predominantly located outside the ACT. Of those employees located in the ACT involved in service delivery there has been a decline from 34% in 2004 to 29% in 2005. Of the large agencies, Centrelink, CSA, and CRS are three agencies that stand out, with over 80% of their employees directly involved in providing services to the public. APS 1–6 employees make up 86% of all employees directly involved in, or managing, the delivery of services to the public, compared to EL employees (13%) and SES employees (1%). This finding is similar to last year’s result. More women (61%) are involved in the delivery of services to the public than men (48%). The representation of women in service delivery is higher than the representation of women in the APS overall (54%) but it is similar to the representation of women in lower classification levels, particularly APS 3–4 (65%). Relevant employees were also asked if the services they provided were coordinated effectively. Thirty-three per cent of relevant respondents thought that the service they deliver was effectively coordinated and 35% of relevant respondents agreed or strongly agreed that over the last 12 months cooperation between their agency and other APS agencies had improved their ‘work area’s capacity to tailor service delivery to the needs of their clients’. More information on collaboration between agencies to meet the service delivery needs of service users can be found in Chapter 11, ‘Whole of Government’. The effectiveness of service delivery Both agency and employee survey results indicate that APS agencies are recognising the importance of obtaining their service users’ perspectives on service delivery. This is a good first step in understanding the needs of service users and being able to measure with some rigour the effectiveness of the services agencies are delivering. What it does not provide is a holistic view on how the APS is performing. This is a step towards which some other countries are moving. In the UK the Cabinet Office is working towards improved measurement of complex data regarding people’s experiences of government service provision. The ultimate aim is a comprehensive customer satisfaction index that can identify, and then track, the degree of customer satisfaction with public services. Despite the existence of sophisticated satisfaction-assessment mechanisms devised by particular service providers, there is a call for a standard measurement system across public services which will allow customers to evaluate the effectiveness of government service delivery and measure how different services compare. Of course the UK jurisdiction varies from the APS in both its composition and the services involved—but the development is of interest in terms of efforts to measure and improve service provision quality. Last year the Commission examined how a selection of agencies (ATO, AWM, Centrelink, CSA, Customs, DVA, DEWR, DITR) measured both the effectiveness of the services they deliver to the public and service user levels of satisfaction with agencies’ services. In consultation with each of these agencies, the Commission selected one key indicator of service user satisfaction from the survey data where trend data was available that best represented overall satisfaction levels of service delivery in that agency.5 This year those agencies were again asked for satisfaction results for the 2004–05 year. In addition, data has been included on satisfaction with the service provided by the National Museum of Australia (NMA) and DEST—Questacon. Figure 4.4 plots service user satisfaction with these 10 agencies on a single graph to provide a visual representation of the range of service user satisfaction levels with APS service delivery. Direct comparisons between agencies are not recommended, as agencies conduct surveys in levels of satisfaction within the context of their own business environment and use different methodologies. However, the broad tools of satisfaction and trends in service user perceptions are of interest. Results of the satisfaction surveys from the 10 agencies paint a positive picture when it comes to service users’ overall satisfaction with the relevant APS organisations. Figure 4.4 shows that, generally, satisfaction levels of agencies sampled are tracking at 70% or higher since 2000, with seven agencies trending above 80% in the current year. Again, AWM has the most satisfied service users closely followed by NMA and DEST— Questacon (both newcomers this year). These results reflect the high level of satisfaction of visitors choosing to visit these establishments—or, in the case of agencies such as DVA, to access benefits. By comparison, service users of CSA, who are generally required to access CSA services and often to provide child support, advise the lowest satisfaction levels, although still well over 70%; these levels saw a notable improvement in 2003–04 and 2004–05. Fluctuations in the graph can be accounted for by a number of factors, including seasonal changes, implementation of new initiatives and/or contracts, and/or new training of employees. Nevertheless, for most agencies there has been a trend to increased levels of satisfaction in recent years. Figure 4.4: Overall satisfaction with APS service delivery, 1997–98 to 2004–05 Source: Agency service user survey data Notes: Dotted lines indicate non-consecutive years of data collection, with the exception of DITR which represents benchmarked data collected over two years. (a) Centrelink’s measure is ‘overall quality of Centrelink’s people, services and information as either good or very good.’ (b) DEWR’s measure is ‘overall jobseeker satisfaction with service provided by Job Network Members as satisfied or very satisfied.’ (c) AWM’s measure is ‘overall would you say your visit met or exceeded your expectations?’ (d) CSA’s measure is its ‘Professionalism Index’, which measures satisfaction with four key elements of CSA employees’ professionalism: personal characteristics, professional characteristics, treatment of service users, and outcome of the interaction. Results are based on an average result on a five-point index scale to record satisfaction. For representation in this graph the CSA index has been converted to a percentage scale. (e) Customs’ measure is the ‘overall satisfaction of clients with the service provided by Customs that scored 7 or more out of a score of 10.’ (f) DVA’s measure is of ‘clients satisfied or very satisfied with the service provided by DVA.’ Results represented are the average results of surveys conducted within each financial year. (g) ATO’s measure is its ‘Satisfaction with Professionalism Average’, which measures ATO employees on their behaviour and ability including levels of empathy, provision of fair and just outcomes, communication skills and levels of accountability. Results are based on an average result on a five-point index scale to record satisfaction. For representation in this graph the ATO index has been converted to a percentage scale. (h) DITR (AusIndustry)’s measure is ‘overall customer satisfaction with service delivery’. DITR results are unweighted to allow comparison with earlier benchmark data, shown as 2000–01 but which covered 1999–00 to 2001–02. Weighted data for 2002–03 (89%), 2003–04 (90%) and 2004–05 (88%) is slightly higher than the unweighted data. (i) NMA’s measure is overall visitor satisfaction, that is, the percentage of visitors interviewed who were ‘satisfied’ or ‘very satisfied’ with their visit. (j) DEST—Questacon’s measure is the percentage of ‘visitors rating their experience as good or very good’. 5 Data provided by the sample agencies may not cover all of an agency’s programmes, and may represent only one aspect of the agency’s business. Improving service delivery Improving service delivery is reflected in a number of approaches adopted by APS agencies. These include mechanisms to obtain feedback from the public, and providing information and training to employees on their service delivery responsibilities. International Developments The Government of Canada is committed to improving its delivery of information and services, both online and through other service delivery channels such as over the telephone or at government offices. It is conducting an online research Panel with citizens accessing the government website being randomly selected to participate on this panel. For one year, starting in September 2005, members of the Panel will be invited periodically to give their views or join in discussions about topics ranging from specific features or services on government websites to the development and implementation of federal policies and programmes. international evidence Feedback mechanisms The 2005 agency survey asked agencies that have contact with the public about the mechanisms they use to obtain feedback from the public. Those agencies that indicated that they had no public contact have been excluded from the following analysis. Overall, the use of feedback mechanisms remained constant. The most common mechanism reported was a complaints/feedback website link, reported by 88% of agencies that have contact with the public (a similar result to last year’s). Other widely-used mechanisms include complaints/feedback phone hotlines (75%) and customer surveys (71%); both remain relatively constant compared with last year’s results. There is still some variation among agencies in their use of feedback mechanisms, depending on their size. Large agencies were more likely to use complaints/feedback phone hotlines (90% compared to 64% of relevant small agencies and 74% of relevant medium agencies). Large and medium agencies were more likely to use complaints/ feedback website links—95% and 91% respectively—than relevant small agencies (79%). Small agencies show a sizeable decline in the use of both of these mechanisms compared with last year (the 2003–04 results were 76% for phone hotlines and 90% for website links). Examples of online feedback and evaluation include: Connected Government website—seeks feedback from users on how easy it was to find information on the website, who is using the website, and how the website could be improved. Finance website—provides the option of sending feedback via email or a form. The form is designed for both Australian and overseas users, and provides optional questions. The Department of Agriculture, Fisheries and Forestry (DAFF) website feedback form—prompts users for information about why they visited the website, how they located it and how well different features worked. CSA website feedback form—the survey collects information about the types of information sought by the user, the characteristics of the user, and aspects of the site that work well and not so well. DEWR has a purpose built usability facility, used for a range of products, including touch screens, work processes, ergonomics, occupational health and safety (OHS) issues and training videos. The usability facility is a key supporting factor for software development within the department, including user testing of online services. agency case study Use of customer surveys was more often reported by relevant medium agencies (78%), closely followed by relevant large agencies (76%), than by relevant small agencies (61%). The increased use of customer surveys by relevant medium agencies (from 63% last year) is noteworthy—as is the decline in their use by relevant large agencies (from 90% last year). Visitors’ books were least likely to be used by relevant large agencies (5%), although their use did increase marginally in relevant small and medium agencies (a quarter of relevant small and medium agencies). These differences could reflect the nature of the agency concerned—different types of service users and relationships, different ways of doing business or different levels of available resources. Selected agencies’ results in relation to service user surveys and satisfaction levels are discussed in the previous section of this chapter on the effectiveness of service delivery. Both the agency and the employee surveys asked questions on the use of mechanisms to receive feedback from the public regarding service delivery.6 As previously mentioned, the three most popular feedback mechanisms used by agencies are ‘complaints/ feedback website link’ (88% of relevant agencies), ‘complaints/feedback phone hotline’ (75%) and ‘customer surveys’ (71%). These findings are consistent with last year’s results. In the 2005 employee survey, 67% of employees involved in service delivery stated that their work unit received regular feedback from the public, either directly or indirectly, on the quality of services it provided. This is a considerable decline from the 2003–04 result of 73%. Relevant SES employees (88%) were much more likely to indicate that their work unit obtained feedback from the public than relevant EL (69%) and APS 1–6 (67%) employees. This was also a significant increase on last year’s result (79%) for the SES group. By comparison, this year’s response from APS 1–6 employees about obtaining feedback from the public marked a significant decline from last year (from 73% to 67%). Although EL employees recorded a decline from last year (72% to 69%) this result was not statistically significant. Comments by employees in the 2005 employee survey on receiving regular feedback from the public included: Rarely get to hear results of client feedback (e.g. survey forms)” “We only ever get told when we do something wrong.” “We don’t hear about it, once again, no feedback given to staff.” “Stakeholders [provided] with the opportunity to provide continuous feedback which enables us to tailor the service to meet the need where appropriate.” “Feedback from clients on service standards is for negative feedback only. employee survey Eighty per cent or more of employees involved in service delivery from three large agencies (CRS, CSA and BoM) indicated that their work unit received regular feedback from the public. In 2003–04, Centrelink delivered services to approximately 6.5 million customers (about one-third of the Australian population). Centrelink recognises the importance of regularly seeking feedback from its large customer base on the quality of the services provided by its customer service network, and it has a number of processes through which it obtains customer feedback. An important element of Centrelink’s customer feedback system is its complaints handling system. Management of customer complaints is seen as important for both Centrelink’s performance and its reputation as a service provider. Given the number of customers and decisions made each year, Centrelink has relatively few complaints. agency case study The employee survey also asked employees involved in service delivery if there were formal mechanisms in place to respond to feedback from the public. Seventy-nine per cent of employees confirmed that there were formal mechanisms in place in their work unit to respond to feedback from the public, a slight increase on the 2003–04 result (76%). This department has a policy of responding to all comments submitted to the department’s website… employee survey Relevant SES employees (84%) were as likely to indicate that there were formal mechanisms in place in their work unit to respond to feedback from the public than were APS 1–6 and EL employees (both 79%). This was a significant increase from last year for the SES group, up from 72%. Last year EL employees (86%) were much more positive than both SES (72%) and APS 1–6 (74%) employees in reporting that formal mechanisms were in place to respond to feedback from the public. Customs prepares national quarterly reports on complaints and compliments received from its clients. The feedback that clients provide is used to monitor and improve services, to address problem areas, and to give credit to areas of the organisation that receive compliments. These reports are available on the Customs website. In the last quarterly report (April–June 2005) Customs received 665 complaints, with the top three complaints being ‘didn’t expect duty/tax’, ‘officer was rude’ and ‘process took too long’. The prime reason identified for the increase in complaints was some travellers being unaware of an amendment to passenger-duty free concessions that was introduced in February 2005. Customs also received 212 compliments, with the top three compliments being, ‘officer was helpful’, ‘appreciated assistance’ and ‘officer was professional’. agency case study Approximately 90% of relevant employees from three large agencies, Customs, Centrelink and the Department of Foreign Affairs and Trade (DFAT), indicated that there were formal mechanisms in place to respond to feedback from the public. This is a very high response rate when compared to the APS-wide result of 79%, though perhaps not unexpected, considering that these agencies have a focus on service delivery. Overall, relevant employees from large agencies (80%) are more likely to agree that formal mechanisms were in place to respond to feedback than are relevant employees from small (62%) agencies. Employees from outside the ACT (81%) were much more likely to indicate that formal mechanisms were in place to respond to feedback from the public than were those in the ACT (72%). This is not surprising, given that most services are delivered from the regions. Results do show an increase from last year for employees outside the ACT, suggesting that a stronger focus may have been given to this area of business in some agencies. The employee survey found that the effectiveness of these formal mechanisms for responding to the public was rated as high or very high by 56% of employees involved in service delivery in 2005. This is a drop on last year’s result (61%). Seventy per cent or more of employees from BoM, DEST, DFAT and DITR (agencies with 1000 or more ongoing employees) rated the effectiveness of these formal mechanisms as high or very high. This year employees were also asked to provide their views about strategies that would improve the provision of services in their work area. Thirty-one per cent of relevant employees responded that ‘more feedback/consultation with clients’ would enable them to improve services. Overall, there is some disparity between the agency and employee data on the use of mechanisms to obtain feedback from the public. Some of this disparity may be explained by the different components of feedback mechanisms examined in the employee and agency surveys. The agency survey focused on the external component, which is the relationship between the public and the agency. In contrast, the employee survey focused on the internal component, which concerns internal communication from the broader agency level to the work unit level. Overall analysis suggests that while the external components of agency feedback mechanisms appear to be working well, the internal components could be further improved. This proposition is also supported by the discussion on consultative mechanisms in Chapter 5 ‘The Values and Workplace Relationships’. Employee training and/or information in service delivery responsibilities The increased focus on service delivery is also reflected in an increasing attention to ‘client-focused’ training and reinforcement of behaviours that promote the Values and the Code that relate to the provision of services to the public. Of those APS employees that responded to the employee survey, 77% of employees involved in service delivery agreed that they ‘received appropriate training or had access to information that enabled them to undertake their client service responsibilities’. This was comparable to last year’s result. Less than a quarter of employees were undecided or disagreed that they received appropriate training. In 2005, employees involved in service delivery were also asked about strategies to improve the provision of services in their work area. Forty-four per cent of employees indicated that more training and development activities would enable them to improve services. This is consistent with comments made by employees about training to meet client service responsibilities. At present, new employees do not [receive appropriate training]. When I started I received far more than I expected. ” “Some clients who ring up are very distraught and expect me to provide marriage counselling service to them. I have not been trained in this. ” “It is difficult to conduct … more training and development when resources are continually being cut. ” “We are a major ‘service to the public’ organisation but to date [we have] received very limited support/training focus.” “Training in client relations in [agency] was woefully inadequate when I started… ” “we need to understand more about our clients industry environment. employee survey Of agencies with over 1000 ongoing employees, over 80% of employees involved in service delivery from CSA, CRS, DFAT, the Department of Health and Ageing (Health) and DVA, agreed that they received ‘appropriate training and/or had access to information that enabled them to meet their client service responsibilities’. This year relevant employees from medium agencies (83%) were more likely to agree that they received ‘appropriate training and had access to information to meet their client responsibilities’ than relevant employees from small (74%) and large (77%) agencies. Relevant APS 1–6 employees (77%) were less likely to think that they get ‘appropriate training and information to meet their client responsibilities’ than relevant EL (82%) and SES (81%) employees. The more time employees spent on off-the-job training the more likely they were to agree that they receive ‘appropriate training to meet their client service responsibilities’. Service charters A key mechanism used by the Australian Government to improve service delivery is agency service charters. A service charter is a public document that describes the service experience the public can expect from an agency. This includes information about the agency’s service delivery approach and the relationship the client will have with the agency. All government agencies delivering services directly to the public are required to prepare and implement such a charter. Agencies with policy development functions are also encouraged to develop charters. International developments point to a whole of government approach to the design of service charters, especially in the arena of e-services, with a focus on building confidence and trust with citizens who use services and information. There is also recognition of the importance of assessing the success of client service for all public service providers—public and private—recognising the stronger links being built to provide a seamless service to the public. The UK Cabinet Office is reviewing their ‘Charter Mark’ scheme, which provides certification for excellence in public service. Recent emphasis has been on focusing public service providers on the needs of customers; the next step is to encourage and recognise outstanding customer service across public services. It is proposed that the new customer satisfaction standard will apply to all public service providers—in the public, private and voluntary sectors. It is anticipated that, as the barriers between state, business and voluntary providers are increasingly broken down in new, user-focused public services, it is only fair that the efforts of each provider in delivering customer satisfaction are given equal merit.7 The Government of Canada portal—Service Canada—provides a whole of government approach to services to its citizens. It also has a highly developed ‘Service Charter’ which is a whole of government service charter that describes the government’s service commitment to Canadians. A ‘Minister for Service Canada’ oversees this. The Australian Government’s approach to service charters is a network of service charters that are based on a set of common principles contained in the Client Service Charter Principles 2000, and contain mandatory elements around service standards, feedback options and reporting on performance. The effectiveness of service charters depends on a number of factors, including the ability of agencies to successfully monitor and report on service user satisfaction using quantifiable performance indicators. The ANAO has undertaken audits of both the ATO’s Taxpayers’ Charter and Centrelink’s Customer Charter. It concluded that, although progress has been made, more work still needs to be done before these charters can effectively drive service improvement.8 Coverage and review The 2005 agency survey found that 62 agencies (76%) had an agency-wide service charter in place. This was similar to the proportion of agencies that reported having a service charter in both 2003–04 and 2002–03, and includes the vast majority of agencies with a major service delivery focus. A further three agencies indicated that they were developing agency-wide service charters. Seventeen agencies did not have a service charter; of these, seven indicated that they did not have any public contact. Service charters continue to be more common in large agencies (86%) than in medium agencies (77%) and small agencies (69%). Performance indicators and service standards The Client Service Charter Principles 2000 place a strong emphasis on the monitoring and reporting of satisfaction. They provide that service charters must include service standards and have avenues for service users to provide feedback and make complaints. In some cases, the feedback mechanisms mentioned earlier contribute to the measures used in assessing the performance of the service to the public as outlined in the service charter. There must also be mechanisms to report on that data. The Client Service Charter Principles 2000 also state that, when deciding which service standards to publish, agencies should take account of their ability to measure performance against each standard. This year 81% of agencies with public contact stated that they had identified service standards, an increase on last year’s result (78%). The number of agencies reporting that they have identified performance indicators has, however, remained the same for the last three years. A further seven per cent of agencies said indicators were being developed, the same as last year. Ten agencies indicated that they did not have performance indicators because they did not have contact with the public. A further nine agencies indicated that they did not have performance indicators, though five of these agencies had a service charter. Quantifiable indicators or standards are still more common in relevant medium (87%) and large (86%) agencies than in relevant small (71%) agencies with public contact, although there has been a slight increase in the number of small agencies with charters compared to last year (69%). Although agencies with a service charter are required to publish performance against their charter commitments in their annual report, there has been a decline in the proportion of agencies reporting that they do so (81% down from 90% last year). Reporting through internal agency management structures remained high at 82%, similar to last year’s result. The annual report and reporting through internal agency management structures were the most common mechanisms used to report the quality of service provided to the public. Reporting through internal service delivery units/teams remained constant at 69%. The proportion of agencies using these measures as part of a balanced scorecard concept also remained stable at 34%. E-government (government online) ICT is pervasive in all Australian Government functions, from the delivery of health care and education, to the collection of taxes and the protection of borders. The ongoing changes in technology present the APS with both challenges and significant opportunities in the area of service delivery. Technology has been a major driver and enabler for change. The availability of ICT to both public and private sector organisations and individuals has increased dramatically in recent years. The Internet has been particularly important in driving commercial, government, and social and personal change.9 Changes in technology have the potential to dramatically improve the effectiveness of service delivery. Australia’s e-government objective is to simplify the complexity of government for citizens and business, and improve the efficiency of government administration at the same time. The Australian Government is committed to the continuing reform of government operations, which underpins better electronic service delivery to citizens and business. Australian Government agencies are identifying priority areas for service improvement, where better linkages can bring a tangible benefit to a citizen’s experience of electronic government services. At the same time, they are improving the ways information is made available to relevant parties and delivering more effective electronic services. Australian Government agencies are enhancing electronic service delivery by making it cheaper, faster and easier for citizens and business through: * better infrastructure * multi-channel service delivery * more strategic ICT investment * services designed in response to the needs of citizens and business * whole of government approaches. APS e-government effectiveness Australia continues to rank among the top-performing countries in various international e-government reports. These reports reflect international and domestic recognition of the Australian Government as an exemplary user of ICT, particularly in implementing and delivering e-government and developing customer-centric models of service delivery. While comparisons with previous data are difficult, there is little doubt that the use of e-government services in Australia is continuing to grow. The 2005 Accenture report, e-Government Leadership, ranked Australia equal third behind Canada and the USA, in overall customer service maturity. The report noted that Australia has been at the forefront of e-government policy and implementation, and has consistently ranked among the top countries in terms of e-government maturity; it has also begun to lay the groundwork for true leadership in customer service, that is, citizen-centred, multi-channel and interconnected government.10 In the United Nations Global E Government Readiness Report (2004) Australia ranked sixth out of 191 member states in e-government readiness (based on website assessment, telecommunications infrastructure and human resource endowment) behind the USA, Denmark, the UK, Sweden, and Korea. Australia was ranked 10th in e-participation (the quality, relevance, usefulness and willingness of government websites for providing online information and participatory tools and services to the people) behind the UK, the USA, Canada, Singapore, the Netherlands, Mexico, New Zealand, Korea, and Denmark. The United Nations noted that Australia had one of the most impressive online provisions of information and services.11 Customs is modernising the way businesses report the movement of goods across Australia’s borders. These changes, a result of the Customs Cargo Management Re-engineering (CMR) project, have involved a major review of Customs practices. The CMR project includes the introduction of a new integrated IT system, the Integrated Cargo System (ICS) that will replace the existing reporting and processing procedures. The ICS enhances Customs’ risk management assessment at the border and assists industry track cargo movements more efficiently through the ability to verify the status of transactions, and through enhanced functionality for lodging import and/or export declarations. A major feature of ICS is its improved security. Users and transactions will be protected by public key infrastructure. This involves the use of digital certificates, which are a proven way of providing confidentiality, authentication, non- repudiation and message integrity over open networks such as the Internet. The export component of ICS was implemented in October 2004. Since this time it has been mandatory for all export cargo to be reported to Customs via ICS. Over 4.3 million transactions have been processed to date. In February 2005, a comprehensive CMR education campaign commenced. Workshops emphasised the major changes to be introduced with ICS for each specific industry sector. To complement formal CMR workshops, additional onsite training was also provided. Customs maintains a website dedicated to CMR. This website, which provides considerable information on CMR and ICS, can be found at . agency case study The Internet is now a mainstream means of government-citizen interaction. For the first time, a survey has been conducted to assess citizens’ satisfaction with e-government services. Australians’ Use of and Satisfaction with E-Government Services, which was released on 21 June 2005, successfully engaged governments across all jurisdictions. This report highlights the increasing use of e-government services in Australia and provides data that governments can use to enable services to continue to meet the needs of citizens and business. It is anticipated that the survey will be repeated annually, in order to gather trend data.12 The survey found that people accessing government services via the Internet are no longer a small minority. Thirty-nine per cent or nearly four in 10 adults—and more than half of all adults who use the Internet—contacted an Australian government agency via the Internet in 2004. This represents a substantial increase on the most recent figures published by ABS in 2002, which showed that 21% had accessed government services via the Internet. There has also been an increase in the percentage of businesses accessing government services online, from 44% at June 2000 to 71% at June 2003.13 The types of services most frequently accessed via the Internet include income or personal tax (16%), land rates or land tax (10%) and car, boat and vehicle registration and licenses (8%). Reasons cited for using the Internet to contact government were that it could be done at a time that suited users, required less time and was easy and uncomplicated. By contrast, the most significant reason for not using the Internet was that people thought that the service they wanted could not be done online. Almost a quarter of people cited this reason. Overall, the satisfaction levels of Australians using the Internet to access government services were high. Nine out of 10 Internet users accessing government services online achieved what they wanted, were satisfied with the ease of using the service and with the ease of finding specific information and/or service respondents. Dissatisfaction with the Internet primarily reflected difficulties in navigating websites or incomplete information on websites. The National Pests and Disease Outbreaks Website —the result of collaboration between the Australian Government and state and territory government agricultural agencies—aims to help manage agricultural emergencies by keeping stakeholders abreast of current and reliable information. Agricultural industries are economically vital to Australia. Pests and disease do not respect state boundaries, and agricultural emergencies are situations common to many countries. This website has been developed to better manage these situations. It demonstrates how government agencies can operate outside traditional organisational silos and away from the previous ‘lead agency’ model. agency case study E-government progress within APS agencies Australian Government agencies are continuing to develop innovative and practical ways of applying new technologies in order to benefit the community, business and government itself. Examples of agency initiatives designed to increase productivity, build internal capability and improve service user focus are: * DEWR’s JobSearch website enables people and organisations—whether job seekers, employers or recruitment agencies— to use electronic channels to find jobs, build resumés, advertise jobs or seek seasonal work. This service is delivered, according to the user’s preference, via a personalised web page, email, telephone or a text message to a mobile telephone. JobSearch provides access to over 300,000 jobs each day and securely holds over 100,000 resumés. * Centrelink’s Electronic Welfare Services Framework is about improving linkages between electronic government services. These services use natural voice recognition, text messaging and other technologies to implement the principle of ‘no wrong door’ so that citizens, wherever they are—at home, at a service centre, at a charity refuge, over the telephone—can quickly access government services in response to their life events. * HealthConnect is a collaborative effort between the Australian Government and state and territory governments. HealthConnect involves redefining roles and 70 The Values and relationships with the public relationships between citizens and private and public health care providers. HealthConnect is a change management strategy that aims to improve the flow of information across the Australian health sector within strict privacy safeguards. Better flows of information will give doctors, and other health professionals, access to important and potentially lifesaving medical information and improve the quality and safety of health care for all Australians. * The DITR business website offers simple and convenient access to all government information, transactions and services. It is a whole of government service providing essential information on planning, starting and running a business. This website is estimated to provide time and cost savings of approximately $50 million a year to both business and government. * The ABS is developing the National Data Network as part of its strategy to strengthen the National Statistical System. The network will support the sharing and integration of information sources relevant to policy development and research. The National Data Network will also provide access to a range of services such as data analysis and geocoding (a process of allocating latitude and longitude to each statistical unit (e.g. a business unit or dwelling)), thereby describing its position on the surface of the earth. * The ATO has introduced the Tax Agents Portal which aims to improve agents’ tax experience by ensuring they can access the information they need in a convenient, efficient and more personalised way. * The Australian Business Register (ABR) is an extensive database of identity information provided by businesses when they register for an Australian business number (ABN). The ABR makes it easier for businesses and all levels of government to interact using a unique identifier—the ABN. By providing a single point where a business can maintain its registration details and government can view business registration details, the ABR generates administrative efficiencies through re-using data. The ABR is an excellent example of re-using of information. * The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has developed an effective online search facility—the Panoptic search engine. This product provides high-level search efficiencies for agencies by combining a wide range of indicators to produce relevant search results, thereby facilitating clients’ searching for information on agency websites. The incorporation of Panoptic into the website provides access to over five million unique resources from over 1100 government sites. ICT continues to grow in both capability and complexity, as does individual agencies’ dependence on information and technology capabilities for the delivery of services. The time, cost and quality risks involved in implementing new ICT projects are high. The Edge project, a joint project between Centrelink and the Department of Family and Community Services (FaCS) to develop an expert system for the Family Assistance Office is an example of the risks involved. This project was terminated before completion as it was over time and over budget and the direct financial savings from the project were not realised, nor was the project successful when assessed against its aims.14 ANAO audits of online service delivery Government policy requires that agencies use the Internet to deliver all appropriate programmes and services.15 Implementation of this policy has led to considerable agency investment in online service delivery. Government policy also requires investment in Internet-based service delivery which should deliver tangible returns through cost reductions, increased efficiency and productivity, or improved services to businesses and the broader community. The 2005 ANAO audit programme included a number of audits on growing interconnectivity and changing service delivery through information technology and telecommunications. ANAO examined the Defence project management of the Standard Defence Supply System (SDSS) Upgrade Project, specifically project management procedures and practices in the information management system domain. ANAO found that the Project had not delivered value for money.16 Also examined was ATO’s Administration of Taxation Rulings. This was a follow-up on an earlier audit that examined ATO’s information technology (IT) systems supporting the provision of advice capability. ATO replaced systems previously used with one case management system which also supported enhanced monitoring and reporting of performance.17 Another follow-up audit of the ATO was of the integrity of Tax File Numbers. ANAO found that interrelationships between the Tax File Number (TFN) system and other systems within ATO still require some improvement.18 ANAO conducted an audit that measured the efficiency and effectiveness of e-Government. This audit examined the methods used by selected agencies to measure the efficiency and effectiveness of their delivery of services through the Internet; to evaluate the adequacy of these methods; and to identify lessons learned and opportunities for improvement. The audit covered a specific Internet-delivered service and website of each of the six participating agencies. The agencies selected were of varying size with different types of programmes and services, providing for a mixture of groups. ANAO found that all of the participating agencies had developed a strategy that set out responsibility for the management of their website and online services. Agencies’ monitoring of the effectiveness of their websites was found to be adequate; however, agencies were unable to report any efficiency savings through the use of the Internet, as they had not evaluated their services. ANAO concluded that most agencies had not developed adequate measures to determine whether their website offered an efficient form of service delivery. ANAO found that agencies generally did better in measuring the efficiency and effectiveness of selected online services, but that few agencies had collected information that facilitated comparison with other service delivery channels. It was noted that agencies could demonstrate their achievements against the Government’s aim for e-government through the provision of services to their service users, business and the broader community, but in general were unable to conclude that their investment in e-government was delivering tangible returns. Overall, ANAO determined that agencies’ methods were inadequate in assessing whether the online delivery of government services and programmes was efficient and effective, although there was evidence that agencies had made considerable progress in this arena during the last year.19 Management of strategic e-government issues Key strategic e-government issues are being addressed by high-level cross-government committees. The Online and Communications Council focuses on a broad information economy agenda of strategic national significance. The strategic priorities for the Council include broadband policy, regional and Indigenous communications services, ICT capability, e-security and online environment, e-government and digital divide. The Council is a collaborative government approach with members from all state and territory governments and the Australian Government. The Information Management Strategy Committee (IMSC), a subcommittee of MAC, is chaired by Dr Ian Watt, Secretary of Finance. Membership consists of the Secretaries and CEOs of 12 departments and agencies. IMSC provides shared leadership on multi-agency and whole of government information management strategies. It also provides whole of government governance on ICT matters that contribute to Australian Government administration, operations and service delivery. IMSC has progressed a number of significant issues. These include the Technical Interoperability Framework, an Australian Government Authentication Framework, an agreed Gatekeeper Public Key Infrastructure (PKI) Framework, a guide to ICT Sourcing and the roll-out of the FedLink encryption system (see Chapter 11). In his 28 September 2005 speech, ‘E-government, the way forward’, the Special Minister of State Senator the Hon Eric Abetz, discussed the Australian Government’s strategic directions for e-government—electronic service delivery to Australians. He stressed that e-government has reached a major turning point. The major drivers for the new direction being proposed for e-government included a commitment to achieving greater levels of use and higher levels of satisfaction with Government electronic services, the need to reduce red tape and administration, to make services simpler and more intuitive, and a desire to cut the Government’s service delivery costs.20 The challenge for the future is embedding ICT into the business of government, while ensuring value for money and ICT project success. At the same time the pursuit of service excellence and protecting privacy and security are essential. 6 The agency survey asked about the use of a range feedback mechanisms at the agency level while the employee survey asked questions concerning regular public feedback and formal mechanisms at the work unit level. 7 J. Hutton, Minister for the Cabinet Office (speech on public service reform and social justice, 24 August 2005), 8 ANAO, Taxpayers’ Charter, Performance Audit Report No. 19, December 2004; Centrelink’s Customer Charter and Community Consultation Program, Performance Audit Report No. 32, March 2005, 9 AGIMO & IPAA, Future Challenges for E-Government Volumes 1 & 2, 2004, 10 Accenture, e-Government Leadership, April 2005 11 United Nations Global E Government Readiness report (2004), 12 Australians’ Use of and Satisfaction with E-Government Services, 13 DCITA, The Current State of Play 2004, p. 23, 14 ANAO, The Edge Project, Performance Audit Report No. 40, April 2005 15 National Office for the Information Economy (NOIE), Government Online—The Commonwealth Government’s Strategy, April 2000 16 ANAO, Management of the Standard Defence Supply System Upgrade, Performance Audit Report No. 5, August 2004, 17 ANAO, Administration of Taxation Rulings Follow-up Audit, Performance Audit Report No. 7, August 2004, 18 ANAO, Australian Taxation Office Tax File Number Integrity, Performance Audit Report No. 47, May 2005, 19 ANAO, Measuring the Efficiency and Effectiveness of E-Government, Performance Audit Report No. 26, February 2005, 20 Reviews of specific programmes and administrative decision-making A suite of Commonwealth administrative law mechanisms supports public scrutiny of government decision-making. These mechanisms include the Ombudsman (who is also the Defence Force Ombudsman and the Taxation Ombudsman), external review by specialist tribunals and the Administrative Appeals Tribunal (AAT), review under the Administrative Decisions (Judicial Review) Act 1977 (Cwlth), and access to documents under the Freedom of Information Act 1982.21 With the exception of the Ombudsman, these processes generally concentrate on administrative decision-making, rather than on the process of service delivery. Many ANAO performance audits of specific government programmes also deal with issues related to service delivery and accuracy of decision- making. Information from ANAO audits on service delivery issues and the activities of the Ombudsman are discussed below. ANAO performance audits ANAO’s performance audits examine and report to Parliament on the economy, effectiveness and efficiency of the administration of many Australian government agencies. As noted above, broad themes for the 2004–05 audit work programme included growing interconnectivity and changing service delivery through ICT and evolving governance structures, including higher community expectations for strong management and appropriate governance.22 In 2004–05, ANAO tabled several performance audit reports which addressed the theme of service delivery in the context of the delivery of specific programmes or components of programmes.23 Recommendations stemming from these reports related specifically to the programmes audited, but key themes included the need to have: * basic systems and controls to promote the quality and transparency of service delivery and improved integrity and transparency of processes * adequate guidance and training available to agency employees required to deliver services * measurement and control frameworks related to administration of services delivered * up-to-date guidelines and documentation for both employees and service users and effective strategies to promote services to users * improved performance management and reporting, including by enhancing the range of performance indicators and the means of measuring performance and monitoring of service user satisfaction with services * appropriate protocols and procedures to advise service users of their rights and obligations as part of their interaction with agencies * effective management of service user and outsourced services, including clear expectations of the level and/or quality of services to be delivered and mechanisms to protect the Australian Government’s interests. In each case, the agency concerned agreed to the recommendations of ANAO. Role of the Commonwealth Ombudsman During 2004–05, the Ombudsman investigated complaints made about 105 Australian Government departments and agencies. The complaints ranged across the spectrum of government activity. Building on the experience and insights gained from handling complaints, the Ombudsman is in a good position to develop a broad perspective on the systemic issues affecting the overall effectiveness of service delivery in the APS, and some of the practical challenges facing agencies. Information in this section has been provided directly by the Ombudsman, and includes statistics also included in the Ombudsman’s 2004–05 annual report and additional analysis of systemic issues facing the APS. Own motion investigations The Ombudsman undertakes a number of own motion investigations each year. In 2004–05, the Ombudsman published reports on six own motion and major investigations relating to APS agencies. One of the investigations (which related to ATO) was completed and provided to the agency in 2003–04, and was reported in last year’s report. Of the remaining five reports finalised and released publicly in 2004–05, two related to the Australian Defence Force (ADF), two to DIMIA, and one to the Australian Crime Commission (ACC).24 Reports on two other own motion investigations concluded during 2004–05. One investigation looked at administrative matters relating to Defence’s dealings with young people. The other examined the quality of Freedom of Information processing by Australian Government agencies. The Ombudsman also commenced own motion investigations into the policy underpinning the administration of marriage-like relationships under the social security law, and an own motion investigation into DIMIA’s administration of visa cancellations under section 501 of the Migration Act 1958 in relation to long-term Australian residents. In addition, the review commenced by the Ombudsman in 2003–04 on the complaint- handling mechanisms employed by DoTARS continued during 2004–05. This was due to DoTARS developing new complaint procedures within its Vehicle Standards Safety Branch and also initiating a review of internal complaint-handling procedures in other areas during the year. Complaints to the Ombudsman Many larger agencies have established effective mechanisms for reviewing decisions, handling complaints and obtaining customer feedback to enable improvements to services. This means that for many of the approaches made by members of the public, the Ombudsman does not initially investigate the matter but advises the person about using agency mechanisms for complaint handling and review. Complainants may subsequently request the Ombudsman’s assistance if the agency does not resolve the issues. The total number of complaints received by the Ombudsman in 2004–05 was 17,310, a decrease of 1% over the previous year.25 Of these, 14,143 complaints were related to APS agencies, a decrease of 1.6% over the 14,380 received in the previous year. This year’s decrease was spread across most agencies; however, it was offset by an increase in complaints received about DEWR (up 19% from a small base) and the CSA (up 7%). In 2004–05, the Ombudsman did not initially investigate 67% of complaints received— an investigation rate similar to that for the previous three years. The complaints that are investigated by the Ombudsman about the activities of APS agencies tend to involve more complex and difficult issues. Centrelink remains the APS agency about which the most complaints are received, due to its primary role in the delivery of a large number of Australian Government programmes to the Australian public. Complaints about Centrelink finalised during the year fell by 4% to 7719, accounting for 54% of complaints finalised about APS agencies. The Ombudsman chose not to investigate over two-thirds of complaints received about Centrelink, instead referring 70% of these complaints to Centrelink’s internal complaint or review processes. Of the 2696 Centrelink issues investigated, the Ombudsman identified an arguable administrative deficiency or error in 415 issues (15%). Remedies were achieved for 2024 of issues investigated. The Ombudsman received 2094 complaints about CSA, representing almost 15% of complaints received about APS agencies and an increase of 7% on CSA complaints received last year. The number of complaints received about ATO continued to decline (1633, down by 5% on last year), perhaps reflecting the bedding down of the major changes to the taxation system over the past four years. Complaints about ATO represent 12% of complaints received about APS agencies. This suggests a return to greater stability in ATO complaint numbers comparable with the period prior to the introduction of the new tax system and the difficulties over the tax treatment of mass-marketed investment schemes. DIMIA was another substantial source of complaints received by the Ombudsman during the year, with 873 complaints received, compared to 865 complaints received last year. The Ombudsman investigated 43% of complaint issues arising from complaints about DIMIA, against the general average of 33% across all Australian Government agencies.26 The higher investigation rate perhaps reflects the more limited availability of internal review for DIMIA’s complainants. Of the 427 DIMIA issues investigated, the Ombudsman identified arguable administrative deficiency or error in only 41 issues (10%). This compares favourably with the average for APS agencies of 13%. Systemic issues There continues to be a large number of complaints about APS agencies that consistently raise common themes. Many complainants are concerned about agency decisions that directly affect them, and complain that they have not been given sufficient reasons for the decision or that the decisions are flawed. Investigation of such complaints is often complicated due to poor record keeping by agencies or a failure to record oral advice. This latter issue is of particular importance, given the widespread use of customer contact centres to respond to queries in large service delivery agencies. Complaints about call centres arise particularly in relation to Centrelink, CSA and ATO. The other major area that continues to result in many complaints to the Ombudsman is delay by agencies in taking actions or making decisions. Other matters include harsh or unreasonable use of statutory powers to gather information or enter premises; unreasonable debt recovery policies and practices; failure to coordinate decisions and actions between agencies; loss of correspondence; and inadequate, misleading or ambiguous information in publications or on websites. Private contractors Some aspects of the role of the Ombudsman have changed over the years because of developments in the way agencies go about their business. As more agencies ‘contract out’ some of their operations, the Ombudsman tries to ensure that proper accountability is retained, either by treating the contractor’s actions as those of the agency (if that can lawfully be done) or by examining the way in which the agency dealt with a complaint about the contractor. The limits of government responsibility and responsiveness are tested by complaints that stem from the failure of private entities to meet their obligations to government, with consequent injury to others. An example is complaints about the Superannuation Guarantee. Where an employer fails to pay superannuation contributions in respect of employees, ATO can pursue the employer for the unpaid superannuation. However, ATO is limited to using the recovery mechanisms established by law. If an employer goes into insolvency, there is often little scope for ATO to recover the monies owed to the employees. In such cases, it is difficult for the Ombudsman to go beyond investigating with a view to reassuring complainants all has been reasonably done under the law to assist in the recovery of their lost entitlements. Tax complaints received by the Ombudsman reveal similar issues. Tax agents play an increasingly important role in our taxation system, with almost 75% of individual tax returns prepared by agents. Although there is some scope for administrative discretion, the ultimate responsibility for the return rests with the taxpayer. Where an agent makes a mistake in a return, or fails to lodge a return, the taxpayer will generally carry the burden for those errors. One line of investigation that can be pursued is to consider whether ATO has taken account of all the facts and been prepared to exercise any available discretion to assist the taxpayer. Beyond that, taxpayers are advised of their right to take the matter up with either the relevant Tax Agents’ Board or the appropriate professional body. Action taken by government contractors that affects members of the public is another area where the Ombudsman has cause to examine the limits of government responsibility. This has been a particular theme this year in relation to complaints about actions occurring in immigration detention facilities managed by a private service provider under a contracted arrangement with DIMIA; the department retains an overall duty of care for detainees, and the Immigration Detention Standards provide the framework for how detainees are to be managed and treated. DIMIA may nevertheless decline responsibility for actions taken by independent contractors, such as medical practitioners. The Ombudsman also deals with the complex and difficult area of complaints about the way agencies conduct tenders and administer contracts to provide services. Most agencies have developed effective internal complaint and review systems. While sound internal complaint management can reduce the number of complaints that the Ombudsman needs to consider, the effect is commonly that the Ombudsman deals with a higher proportion of more complex or intractable matters. 21 The availability of review mechanisms varies depending on a range of factors, including the specific legislative context. For a comprehensive description of Commonwealth administrative law refer to the federal Attorney-General’s Department website 22 ANAO, Audit Activity Report: July to December 2004, Audit Activity Report No. 23, January 2005, 23 ANAO, Performance Audit Report Nos. 14, 19, 24, 32, 37, 43, 50, 51, 58, published in 2004–05, 24 To the extent possible, the Ombudsman’s reports on own motion investigations are published in full or in an abridged version on the Ombudsman’s website at . 25 Complaints received in all jurisdictions, including ADF, Australian Federal Police (AFP) and ACT. 26 Commonwealth and ADF complaints (excludes AFP and ACT complaints). Key chapter findings Increasingly, the focus of service delivery is shifting towards a whole of government approach. The push to move services and information resources online has continued and would appear to be the way of the future. Despite significant investment in the move to online service provision, governments around the world, including Australia, are still recognising the need for further improvement to meet the growing expectations of citizens for better customer service. The agency survey shows that consultation in the making of policy and programme decisions is widespread among APS agencies, but less in the area of government regulation. Consultation continues to be a significant mechanism for engaging stakeholders in public debate about government services. The increased government presence on the Internet and citizen access to government services and resources via this medium provides a ready-made mechanism for engaging with service user groups, and is already being used, by agencies. Improving service delivery continues to be a major theme for the APS. With 55% of APS employees directly involved in the delivery of services to the general public, or managing employees who do so, the importance of those Values that set out how the APS interacts with the public is paramount. As expected, employees delivering services are predominantly located outside the ACT. Results from selected agency service user satisfaction surveys paint a positive picture in relation to the overall satisfaction with selected APS organisations, with the majority of service user satisfaction levels with agencies above 80% in 2005. The majority of agencies appear to have developed effective mechanisms for receiving and responding to feedback from the general public. Seventy-nine per cent of relevant employees confirmed that formal feedback mechanisms were in place, although employees reported a drop in the effectiveness of these mechanisms. Over three- quarters of APS employees involved in service delivery agree that they received ‘appropriate training or have access to information that enabled them to undertake their client service responsibilities’. The use of service charters is widespread, and most agencies have taken on board the need to monitor and review their effectiveness. Although progress has been made, as suggested by ANAO, more work is required before service charters can effectively drive service improvement. Australian Government agencies are continuing to develop innovative and practical ways of applying new technologies to benefit the community, business and government itself. The Australian Government’s e-government objective is to simplify the complexity of government and improve efficiency of government administration at the same time. Agencies are identifying priority areas for service improvement, where better linkages can bring tangible benefits to a citizen’s experience of electronic government services. Information provided by the Ombudsman indicates that, although complaint numbers decreased this year, there continues to be a large number of complaints regarding the lack of information provided about decisions made by agencies or that decisions are flawed, and that this is often compounded by poor agency record keeping. Evidence from ANAO reports suggests also that agencies need to have systems in place to promote the quality and transparency of service delivery along with mechanisms that measure the effectiveness of the service they provide. Chapter 5: The Values and workplace relationships The Values, which provide the framework for effective workplace relationships in the APS, articulate an APS: * where employment decisions are based on merit * that provides eligible members of the Australian community with the opportunity to apply for APS employment * that is free from discrimination and recognises and utilises the diversity of the Australian community it serves * where workplace relations value communication, consultation, cooperation and input from employees on matters that affect their workplace * that provides a fair, flexible, safe and rewarding workplace * that focuses on achieving results and managing performance * that promotes equity in employment * that provides a fair system of review of decisions taken in respect of APS employees. In examining the relationship between the Values and workplace relationships, this chapter draws on both employee perceptions and agency practices. The issues discussed include the application of merit in employment decisions, review mechanisms, the major developments in APS remuneration in 2004–05, consultative mechanisms adopted by agencies and, finally, data from Comcare is presented. Other important aspects of workplace relationships in the APS—personal behaviour including bullying or harassment, diversity and leadership—are discussed in Chapter 6, ‘Personal Behaviour’, Chapter 9, ‘Workplace Diversity’ and Chapter 10, ‘Leadership, Learning and Development in the APS’. Merit and access to APS employment The principle of merit-based selection is one of the foundations of employment within the APS. Indeed, it remains as vital today as when it was elaborated in the first Annual Report of the Public Service Commissioner in 1904. In that report, Commissioner Duncan McLachlan stated, ‘Merit is the foundation of a just and equitable system, excluding all political and other patronage, throwing all appointments open to rich and poor alike’. The Value requiring that employment decisions be based on merit is complemented by the Value requiring that all eligible members of the Australian community have a reasonable opportunity to apply for APS employment.1 The practical application of merit in selection for engagement or promotion requires agencies to have in place processes designed to ensure that eligible applicants can apply and that the selection process, determined in advance, is both transparent and fair. The selection decision must be made following an assessment of the relative suitability of candidates for the duties following a competitive selection process. The Act and the Commissioner’s Directions specify that the assessment must be based on the relationship between the candidates’ work-related qualities and the work-related qualities required for the duties, and must focus on the relative capacity of the candidates to achieve outcomes related to the duties. Employment decisions that do not involve engagement or promotion must still be based on merit but need not involve a competitive selection process. A selection process, for example, to assign new duties to an employee within an agency at the same classification (i.e. internal transfer), as a minimum, must include an assessment of an employee’s work-related qualities against the work-related qualities required for efficient and effective organisational performance. The decision as to whether or not to open such opportunities to competition, rests with the agency and will be determined by its staffing policies and the nature of the opportunity. SES engagements Different processes2 are adopted for selection processes for promotions or engagements to the SES than are adopted for non-SES selections. This distinction reflects the need to ensure the application of a transparent process to the assessment of applicants for the senior leadership group of the APS, with assessment focusing on the core leadership capabilities required at this level. These processes do not preclude considerable scope for agencies to draw on a range of processes that best suit the needs of their organisation, including executive search, assessment centres and recruitment agencies. An important aspect of the Commissioner’s oversighting responsibilities under the Commissioner’s Directions is the endorsement of a promotion or engagement process. Each selection panel must include a Commissioner’s representative, whose certification of the selection process must be endorsed by the Commissioner before an engagement or promotion can be effected. The Commissioner has recently advised agency heads that the Commissioner’s representative must hold a higher classification than the classification of the employment opportunity being filled. All SES employment opportunities must be notified in the Public Service Gazette (the Gazette) and in the press, and applicants are assessed against the five core SES selection criteria that were adopted in 1999. In December 2004, the Commission relaxed the requirements relating to agencies adding additional job and/or agency-specific selection criteria to the five core SES selection criteria.3 The change, allowing agencies to add one extra criterion without requiring the Commissioner’s agreement, recognised that agencies have added additional criteria appropriately. Agencies are still required to seek the Commissioner’s agreement where two or more additional criteria are proposed. In relation to the Commissioner’s role in scrutinising SES selection processes, all processes put forward to the Commissioner in 2004–05 were endorsed following the usual full examination of the relevant selection documentation. Leadership issues are discussed in Chapter 10. 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 not requiring, a competitive selection process. This section examines the results of these questions. The employee survey asked respondents to indicate their level of agreement as to whether, in their experience, their agency routinely applies merit (as defined in the Act) in a number of types of employment decisions. 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 (53%) agreed, while 21% 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 (38%) and from outside (37%) the agency and temporary assignment of higher duties (37%)). Employees were even less likely to have agreed that merit is routinely applied in these types of employment decisions if a competitive selection process was not involved (30% (transfers within), 23% (transfers outside) and 34% (higher duties), 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 greatly according to whether or not there had been a competitive selection process. Consistent with last year’s results, employees in large agencies were less likely to agree that merit is routinely applied (across all decision types involving a competitive selection exercise) than were employees in medium and small agencies. An examination of large agency responses suggests that this decline in confidence was fairly evenly spread across all large agencies and without a bias towards one or two large agencies. Table 5.1: Employees’ perceptions of merit about various types of employment decisions, 2003–04 and 2004–05   My agency routinely applies merit (as defined in the Act) in the following types of employment decisions   Agree (%) Neither agree nor disagree (%) Disagree (%) Don’t know (%)   2003–04 2004–05 2003–04 2004–05 2003–04 2004–05 2003–04 2004–05 Engagement and promotion resulting   from a CSP* 59 53 18 19 18 21 4 7 Movement at level from another agency   from a CSP 42 37 27 27 12 13 19 23 without a CSP 26 23 33 29 15 16 27 32 Movement at level within my agency                 from a CSP 44 38 26 28 21 23 10 12 without a CSP 33 30 30 28 21 24 15 18 Temporary assignment of ‘higher duties’                 from a CSP 42 37 23 24 27 28 8 11 without a CSP 35 34 28 26 25 24 12 16 Source: Employee survey Note: * CSP—competitive selection process to assess the relative suitability of applicants for the duties of a job. The only employment decision where more than 50% of employees were confident that merit is routinely applied was that of ‘engagement and promotion’—the sole decision category requiring a competitive selection process. Table 5.1 also shows that employee perceptions of whether merit was applied in employment decisions have declined (at statistically significant rates) across all decision types compared to last year—although the overall pattern of responses remains similar. The only exception to this decline in perception of merit was the temporary assignment of higher duties when a competitive selection process is not used—this was not significantly different. The most significant fall in perception that merit was applied (six percentage points) was in the category of engagement and promotion decisions. The fall in confidence in other decision types ranged from one to five percentage points. While there have been some increases in the percentage of employees disagreeing that merit is applied, the survey showed an increasing proportion of employees (between two and five percentage points for the different employment decisions) who ‘don’t know’ whether merit is routinely applied in their agency. In 2004, the Commission conducted a small study of participants in Commission training courses dealing with the concept of merit to test whether there was any evidence that the varying perceptions of merit across both the competitive and non-competitive processes reflected a lack of awareness of the legislative provisions around the application of merit. Questions were asked both prior to training and after the course. Almost all of the 164 respondents (98%) were aware that a competitive selection process assessing the relative suitability of candidates was mandatory for promotion and engagement decisions. However, knowledge of the actual merit selection process was much lower, with only 66% of respondents being aware that an interview was optional and only 64% knowing that a referee or delegate can be included on a selection panel. Although these results are not representative of APS employees, they provide some insight as to why only around half of APS employees agree that merit is applied in their agency for promotion and engagement decisions. In the small study, the percentage of respondents who correctly answered the questions relating to movement at level (i.e. transfers between and within agencies), and temporary assignment of duties at a higher classification (‘higher duties’), was 55% and 53% respectively. This outcome mirrors the result of the State of the Service employee survey showing reduced confidence in employment decisions involving movement and temporary assignment. The results of this study, discussed further below, suggest that knowledge of what the merit Value requires in relation to particular types of decisions (other than basic awareness of the need for a competitive process for engagement and promotion to assess relative suitability) was relatively low amongst those who completed the questionnaire. This study also suggests that training in the concept of merit can improve knowledge of the merit Value, and it should assist employees in determining whether merit is appropriately applied in their agency. Merit study 2004 In 2004, the Commission undertook a small study of APS employees to collect information on factors affecting perceptions of merit in the APS, including the level of understanding among APS employees of what merit means and how it applies to different employment decisions under the Act. A questionnaire was developed to examine whether perceptions of merit are linked to levels of understanding of the application of merit under the Act and to help assess the impact of merit-related training on perceptions of merit. Participants attending Commission courses containing content that covered the application of merit to employment decisions were asked to complete the questionnaire. Prior to commencing the training, participants were asked about their level of confidence that merit was consistently applied in the APS. The respondents were also given six statements covering a number of merit-related scenarios and asked whether each statement was true or false. At the completion of the training, participants were asked whether the training had changed their understanding of the application of merit and their confidence about how consistently merit is applied to selection processes. Completion of the questionnaire was voluntary and 164 non-SES employees provided a response. Of these respondents: * 60% were female * 70% were located outside of Canberra . * 73% were at APS 1–6 or equivalent classifications. Prior to receiving training, 35% of the respondents who answered the question were highly confident and a further 52% moderately confident, that merit is consistently applied in the APS. There was some difference evident by location, with the respondents outside the ACT (37%) more highly confident than respondents within the ACT (29%). Almost all respondents (98%) knew that a competitive selection process assessing the relative suitability of candidates must be used in promotion and engagement decisions. However, the responses to the remaining five questions showed a much lower level of awareness of current minimum requirements: * Two-thirds of respondents knew that an interview is not required for a competitive selection for promotion or engagement. * Just under two-thirds of respondents knew that an employee providing a referee report on an applicant and/or the delegate who has the authority to decide the outcome may be part of the selection committee. * Fifty-eight per cent of respondents were aware that factors such as availability within a certain timeframe or refusing to move without the payment of removal costs can be taken into account when deciding to promote or engage a person. * Fifty-five per cent knew that a competitive selection process is not required for movement at level either within or between agencies. * Just over half of respondents knew that temporary ‘higher duties’ need not be given to the most efficient and effective employee—it can be used for developmental purposes. Of the respondents who answered at least one question, only 13% answered all six questions correctly and a further 23% had five correct. The level of confidence in the application of merit did not necessarily result in correct answers. Forty per cent of respondents reporting high confidence scored five or six compared to 37% of respondents with moderate confidence. After the training, 71% of the respondents who answered the question indicated that their understanding of the application of merit to selection processes in the APS had changed. Forty-one per cent of respondents were more confident that merit had been applied to selection processes in the APS following the training programme; 49% noted no change and only 7% of respondents reported less confidence. APS 1–6 respondents and respondents outside of the ACT indicated they were more confident that merit had been applied after the training session than EL and ACT respondents. While this small study is not representative of APS employees, the results support the view that perceptions of merit are associated with the level of understanding of the processes, and that training can assist employees to understand how merit applies in different situations and to better evaluate the application of merit within agencies. study The data examined in the remainder of this section was collected in the employee survey and relates to employees’ perceptions of merit regarding engagements and promotions resulting from a competitive selection process. Analysis shows that a number of variables strongly associated with these results are consistent with those noted last year, although they also reflect the overall decrease in employees’ perceptions that merit is routinely applied. Perceptions of merit continue to vary amongst employees in the 21 large agencies— with 31% to 71% of employees having agreed that merit is routinely applied in their agency. Seven large agencies had agreement rates that were statistically significantly higher than the APS average of 53%: BoM, CRS, DEST, DEWR, Finance, DFAT and DEH. Only three agencies were statistically significantly lower than the APS average—the Australian Securities and Investments Commission (ASIC), ATO and Centrelink. Employees in large agencies were considerably less likely to agree that merit was applied (51%) than employees in small or medium agencies (both 65%), as were those employees working outside the ACT (49%) compared to those working in the ACT (61%). An employee’s classification was also significant, with APS 1–6 employees least likely to agree that merit was applied (48%) compared to EL (69%) and SES (79%) employees. Again, perceptions of merit were strongly related to employees’ job satisfaction levels and their views on the integrity of their immediate supervisor. Employees with the highest level of job satisfaction were more likely to report higher confidence in the application of merit (69%) than were those with the lowest level of job satisfaction (21%).4 Employees who agree that their immediate manager acts in accordance with the Values are more likely to agree that merit is applied (56%) than those who disagreed that their immediate manager acts in accordance with the Values (34%). The confidence that merit is applied is also higher (60%) if employees agree that the most senior managers in the agency act in accordance with the Values in their everyday work. This year’s data is also consistent with the finding in 2003–04 that employees who have applied for, and been successful in obtaining, a new position in the last 12 months, are more likely to agree that merit has been applied (68%) compared to employees who have applied and were unsuccessful (45%). Not surprisingly, unsuccessful applicants were over twice as likely to consider that merit was not applied as were successful applicants (30% compared to 13%). There is little difference in the level of agreement that merit is applied between employees who have applied for positions (53%) and those who have not (52%), but those who have applied for a position are more likely to disagree (25%) than those who did not (19%). In 2004–05, 45% of employees had applied for a position, a seven percentage point increase over 2003–04. On the basis of the most recent employee survey data, the APS does not compare favourably with state jurisdictions on the measure of whether employees consider employment decisions to be fair. The 2005 employee survey indicated only 35% of APS employees agreed that promotion and engagement decisions were fair compared to 53% of WA public sector health and education employees surveyed.5 The Victorian Office of Public Employment’s People Matter Survey Report 2004, noted that 62% of employees agreed with the statement ‘selection decisions in this organisation are fair’. Care should be taken when comparing the Victorian result with the APS and WA results as there was a difference in the response options available.6 It is not evident from the employee survey data why there has been an overall decrease in employees’ perceptions that merit is routinely applied. The small merit study results indicate that this may be in part a reflection of employees’ knowledge of the practical application of the merit Value. However, the variability of employees’ perceptions apparent within the larger agencies, and the strong relationships between perceptions of the immediate managers and more senior managers behaving in accordance with the Values, indicates that agency-specific issues may be influencing these findings. As these agency-specific issues are very difficult to capture in an APS-wide survey, agencies—particularly those with poorer results—need to investigate why employees are less confident in the application of merit in order to address this issue as part of meeting their responsibilities to uphold and promote the Values. Selection processes used by agencies In 2004–05, all 82 agencies recruited APS 1–6 and EL employees, although only 53 agencies recruited at least one SES employee. Subject to the APS recruitment framework, including the Values of merit and reasonable community access, agencies are able to use varying selection processes for employment decisions depending on their individual needs and circumstances. Sixty-three percent of all agencies reported that they routinely require the use of competitive selection processes for non-SES movements at level from another agency (down from around 75% in 2003–04), although this is not required under the statutory framework. This rate fell to 51% of agencies in relation to processes for movements at level within the agency, a slight fall from 55% in 2003–04. Small agencies were more likely to have such requirements for both external and internal transfers7 (77% and 57%, respectively), while large agencies had the lowest rates of such requirements for external transfers (52%) and medium agencies for internal transfers (46%). Just over three-quarters of agencies reported having a routine requirement for competitive selection processes for the assignment of long-term temporary higher duties despite this not being a requirement under the statutory framework. This level is similar to that reported in 2003–04. Again, small agencies were more likely to have such a requirement (83%). This year’s survey asked agencies to indicate whether they had used particular recruitment selection measures from a list of 16 possible measures. Where an agency identified that they had used a particular measure, they were then asked the proportion of selections for which that measure was used (<25%, 25%–50%, 51%–75%, >75%). Agencies were also given the option of indicating that they were unsure because the function was devolved. Not surprisingly, of the relevant agencies, large agencies reported higher rates of uncertainty across the different measures ranging from 5%–33% for APS 1–6 selections and from 5%–33% for EL selections. Where agencies were able to identify the proportion of usage, there was no clear pattern by classification or agency size. Agencies reported using a variety of selection processes for the engagement, promotion, and movement of employees for the APS 1–6, EL and SES groups. These variations fall mostly into one of two categories—the form of the selection process and the selection techniques used to assess applicants. The remaining processes involve the extent to which agencies outsource aspects of the selection process. Results from the agency survey show some variation by agency size and classification. Examining the form of the selection process, almost 90% of agencies report using internal assignment of duties at level and existing orders of merit to fill a vacancy— the two most common selection processes. While all large agencies report using these processes for the APS 1–6 and EL groups, small and medium agencies are more likely to use these processes for APS 1–6 selection than for EL selection. With SES selection, large agencies were more likely to use internal assignment of duties at level (81%) and existing orders of merit (62%) than small agencies (3% and 11%, respectively). The other methods used by more than half of agencies to select ongoing employees were movements from another agency without a competitive selection process (57%) and use of bulk rounds8 at agency or group level (56%). While only 21% of agencies nominated use of Independent Selection Advisory Committees (ISACs), their use was more commonly reported in large agencies, and for APS 1–6 selection exercises. The most common selection technique remains face-to-face interviews (100% of agencies). In addition, 99% of agencies included on the selection panel at least one member from outside the general work area. These results are consistent with last year’s. All medium and large agencies reported using the above processes for APS 1–6 and EL selections and for SES selections (if undertaken) in 2004–05. The pattern varied among smaller agencies depending on classification—two agencies did not use face-to-face interviews for EL selections and one for SES, while four small agencies did not report ‘including a panel member from outside the area’ for APS 1–6 selections and three did not report doing so for EL selections. Further examination of the selection techniques used to assess applicants shows that since 2003–04 the use of three types of selection techniques has fallen across all agencies—assessment centres (by eight percentage points to 18%), psychometric testing (by five percentage points to 27%) and other direct testing exercises to assess required workplace skills (by three percentage points to 50%). Conversely, the use of initial telephone screening of applications is now used in nearly one-third of agencies (an increase of 17 percentage points). The proportion of agencies using assessment centres, psychometric testing and direct testing exercises decreases substantially as the classification of the duties increases (they are used by 8% or fewer agencies for SES selection exercises);9 these processes are generally used more by large agencies. Just over three-quarters of large agencies used direct testing to assess required workplace skills in some APS 1–6 selection exercises compared to 37% of small and 46% of medium agencies. The pattern for initial telephone screening is similar, with around half of large agencies and 14% of small agencies reporting use at the APS 1–6 levels. Examining the remaining processes—the extent to which agencies outsource aspects of the recruitment process—shows that while agencies continue to outsource aspects of the selection process to recruitment agencies, there has been some variation in the degree across agencies. There has been a small reduction in the percentage of agencies using recruitment agencies for assistance with routine administration such as scribing— from 89% to 84%. At the same time, 56% of agencies report using recruitment agencies for more than routine administration but for less than the entire process (a rise of 16 percentage points). Nearly one in four agencies now use recruitment agencies for the entire process including the recommendation to the delegate (up from 20%). Agencies of all sizes were more likely to report using recruitment agencies for routine assistance, but small agencies made far less use of more than routine assistance (APS 1–6 (17%) and EL and SES (both 11%), respectively) than medium or large agencies. The use of recruitment agencies for the entire selection process has remained constant at 11% of all agencies for EL selections and has risen slightly for APS 1–6 selection processes (from around 14% to 17% of agencies). This year small agencies have only used recruitment agencies for SES selections. Their use peaks in large agencies, nearly half of which report using recruitment agencies for the whole process in some APS 1–6 selections and in around a quarter in EL selections. This year’s agency survey asked new questions concerning selection processes that relied only on written applications and those relying on written applications combined with referee reports. Total reliance on written applications was the lowest reported selection method and was used in only 14 agencies (17%). Total reliance on written applications increased by agency size, with only two small agencies (6%) reporting its use compared to almost half of large agencies (48%). Eight of the 14 agencies used it for both APS 1–6 and EL selections, with a further four using it for APS 1–6 selections only and two for EL selections only—no agency totally relied on written reports for SES selection. For both the APS 1–6 and EL groups, it was most commonly used for movements at level within the agency, followed by promotion. It was least used for movements at level from another agency. Agencies reporting reliance on written applications combined with referee reports only, for selection, were similar to 2003–04, with 44 agencies (54%) reporting usage in 2004–05. There are differences in patterns of use by agency size, with 37% of small agencies reporting its use compared to 86% of large agencies (medium 50%). Of those 44 agencies, 26 used it for both APS 1–6 and EL selections with a further 16 using it for APS 1–6 only and two for EL selections only. One agency reported its use for SES selection for movement within the agency (internal transfer). Like the use of written applications alone, for both the APS 1–6 and EL groups, written applications combined with referee reports were most commonly used for movements at level within the agency, followed by promotion of employees. They were least used for movements at level from another agency. Over the last few years, there have been reports in the media indicating that a number of job applicants may be providing false or misleading information during recruitment processes. In the Commission publication, Ongoing Employment—Recruitment and Selection, agencies are encouraged to seek relevant information and to undertake appropriate pre-employment checking. This year agencies were asked whether they had a policy of verifying claims made by applicants as part of the selection process prior to employment. Almost all agencies noted that they had some policies for new recruits, the only exception being two small agencies. The two most common policies or processes in relevant agencies were character checks such as police checks (93%) and reference checks (88%). Just over half of agencies check qualifications (55%) and claims of prior work experience (60%), with less than one in five checking for prior APS misconduct proceedings. Other processes undertaken by agencies include security clearances, medical or health assessments and citizenship checks. It is important for agencies to collect and verify relevant information where practical prior to engaging prospective employees. While the Code requires honesty and integrity in the course of employment and specifically prohibits an APS employee from providing false or misleading information in connection with employment, the Code does not apply to prospective employees. The Commission has suggested that APS agencies: * advise prospective employees that the Criminal Code Act 1995 creates offences relating to providing false or misleading information or documents * require new employees to sign a declaration that the statements they made in the course of completing their recruitment and clearance processes (both before and after engagement) were true10 * impose a condition of engagement stating that employment was subject to a condition that the employee did not provide false or misleading information.11 Agencies with policies for graduate programme recruits (50%) also have policies for verifying claims made by applicants regarding character checks (83%), references (76%), prior work experience (56%) and checking for prior APS misconduct (20%). Not surprisingly, a greater emphasis was placed on verifying claims regarding qualifications in agencies with a graduate programme (80% of agencies). Some agencies also noted policies covering pre-employment checks for other specialist groups (including IP Australia examiners, legal officers, public affairs officers, engineers), for positions needing qualifications, for non-ongoing employees and for the SES. These groups are usually also subject to the other checks undertaken by the employing agency, outlined previously. As merit is one of the key Values, agencies are encouraged to use the flexibilities available under the legislative framework to ensure selection processes identify the right person for the particular employment opportunity in the most efficient way. While the traditional selection techniques such as face-to-face interviews are still effective tools, agencies need to ensure they are assessing the effectiveness of other potential techniques while at the same time considering the most appropriate methods of selection. The increasing use of some selection techniques or methods may, in part, be contributing to the fall in employee confidence that merit is routinely applied in their agency. The use of initial telephone screening of applicants, for example, can be an effective technique as part of a competitive process. However, if the process is not transparent and prospective employees are either unaware of the criteria against which they are being assessed or are unaware that the telephone call is part of the selection process, then applicants may well consider that merit has not been applied. Community access to APS employment opportunities Under the Values, agencies are required to provide a reasonable opportunity for community access to employment opportunities.12 Since 1998, the Commission has undertaken a small annual survey of the selection outcomes of non-SES ongoing employment opportunities notified in a February Gazette aimed at providing a snapshot of access trends. This study was undertaken again in 2005, using the employment opportunities notified in the Gazette of 17 February 2005. The percentage of ongoing employment opportunities notified in the Gazette of 17 February 2005 as being open to the public was again over the 99% mark recorded in surveys prior to the 2004 survey (when it fell to 98%). As shown in Figure 5.1 below, this year also saw a reversal in the previous decline in the total number of ongoing employment opportunities notified in the February Gazette. The 608 notified opportunities represent a substantial increase over the 2004 figure of 393. Figure 5.1: Number of employment opportunities notified in the February Gazette, 2001 to 2005 Source: Commission access survey Possible reasons behind the variability of the number of opportunities from year to year include recruitment freezes in large agencies, bulk recruitment practices such as the use of ISACs and use of existing orders of merit to fill opportunities. Agencies are able to draw on an order of merit arising out of a notification in the Gazette to promote or engage people to similar employment opportunities for a period of 12 months from the date of the original Gazette notification. Information was provided by agencies on subsequent selection action in relation to the 608 ongoing employment opportunities that arose from the 280 Gazette notices.13 As shown in Figure 5.2 below, 68 (11%) of selection exercises had not resulted in a selection by early August 2005. Just under half of these incomplete selection exercises had ceased for a variety of reasons, including the selected applicant declining the offer, a reorganisation within an agency, no suitable applicant being identified, or the implementation of a machinery of government change. This represents a slight increase in the number of non-finalised exercises over the previous year. Figure 5.2: Proportion of employment opportunities notified in the February Gazette that did not result in a selection, 2001 to 2005 Source: Commission access survey Of the finalised positions that were open to eligible members of the community, just over 40% were filled on an ongoing basis by applicants who were external to the APS, down from the high of 51% in 2003. However, this is higher than the average of 34% for the eight years of the survey. Given that the study draws on only one Gazette a year, it is difficult to be definitive on overall trends. However, as it did last year, the data obtained supports the general observation that agencies: * are providing reasonable community access to APS employment opportunities * have measures in place to allow external applicants to compete on merit. The proportion of lateral engagements, (employment opportunities filled from outside the APS) is also an indicator of community access to APS employment opportunities. The proportion of lateral engagements has increased substantially over the past decade suggesting an opening up of the APS labour market. This issue is discussed further in Chapter 2, ‘Statistical Snapshot’ and Chapter 8 ‘Managing, Sustaining and Engaging the APS workforce’. The recent MAC report, Managing and Sustaining the APS Workforce states that, if agencies are to derive maximum benefit from APS-wide efforts to attract more quality potential recruits, they need to ensure their recruitment processes do not discourage outsiders from applying. In reviewing these processes, agencies should remove impenetrable public service jargon, ensure selection criteria are used consistently and sparingly, clearly specify all required written information in applications, and make effective use of e-recruitment and interactive online processes.14 The MAC report’s recommendations on APS capability recruitment are discussed in Chapter 8 of this report. Use of clause 4.2A of the Commissioner’s Directions— engagement in exceptional circumstances Clause 4.2A of the Commissioner’s Directions permits the Commissioner to authorise an agency head to engage a non-ongoing employee as an ongoing employee without the need for further advertising or merit competition in exceptional cases. In the explanatory statement to the amending Commissioner’s Direction, the Commissioner undertook to report annually on the use of this authority. In 2004–05, the Commissioner exercised this power once, authorising the engagement of a non-ongoing employee as an ongoing employee in the National Oceans Office. Following a competitive selection process for an ongoing opportunity, the successful applicant was engaged as a non-ongoing employee pending obtaining release from a non-APS agency. As it took more than 12 months for the employee to obtain such a release, the agency head was unable to use the original merit-based selection exercise to engage the employee as an ongoing employee, consistent with the undertakings given to the employee, and sought the assistance of the Commissioner. In making his decision, the then Commissioner had regard to the following factors: * the written request by the agency head outlining the suitability of the non-ongoing employee * evidence of compliance with the Values of merit and reasonable access in the original engagement as a non-ongoing employee—the relevant employment opportunity was notified in the Gazette and followed by a competitive selection process * the existence of exceptional circumstances that justified an ongoing engagement. 1 The Act and the Public Service Commissioner’s Directions 1999 (the Commissioner’s Directions), Chapters 2 and 4, contain further requirements in relation to engagement and promotion and other employment decisions. 2 The Commissioner’s Directions, Chapter 6. 3 The additional SES criteria change was announced through Commission Circular 2004/7 of 6 December 2004. 4 The highest levels of job satisfaction—scores of nine or higher in the job satisfaction index—are discussed in Chapter 8, ‘Managing, Sustaining and Engaging the APS Workforce’. The lowest levels are scores of two or less in the index. 5 The data for WA for 2004–05 represents two non-metropolitan Departments of Education and two non-metropolitan Departments of Health. 6 While the question was similar to that included in the APS employee survey, the possible responses varied. The Victorian survey used ‘don’t know’ rather than ‘neither agree nor disagree’ which may not elicit a similar pattern of responses. 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 A bulk round is a recruitment exercise that involves the filling of a number of employment opportunities from the one selection exercise. 9 While the Career Development Assessment Centre (CDAC) process is widely used by agencies to identify the developmental needs of EL2 employees, it is not a selection method. 10 Australian Public Service Commission, Ongoing Employment—Recruitment and Related Issues, 2005, 11 Australian Public Service Commission, Conditions of Engagement, 2005, 12 The Commissioner’s Directions elaborate on the scope and application of this Value in Chapter 2 and Chapter 4. 13 A Gazette notification may be for a single employment opportunity or for multiple opportunities. 14 Management Advisory Committee 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra. Review of employment actions One of the Values relevant to the employment relationship is that the APS provides a fair system of review of actions taken in respect of APS employees. The Act, the Public Service Regulations 1999 (the Regulations) and the Commissioner’s Directions establish a review of action framework for the APS. The intent of the framework is to encourage the resolution of employee concerns in the workplace, including the use of alternative dispute resolution methods where appropriate. Under the Regulations, non-SES employees may seek review of certain actions or decisions that relate to their employment. Subject to some exceptions, the Regulations provide for a primary review by the relevant agency of actions affecting the employee. The Regulations also provide that for cases where employees’ concerns are not resolved, employees can apply to the Merit Protection Commissioner for review of the agency action that affected them. Reviews of actions relating to alleged breaches of the Code are dealt with directly by the Merit Protection Commissioner and considered in In the case of certain promotion decisions (promotions between APS 2 and APS 6), the decision is reviewable by a Promotion Review Committee (PRC) established by the Merit Protection Commissioner. In addition to addressing individual employee concerns about employment actions, the centralised review processes can be monitored and used by agency heads as an assurance mechanism to identify areas where Values relating to workplace relationships are not being applied as well as they could be in particular agencies. Raising awareness of the availability of review mechanisms and providing appropriate support to employees who choose to seek review can help to develop a relationship of trust between employees and management. This section reports the results of the agency survey on the procedures used in agencies for internal reviews, review applications finalised during the year, and the promotion reviews conducted by PRCs. Agencies’ internal reviews in 2004–05 The agency survey asked about applications for primary review, that is, application for review of employment actions lodged directly with agencies, during 2004–05. Overall, 49% of agencies reported having had at least one such application lodged during the year—this compares to 44% last year. Of the agencies that had at least one application for review lodged in 2004–05, 63% had in place alternative dispute resolution (ADR) as a first step following lodgement of a review application. The comparable figure in 2003–04 was 76%; in 2002–03, it was 54%. Last year’s report suggested that the increase to 76% was a positive development in line with the general policy about the use of ADR methods, where appropriate, in reviews of actions.15 Conversely, this year’s drop to 63% of relevant agencies using ADR as a first step is concerning as ADR methods can often lead to satisfactory outcomes acceptable to all the parties involved without aggravating the situation. However, the three-year trend remains upwards overall and will continue to be monitored. Figure 5.3 shows the variation in agency measures in place to deal with reviews over the last three years. Figure 5.3: Relevant agency measures for review of employment actions, 2002–03 to 2004–05 Note: Only agencies that had received at least one application for review during the reporting period have been included. Source: Agency survey Figure 5.3 shows a steady upwards trend among relevant agencies towards the use of reviewers from within line management structures (from 67% in 2002–03 to 73% in 2004–05). The results of the other four measures are somewhat less stable. The use of corporate services employees as reviewers (down to 80%) and of reviewers identified after lodgement (up marginally to 88%) appears to have stabilised to 2002–03 levels after variations last year. Although the use of contractors as reviewers dropped to 53% from 58% in 2003–04, the three-year trend is still upwards. These fluctuations may reflect the nature of applications in a particular year and agency decisions to choose the most appropriate approach to deal with particular matters. The trends will continue to be monitored and more data may assist in determining overall trends and other relationships. In order to assist agencies in calculating their responses, and to improve data quality, this year’s survey targeted in-depth questions on this topic to applications for primary review of employment actions (other than decisions about breaches of the Code and matters that went to a PRC that were finalised during 2004–05. As a result this year’s figures are not comparable with those from previous years. Overall, 43% of agencies reported having finalised at least one application for primary review of an employment action. A total of 358 primary review applications were finalised during the year across the APS, leading to 123 applications being upheld (i.e. the original decision was varied or overturned). Fifty-five of these 358 finalised applications became the subject of external review by the Merit Protection Commissioner. Four large agencies (Centrelink, ATO, Defence, and DFAT) accounted for three-quarters of all applications for primary reviews of actions finalised in the APS during the past year. The highest number of primary applications finalised in one agency was 110 (Centrelink). The rate of finalised applications per thousand non-SES employees in 2004–05 varied widely among large agencies, with the highest being about nine per thousand at DFAT. Finance, DVA and CRS did not finalise any applications. The role of the Merit Protection Commissioner Both the 2003 and 2004 employee surveys collected data on employees’ awareness of the role of the Merit Protection Commissioner and the survey results were discussed in last year’s State of the Service report. Questions seeking this data were not included in the 2005 survey but will be asked again in future years. Last year’s report stated that progress had been made towards settlement of a number of threshold issues relating to the review function, and noted that a number of activities associated with promoting the Merit Protection Commissioner’s role and services were tied to the settlement of these issues. These matters were resolved during the year and, as a consequence, the Merit Protection Commissioner expects to be able to focus on a number of awareness raising activities in 2005–06. In that context, the Merit Protection Commissioner will continue to promote his role and functions through activities such as speeches and presentations. He also intends to develop new, simplified material on the review process, ensuring that information is provided in the ways which best meet the needs of both employees and agencies. The Merit Protection Commissioner’s priorities for 2005–06 also include contributing to the review of the Act. Review of promotion decisions The ability of APS employees to apply to the Merit Protection Commissioner for the review of promotion decisions to the APS 2–6 classifications is one of the assurance mechanisms that protect merit as the basis for the promotion of employees. Promotion decisions at these classifications can be reviewed on the ground of merit. The Merit Protection Commissioner appoints an independent three-person PRC to consider such applications. A decision by a PRC is binding on the agency head. Table 5.2 details the total number of promotion decisions considered by PRCs (or Promotion Appeal Committees (PACs) under the former legislation), and the number and percentage of promotion decisions that have been varied during the past seven years. During 2004–05, 658 individual applications for review by a PRC were considered relating to 99 cases reviewed. This compared with 443 individual applications in 2003–04 relating to 73 cases reviewed. By way of background the following information should assist in interpreting this data and the data contained in Table 5.2. A case is defined as an application by one or more APS employees for a review by a PRC of a decision or decisions arising from a discrete agency selection exercise. This year’s data records 658 applications for review in relation to 99 cases and each application may seek review of more than one promotion decision. Thus, the 658 applications for review led to 840 promotion decisions being reviewed (as per Table 5.2). Bulk recruitment exercises in Customs and ATO that resulted in high numbers of promotions to reviewable classifications contributed significantly to the number of applications for review lodged and the number of promotion decisions reviewed during the reporting period. No applications for review by a PRC were received this financial year in relation to the engagement in the APS of a Parliamentary Service employee. Table 5.2: Promotion decisions reviewed and varied, 1998–99 to 2004–05   1998–99 (a) 1999–00 (b) 2000–01 2001–02 2002–03 2003–04 2004–05 Number of promotion decisions reviewed NA(c) 1047 717 277 1071 404 840 Number of decisions varied NA(c) 29 26 15 30 24 42 Proportion of decisions varied (%) 8.8 2.8 3.6 5.4 2.8 5.9 5.0 Notes: (a) May include a small number of temporary performance selection decisions. (b) In 1999–00, 485 promotion decisions were considered by PRCs. Thirteen (or 2.7%) of these promotion decisions were not upheld. In addition, a number of promotions and temporary performance selections were also considered by PACs, established under the Merit Protection Act 1984 (Cwlth) or the transitional regulations under the Public Employment (Consequential and Transitional) Amendment Act 1999 (Cwlth) (PECTA). PACs established under the Merit Protection Act considered 233 promotions, varying the decision in 10 or 4.3% of cases. PACs established under the PECTA provisions considered 329 promotions, varying the decision in six or 1.8% of cases. (c) Historical information is not available in this format. Source: APS Commission The number of PRCs established increased this financial year compared with 2003–04 (99 established in 2004–05 compared with 73 established in 2003–04, an increase of 26 or 36%). The number of PRCs has fluctuated over recent financial years. This appears to some extent to be a reflection of volatility in recruitment patterns. The increase in the number of PRCs this financial year, for example, coincides with an increase of about 25% in the number of reviewable promotions and engagements gazetted, compared with the number last financial year. 15 See Regulation 5.1(4). Remuneration Since 1997, the wages and conditions of employees in the APS have been negotiated and determined at the agency level. After almost a decade of agency level bargaining, the proportion of ongoing employees covered by individual Australian workplace agreements (AWAs) continues to trend upwards to about 10% (compared with 8.5% last year and 6.7% in 2002–03), while around 90% of employees are covered by certified agreements (CAs). In negotiating wages and conditions, agencies have flexibility subject to consistency with the Government’s Policy Parameters for Agreement Making in the APS.16 These policy parameters require CAs and AWAs to be consistent with the Government’s workplace relations policy but also cover a range of other matters, including the important requirements that improvements in pay and conditions be linked to organisational productivity and performance and that they be funded from within agency budgets. To further encourage consistency with Government policy, in 2002 the policy parameters were adjusted to require CAs to contain clauses allowing for comprehensive AWAs to be made with employees. In December 2003, the policy parameters were expanded further to include a new parameter requiring agencies to include in their agreements leave policies and employment practices that support the release of Defence Reservists for peacetime training and deployment. After examining agreement types in more detail, this section will examine remuneration data on salary increases in 2004, compare total remuneration packages in the APS with the private sector, offer an AWA and CA wage comparison and then examine performance pay bonuses. The section then moves from the provision of micro remuneration data to the broader, macro remuneration issues that have been canvassed in previous State of the Service reports. Agencies’ remuneration policies are discussed and the importance of robust remuneration policies is considered; the extent of overlapping salary ranges using the 2004 data is then presented followed by a discussion of funding arrangements. Certified agreements Agreement-making in the APS is now well established, with some agencies having entered into their fifth agency-level agreement. Data provided by DEWR indicates that at 30 June 2005, there were 103 CAs operating in the APS. Thirty-four agreements were made during the year to 30 June 2005 (compared with 38 agreements made in the previous 12 months). Overall, the 103 agreements cover around 95% of ongoing APS 1–6 employees and just under 80% of ongoing EL employees but few, if any, SES employees. Almost 70% of operating agreements have been made with one or more trade unions under section 170LJ of the Workplace Relations Act 1996 (Cwlth), while 30% have been made directly with employees under section 170LK. These proportions have been much the same over the past three years. The number of operating CAs that are stand-alone agreements which completely displace the Australian Public Service Award 1998 has remained steady for the past two years, at 98% (it was 94% at the end of 2002–03 and 60% in 1998–99). The average annualised wage increase (AAWI) for all APS agreements certified in the 12 months to 30 June 2005 was 4.2% (the same as for 2003–04, compared with 4.9% at the end of 2002–03). When calculated from the nominal expiry date (NED) of an agreement to the NED of that agreement’s replacement, the AAWI was 4.0% for the 12 months to 30 June 2005 (the same as for the previous 12 months). The spread of NED to NED AAWI in APS CAs in the 12 months to 30 June 2005 narrowed over the year, ranging from 2.7% to 4.7% (last year the comparable data was 2.1% to 5.0%). Table 5.3: Comparisons of wages growth, 1997–98 to 2004–05   APS AAWI (a) (%) APS NED to NED AAWI (b) (%) Private sector AAWI (c) (%) Comparable sectors’ AAWI (d) (%) ABS wage cost index (e) (%) 1997-98 2.6 (f) NA 4.0 4.1   1998-99 2.6 (f) NA 3.9 4.1 3.2 1999-00 3.3 3.0 3.6 3.6 2.9 2000-01 4.8 3.5 3.7 3.9 3.4 2001-02 4.1 3.9 3.7 4.0 3.3 2002-03 4.9 3.9 3.6 4.1 3.4 2003-04 4.2 4.0 3.7 4.3 3.6 2004-05 4.2 4.0 3.8 4.4 3.8 Notes: (a) Average annual wage increases in current APS certified agreements. Provided by DEWR. (b) The NED to NED AAWI measures the average annual pay increase from the nominal expiry date (NED) of the previous agreement to the NED of the current agreement. The NED to NED AAWI allows for particular comparisons of annual wage increases across APS agency agreements and should only be used in this context. (c) Average annual wage increase in current private sector certified agreements. (d) Average annual wage increase in industry sectors with more than half their employees having post-school qualifications. ABS data shows that there were six industry sectors with more than 50% of their employees with post-school qualifications—Electricity, Gas and Water (65%), Construction (55%), Property and Business Services (56%), Government Administration and Defence (54%), Education (77%), and Health and Community Services (61%). There were 13 industry sectors with half or less than half of their employees with tertiary qualifications. This data is sourced from the ABS 2001 Census of Population and Housing. The data on AAWI by industry sector was provided by DEWR. (e) ABS Cat. No. 6345.0 Labour Price Indexes, Australia. Average annual index—ordinary time hourly rates of pay excluding bonuses. It is a broad measure of wage growth in both the federal and state jurisdictions covering all employees. (f) These numbers are estimates based on a DEWR publication Pay Increases in APS Agencies—April 2001 Report which calculated that the AAWI since 1996 to the end of 2000 was 2.6 per cent per annum. Measuring and comparing remuneration increases is difficult, given the different timeframes for negotiating different agreements and changes in the composition of remuneration. Using the NED to NED AAWI abstracts from some of these problems.17 Comparisons with the private sector are more difficult as comparable NED to NED AAWI data is not available. Using AAWIs as the basis for comparison, as shown in Table 5.3 below, the private sector AAWI at 30 June 2005 was 3.8%. On an AAWI basis, the average APS wage increase in CAs has been above the average for the private sector over the past five years. While on the face of it this may be of some concern, Table 5.3 shows that further comparison based on comparable skill levels in the private sector, suggests that over the past eight years the APS is broadly matching equivalent private sector increases but not leading them. This issue is considered later in the chapter and a comparison between APS and private sector total remuneration packages based on the Mercer remuneration survey data is provided. Australian Workplace Agreements Data collected by DEWR from agencies indicates that the number of operative AWAs in the APS over the 12 months to the end of June 2005 increased by around 14% to 11,823. This figure is comprised of 1937 AWAs covering the SES (1870 last year), 5966 covering EL employees (5506 last year) and 3837 covering APS 1–6 employees (2986 last year). The rate of growth for AWA coverage of APS 1–6 employees continued to be strong (over 28%) but this increase is from a very low base. The APS 1–6 classification group still has the lowest coverage level (around 3% of all ongoing employees) compared with around 21% for EL employees and essentially all the SES. The last three employee surveys asked employees to indicate if their salary was set out in an AWA or their agency’s CA. Consistent with the above DEWR data, nearly all the SES and 23% of EL employees (a similar proportion to the past three years) responded that their salary was set out in an AWA. However, 9% of APS 1–6 employees indicated they were covered by an AWA (similar to the 10% last year), three times the coverage indicated by the DEWR data. As suggested in last year’s report, the most likely explanation for this discrepancy between the DEWR data and the employee survey data is that some survey respondents in this classification group are unaware of the distinction between AWAs and CAs. Salary and performance pay Data on salary increases, salary levels and performance pay (including who is eligible and the amounts actually paid) by classification for those on AWAs and CAs is available from the results of an agency survey of SES and non-SES remuneration conducted annually for DEWR by Mercer Human Resource Consulting (the Mercer remuneration survey) each December.18 As participation in the Mercer remuneration survey is voluntary there are limitations surrounding the generalisability of the data collected from the 47 participating agencies in 2004 to the whole of the APS. That said, as the survey includes remuneration data for approximately 55% of the APS employees, it does provide a reasonably sound guide to remuneration in the APS. Salary increases in 2004 For non-SES employees, the 2004 Mercer remuneration survey found that the median Total Remuneration Package19 (TRP) increased by 4.2% in 2004 compared to 5.3% between 2002 and 2003. There were wide variations across classifications with APS 3 and 6 employees recording the highest median movement (5.2%) and APS 1 employees (2.7%) the lowest. The comparable median TRP annual increase for the private sector provided by Mercer is 2.9% for equivalent non-SES classifications. However, the AAWI in CAs from comparable industry sectors is slightly higher (at 4.4%) than the non-SES TRP median increase (4.2%). The AAWI increases in CAs are discussed above. For SES levels, the 2004 Mercer remuneration survey found that median SES TRP increased by 7.1% for SES Band 1, 8.2% for SES Band 2, and 9.4% for SES Band 3. The overall median across the SES Bands being 8.2%. Although these increases are significantly higher than the overall private sector equivalent increases of 4.1%, the SES TRP still lags behind private sector equivalents, as discussed below. Comparing TRP to private sector An important aspect of the Mercer survey is to allow agencies to benchmark the remuneration of their employees with private sector equivalents. This is important, given the increasing levels of lateral recruitment discussed in Chapter 8. From the APS-wide perspective, as shown in Figure 5.4 below, TRP for the APS 1–3 levels is fairly competitive with the private sector. The TRP then falls progressively below the private sector for APS 4 and above until the EL classifications. Both TRP and median base salary for non-SES employees on AWAs is generally higher where agencies use both AWAs and CAs. Figure 5.4: TRP Quartile 1 and median comparison between APS and private sector Source: Mercer 2004 APS Non-SES Remuneration Survey While the median SES TRP increases discussed above exceeded the equivalent private sector increases in 2004, as shown in Figure 5.5 the Mercer surveys confirmed that the SES median TRP remains between 7% (for SES 1) and 58% (for SES 3) below private sector TRP for comparable employees. Figure 5.5: TRP Quartile 1 and median comparison between APS and private sector (by classifications SES 1 to SES 3), 2004 Source: Mercer 2004 APS SES Remuneration Survey AWA/CA comparison The past few State of the Service reports have provided an analysis of differences in salaries paid under AWAs and CAs based on the results of all relevant data in the Non-SES Mercer Remuneration Survey. Drawing on the Mercer time series data,20 Table 5.4 below shows that, for non-SES median base salaries, employees on AWAs received higher salaries during 2001, 2002 and 2003 at all classification levels except for APS 4s in 2003. In 2004, APS 2s and APS 4s covered by CAs had a higher median base salary than those covered by AWAs. Table 5.4: Median base salary comparison—CAs and AWAs, 2001 to 2004 APS Classification 2001 2002 2003 2004 CA AWA CA AWA CA AWA CA AWA APS 2 32540 34000 34536 35841 36216 36980 38141 36898 APS 3 36360 36700 37675 40827 40545 41000 42042 43015 APS 4 40600 41900 42241 44262 45688 45071 47387 46900 APS 5 44870 45000 46527 49074 49850 50000 52008 52535 APS 6 51650 53020 53581 56790 56457 58494 59693 61357 EL 1 63760 65100 68096 69984 71338 72172 74425 75059 EL 2 78880 80040 82839 85691 86797 88699 90751 93247 Source: Mercer 2004 APS Non-SES Remuneration Survey Note: The bolded figures highlight highest salary for a particular classification in each year. Examining the gap difference between the two groups of employees provides a more thorough understanding of median base salary trends over time. Between 2001 and 2002 the gap grew substantially in favour of AWAs for all classifications with the exception of APS 2s where it fell marginally. However, 2002 represented the high-water mark for differentials between AWA and CA median base salaries and in 2003 the gap reduced considerably for all classifications consistent with the higher AAWI data for CAs for 2002–03. By 2004, not only was the gap further reduced, CAs provided a higher median base salary for APS 2s and APS 4s. Consistent with last year’s findings, Table 5.5 shows that percentage increases in median base salary varied widely between those on CAs and AWAs and between classifications. The variability in actual outcomes reflects a number of different factors, including that individuals move through salary ranges at different paces (as part of a performance management system), or because the proportion of employees at the top of salary ranges (and therefore generally ineligible for additional increases via movements in base salary) varies between classifications. It may also reflect remuneration policies deliberately targeting higher increases at particular classification levels or the retention of employees with particular skills and experience. Table 5.5: Median base salary comparison—CAs and AWAs, 2003, 2004   CA AWA Percentage difference between base salary in AWAs and CAs % APS Classification 2003 $ 2004 $ % increase 2003 $ 2004 $ % increase Dec 2003 Dec 2004 APS 2 36216 38141 5.3 36980 36898 – 0.2 2.1 - 3.3 APS 3 40545 42042 3.7 41000 43015 4.9 1.1 2.3 APS 4 45688 47387 3.7 45071 46900 4.1 - 1.4 - 1.0 APS 5 49850 52008 4.3 50000 52535 5.1 0.3 1.0 APS 6 56457 59693 5.7 58494 61357 4.9 3.6 2.8 EL 1 71338 74425 4.3 72172 75059 4.0 1.2 0.9 EL 2 86797 90751 4.6 88699 93247 5.1 2.2 2.8 Source: Mercer, 2003 APS Non-SES Remuneration Survey, revised version released October 2004; 2004 APS Non-SES Remuneration Survey. The above comparisons between AWA and CA remuneration include all data from the Non-SES Mercer Remuneration Survey. In the 2004 APS Non-SES Remuneration Survey Mercer suggests that a more useful comparison would involve an agency-byagency approach that focused on agency policy regarding the particular employment instrument, while factoring out the impact of differing agency pay policies, in terms of remuneration competitiveness (captured in the above data). This is achieved by limiting the analysis to agencies that use both AWAs and CAs at each of the classification levels. Adopting this approach, the Mercer data shows that, where agencies offer both AWAs and CAs, most agencies have higher median base salaries and median TRP under their AWAs than CAs across all non-SES classifications. Table 5.6 sets out the Mercer agency-by-agency analysis for TRP. Table 5.6: Comparison of median TRP in 2004 (in agencies that used both AWAs and CAs to cover employees at the same level) (number of agencies) APS Classification Equal Median Higher AWA Median Higher CA Median APS 2   7   APS 3   7 2 APS 4   14 5 APS 5   21 2 APS 6   24 8 EL 1 6 29 3 EL 2 1 37 3 Source: Mercer 2004 APS Non-SES Remuneration Survey. However, Mercer notes that it is not uncommon for agencies to report that median base salary was equal for AWAs and CAs. This suggests that, at least in agencies reporting similar median base salaries, many agencies offering both types of agreements use AWAs as a means of topping-up salaries. This is also reflected in agencies’ responses (discussed below) as to why they have employees at the same classification on AWAs and CAs. Agencies’ remuneration policies and their use of AWAs/CAs for non-SES employees Consistent with last year’s results, nearly all agencies (95%) reported having some non-SES employees covered by an AWA. For 89% of relevant agencies, this meant employing non-SES employees at the same classification level on a mix of AWAs and the agency’s CA (i.e. some employees at the same level are on AWAs while others are covered by the CA). Approximately three-quarters of agencies reported that this occurred for EL 2 employees, just over two-thirds of agencies for EL 1 employees and 60% of all agencies for APS 1–6 employees. As shown in Figure 5.6, the two most common reasons for having employees at the same classification level on a mix of AWA coverage and CA coverage were the same for EL 2, EL 1 and APS 1–6 employees, namely, to attract and retain people with critical skills and knowledge and to reflect differences in skill and/or knowledge. Most of these employees, of course, have also been able to choose whether to be on a CA or their existing AWA. These practices are consistent with last year’s findings. Figure 5.6: Reasons for having employees at same level on mix of AWAs and CAs, 2005 Source: Agency survey In 2004–05, a higher proportion of agencies reported using AWAs to attract and retain critical skills or knowledge at the EL classifications compared to last year. These changes occurred in an environment where EL employee mobility increased at a rate higher than the APS average, suggesting the possibility that agencies are using AWAs to enhance wages and conditions for employees with critical skills and knowledge rather than simply maintaining previous arrangements following movement between agencies. These trends will continue to be monitored. For more information on mobility issues generally see Chapter 2, and for a discussion of mobility and classification issues see In 2004–05, more agencies reported using AWAs to implement performance pay systems for APS 1–6 employees. As agencies have been required to have performance pay systems in place for a number of years this finding may reflect changes to agency performance pay systems designed to accommodate broader changes in the labour market or other agency-specific priorities. Despite the use of AWAs for almost 8% of non-SES APS employees across 95% of agencies, only 36% (compared to 26% in 2003 and 37% in 2004)21 of agencies employing non-SES employees on AWAs reported having a written remuneration policy dealing with employees covered by AWAs.22 Another 19% of relevant agencies reported that they were currently developing such a policy. These APS wide figures are similar to those reported last year but changes did occur within large agencies. Although large agencies remain more likely to have a written remuneration policy that deals with employees covered by AWAs, this figure is down to 57% from 67% last year whereas medium and small agencies remained relatively stable at 42% and 21% respectively. The previous two State of the Service reports have commented that the availability of flexibility for agencies in relation to remuneration has reinforced the desirability of clear remuneration policies that set out the criteria for determining remuneration for employees. The progress in this area that was commented on last year appears to have reached a plateau and it remains apparent that there are a substantial number of agencies that should undertake the development of robust remuneration policies that make clear the links between skills, performance and pay. Moreover, these policies should be transparent and available to all employees. This is important from an accountability perspective as well as for building and maintaining employee confidence in, and support for, individually based approaches to remuneration that are consistent with merit-based employment and a fair workplace (as required by the Values). Both workforce planning and skills deficit issues confronted by agencies, as discussed in Chapter 8, make it clear that remuneration policies should also incorporate a strategic approach for dealing with longer term agency capability issues to address current and future labour market characteristics. An indicator of remuneration policy effectiveness is employee attitudes toward performance pay and these are examined in Chapter 8. Overlapping salary ranges The last two State of the Service reports commented on the increasing salary overlap between classifications across the APS. It was found that salary overlaps within agencies were confined to a relatively small number of agencies and affected only very small numbers of employees with particular skills or particular duties, moderating to a large extent concerns about undermining the merit principle.23 Figures 5.7 and 5.8 present data from the Mercer APS Non-SES Remuneration Survey on the extent of APS-wide overlaps in 2004. Figures 5.7 and 5.8 indicate that for the APS 1–3 levels and Graduate and APS 4–6 levels, respectively, there continues to be considerable overlap between classifications. Indeed, some APS 1 employees earn more than the median APS 2 salary and some APS 5 employees earn more than the median APS 6 salary. However, the 50% of employees paid around the median (i.e. in the second and third quartiles) do not overlap between any of these classifications. This is consistent with last year’s findings. Figure 5.7: Base salary distribution in 2004 for APS 1–3 employees, 2004 Source: Mercer 2004 APS Non-SES Remuneration Survey Figure 5.8: Base salary distribution for Graduate and APS 4–6 employees, 2004 Source: Mercer 2004 APS Non-SES Remuneration Survey Figure 5.9: Base salary distribution for EL 1–2 employees, 2004 Source: Mercer 2004 APS Non-SES Remuneration Survey Figure 5.9 illustrates that salary overlaps also occur at the EL classifications with some EL 1 employees earning more than the median EL 2 salary and some EL 2 employees earning less than the EL 1 median. However, consistent with the Graduate and APS 1–6 experience, the 50% of employees paid around the median do not overlap between the EL 1 and EL 2 classifications or between the EL 2 and the SES Band 1 classifications. Figure 5.10 provides the salary overlaps for the three SES bands and the findings are the same as for the EL classifications discussed above. Figure 5.10: Base salary distribution for SES employees, 2004 Source: Mercer 2004 APS SES Remuneration Survey The Commission is currently conducting an evaluation exercise into APS agencies’ remuneration policies, including the longer-term strategic aspects of using AWAs to deal with APS capability issues, and the intersection of the devolved responsibilities for establishing salary ranges and classification structures. The findings of the Evaluation exercise will be reported next year. Performance pay bonuses Results from the 2004 Mercer remuneration survey indicated that, overall, 27% of non-SES employees and 85% of SES employees are eligible for bonuses. Eligibility varies by classification with Graduates and APS 1–6 employees averaging 21% and ELs averaging 48% eligibility. The Mercer figures are slightly higher than those collected in the State of the Service employee survey that found 18% of relevant APS 1–6 employees, 42% of relevant EL employees and 78% of relevant SES employees were eligible for a bonus. Consistent with last year’s data, responses to the Mercer survey indicated that employees on an AWA were more likely to be eligible for a bonus and more likely to receive a bonus than those on a CA (for employees at the APS 1–2 levels the reverse was true). The more widespread access to performance bonuses for those employees on AWAs serves to increase the remuneration gap between those on CAs and those on AWAs. Table 5.8 below provides an agency-by-agency analysis of median total remuneration (TR) from the Mercer survey which shows that, when bonuses are included, the differential between AWAs and CAs is even more widespread than for TRP. Table 5.8: Comparison of median TR in 2004 (in agencies that used both AWAs and CAs to cover employees at the same level) (number of agencies) APS Classification Equal Median Higher AWA Median Higher CA Median APS 2   7   APS 3   7 2 APS 4   16 3 APS 5   22 1 APS 6   28 4 EL 1   35 3 EL 2 1 38 2 Source: Mercer 2004 APS Non-SES Remuneration Survey In agencies participating in the Mercer remuneration survey, 67% of EL 1s on an AWA were eligible for a bonus compared to only 18% covered by the CA, and 68% of AWA-covered EL 2s were eligible for a bonus compared to 26% on the CA. This differential is further reinforced by the fact that, for those employees who received a performance bonus, those on AWAs consistently receive higher bonuses at all classification levels. Of those who received a bonus at the EL 1 classification, for example, the average performance bonus received by those on AWAs was $4174, while for those on CAs the average was $1475. The comparable figures for the EL 2 classification, were an AWA bonus of $4625 and a CA bonus of $3083. In a 2004 audit of performance management in the APS, the ANAO found that across all classifications AWA employees received 127% more in bonuses than did CA employees.24 Employee perceptions from the employee survey on the operation of performance pay are discussed in Chapter 8. The ANAO audit also found that many employees believed that the distribution of performance pay in their agency was unfair in that bias and favouritism was exhibited in performance reward decisions.25 The different level of bonuses associated with AWAs and CAs should not, however, be interpreted as firm evidence of unfairness or discrimination. Many agencies report making strategic use of AWAs to attract and retain key employees, and some high performing employees may be particularly attracted to the opportunity to gain performance bonuses. Moreover, higher performance bonuses at higher classification levels also represent more pay at risk. Nevertheless, the data does reinforce the importance of agencies having clear remuneration policies, and of consulting employees about them, to limit the risk of a perception (as well as the reality) of unfairness. Funding arrangements Last year’s report touched on the matter of pay increases in the APS and their funding. The policy parameter that requires the ongoing funding of remuneration increases for CAs and AWAs from productivity improvements within agency budgets had not, at least at the average level, appeared to have prevented APS employees from achieving salary increases in excess of the average of the private sector. However, the comparison with the average increase for the total private sector is somewhat misleading in that the APS workforce is, on average, a more highly qualified workforce than the general Australian labour force. The results of the 2005 State of the Service employee survey indicated that 66% of APS employees had a tertiary qualification26 (similar to the 64% last year); comparative data for the broader employed Australian labour force is 47% with tertiary qualifications according to the 2001 ABS Census of Population and Housing. A comparison with industry sectors which have relevant proportions of employees with tertiary qualifications reverses the gap between average increases in the APS and other sectors in 2005. The AAWI in certified agreements current at the end of June 2005 for industry sectors in which more than half of employees have tertiary qualifications was 4.4% (up from 4.2% last year); in industry sectors where half or less than half of their employees have tertiary qualifications the AAWI remained stable at 3.7%.27 So, on average, at June 2005, pay increases in the APS for CAs (an AAWI of 4.2%—the same as last year’s) are not increasing more quickly than in comparable areas of the private sector, though they are not lagging behind by much. This limited evidence also tends to suggest that there is little ‘bidding up’ of pay amongst APS agencies beyond what the broader labour market demands, at least for employees covered by CAs. However, if demographic changes in Australia impact on labour markets as predicted (see Chapter 8) the pay differentials between the public and private sectors discussed earlier could make attraction to public sector employment more difficult, particularly at the higher classifications. The 2002–03 State of the Service report advised that there was no evidence that levels of base salary had fallen behind in small agencies, and that the average salary paid in very large agencies (greater than 5000 employees) was more consistently at the lower end of the range. The 2003 Mercer Non-SES Remuneration Survey indicated that very small agencies (with fewer than 100 employees) consistently had the lowest level of average base salary paid for all classifications from APS 2 through to the SES Band 1 classification.28 Although the 2004 Mercer data does not duplicate this pattern, the broad trend is similar to that reported last year, with small agencies towards the lower end of the salary scale for most classifications. It is reasonable to assume that in a tightening labour market small agencies may begin to experience difficulties in matching the market rates for the skills they need, given current funding arrangements. This issue will require continued monitoring informed by data on agency resourcing to establish whether there are potential longer-term issues. The overall productivity gains required to be made by APS agencies by the current funding arrangements are quite substantial. In addition to the ongoing efficiency dividend, the wage cost index used for the indexation of expenses also incorporates an assumption of productivity gains by agencies to finance wage increases, in line with Government policy. The wage cost indexes developed by Finance are used for the indexation of departmental expenses and various other Commonwealth outlays, including certain specific purpose payments. The wage cost indexes are weighted averages of measures of wage and non-wage growth. The wage component excludes wages growth that should be offset by productivity gains and is typically adjusted by not much more than half the movement in the CPI. The non-wage component reflects movements in the consumer price index (CPI). The indexes are designed to reflect the reasonable expectation across the economy that wage movements should reflect genuine productivity gains, at least above some modest inflationary factor. For the APS, in order to fund pay increases of around 4%, the index requires agencies to find productivity gains of around 2%, which is broadly in line with productivity gains across the economy as a whole over the period from 2001–02 to 2004–05. A further 1.25% is required to fund the efficiency dividend. Agencies may achieve these gains by genuine efficiency gains or by sensible reconsideration of priorities. Notwithstanding this, there is the real possibility that for some agencies funding pay increases means cutting activities and/or employees, and that it can also mean reduced capacity to absorb new initiatives. Looking ahead, there may be some problems, particularly amongst smaller agencies, in maintaining competitive pay rates. As evidenced in the MAC report on Managing and Sustaining the APS Workforce,29 the APS is likely to face increasing wages and conditions pressures with a tightening labour market. 16 17 See note (b) to Table 5.3. 18 Mercer Human Resource Consulting, 2004 APS Remuneration survey conducted for DEWR, in 2001, 2002, 2003 and 2004. Since 2002 the Mercer surveys present a snapshot of data as at 31 December each year. For additional information see 19 Total Remuneration Package (TRP) represents the total of: Base salary; superannuation (including employer productivity superannuation contribution amounts); annual remuneration value of motor vehicles (including parking and FBT); and other fixed benefit items. Base Salary represents full-time equivalent annualised PAYG salary. It includes post- tax employee superannuation contributions and any additional post-tax sacrifice amount. It excludes all other cash components including bonuses and allowances. 20 Graduates have not been included as changing definitions makes time series comparisons problematic and the APS 1 classification has been omitted as data was incomplete, both between agencies and over the time period. 21 The survey question asking about a written remuneration policy covering non-SES employees has changed slightly over the past three years but the data remains comparable as the response captured remained essentially the same. 22 There continues to be an apparent discrepancy between the results of the agency survey and the Mercer survey. The 2004 Mercer survey reported that 82% of the 47 responding agencies stated that they had a formal non-SES remuneration strategy that is communicated to non-SES employees (up from 76% of 49 agencies in 2003). The question in the State of the Service agency survey asked agencies the more specific question as to whether agencies had ‘a written remuneration policy that deals with how to set and adjust the remuneration of non-SES employees on AWAs?’ It may be that the ‘strategies’ referred to in the Mercer survey relates to broader documents, such as an agency’s CA, in some of the responding agencies. 23 Australian Public Service Commission, State of the Service Report 2002–03, 2003 p. 87 24 ANAO, Performance Management in the Australian Public Service, Performance Audit Report No. 6, August 2004, 25 ibid. 26 For comparability purposes the ABS definition of tertiary education is adopted, that is, formal education beyond secondary education, including higher education, vocational education and training, or other specialist post-secondary education or training. The qualification categories contained in the employee survey question included under this definition of tertiary education are: vocational qualification; associate diploma; undergraduate diploma; bachelor degree; postgraduate diploma; masters; and doctorate. 27 There were six ABS industry sectors in which more than 50% of employees had tertiary qualifications—Electricity, Gas and Water (65%), Construction (55%), Property and Business Services (56%), Government Administration and Defence (54%), Education (77%) and Health and Community Services (61%). There were 13 other industry sectors with half or less than half of their employees with tertiary qualifications. This data is sourced from the ABS 2001 Census of Population and Housing. The data on AAWI by sector was provided by DEWR. 28 Mercer Human Resource Consulting, 2003 APS Remuneration Survey. 29 Management Advisory Committee, Managing and Sustaining the APS Workforce. Workplace consultation The Values include the establishment of workplace relationships in the APS that value communication, consultation, cooperation and input from employees on matters that affect their workplace. These consultative arrangements are critical to achieving good quality results and underpinning productive working relationships. Consultation practices amongst agencies can be expected to vary given differences in agencies’ size and the nature of their business. Employees’ perceptions of consultation Regular staff meetings, if well run and focused, can be an effective part of the consultation process and support genuine and constructive employee engagement. The employee survey asked employees how often they attended meetings at their section/unit/team (team/section) level and how often they attended meetings at the broader level (i.e. branch, group, division or office level). The results from this year’s survey were very similar to last year’s results—the most common experience of employees is attendance at regular meetings at the team/section level, with fewer employees attending regular meetings at broader levels. Sixty per cent of employees reported attending team/section level meetings fortnightly or more often and almost three-quarters of employees reported attending this level of meetings on a monthly, or a more frequent basis. Only 3% reported that they never attended such staff meetings and a further 22% indicated that they attended these meetings on an ad hoc basis. Attendance at team/section meetings on a monthly or more frequent basis increases with classification level—70% of APS 1–6 employees, 82% of EL employees and 87% of SES employees reported this level of attendance. These figures are consistent with last year’s. Of the agency-specific results available for 21 large agencies, the variation in results was again considerable. The percentage of employees reporting that they never attended meetings at their team/section level or only did so on an ad hoc basis, for example, varied from a high of 44% to a low of 9%. Conversely, the percentage of employees who reported attending team/section meetings fortnightly or more often across all large agencies was 44%, with a range from 31% to 76%. The large agencies with significantly higher percentages of employees reporting attendance at regular meetings at the team/ section level than the APS average were Finance, CSA and the FaCS; the two large agencies with the lowest percentages were BoM and DIMIA. Eighteen per cent of employees reported attending meetings at the broader level fortnightly or more often, and just over one-third reported attending this level of meetings monthly or more often. Another 5% reported this type of meeting as being ‘not applicable’ to their circumstances. Twenty per cent of employees indicated that they did not attend this type of meeting and a further 39% indicated that they attended these meetings on an ad hoc basis. The employment status of employees affects attendance at consultative meetings at both the team/section level and the broader level. Full-time employees, for example, are more likely to attend team/section meetings on a fortnightly or more frequent basis than are part-time employees (62% compared to 49%); they are also more likely to attend broader level meetings on a monthly or more frequent basis (37% compared to 26%). Similarly, ongoing employees are more likely to attend team/section meetings weekly or fortnightly (61%) than are non-ongoing employees (49%); they are also more likely to attend broader level meetings on a monthly or more frequent basis (36% compared to 28%). The employee survey asked respondents if they were satisfied that the meetings they attended provided a forum in which to contribute their views on issues that impact on their work. It also asked about their satisfaction level with the overall say they have in decisions impacting on their work. Compared to last year’s results employees reported being significantly less satisfied in response to both questions. Forty-eight per cent of employees, for example, reported being satisfied that the meetings they attended provided an adequate forum to contribute their views, down from 58% last year. The percentage of employees dissatisfied rose from 17% to 21% in 2004–05. Similarly, 45% of employees were satisfied with their overall say in decisions that impact on their work this year compared to 49% last year. The percentage of employees reporting that they were dissatisfied rose from 25% to 29% in 2004–05. Consistent with last year’s survey results employee satisfaction with overall say in decisions was related to a number of factors, including: * attendance at regular staff meetings at both the team/section level and the broader workplace level (for example, 57% of employees who attended a weekly meeting at the team/section level are satisfied with their overall say in decisions compared to only 13% of employees who report never attending such meetings) * perceptions of their supervisor’s ability to manage people (employees satisfied with their overall say in decisions are much more likely to consider that their supervisor is highly effective at managing people and vice versa) * overall job satisfaction (there is a very strong relationship between employees satisfied with their overall say in decisions and them having a high overall job satisfaction rating and vice versa). Agencies’ policies on workplace consultation The agency survey asked agencies about whether they had policies in place requiring regular staff meetings in their agency (at the team/section level and the broader level). The percentage of agencies with policies requiring team/section meetings has steadily increased over the past three years (from 49% in 2002–03 to 54% last year and again to 56% in 2004–05). The percentage of agencies requiring broader level meetings increased from around 64% over the past two years to 74% this year, whereas those requiring an agency consultative body remained stable at around 86%. The increasing trend in the proportion of agencies requiring staff meetings appears to run contrary to the decrease in employee satisfaction with their overall say in decisions that impact on their work, as discussed above. This contradiction can be partially explained by the substantial drop in the proportion of employees who were satisfied that the meetings they attended provided an adequate forum in which to contribute their views. Of course, having a policy requiring a meeting does not necessarily mean that a meeting is held or, if it is, that it provides employees with the opportunity to contribute their views in a considered manner. This year’s figures confirmed the previous observation that large agencies are least likely to have policies requiring meetings compared to small and medium agencies—which is the opposite of what might be expected given the greater difficulties of communication sometimes experienced in larger agencies. Of the large agencies reporting that they did not have policies requiring regular staff meetings at the team/section and broader work levels, 60% (two-thirds last year) had less than half of their employees satisfied with their overall say in work decisions. The survey results show that the extent to which agencies regularly consult with their employees on workplace issues continues to vary widely, but that an upwards trend in policies requiring meetings has begun to emerge. However, the increase in the proportion of agencies requiring team/section and broader level meetings on a regular basis may, of itself, not be enough as attested to by the decrease in employees’ satisfaction levels with consultative mechanisms. Those agencies with low levels of employee satisfaction with their say in workplace decisions, particularly those that require regular meetings, should be devoting more effort to developing consultation skills among supervisory staff and within the workplace generally. Safe workplaces The Values require safe, as well as fair, flexible and rewarding workplaces. APS employers also have responsibilities under the Occupational Health and Safety (Commonwealth Employment) Act 1991 to take all reasonably practicable steps to protect the health and safety of their employees at work. This general duty of care extends to the provision and maintenance of a safe working environment and systems of work, including adequate facilities for employees’ welfare. APS employees are required to cooperate with their employer in ensuring that they do not create a risk, or increase an existing risk, to their own health and safety, or that of other persons. While the primary focus should be on injury prevention, under the Safety, Rehabilitation and Compensation Act 1988 responsibility extends to APS employers and injured employees to work together to ensure timely and durable return to work is achieved. Safety is everyone’s responsibility and sustained effort is required to minimise both the human and financial cost of workplace injury and disease throughout APS employment. The Australian Government’s workers’ compensation scheme provides fair and generous benefits and compares favourably against other state and/or territory schemes on premium rates. However, increases in premiums over recent years indicate that APS agencies need to improve both their injury prevention and their return to work strategies. For 2005–06, Australian Government agencies will pay around $187 million in workers’ compensation premiums, with APS agencies contributing around $147 million. The overall premium rate for Australian Government agencies increased from 1% of payroll for 2001–02 to 1.77% for 2005–06, which translates to $1116 per full-time equivalent (FTE) employee. This represents a 6% increase in the last year and a 77% growth in premium rates over the last four years. Figures 5.11, 5.12 and 5.13 show the average performance of all APS agencies from 2000–01 to 2004–05 against three key performance indicators. They also show the average performance of the 15 APS agencies with the highest premium rates for 2005–06 against the same three indicators. The performance indicators used are: * the incidence rate (number of claims per 1000 FTE employees) for compensated workplace injuries that resulted in five or more days off work * the incidence rate for compensated workplace injuries that accumulated 30 days and 60 or more days off work (which are good indicators of return to work performance). Figure 5.11 shows that the performance of all APS agencies and the 15 APS agencies paying the highest premium rates for 2005–06 has continued to deteriorate against the first indicator (five or more days off work). Figure 5.11: Incidence of injuries resulting in five or more days off work, 2000–01 to 2004–05 Source: Comcare As Figures 5.12 and 5.13 show, the incidence of injuries that resulted in 30 and 60 or more days off work has also continued to deteriorate. Again, the deterioration in performance was more significant for those 15 agencies with the highest premium rates. This deterioration largely reflects the increased numbers of complex claims for conditions such as psychological injury, and the increased time off work per claim. Figure 5.12: Incidence of injuries resulting in 30 or more days off work, 2000–01 to 2004–05 Source: Comcare Figure 5.13: Incidence of injuries resulting in 60 or more days off work, 2000–01 to 2004–05 Source: Comcare In 2002, the Workplace Relations Ministers’ Council endorsed the National Occupational Health and Safety Strategy 2002–2012. As part of that strategy, Ministers stated their commitment to achieving national targets to: * sustain a significant and continual reduction in the incidence of work-related fatalities with a reduction of at least 20% by 30 June 2012 (with a 10% reduction by 30 June 2007) * reduce the incidence of workplace injury by at least 40% by 30 June 2012 (with a 20% reduction by 30 June 2007). The Safety, Rehabilitation and Compensation Commission adopted the National Occupational Health and Safety (OHS) Strategy targets, but went further by setting a zero target for workplace fatalities for the Commonwealth jurisdiction. This excludes death from disease and commuting claims, and takes into account declarations by the Minister for Defence of warlike and non-warlike operations for military personnel. The Commission also extended the workplace injury target to include disease and commuting injuries. Performance against the targets will be reported in 2007, once the first milestone is reached. In addition to these targets, Australian Government premium paying agencies have been asked to adopt a further two targets to improve return to work and injury management by: * reducing the average weeks lost due to injury by at least 40% by 2012 * reducing the average time taken for return to work activity to commence by 90% by 2012. In June 2003, large premium paying agencies (with 1000 or more employees) were invited to sign a ‘statement of commitment’ towards achieving these four targets. This initiative was extended in February 2004 to medium premium paying agencies (with between 500 and 999 employees) and to small premium paying agencies in November 2004. As at 30 June 2005, 23 current APS agencies (listed in the table below) had signed a ‘statement of commitment’. Based on FTE employee data, this group of agencies covers more than three-quarters of the workforce employed by APS agencies. The Family Court of Australia (the Family Court) has determined a signing date with Comcare for early 2005–06. In implementing target setting, agencies have been encouraged to monitor their performance using Comcare’s Customer Information System (CIS) and to report on their own performance in their annual reports. Workshops have also been held to assist agencies to develop strategies to improve performance against the targets. List of APS agencies that have signed a ‘statement of commitment’ as at 30 June 2005 Aboriginal Hostels Limited Australian Bureau of Statistics Australian Customs Service Australian Electoral Commission Australian Institute of Aboriginal and Torres Strait Islander Studies Australian Public Service Commission Australian Research Council Australian Securities and Investments Commission Australian Taxation Office Centrelink Comcare Defence Housing Authority Department of Agriculture, Fisheries and Forestry Department of Defence Department of Education, Science and Training Department of Employment and Workplace Relations Department of Finance and Administration Department of Foreign Affairs and Trade Department of Health and Ageing Department of Industry, Tourism and Resources Department of Veterans’ Affairs Great Barrier Reef Marine Park Authority Professional Services Review Key chapter findings This chapter has explored employee perceptions of how merit is routinely applied in employment decisions and the processes agencies use to make such decisions. The positive news about APS employees’ perceptions of merit reported in the 2003–04 report has weakened somewhat during the course of 2004–05. When evaluated against both employee survey results from previous years and against public sector employees in state jurisdictions, APS employees’ perceptions of merit have deteriorated; this is particularly true of employees in large agencies. Consistent with last year’s findings, agency-specific issues continue to influence employee perceptions, and agencies wishing to improve in this area should be taking actions to explore the factors underlying their employees’ perceptions. Factors examined in this chapter that may assist in improving perceptions of merit include constructive and accurate feedback provided systematically at least to unsuccessful internal candidates for positions, and improving employees’ knowledge and understanding of how merit is applied in their selection processes through training. Agencies reported using a wide range of selection processes for the engagement, promotion and movement of employees. The two most common forms of selection process used to fill a vacancy (90% of agencies) were internal assignment of duties and existing orders of merit. The most common selection technique remained face-toface interviews (100% of agencies). In addition, 99% of agencies also included on the selection panel at least one member from outside the general work area. Agencies have continued to outsource aspects of the recruitment process at similar levels to last year, but when engaged, these recruitment agencies appear to be responsible for more than routine tasks (for example, scribing). With regard to remuneration issues the chapter found that the Mercer surveys reported that median APS TRP wage increases across all classifications exceeded equivalents in the private sector. However, with the exception of the lower APS classifications, TRP in the APS continued to be substantially lower than the private sector. When comparing AAWI contained in APS CAs with those in equivalent private sector industries, it was found that, although APS pay increases at 30 June 2005 are not increasing more quickly, they are not lagging behind by much. An examination of agreement types covering APS employees highlighted that AWA coverage continued to expand and the growth rate for APS 1–6 employees was over 28%, albeit from a low base. Where agencies cover employees at the same level under both AWAs and CAs, most agencies have higher median base salaries and median TRP under their AWAs than CAs across all non-SES classifications. Using TR calculations (which include bonuses) the remuneration gap between those on AWAs and those on CAs increases. The issue of remuneration policy was also examined. Consistent with last year’s finding, while 95% of agencies reported having some non-SES employees covered by AWAs, only 38% of those agencies also reported having a written policy dealing with employees covered by AWAs. After a promising increase the previous year, the number of agencies with written remuneration policies has stabilised, and it is apparent that a significant number of agencies should be developing robust remuneration policies that make clear links between skills, performance and pay, are transparent and available to all employees, and incorporate a strategic approach to dealing with longer-term agency capability. The funding arrangements for remuneration increases in APS agencies continue to present a challenge in some situations. There is a clear case for the Government to require ongoing productivity gains to help finance wage increases, and most agencies have been able to provide for wage increases in line with those in their labour market, notwithstanding the funding constraints. More generally, the pressure on some agencies may heighten as they experience difficulties in recruiting required skills in a contracting labour market. This year’s survey results on workplace consultation were very similar to last year’s, with 60% of employees reporting attending team/section level meetings fortnightly or more often, and almost three-quarters of employees reported attending this level of meetings on monthly or a more frequent basis. Part-time and non-ongoing employees were less likely to attend regular meetings than were full-time and ongoing employees. There is an increasing trend in the proportion of agencies having policies requiring team/ section meetings. However, compared to last year’s results, employees reported being significantly less satisfied that the meetings they attended provided a forum in which to contribute their views on issues that impact on their work and with the overall say they have in decisions impacting on their work. The requirement that agencies hold team/section and broader level meetings on a regular basis may, of itself, not be enough, as attested to by the decrease in employees’ satisfaction levels with consultative mechanisms. Those agencies with low levels of employee satisfaction with their say in workplace decisions, particularly those that require regular meetings, should be devoting more effort to developing consultation skills among supervisory staff and within the workplace generally. Chapter 6: Personal behaviour The Code sets out the high standards of behaviour required of APS employees— it establishes behaviours to be achieved rather than proscribing specific offences. An employee whose conduct does not meet the standard of one or more elements of the Code can be found to have breached the Code. Agency heads are required to establish procedures for determining whether an APS employee in their agency has breached the Code. Taking action in cases of suspected breaches of the Code is primarily aimed at protecting the integrity of the APS and thereby maintaining public confidence in public administration. This chapter details the extent to which APS employees understand the levels of behaviour expected of them, what agencies are doing to promote this, and how agencies manage, where necessary, instances where employees do not meet the standards expected of them. The statistical information in this chapter, unless otherwise stated, has been drawn from the 2005 agency survey or the corresponding survey of APS employees. Reporting suspected breaches of the Code of Conduct Forty-four per cent of the reports of suspected breaches of the Code identified in the agency survey arise from the observations of managers, supervisors or work colleagues. Agencies, therefore, have a strong interest in ensuring that all employees are educated in all aspects of the Code, including how they can report suspected misconduct and the protections against victimisation or harassment for them should they do so. Awareness The employee survey indicates almost all employees are either familiar with or have heard of the Code. However, when those employees who said they were familiar with the Code or had heard of it were asked to rate their level of familiarity on a five point scale from very high to low, only 55% of employees rated their level of familiarity as high or very high with a further 39% rating their familiarity as moderate. APS employees who had either heard of the Code or were familiar with the Code became aware of the Code in a number of ways. The most common method continues to be the steps taken by the current agency (71%), followed by steps taken by the employees themselves (31%), with a further 27% reporting being made aware of the Code through Commission material (an increase of three percentage points). Around 97% of APS employees consider the Code to be moderately or highly relevant to their daily work.1 However, there has been a fall in the proportion of employees who consider the Code to be highly relevant to their daily work from 84% in 2003–04 to 81% in 2004–05. The agency survey continues to show that all agencies use measures of some kind to make employees aware of the Code. These measures are discussed in Chapter 7, ‘Embedding the APS Values and the Code’.2 The employee survey also sought information from employees about their confidence that they would not be victimised or discriminated against by people in their agency, if they made a report about a suspected serious breach of the Code. Table 6.1: Employee confidence that they would not be victimised or discriminated against for reporting suspected breaches, 2004–05 Person (hypothetically) reported for suspected serious breach High (%) Moderate (%) Low (%) Not Sure (%) Employee’s supervisor or manager 45 25 24 6 Manager other than direct supervisor or manager 37 30 25 8 Colleague or peer 41 34 19 6 Source: Employee survey As shown in Table 6.1, for the different groups, 70%, 67% and 75% of employees had a high or moderate level of confidence that they would not be victimised or harassed as a consequence of making a report that they suspected that another person had seriously breached the Code. Overall, there was a slight decrease since 2003–04 in levels of confidence in relation to reporting people from each group. Employee comments, when provided, commonly reflected this variability in confidence. I have been made aware that anyone reporting an issue would be protected from victimisation, but at the end of the day it depends who that person is. ” “I would have to think very seriously about reporting a breach of the Code. ” “Despite an agency’s best intentions not to victimise/discriminate against the reporter, I think there is still a high chance that it will happen regardless, especially if the reportee is more senior. employee survey While there was a slight fall in employees’ confidence about not being victimised or harassed, the percentage of employees who reported they had witnessed a serious breach of the Code remained the same at 11%, and there was no change in the proportion of those employees who reported such suspected breaches (50%). Employee confidence is positively correlated with the operation of the Values—if an employee agrees that managers and other employees in the agency act in accordance with the Values in their everyday work, then their level of confidence that they would not be victimised or harassed if they reported a suspected breach of the Code is also higher. This is summed up succinctly by one employee. I have a high degree of trust in my Branch Head, Division Head and the team that I supervise. They are the sort of characters who would not breach the code of conduct so the scenarios in this table do not arise. If they displayed the sort of character that would breach the code of conduct, then they would also probably be the sort of person who may indulge in victimisation. employee survey Similarly, the data shows that if an employee has witnessed another employee engaging in behaviour they see as a serious breach of the Code, the employee is more likely to have low confidence in not being victimised or harassed. Common concerns raised by employees who chose to comment on victimisation or harassment were a perceived lack of any transparent action on the part of agencies and observations of the prior bad experiences of other employees under similar circumstances—though not always as a result of employer action. I have reported from time to time in my role, but dissatisfied with reporting to know that anything has been actioned and what the outcome is.3 ” “I am aware that reported breaches of the code of conduct in my branch have led to victimisation of the person who reported the breach. ” “I have been involved in a breach and it was dealt with in a professional manner by my superiors—it was my peers that caused the problem. employee survey While this year’s results continue to raise concerns about the willingness of many employees to use processes for raising issues relating to misconduct, the APS compares favourably with state and territory jurisdictions. In 2004, the WA Commissioner for Public Sector Standards4 reported on a survey showing that only 50% of respondents in that jurisdiction believed people who reported wrongdoing were protected from victimisation or harassment. In addition, 21% of the WA public sector employees surveyed indicated that they were aware of an occurrence of unethical behaviour but did not report it, compared to 11% of employees in the APS who reported witnessing a suspected breach of the Code and half of whom did not report it. Following the survey, the WA Commissioner for Public Sector Standards concluded that WA public sector agencies need to build trust and instil confidence in the process for raising ethical issues and to improve the confidence of employees so that they do not fear adverse consequences if they raise an issue. This finding is also applicable to the APS. Methods of reporting Relevant agencies indicated that there had been a significant change since last year in the means by which suspected breaches of the Code had been brought to their attention. The most common means is now through an agency’s compliance or monitoring systems such as audit (accounting for 27% of investigations compared to 15% in 2003–04). While conduct identified by supervisors and/or managers (25%) and conduct identified by work colleagues (19%) remain significant, complaints from members of the public or stakeholders have declined as a proportion of investigations from 17% to 12%. Thirteen per cent of investigations arose from other sources, including notification by another agency, state police, external contractors or specialist groups within an agency. Of the normal methods for reporting suspected breaches, the least-used method continues to be the whistleblowing framework, despite a small increase in such reports from 2% in 2003–04 to 4% this year. An APS employee who reports a suspected breach of the Code to the Commissioner, the Merit Protection Commissioner or the agency head (or other appropriately authorised persons) through their agency’s whistleblower procedures is considered to be a ‘whistleblower’. The APS whistleblowing scheme is provided for in the Act and the Regulations. Section 16 of the Act prohibits the victimisation of, or discrimination against, an APS employee who reports a breach or alleged breach of the Code to an authorised person within the agency. The Regulations require agency heads to establish procedures for dealing with such reports. One conclusion from the Commission’s report, ‘Managing Suspected Breaches of the Code of Conduct’,5 is that, while there is a statutory framework for whistleblowing, many APS employees do not necessarily equate reporting misconduct to a supervisor or other manager with making a whistleblower report. In last year’s State of the Service report, concern was expressed regarding the possible under-reporting of whistleblower complaints because of an inability on the part of both agencies and employees to recognise when a report of an alleged breach of the Code is also a whistleblowing complaint. This may in part result from agencies designating a wide range of ‘authorised persons’ to receive reports of suspected misconduct (see below) who may not then treat many of the reports of suspected misconduct as whistleblowing complaints. Whistleblowing reports The agency survey indicated that only three small agencies had no procedures in place for dealing with whistleblower reports made by employees under s.16 of the Act the Australian Broadcasting Authority (ABA) (now part of the Australian Communications and Media Authority (ACMA), the Australian Film Commission (AFC) and AIATSIS). A further eight agencies (5 small agencies, 2 medium agencies and 1 large agency) reported that they were developing procedures. The percentage of employees indicating they had been made aware by their current agency that they could report a suspected breach of the Code to an authorised person in the agency (69%) is similar to last year’s. Over three quarters of those employees who were made aware had also been made aware that if they report a suspected breach of the Code to an authorised person they are provided with protection from victimisation and discrimination. In their responses to the last two surveys, agencies indicated that they received very few reports under the whistleblowing framework. In 2004–05, only 34 (4%) out of a total of 865 formal investigations into suspected breaches of the Code which were finalised were instigated as a result of a report under the agency whistleblower procedures. This is a slight increase from the 2% of finalised cases (25 out of 1083) reported in 2003–04. Even when the intent of the whistleblowing provisions is understood (namely, to protect people making reports), employees may not necessarily have sufficient confidence to initiate the process, despite the protection available against victimisation and discrimination. When employees chose to comment, the potential effect on working relationships was a common concern. I’ve never seen a whistle blower survive in the organisation they’ve tried to protect. employee survey The current whistleblowing provisions and their relationship with the Code are to be examined as part of the review of the Act to be conducted by the Commission in 2005–06. The Commission will provide advice to agencies on any changes to the legislative framework that may result from the findings of the review. People authorised to receive reports This year’s survey asked agencies to provide information on the person or people authorised by the agency head to receive whistleblower reports. The results in Table 6.2 confirm that there is a wide variation in who is authorised to receive reports within agencies. Only 16 agencies (11 small and 5 medium) rely on the agency head and have not authorised any other people to receive reports. Overall, the most commonly nominated authorised people are the head of corporate services (44%) and the human resources manager (41%). Table 6.2: Person(s) authorised to receive whistleblower reports, 2004–05 Categories of ‘authorised’ persons Number of agencies reporting each category Small Medium Large All agencies Head of corporate services 11 14 11 36 HR manager 9 15 10 34 All line managers 0 2 4 6 Employees in a specialist conduct unit 0 0 7 7 Agency head only person 11 5 0 16 All SES 8 5 5 18 SES Band 2s and 3s 1 1 6 8 Source: Agency survey Size and location influence the numbers of authorised people. The numbers of authorised people tended to increase with agency size. Larger agencies also made greater use of the SES and authorised more people outside Canberra, with five large agencies specifically mentioning having regional, state or territory managers as authorised people. The only agencies which reported authorised people below the EL2 level were the Australian Agency for International Development (AusAID) (an EL1 manager staffing) and Centrelink (APS6 upper). Whistleblower referrals to the Public Service Commissioner or the Merit Protection Commissioner In circumstances where it is not appropriate for an agency head to deal with a particular matter, or where the whistleblower is not satisfied with the outcome of the investigation by the agency, an APS employee may refer the report to the Commissioner or the Merit Protection Commissioner. Table 6.3: Whistleblower reports received during 2004–05   Carried over from 2003–04 Received Withdrawn Not accepted Under consideration Finalised Merit Protection Commissioner 3 4 0 5 0 2 Public Service Commissioner 3 19 0 16 3 3 Source: Merit Protection Commissioner As Table 6.3 indicates, the Merit Protection Commissioner received four whistleblowing reports during 2004–05, two less than in 2003–04. Three reports were not accepted and the remaining report and a second report which had not been finalised in 2003–04 were investigated and finalised. Issues raised included: the mismanagement of a range of personnel matters, including leave entitlements and probation; the misuse of Commonwealth funds; and harassment. The Commissioner received 19 reports in 2004–05, seven more than the number received during 2003–04. Ten of these were from current APS employees, two were from former employees and seven were from private citizens. Only three reports met the criteria for investigation by the Commissioner and these were not finalised in 2004–05. These reports all concerned the conduct of the same person and dealt with a range of matters relating to alleged harassment and the probity of a number of administrative actions and decisions. The other sixteen disclosures did not meet the criteria for investigation by the Commissioner. As the APS whistleblowing scheme does not cover reporting by members of the public or by former APS employees, advice was provided to complainants on the appropriate ways in which their concerns could be addressed, either by referral to the relevant agency head or to other administrative review bodies. The 10 current APS employees were advised that the scheme requires that, in the first instance, they should direct their allegations to the relevant agency head, unless it is not appropriate for the agency head to deal with a particular matter or where the whistleblower is not satisfied with the outcome of the investigation by the agency. Matters covered in the sixteen reports ranged from concerns about taxation issues and payments administered by Centrelink to actions in relation to selection processes. During 2004–05, the Commissioner finalised inquiries into three reports received in the previous year. Two of these contained allegations of abuse of employer powers by an agency head and a senior employee. In these cases the Commissioner concluded that, while some processes and decisions could have been improved and better documented, there were no breaches of the Code. The Commissioner also recommended that the senior employee be counselled about their communication style. The other report contained allegations that a supervisor provided false information in relation to performance management and, in not approving a leave application, failed to comply with the law. In this matter the Commissioner concluded that there was insufficient evidence to support a recommendation to the agency head to commence action under the procedures for determining breaches of the Code. 1 Employees who were not familiar with the Code were provided with a copy to read before answering the question on relevance. 2 The employee survey gave the following examples of a serious breach: fraud, theft, misusing clients’ personal information, sexual harassment and leaking classified documentation. 3 This concern has been observed in previous State of the Service reports. It reveals the tension that exists between the fact that, while APS employees are encouraged to report suspected breaches of the Code, any subsequent investigation of their reports is required to be conducted privately, with the final outcomes being confidential. 4 Office of the Public Sector Standards Commissioner, Annual Compliance Report 2004, November 2004, 5 ‘Managing Suspected Breaches of the Code of Conduct’ was discussed in the State of the Service Report 2003–04. Managing suspected breaches of the Code of Conduct This section examines data on the number of finalised investigations into suspected breaches of the Code by agencies in 2004–05 and how such suspected breaches were managed. Last year’s report contained a summary of the findings of an evaluation conducted by the Commission of the management of suspected breaches of the Code. The Commission acknowledged the desirability of providing agencies with further guidance, and noted that a good practice guide drawing on the findings of the evaluation would be published in 2005. Work on this good practice guide progressed during the year but, as other priorities intervened, it will not be published until 2006. Levels of investigation The agency survey sought information about the number of employees who were the subject of formal investigations into suspected breaches of the Code finalised during 2004–05. During 2004–05, 45 agencies finalised investigations6 into the behaviour of 865 employees suspected of breaching the Code, compared to 48 agencies and 1083 employees in 2003–04. Investigations were finalised in 17% of small agencies, 69% of medium agencies and all large agencies. This result by agency size was similar to that in 2003–04. Over the last two years the percentage of employees investigated who were found to have breached the Code has remained steady at 63%. The overall decrease in the number of finalised investigations should be viewed with caution as it is unknown how many cases commenced this year and are still to be finalised (20% of the cases finalised this year commenced prior to 2004–05). There continues to be a large variation amongst agencies, not explained by agency size, in the proportion of employees subject to investigations into suspected breaches of the Code. Seven large agencies reported fewer than three investigations for every 1000 employees (ASIC, BoM, FaCS, Finance, Health, DEH, DoTARS) compared to 10 large agencies in 2003–04. CRS, DEST and DIMIA were the only three large agencies to report more than 10 investigations per 1000 employees—DIMIA and CSA both reported more than 20 in 2003–04. Of the employees investigated for a suspected breach, 68% were from five agencies (Centrelink, ATO, Defence, DIMIA and ComSuper). The inclusion of ComSuper in the five agencies with the highest number of employees investigated is unusual for a medium agency—ComSuper has advised that this was the result of one particular suspected breach where the subsequent investigation identified some degree of involvement of other employees. Nature of reported breaches Table 6.4 sets out the frequency with which particular elements of the Code were suspected of being breached in the formal investigations finalised during 2004–05 and the number of agencies that reported having finalised at least one formal investigation involving a suspected breach of that element of the Code. Table 6.4: Elements of the Code suspected of being breached in investigations finalised during 2004–05 Element of the Code No. of employees investigated for a suspected breach of this element Percentage of cases where a breach was found No. of agencies with finalised investigations An APS employee must: at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS (s.13(11)) 421 58 29 comply with any lawful and reasonable direction given by someone in the employee’s agency who has authority to give the direction (s.13(5)) 378 69 25 use Commonwealth resources in a proper manner (s.13(8)) 360 58 31 when acting in the course of APS employment, treat everyone with respect and courtesy, and without harassment (s.13(3)) 284 49 35 behave honestly and with integrity in the course of APS employment (s.13(1)) 254 59 33 act with care and diligence in the course of APS employment (s.13(2)) 128 73 22 disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment (s.13(7)) 118 77 15 when acting in the course of APS employment, comply with all applicable Australian laws (s.13(4)) 105 71 17 not make improper use of: inside information, or the employee’s duties, status, power or authority; in order to gain, or seek to gain, a benefit or advantage for the employee or for any other person (s.13(10)) 63 57 17 not provide false or misleading information in response to a request for information that is made for official purposes in connection with the employee’s APS employment (s.13(9)) 39 54 12 not disclose certain information without authority (information communicated in confidence or where disclosure could be prejudicial to the effective working of government (s.13(13) and Regulation 2.1—but see the discussion of the Reg 2.1 amendments later in this chapter)7 6 33 4 while on duty overseas, at all times behave in a way that upholds the good reputation of Australia (s.13(12)) 5 60 3 maintain appropriate confidentiality about dealings that the employee has with any Minister or Minister’s member of staff (s.13(6)) 1 100 1 Note: While agencies were asked for data on employees that were the subject of formal investigations, and were specifically asked not to include data on initial investigations that did not proceed to formal misconduct procedures, it is possible that some agencies may have provided information on elements of the Code that were suspected of being breached in both formal and informal investigations. Source: Agency survey While there has been a decrease in the number of employees investigated for suspected breaches of the Code in 2004–05, there has been an increase in the average number of suspected breaches investigated per employee. In 2004–05, 865 employees involved in finalised investigations were investigated for a total of 2162 suspected breaches of elements of the Code representing an average of 2.5 elements of the Code suspected of having been breached by each employee investigated. This compares with 1.8 elements per employee in 2003–04; there was no comparable data from 2002–03. The increase in the average number of elements of the Code suspected of being breached by employees investigated may not be significant. One event can clearly lead to a suspected breach of more than one element of the Code and an increase could represent a change in an agency’s practice to investigate every possible breach of the Code arising from the facts of the case, not just the one originally brought to the agency’s attention. The element of the Code that was suspected of being breached by the highest number of employees overall was s. 13(11) of the Act—‘an APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS’. Investigations into possible breaches of s. 13(11) were finalised in three per cent of small agencies (one agency), 42% of medium agencies and 81% of large agencies. The increased use of this element of the Code in 2004–05 (26% more employees investigated for a suspected breach than in 2003–04) may in part reflect its greater use in combination with other elements as noted above. Table 6.5 identifies the number of employees investigated for particular types of misconduct and the number of agencies that reported having finalised at least one formal investigation for misconduct of that type. By far, the two most common types of misconduct were improper use of the Internet and/or email and improper access to personal information. With the exception of improper use of the Internet and/or email (65%), large agencies accounted for between 82% and 100% of employees investigated for the different types of misconduct. Table 6.5: Number of employees by types of misconduct in investigations finalised during 2004–05 Type of misconduct No. of employees investigated for this type of misconduct Percentage of cases where a breach was found No. of agencies with finalised investigations Improper use of Internet/email 294 58 23 Improper access to personal information (e.g. browsing) 140 83 9 Harassment and/or bullying 85 49 19 Inappropriate behaviour of employees (other than harassment or bullying) during working hours (e.g. treating clients or stakeholders disrespectfully) 72 60 19 Conflict of interest 71 73 16 Improper use of resources other than Internet/email (e.g. vehicles) 64 75 16 Improper use of position status (e.g. abuse of power, exceeding delegations) 39 56 14 Fraud other than theft (e.g. identity fraud) 31 52 8 Theft 24 71 12 Private behaviour of employees (e.g. at social functions outside working hours) 13 62 8 Unauthorised disclosure of information (e.g. leaks) 11 73 9 Misuse of drugs or alcohol 4 50 4 Note: An individual employee may be counted against more than one type of misconduct. Source: Agency survey The above data suggests that misconduct in areas where the investigation of the suspected breach relies more on physical evidence (e.g. computer records or actions identified through routine audit practices) than on opinion or observation is more likely to result in a finding that the Code has been breached. The Commission’s research as part of its report, ‘Managing Suspected Breaches of the Code of Conduct’, also suggests that another factor influencing the likelihood of a finding that the Code was breached is the different practices in agencies as to the amount of evidence required before commencing an investigation. As noted in last year’s report, some agencies delay commencing a formal investigation until a preliminary investigation has been conducted whereas other agencies routinely commence formal investigations as soon as they are notified of a suspected breach. Data from 2003–04 is not directly comparable with 2004–05 data, as this year’s agency survey sought details on the numbers of employees who were investigated for a particular type of misconduct, whereas last year’s survey only asked agencies to report on the subject matter of investigations finalised. Outcomes of finalised investigations Table 6.6 shows the outcomes of investigations into suspected breaches of the Code finalised by agencies during 2004–05. Table 6.6: Outcomes of finalised investigations into suspected breaches of the Code (in order of severity), 2004–05 Outcome No. of employees affected (a) No. of agencies that reported the outcome Termination of employment 70 18 Reduction in classification 50 14 Reduction in salary 49 15 Reassignment of duties 23 13 Deduction from salary by way of a fine 192 18 Reprimand 257 32 No breach found 229 25 Breach found but no sanction imposed 12 8 Investigation discontinued because of resignation of employee under investigation 91 16 Investigation discontinued but employee counselled 13 6 Other 27 12 (a) An employee may be counted against more than one outcome. Note: While agencies were asked for data on employees who were the subject of formal investigations, and were specifically asked not to include data on initial investigations that did not proceed to formal misconduct procedures, it is possible that some agencies may have provided information on elements of the Code that were suspected of being breached in both formal and informal investigations. Source: Agency survey In 91 cases (11%), the formal investigation into a suspected breach of the Code was discontinued when the employee under investigation resigned from the APS. There has been no change to the resignation rate in such circumstances since 2003–04. The employment of 70 employees from 18 agencies was terminated as a consequence of misconduct investigations finalised during 2004–05. Seven medium agencies each terminated the employment of one employee and the remaining terminations occurred in 11 large agencies. Defence, Centrelink and ATO accounted for nearly two-thirds (64%) of terminations. Reductions in classification occurred in three medium agencies and 11 large agencies with two thirds of the reductions reported in Centrelink, ATO and Defence. Fifteen agencies reduced the salary of 49 employees—Centrelink and ATO accounted for 65% of the salary reductions. The most common ‘other’ outcome reported in 15 cases was counselling of an employee found to have breached the Code. The last two State of the Service reports have noted variation between large agencies in the extent of their use of ‘high impact’ sanctions. High impact sanctions are those that have the greatest impact on employees—termination of employment, reduction in classification and reduction in salary. The data from this year’s survey, calculated as a proportion of the total number of sanctions imposed by each of the 21 large agencies (ranging from 2 to 239), is consistent with previous findings. The imposition of the ‘high impact’ varied between 0% and 50% of total sanctions imposed amongst large agencies. ‘High impact’ sanctions were not used in five large agencies and were greater than a third of total sanctions in two large agencies. 6 ‘The agency survey provided the following guidance on what was meant by ‘investigation’—‘This includes all investigations conducted under an agency’s procedures established under section 15(3) of the Public Service Act 1999 for handling suspected breaches of the Code. It does not include initial investigations that do not proceed to misconduct procedures established under section 15(3) of the Public Service Act 1999. It does not include the outcomes of reviews of actions under section 33 of the Public Service Act 1999’. 7 The survey question did not distinguish between the two versions of PS Regulation 2.1 that were in force for different periods during 2004–05. Table 6.4 includes the version of the regulation that was in place during the period between 23 December 2004 and 16 June 2005. Reviews related to Code of Conduct matters The Regulations provide non-SES employees with a review right in relation to a determination that they breached the Code and/or the sanction imposed for a breach (other than termination decisions). An application for such a review is lodged directly with the Merit Protection Commissioner. Table 6.7: Reviews related to Code breaches or sanctions, 2001–02 to 2004–05   2001–02 2002–03 2003–04 2004–05 Number received 43(a) 43 58 41 Percentage of finalised cases where the original decision was confirmed 64% 34% 43% 46% Note: (a) This figure now excludes a matter dealt with under the Public Employment (Consequential and Transitional) Amendment Act 1999. Source: Merit Protection Commissioner In 2004–05, the Merit Protection Commissioner received 41 applications for review compared to 58 in 2003–04. This represents a review rate of around 8% of finalised investigations where employees were found to have breached the Code. During 2004–05, the Merit Protection Commissioner made a formal recommendation to an agency head in 26 cases. In 12 (46%) of these, the Merit Protection Commissioner recommended the decision be confirmed. In a further 12 cases the Merit Protection Commissioner recommended that the agency head vary the decision and in the remaining two cases he recommended setting aside the decision. Only three reviews included a recommendation to vary the sanction imposed. No systemic issues were identified through these reviews. The data indicates that the percentage of cases in which original decisions are set aside can vary greatly from year to year. This reflects both the small number of reviews and the diverse nature of the different cases. Bullying and harassment The Code requires that an APS employee, when acting in the course of APS employment, must treat everyone with respect and courtesy, and without harassment (s. 13(3) of the Act). In 2004–05, 17% of employees reported that they had been subjected to bullying or harassment in the previous 12 months, compared to 15% in 2003–04. In addition, 19 agencies reported that a total of 85 employees had been investigated for bullying or harassment with 49% found to have breached the Code. This was the third most frequent type of misconduct reported in 2004–05; however, it represents only 10% of employees investigated for misconduct. It is disappointing that there has been a slight increase across the APS in the proportion of employees who report having been subjected to bullying or harassment in their workplace. There is no evidence that this increase can be attributed to particular agencies—where comparable data is available for 20 large agencies, only one agency showed a statistically significant increase8 in employees reporting being subjected to bullying and harassment over the last two years. It is not clear from the employee survey data whether the two percentage point increase is a result of increased incidence, or greater awareness, of the types of behaviour that are classed as bullying9 or harassment.10 The slight increase observed this year may also be partially affected by not including a question on the related issue of discrimination in the 2005 employee survey. It may be that this year some employees, in considering their responses to bullying and harassment, included behaviour that may have been reported as discrimination last year. One response from the employee survey provides a perspective that may be relevant when considering this year’s increase. I do not think this is a systemic issue in […] but there are certainly individuals at the middle management level who continue to bully and victimise. I think the agency has moved to the point where it has done a good job of changing the culture and raising the issues but it now needs to move to the next (more difficult phase) of actually weeding out individuals who have managed to remain below the radar during the first ‘cultural change and awareness raising’ type of approach. employee survey The Commission is developing a plain English guide on bullying and harassment, provisionally titled ‘Respect: A Good Practice Guide to Promoting a Culture Free from Bullying and Harassment in the APS’. It is anticipated that the guide will be released in 2006. Additional analysis of the employee survey results on reports of bullying and harassment is included in Chapter 9, ‘Workplace Diversity’. 8 In this context the results were statistically significant at the 95% Confidence Interval (see Appendix 2 for more information on confidence intervals). 9 Bullying was defined in the employee survey as ‘repeated workplace behaviour that could reasonably be considered to be humiliating, intimidating, threatening or demeaning to an individual or group of individuals. It can be overt or covert’. 10 Harassment was defined in the employee survey as ‘offensive, belittling or threatening behaviour directed at an individual or group of APS employees. The behaviour is unwelcome, unsolicited, usually unreciprocated and usually but not always repeated.’ Conflict of Interest The Code requires that an APS employee: * must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment (s. 13(7) of the Act) * must not make improper use of inside information or the employee’s duties, status, power or authority, in order to gain, or seek to gain, a benefit or advantage for the employee or for any other person (s. 13(10) of the Act). Agencies have a responsibility to ensure that APS employees are aware of the circumstances in which conflict issues may arise and of how to resolve these issues. More commonly, conflict issues will arise where private interests, financial or personal, could conflict with official duties. Cases can also arise where employees have conflicting duties—particularly if an employee performs more than one role. Agencies must ensure employees are aware of the procedures in place to support them in avoiding or managing such conflicts of interest. Agencies also have a responsibility for defining and communicating their expectations of ethical behaviour to non-APS employees including service providers, consultants and people supplied by labour hire firms. Public confidence in the integrity and impartiality of the APS may be jeopardised if the community perceives that actions of APS employees may have been influenced by conflicts of interest. While the desired course of action is to avoid conflict, this is not always practical and agencies also need to have processes to manage situations where a conflict of interest or duty arises. Policies and procedures for APS employees Overall, the agency survey found a significant improvement in agencies’ provision of support for employees in relation to their conflict of interest obligations. An increasing percentage of agencies (55%) are providing learning and development activities relating to conflict of interest to particular groups of employees—compared to 48% in 2003–04 and 38% in 2002–03. Agencies were not asked to identify the particular groups. It is government policy that senior public servants (including those working in statutory authorities) and statutory office holders (as well as Ministers and ministerial employees) provide written statements of their private interests. The percentage of relevant agencies requiring written statements of interests from their SES employees has risen to 87% in 2004–05 from 80% in 2003–04 and 75% in 2002–03. The proportion of all agencies with specific policies and procedures in place on the acceptance of gifts and benefits, including hospitality, has also increased from 84% in the two previous surveys to 90%. Last year’s report noted that the Review of the Corporate Governance of Statutory Authorities and Office Holders by John Uhrig (the Uhrig report)11 had highlighted the scope for conflicts of duty to arise where APS employees sit as representatives on boards or committees. While the progressive implementation of the recommendations of the Uhrig report accepted by the Government should reduce the scope for such conflicts of duty for employees sitting on the boards of statutory authorities, APS employees must continue to exercise considerable care in identifying, declaring and managing conflicts of interest and conflicts of duty. Over the last three years, the proportion of agencies with procedures for alerting employees who sit on boards or committees of the need to declare and manage any conflict of interest, has continued to increase from around half to nearly three-quarters (49% in 2002–03 and 74% in 2004–05), with a further 7% of agencies currently developing measures in this area. Policies and procedures for non-APS employees Non-public servants are increasingly providing direct services to public sector agencies and government services to the general public, on behalf of APS agencies. The Commonwealth Procurement Guidelines specify that officials, departments and agencies are answerable and accountable for any plans, actions and outcomes involving the expenditure of public money. Agencies are expected to include provisions in tender documentation and contracts alerting prospective providers to the public accountability requirements of the Commonwealth. The Values and the Code are particularly relevant where contractors are delivering services to the public on behalf of the APS. When establishing relationships with providers, agencies need to consider how the Values and the Code might be relevant, how they will be drawn to the attention of contractors (and their employees), and how compliance is to be monitored. Since last year’s agency survey, there has been an increase from 77% to 85% in the percentage of agencies reporting and communicating to non-public servants the agency’s expectations that they would behave in accordance with the relevant Values and the Code. Of these agencies, 69% did this through information set out in tender documentation; 70% reported using general clauses in contracts referring to the Values and the Code; and 49% reported including specific contractual clauses regarding only relevant aspects of the Values and the Code. This year there has been a decline in agencies using information in tender documentation and including general clauses in contracts but a corresponding increase in the use of specific contractual clauses. Twenty-four per cent of relevant agencies reported using non-contractual arrangements such as briefing sessions, protocols, the provision of information and training. Policies and procedures for both APS employees and non-APS employees As part of promoting the Values, agencies also need to ensure that contractors are aware that APS employees are bound by the Values and the Code, and that contractors do not place public servants in a position where their impartiality or professionalism may be compromised.12 In particular, any action that would give rise to a real or apparent conflict of interest on the part of the agency decision-maker must be avoided. One means of minimising conflicts of interest in contracting out is to develop and promote agency policies dealing with the issue of avoiding conflict of interest when taking up employment after leaving the APS. Over the last three surveys, the proportion of agencies with such arrangements in place has increased from 30% to 48% with a further 15% of agencies reporting measures under development in 2004–05. The use of contractual restrictions on the employment of key participants in the tender process by successful tenderers has risen to 50% of agencies. This follows a fall from 52% in 2002–03 to 44% in 2003–04. In 2004–05, there has been a large increase in the proportion of agencies reporting having policies (other than the contractual provisions above) for employees involved in market testing and contracting out processes to manage conflicts of interest from 45% to 60%. 11 J. Uhrig, Review of the Corporate Governance of Statutory Authorities and Office Holders, June 2003, 12 Australian Public Service Commission, APS Values and Code of Conduct in Practice: A Guide to Official Conduct for APS Employees and Agency Heads, 2003, Amendments to Regulation 2.1 Last year’s report noted the decision by the Federal Court (Bennett v HREOC (2003) FCA 1433) that cast doubt on the validity of Regulation 2.1. This regulation dealt with the unauthorised disclosure of work-related information by APS employees. To remove uncertainty about the validity of the provision, a replacement Regulation 2.1 was developed; it became effective on 23 December 2004. The amended Regulation was subject to a notice of disallowance in either House of Parliament and on 16 June 2005 the Senate voted in favour of a motion put by the Opposition to disallow the amended regulation. Immediately following the vote to disallow the amended regulation, the Commission issued interim advice to agencies about the disallowance, and noted that the Government was considering what steps it might take to ensure an appropriate balance between the ability of public servants, as citizens, to discuss important issues, and the need to ensure the confidentiality of government information where appropriate. In the meantime, the original regulation has revived. Further information on this issue can be found in the Commission’s circular 2005/3 Disallowance of Amendments to the Public Service Regulations 1999—Regulation 2.1 (Disclosure of Information). The uncertainty about Regulation 2.1 and subsequent advice provided by the Commissioner may have resulted in agencies not regarding it as an effective part of the Code. Only six employees in four agencies were investigated for disclosure of information without authority in 2004–05. Relevant AIRC Decisions The issue of the behaviour of APS employees has been highlighted in a number of the Australian Industrial Relations Commission (AIRC) decisions during 2004–05, including one finalised on appeal in October 2005. These cases are briefly outlined in the section below. Failure to show respect and courtesy An employee in the ATO sought relief from the AIRC13 in relation to his demotion and subsequent termination of employment due to findings of breaches of the Code. In dismissing the application, the AIRC noted concern that, despite warnings, the approach of the employee in relation to providing co-workers with respect and courtesy did not change and that while the employee may have had legitimate grievances, he chose not to process grievances in the appropriate way. This decision is significant in a number of respects as it: * held that where reduction in classification is imposed as a sanction for termination, such a demotion is not reviewable by the AIRC under the unfair termination provisions * provides useful guidance on the standard of respect and courtesy that applies under the Code. The AIRC held that the correct standard is the ‘general community standard’ and emphasised the importance of the context and circumstances of the conduct. Relationship between the Code of Conduct and criminal processes An employee in DEWR was dismissed for misuse of a departmental credit card. DEWR Code proceedings were delayed until court proceedings were completed and, in the meantime, the employee was assigned other restricted duties. The AIRC14 in the first instance found it difficult to understand the delay in pursuing the Code process. It said that DEWR had decided that the misconduct did not justify instant dismissal but rather assigned him to other duties. As nothing had changed but the court decision, termination was harsh and DEWR was ordered to reinstate the employee. An appeal against the reinstatement was upheld by the Full Bench of the AIRC. This decision is significant as it holds that it is appropriate and reasonable to delay taking Code action so as not to prejudice criminal proceedings about the same matter, and that DEWR’s decision to place him on alternative restricted duties pending resolution of the criminal proceedings was appropriate and preferable to suspension. Poor investigatory processes concerning improper use of client records The employment of an employee in CSA was terminated following an investigation that found a breach of the Code in that the employee improperly accessed the computer records relating to clients, one of whom the employee probably knew. The AIRC15 concluded the investigation was flawed for a number of reasons and that the termination of employment was harsh, unjust and unreasonable. The employee was awarded compensation but not reinstated. False and misleading statements at security interview, improper use of email The employment of an employee in the Attorney-General’s Department (AGD) was terminated for breaching the Code by providing misleading information during interviews for an upgrade of a security clearance, failing to handle a conflict of interest appropriately and failing to abide by the department’s email policy. The AIRC16 found that the termination of employment was for a valid reason and that the procedure adopted to effect the termination of employment was appropriate and fair to the employee. Work-related and private behaviour An issue that has been problematic in the APS, and the public sector generally, is the extent to which an employer has the right to control the private behaviour of its employees. APS employees are citizens and, like all other employees, are entitled to a private life. Some elements of the Code apply ‘at all times’—for example, to behave in a way that ‘upholds the APS Values and the integrity and good reputation of the APS’. Other elements of the Code, such as the duty to treat everyone with respect and courtesy and without harassment, apply only ‘in the course of APS employment’. Anecdotal evidence suggests that how far these elements of the Code apply to conduct after hours and/or outside the workplace, such as work functions and business trips, continues to be an issue for agencies and employees. One recent APS case about when conduct after hours was work-related is discussed below. The Commission will be releasing a good practice guide for reporting and dealing with misconduct that will include material on private behaviour outside working hours or the workplace. The forthcoming publication, ‘Respect: A Good Practice Guide to Promoting a Culture Free from Bullying and Harassment in the APS’, will provide more specific guidance for agencies on measures for preventing and dealing with harassment, including in work-related contexts, after hours and outside the workplace. An employee’s employment at the ABS was terminated after he was found to have breached the Code by using his administrator access to change his football tips in several ABS football tipping competitions after the results were known. The employee contested his termination on the basis that the misconduct was ‘out of hours’ and did not damage the integrity and reputation of the APS and if any breaches occurred they were minor and the penalty disproportionate. While the AIRC17 initially found that the employee had breached the Code, termination was not considered to be an appropriate sanction. The AIRC concluded that because of the range of lesser sanctions available, there was not a valid reason for the termination and ordered the ABS to reinstate the employee. An appeal by the ABS against the decision to reinstate the employee was upheld by the Full Bench of the AIRC in October 2005.18 The Full Bench commented that the football tipping was related to the employee’s work as most of the other participants in the competition would be co-workers and that he used system administrator privileges for personal gain. The Full Bench considered that these matters gave the conduct a direct and significant relationship to work and concluded the termination was not harsh, unjust or unreasonable. It also commented that ‘anything which erodes the trust and honesty between work colleagues is destructive of harmony and cohesion and has the potential to affect the work environment significantly’. This case reinforces the importance of trust in any employment relationship, particularly for employees in management roles. 13 Curr v Australian Taxation Office, U2004/3067 PR953053, 8 November 2004 14 Oakley v Department of Employment and Workplace Relations, U2004/3474 PR952429 and PR954267, 15 December 2004 15 Demicoli v Commonwealth Minister for Community Services—Child Support Agency, U2004/5583 PR953670, 25 November 2004 16 Corey v Attorney-General’s Department, U2004/4942 PR956106, 25 February 2005 17 Cunningham v ABS, U2005/1164 PR958166, 27 May 2005 18 Cunningham v ABS, U2005/3251 PR963720, 10 October 2005 Key chapter findings Overall, the data supports the finding that the Code is operating appropriately within the APS. Agencies have policies and procedures in place to ensure employees are aware of the standards of behaviour that are required of all APS employees. Almost all employees have heard of the Code and consider the Code to be moderately or highly relevant to their daily work. The number of finalised investigations of suspected breaches of the Code has decreased, along with requests for review of decisions forwarded to the Merit Protection Commissioner. Agency monitoring systems have now become the most common source for reporting suspected breaches of the Code. While the Code itself appears to be working well, the forthcoming good practice guide on managing breaches of the Code will assist agencies to review and improve their procedures for reporting and dealing with suspected breaches. Improvements are evident in agencies’ approaches to handling potential conflicts of interest for both APS employees and non-employees. Policies and procedures such as increased learning and development activities, alerting employees sitting on boards to possible conflicts, and on accepting gifts and benefits are now established in the majority of agencies to assist employees in meeting their obligations. Agencies are making increased use of specific contractual clauses, in addition to general clauses, to ensure non-APS employees are aware of expectations that they will behave in accordance with the Values and the Code. While the overall situation is satisfactory, some specific results highlight the need to avoid any sense of complacency and for agencies to continue promoting awareness and understanding of the Code. The small increase in the proportion of employees reporting bullying or harassment in the last 12 months cannot be ignored and, similarly, the decrease in the proportion of employees reporting that the Code is highly relevant to their work needs attention. Another cause for concern is the lack of improvement in the number of employees reporting, or prepared to report, a suspected breach of the Code. The Commission has recently developed a learning and development kit called Being Professional in the Australian Public Service—Values Resources for Facilitators, which addresses this issue by strongly encouraging employees to report suspected breaches of the Code. It may be that agencies need to examine existing policies and methods used to promote awareness to ensure their continuing relevance in a dynamic APS subject to changing expectations by Government, APS employees and the public. Equally important is the need to develop an environment and culture where employees feel confident that they can raise suspicions of misconduct, that any subsequent investigation will be fair, that appropriate action will be taken by the agency, and that they will not suffer victimisation or harassment as a result. Chapter 7: Embedding the APS Values and the Code of Conduct The Values are set out in s.10(1) of the Act. Agency heads must uphold and promote the Values (s.12 of the Act). Their leadership is important in articulating the role of the Values and how they complement their agency’s overall corporate vision and organisational goals. Agency heads must have systems in place to ensure that employees understand and apply the Values. Section 35 of the Act makes it clear that it is part of the role of the SES to promote the Values through personal example. Chapter 2 of the Commissioner’s Directions provides directions for agency heads and APS employees on each of the Values. The Directions set out the minimum requirements that an agency head must meet in upholding and promoting the Values. Similarly, APS employees are required by law to uphold the Values (s.13 of the Act). The Values also provide an ethical framework that underpins an agency’s approach to managing risk and developing their own approaches to their business and management environment without centralised prescription. The effectiveness of this approach depends on the successful integration of the Values and the Code into an agency so that the Values are embodied in daily decision-making and behaviour. The Code is examined in more detail later in this chapter and in Chapter 6 ‘Personal Behaviour’. In 2002–03, the Commission conducted an evaluation of how agencies were embedding the Values and the Code in their processes and practices. This resulted in a good practice guide, Embedding the APS Values.1 The guide identified three elements of importance in successfully integrating the Values into an agency and transforming the Values into daily decision-making and behaviour, namely: * commitment * management * assurance. The State of the Service Report 2003–04 examined progress that the APS had made on the matters identified in the good practice guide. This chapter provides an update of that analysis. 1 Australian Public Service Commission, Embedding the APS Values, August 2003, Commitment Commitment to embedding the Values and the Code is measured through evidence of the leadership activity of agency heads and through the integration of the Values into learning and development programmes. Leadership The 2005 employee survey found that the percentage of SES employees who had been advised by their agency head during the year of the importance of acting in accordance with the Values continued to remain essentially unchanged at around 77% from the previous two years. The percentage of SES employees who reported that they had been told by their agency head that it was important that they develop in their staff an understanding of the Values decreased (although not statistically significantly) to 70% in 2004–05 from 77% in 2003–04. There is a need for continued vigilance by agency heads in these areas, given their statutory responsibility for upholding and promoting the Values (s.12 of the Act) and their role in fostering an effective values-based culture within their organisations and across the APS more broadly. SES employees continue to have a high level of awareness of the relevance of the Values to their daily work. A very high percentage of SES employees (99%) reported that the Values were at least moderately relevant to their daily work. For EL employees this figure drops to 96%. These are comparable results to last year. Ninety-two per cent of the SES reported that the Values were highly relevant to their daily work, an increase from 88% last year. For EL employees the result is 80% compared to 78% last year. The increases between last year and this year for both the SES and the EL group are not statistically significant. Learning and Development Commitment to the Values is also expressed through their integration into learning and development activities that address employees’ responsibilities under the Act. Responses to the agency survey suggest a consistent level of effort to promote the Values and the Code amongst employees during the past year. Over the last three years there has been an increase in the proportion of agencies using online training in relation to the Values and the Code (15% in 2002–03, 17% in 2003–04 and 21% in 2004–05). There has also been a relatively stable effort to promote the Values and the Code in other learning and development areas as measured by the proportion of agencies using induction and/or orientation (96% in 2002–03, 97% in 2003–04 and 98% in 2004–05), and the proportion of agencies conducting sessions on how the Values and the Code should operate (55% in 2002–03, 60% in 2003–04 and 61% in 2004–05). Factors that stand out in Table 7.1 include an increase in the proportion of small agencies using promotional material and an increase in the proportion of medium agencies conducting sessions on how the Values and the Code should operate in practice. This may reflect shifts in the mix of learning and development activities used by individual agencies. Table 7.1: Agency learning and development activities on the Values and the Code by agency size, 2002–03 to 2004–05   Small agencies (%) Medium agencies (%) Large agencies (%) Type of Learning activity 2002–03 2003–04 2004–05 2002–03 2003–04 2004–05 2002–03 2003–04 2004–05 Online training 2 5 3 15 19 19 36 38 52 Induction/ orientation 93 92 97 96 100 96 100 100 100 Sessions on how the Values and the Code should operate in practice 44 44 37 46 59 65 86 90 95 Information on the Intranet - 85 83 - 96 92 - 95 100 Use of promotional material (e.g. pamphlets and bookmarks) - 69 80 - 96 92 - 100 90 Source: Agency survey The percentage of APS employees who reported that they had received training that included an emphasis on the Values during 2004–05 was about the same as for the previous year (41%). Responses to the employee survey continue to show a high level of variability between agencies in relation to the proportions of employees who reported having received training in the Values during the last twelve months. In the 21 large agencies the percentages ranged from 22% in one large agency to 88% at ASIC in 2004–05. In nine of the large agencies fewer than 30% of employees reported receiving such training (down from 10 agencies in 2003–04). Variability has also been reflected in the comments in the employee survey. I believe that more education on the APS values to … staff will be valuable. ” “Considerable training/awareness raising effort has been undertaken across all work areas in … during the last 12 months. ” “I can only comment on my experience. The agency head may have communicated with other sections. I am unaware. APS values should be more actively communicated and actioned in the department. employee survey Learning and development has been recognised in other jurisdictions as an important means of improving the integration of values into an organisation’s culture. The Victorian Commissioner for Public Employment’s 2004 report, Ethics at Work Research Project,2 for example, suggests that training in the code of conduct needs to be focused on making the values and principles within it a part of everyday work practices so that when employees are faced with ethical dilemmas the principles of conduct in their organisation, and not their own values and beliefs, are their point of reference. This is consistent with the evidence supporting the Commission’s publication, Embedding the APS Values.3 Last year’s State of the Service report noted improvements in 2003–04 against a number of indicators in the degree of agencies’ success in embedding the Values. The indicators this year remain relatively stable compared to last year. In 2004–05, some 93% of employees continued to report that they had felt that their agency had a clear set of values about the behaviour expected of employees. Similarly, 85% of employees continued to report that they were familiar with the Values, 14% reported that they were partially familiar and 1% that they were unfamiliar. Of those employees who were either familiar with the Values or had heard of them but were not fully familiar with their detail, 56% rated their levels of familiarity as high. Some 39% rated their levels of familiarity as moderate. Both figures are comparable with last year’s. The proportions of employees in the 21 large agencies who reported that they were familiar with the Values continued to vary quite widely, ranging from 65% to 93%. The five large agencies with at least 90% of employees stating that they were familiar with the Values are ASIC, CSA, FaCS, Finance and DIMIA. This year’s employee survey reveals that almost 100% of employees were either familiar with the Code or had heard of it, but were not fully familiar with its contents. The proportions of employees in the 21 large agencies who reported that they were familiar with the Code ranged from 71% to 95%. The large agencies, in which at least 90% of employees reported that they were familiar with the Code, included ASIC, CSA and DIMIA. The Code is discussed later in this chapter and in Chapter 6. There is no conclusive evidence that familiarity with the Values is linked with an employee’s length of service. In 2004–05, about 85% of employees with more than five years of service in the APS reported that they were familiar with the Values compared to 78% of employees with less than one year of service. However, in 2003–04 some 88% of employees with less than one year of service reported that they were familiar with the Values compared to 86% of employees with more than five years of service. This may suggest that employees learn about the Values very early in their careers. Classification level may influence an employee’s familiarity with the Values. For the third consecutive year reported familiarity with the Values increased with classification. In 2004–05, some 84% of APS 1–6 employees, 89% of EL employees, and 98% of SES employees reported that they were familiar with the Values. These figures are comparable to last year’s. Given the inconclusive data on length of service, this finding may suggest that the complexity of jobs and the associated decision-making may affect an employee’s awareness of, and familiarity with, the Values. The Values are intended to provide consistent guidance to employees in an environment where there are fewer rules and increased scope for discretion in decision-making. As with last year’s findings, most employees (78%) continued to rate the Values as highly relevant to their daily work. However, there was a slight increase in the percentage of employees who rated the relevance of the Values as low (from 3% to 5% between 2003–04 and 2004–05). The relevance of the Values to the employee’s daily work was rated highly by the majority of employees in each of the 21 large agencies. The variation ranged from 57% to 87%, with only two of the large agencies falling below 70%. This is consistent with last year’s range of 59% to 83%. When the percentage of employees within large agencies who agreed that the Values are highly or moderately relevant to their daily work is considered, all large agencies fit within a range of 90% to 99% employee agreement, with 16 of the 21 large agencies recording agreement levels of 95% or above. Views on the relevance of the Values to daily work continued to vary by sex. A higher percentage of women (81%) than men (74%) rated the relevance of the Values to daily work as high. Views also differed by age, with those aged under 25 years (64%) less likely than employees in other age groups (ranging from 76% to 80%) to rate the relevance of the Values to daily work as high. For the second consecutive year the proportion of employees who rated the relevance of the Values to daily work as high increased with classification level. In 2004–05, some 77% of APS 1–6 employees, 80% of EL employees and 92% of SES employees rated the relevance of the Values to their daily work as high. Although not significant, the data indicates that employees in small agencies were not as likely to agree that the Values were highly relevant to their daily work. This may be linked to the training history of small agencies. Table 7.1 shows that in each of the last three years a smaller proportion of small agencies have used various learning and development options in relation to the Values and the Code compared to medium and large agencies. For further discussion on learning and development in small agencies see Chapter 10. This year there was no significant difference between ACT-based employees and other APS employees in their estimate of the relevance of the Values to their daily work (79% compared to 76%—although not significant, an improvement since last year in the result for employees located in the ACT). Consistent with last year’s results, views about the relevance of the Values to daily work were positively correlated with familiarity with the Values. The level of agreement of employees that other employees act in accordance with the Values remained quite high. Levels of agreement that ‘colleagues’ and ‘immediate managers’ act in accordance with the Values continue to remain similar to each other and across years (around 87%). The difference between the proportions of employees in large, medium or small agencies who agreed that in their experience the most senior managers acted in accordance with the Values was not significantly different (i.e. 69% of employees in large agencies, 72% of employees in medium agencies, and 71% of employees in small agencies). Responses continue to indicate lower levels of confidence that the most senior managers act in accordance with the Values compared to levels of confidence in colleagues and immediate managers. Although the change is not significant between 2003–04 and 2004–05, employee confidence on this issue has steadily increased over the past three years from 63% in 2002–03, to 68% last year and 69% in 2004–05. The results for the individual large agencies show: * higher rates of agreement (i.e. 75% or more) were reported in Centrelink, DFAT and CRS —a substantial reduction from the seven agencies in this category last year * responses from employees in 18 of the 21 large agencies were clustered between 63% and 76%—in one large agency the result was less than 50%. 2 3 Australian Public Service Commission, Embedding the APS Values, August 2003, Management As in previous years, responses to the agency survey indicate that most agencies have articulated a commitment to the Values in a variety of corporate documents. As can be seen in Figure 7.1, 89% of all agencies include such a commitment in their CA (with all medium agencies doing so compared to 81% of large agencies and 86% of small agencies). Eighty-two per cent of agencies also include a commitment to the Values in their AWAs, representing a small drop from the 86% reported last year. Figure 7.1: Corporate documents expressing commitment to the Values, 2004–05 Note: Agencies that did not supply data for a category have been counted as a ‘no’ response. Source: Agency survey About two-thirds of all agencies reported that they had expressed a commitment to the Values in their corporate plan; and 12% were in the process of developing their plans. There was a wide variation between the proportion of large agencies (81%) and the proportion of small agencies (60%) and medium agencies (62%) that had incorporated this commitment in their corporate plan. Seventy-eight per cent of all agencies have developed their own agency-specific values, principles or behaviours. This is an increase from the 69% reported last year. As last year’s report noted, it is important from a whole of government perspective that agency level statements and documents are consistent with the common APS culture and accountability framework provided by the Values and the Code. There is no cause for concern about the trend towards agency-specific approaches as long as agency-specific values, principles or behaviours complement and reinforce the Values. However, of those agencies with their own agency-specific values, principles or behaviours 11 agencies (17%) reported that those values do not incorporate the Values. This is somewhat concerning, as a trend towards agency-specific values, principles and behaviours appears to be emerging. On a positive note, both agencies currently developing agency-specific documents on these issues are proposing to incorporate the Values. Agencies that do not make this connection should consider doing so. Agency-specific values are discussed in more detail later in this chapter. Almost half of all agencies reflect the Values in their service and/or client charters (46%). This represents an increase from just over a third last year (36%). Overall, 49% of all agencies reflect the Values in their Chief Executive Instructions (CEIs). This is the same as last year after a significant rise from 40% in 2002–03. The results ranged from 37% for small agencies to 58% for medium agencies and 57% for large agencies. The incorporation of the Values into an agency’s broad performance management arrangements is one of the critical strategies that supports embedding the Values. In considering individual performance, 76% of agencies require that an assessment be made about the extent to which employees demonstrate and consistently apply some or all of the Values and/or agency-specific values and behaviours. This represents a slight decrease from 80% last year. A higher percentage of large agencies (86%) than small agencies (74%) or medium agencies (69%) reported this approach. Table 7.2: Measures used by agencies in performance assessments to ensure employees demonstrate and consistently apply the Values, 2002–03 to 2004–05   2002–03 (% of agencies) 2003–04 (% of agencies) 2004–05 (% of agencies)   Yes Being developed Yes Being developed Yes Being developed An assessment of values/ behaviours in performance assessments 61 15 78 7 77 9 Regular multi-source feedback 22 16 22 16 27 13 Training of all staff on how values/behaviours relate to effective performance 27 17 36 10 35 18 Source: Agency survey As Table 7.2 above shows, the most common measures adopted over the past three years to ensure that agency performance management arrangements address the Values have been their inclusion in performance assessments. This year 77% of agencies reported having such arrangements—a similar proportion to last year. While the overall trends apparent in Table 7.2 are positive, it is somewhat concerning that some agencies are reporting these mechanisms as ‘being developed’ two years in a row. Compared to last year there has been a slight decrease in the proportion of agencies that reported assessing their staff against all the Values (from 60% last year to 54% in 2004–05). This drop is largely concentrated in the large agencies (from 76% to 52%). There has been a similar decline in relevant agencies (i.e. those that have developed agency-specific values, principles or behaviours) assessing their staff against agency- specific values (from 65% to 58%). There has also been a drop from just under a half to a little over a third of relevant agencies that reported assessing their employees against both the Values and their agency-specific values. Responses to the employee survey show a similar pattern to last year in relation to performance assessment including a discussion of behaviour (around 80% of relevant employees reported that this occurred). While relevant respondents could choose multiple responses, assessment against agency-specific values (45%) achieved a higher level of response than assessment against the Values as a set (35%), the Values most relevant to the job (20%) or other behavioural indicators (4%). Once again the results of this year’s employee survey show that assessment of behaviour as part of performance appraisal seems to be related to a higher level of agreement that colleagues, immediate managers and the most senior managers act in accordance with the Values. Assurance Embedding the APS Values4 noted that agency-specific accountability and assurance mechanisms can be used to help sustain compliance with the Values and the Code. The Code itself is an important control mechanism that operates to support the Values in each agency. To be effective the Code requires a workplace culture in which employees understand the Code, its implications and their responsibilities in relation to it. The results of the employee survey that explore this more fully are discussed in Chapter 6, which deals with ‘Personal Behaviour’. Similar to findings last year, the chapter reveals that: * The vast majority of APS employees are familiar with the Code and believe that it is relevant to their workplace. * Most employees had also been told that they could report suspected misconduct to authorised people. * There continues to be a degree of circumspection amongst employees about whether they would report a suspected breach of the Code. Of the 11% of employees who reported that they had witnessed a suspected serious breach of the Code in the last year, only half reported the suspected breach. Staff Surveys Staff surveys that ask questions directly or indirectly about the Values provide another useful quality assurance mechanism to monitor adherence to the Values throughout the agency and to improve agency practice. The agency survey indicated that 34% of agencies conducted an agency-wide staff survey in 2004–05, the same proportion as in 2003–04. Fifty-six per cent of agencies were proposing to conduct staff surveys in 2005–06, with 20% of agencies conducting a survey in 2004–05 and also planning to do so in 2005–06. Large agencies continued to indicate the greatest use of staff surveys (52% in 2004–05 compared to 38% in 2003–04). Small agencies continued to report the least use of staff surveys with the result remaining stable at 31%. The proportion of medium agencies that surveyed their staff during the year declined to 23% in 2004–05 following a significant increase from 12% in 2002–03 to 37% in 2003–04. Eighteen agencies (22%) had not conducted a survey in 2004–05, and reported no firm intention of doing so in the next two years. One agency indicated an intention after absorption into another organisation.5 4 Australian Public Service Commission, Embedding the APS Values, August 2003, 5 Machinery of Government changes and other structural changes will have some effect on changes from year to year. Agency-specific values As discussed above in the section on management, according to the agency survey 78% of agencies (compared to 69% in 2003–04) had developed their own agency- specific values, principles or behaviours and 2% were developing them. Growth is not concentrated in any particular agency size. However, the practice is concentrated more highly in medium agencies (85%) and large agencies (86%). The practice has increased in small agencies to 69% from 59% in 2003–04 and 46% in 2002–03. This is the third year in a row that there continues to be some confusion among employees about whether their agency has its own values, principles or behaviours. The proportion of employees from large agencies which do have their own values, principles or behaviours who believed this to be the case varied from 25% to 81%. This compares to a variation of between 43% and 90% last year. In agencies that had not developed their own values, between 33% and 63% of employees thought they had. This compares to between 29% and 79% last year. The continuing level of confusion highlights the need for agencies to continue to ensure employees are familiar with both the Values and agency-specific values where these exist. This is particularly important in the case of the Values as the Act’s Code requires APS employees to behave at all times in a way that upholds the Values. There is no such direct link between the Code and agency-specific values. Application of the Values is also a key issue in relation to Uhrig governance arrangements.6 While portfolio departments and their Ministers are reviewing portfolio agency governance arrangements against the Uhrig templates, the Commissioner has encouraged them to also consider whether agencies should be covered by the Act. It is expected that this will offer the opportunity to reinforce cultural coherence within the APS, as well as improve the consistency of its governance framework. It would mean that the Values are applied more uniformly to the performance of public service functions and to the way in which public servants understand themselves and what they do. 6 J. Uhrig, Review of the Corporate Governance of Statutory Authorities and Office Holders, June 2003, Key chapter findings Through the Values, the Act provides an ethical framework that allows agencies to manage risk and develop their own approaches to their business and management environment without centralised prescription. The success of this approach depends on the successful integration of the Values and the Code into an agency and integrating the Values into daily decision-making and behaviour. The role of SES and EL employees is important in helping to integrate the Values into an agency’s systems, procedures and culture. A very high percentage of SES employees (99%) reported that the Values were at least moderately relevant to their daily work. Ninety-two per cent reported that the Values were highly relevant to their daily work. For EL employees these two figures drop to 96% and 80%, respectively. This suggests that there may be a need to lift awareness of the importance of the Values amongst EL employees. The agency survey shows an upward trend over the last three years in the proportion of agencies using online training, induction and/or orientation sessions on how the Values and the Code should operate as part of their agency learning and development activities. Responses to the employee survey continue to show a high level of variability among the large agencies in relation to the proportion of employees who reported having received Values training. In nine of the 21 large agencies less than 30% of employees reported such training. While on the whole agencies are directing the same degree of effort towards embedding the Values and the Code into their processes and workplace cultures, and the majority of employees feel that they are familiar with the Values and view them as relevant to their daily work, the concerns noted last year remain: * although the great majority of employees are confident that their immediate managers and colleagues act in accordance with the Values, they continue to have a significantly lower level of trust in their senior managers * employee confusion between agency-specific values and the Values. It can be expected that employees’ perceptions of the leadership group’s active engagement with the Values and the Code will influence perceptions and behaviours throughout the APS. Building trust is something important for all APS employees but particularly for the leadership group. While there may be other factors that contribute to these results there is still a need for continued promotion, discussion and modelling of the Values. The Commission is aware of this need and has recently developed a learning and development kit called Being Professional in the Australian Public Service—Values Resources for Facilitators. This kit enables training activities on the Values and the Code to be tailored to best meet the needs of the diverse range of APS employees including those in the leadership group. Chapter 8: Managing, sustaining and engaging the APS workforce As outlined in the MAC report on Managing and Sustaining the APS Workforce, the APS faces a challenge in attracting and retaining skilled and talented staff in an employment environment very different to that of the past. In this new environment, agencies will need to adopt strategic and dynamic approaches to sustaining the APS workforce. These approaches will also need to take account of the increasingly diverse career paths and aspirations of this workforce.1 This chapter begins by recapping on aspects of the statistical snapshot of the APS presented in Chapter 2, with an overview of the key capability trends in the APS in recent times and the key workforce challenges that APS agencies report having faced in 2004–05. It goes on to examine the ways in which agencies are responding to these challenges, concentrating on the extent to which agencies are planning to ensure they have the skills and capabilities they need into the future. It also examines how agencies are managing for improved performance. The chapter then examines employee intentions with regard to leaving the APS and the factors which impact on employees’ job satisfaction, including employee perceptions about their immediate supervisors’ people management skills. The chapter concludes with a discussion of employees’ perceptions of their own productivity levels, including the factors which affect their individual productivity, and a preliminary discussion around the complex issue of employee engagement. 1 Management Advisory Committee 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra. Key APS capability trends and workforce challenges Changes in the characteristics of the APS workforce in recent years, outlined in Chapter 2, have serious implications for the capacity of the APS to build and sustain its capability and to improve its productivity and effectiveness. In particular, internal and external changes in the APS have produced an APS workforce that is very different to the APS up to the early 1980s. Age A significant trend that affects the building of capability in the APS is the change in the age profile of the APS. In 2005, the median age was 42 years; in 1975 and 1995, it was 29 years and 38 years, respectively. Employees aged 45 years and over, who will be eligible for retirement in the next 10 years, account for 40.4% of ongoing employees. In 1996, this group accounted for only 30.5% of ongoing employees. This is an important issue, which has also been raised in Chapter 2, and is likely to have a major impact on the APS over the next decade. Classification Today’s APS is characterised by streamlined classification structures and, increasingly, the entry point for many APS recruits is above the APS ‘base’ level, with employees now typically commencing at the APS 3–4 levels or higher and advancing fairly rapidly to higher levels. In 1980, 52.4% of ongoing staff were at the APS 1–2 classification levels (and equivalents).2 By 2005, this had fallen dramatically to only 5.2% (down from 6.3% in 2004). This decline has been offset by proportional increases at the APS 3–4, APS 5–6 and EL classifications. SES staff numbers, as a proportion of total ongoing staff, have also risen from 1.1% in 1980 to 1.6% in 2005. The changed classification profile of the APS demonstrates a long-term trend reflecting changes in skill requirements and the changing nature of work. This has resulted in a decrease in the demand for lower level, less skilled workers and a shift from some narrow technical skills to broader administrative and professional skills. Qualifications The APS workforce is increasingly becoming a graduate workforce. The employee survey confirmed a definite trend for a larger proportion of APS employees to hold tertiary qualifications, with employees at all levels being increasingly likely to have such qualifications, regardless of whether they are recruited through graduate entry programmes or general recruitment processes.3 Results from the employee survey show that around 46% of APS employees have a bachelor’s degree or higher qualification, with an additional 18% having another form of post-school qualification. Furthermore, around two-thirds of new recruits possess graduate qualifications.4 While significant in themselves, the APS workforce changes documented in this report need to be viewed in the context of major changes the APS is undergoing in its structure, demography, governance and core activities. Mobility The APS has also seen significant changes in patterns of mobility, both into and out of the APS and between APS agencies. The proportion of positions filled by engagements from outside the APS increased from 33.7% in 1995–96 to 47.6% in 2004–05. As described in Chapter 2, mobility rates have been quite variable over the past decade. The interagency mobility rate (which comprises promotions and transfers between agencies) has declined from 3.0% in 1995–96 to 2.0% in 2004–05.5 It is pleasing to note, however, that the 2.0% represents an increase on the figure reported in 2003–04 of 1.6%. The optimum level of mobility varies between agencies, and depends on the circumstances of the organisation, including the nature of its business and its skill requirements. Agencies have to balance the benefits to their agency, and to the APS as a whole, of encouraging such mobility, with the need to manage turnover rates and ensure capability is developed and maintained within their agency. Chapter 10, ‘Leadership, Learning and Development in the APS’, further discusses the importance of mobility in the context of leadership development. Workforce challenges The changing demographics of the APS discussed above are linked to many contemporary workforce challenges faced by APS agencies. The agency survey asked agencies whether they had faced any workforce challenges during 2004–05. The most common workforce challenge identified by agencies was difficulty in recruiting people with required skills, other than as part of a formal graduate programme (reported by 76% of agencies—up from 62% of agencies in 2003–04). Recruitment as part of a formal graduate programme appeared to be less of an issue with only 11% of agencies reporting concern. The next most common workforce challenge identified by agencies was ensuring that employees’ skills and/or knowledge meet agency requirements (57%, down from 61% in 2003–04). A large number of agencies (48%) also identified the loss of valued mature-aged employees as a workforce challenge. The extent to which agencies reported workforce challenges varied considerably according to agency size. Figure 8.1: Workforce Challenges, 2004–05 Source: Agency survey Those agencies that reported experiencing difficulties in recruiting people with required skills were most likely to report encountering difficulties in recruiting people with financial management (55%) and accounting (55%) skills or skills in information technology (47%). These findings are consistent with the national skill shortage list for 2004, available on DEWR’s job outlook. Some of the specific initiatives identified in the MAC report on Managing and Sustaining the APS Workforce (see box below) address this (among other issues). Agencies also reported difficulties in recruiting people with skills in human resources, project management and contract management. The Management Advisory Committee report, Managing and Sustaining the APS Workforce, addresses the workforce challenges facing the APS as it moves into a new labour market environment characterised by an ageing workforce, skill shortages, changing career patterns and a significant reduction in the number of new labour force entrants. The report calls upon agencies to implement a series of significant initiatives in a range of areas. The following are some examples of the initiatives outlined in the report: workforce planning The Commission, in consultation with agencies, will develop and promulgate advice on best practice in workforce planning. attracting and recruiting employees to the APS A working group of agencies—guided by advice from the Commission on legislative requirements and better practice—will be formed to develop guidelines for streamlined recruitment processes. All APS agencies will explore base-level recruitment pathways targeted at potential employees without post-school qualifications, including how these may assist in building greater workforce diversity through the employment of more Indigenous people and people with disabilities. recruiting and retaining employees with specialist skills in high demand A number of agencies—with the support of relevant lead agencies—will work to establish APS-wide professional communities, initially of accountants, statisticians and ICT professionals, to promote learning and development and career planning in these areas. smarter approaches to graduate recruitment and development APS agencies will review their current graduate programme intake levels, making use of best practice approaches to workforce planning. ensuring new employees have the necessary skills and knowledge to work effectively in the APS environment APS agencies will act to ensure all new starters are given the induction and orientation in the Australian Government and APS processes they will need in order to perform effectively in their positions. interagency mobility The new APS employment portal will include a facility for APS and external organisations to advertise rotation and mobility opportunities and for employees to express interest in accessing such opportunities. responding to the employment needs and career aspirations of the changing APS workforce The new APS employment portal will feature an online registration channel for former APS and other mature-aged employees interested in accessing APS employment. APS agencies will also develop mature-aged workforce strategies and report back to MAC on progress. investing in identifying and developing future leaders MAC has issued a statement on expectations of the SES, covering the need for a greater APS-wide focus on leadership capabilities and development. MAC report highlights 2 Excludes some ongoing employees in some specialist classifications who could not be assigned an APS equivalent classification. 3 Management Advisory Committee, Managing and Sustaining the APS Workforce. 4 The method used to calculate the proportion of employees with graduate or tertiary qualifications includes those with qualifications at bachelor degree and above. It excludes from the denominator those for whom no data was provided by agencies, and those who chose not to provide details of their highest educational qualification. 5 The mobility rate between agencies is calculated as the number of movements (promotions and transfers) between agencies during a financial year, divided by the average of the number of employees at the beginning and end of the period. It does not include non-ongoing transfers or temporary assignments or changes due to machinery of government changes. Workforce planning and succession management The key capability trends within the APS and workforce challenges identified by agencies, when coupled with the sustained period of economic growth being experienced in Australia, low unemployment rates and an ageing population, present significant workforce planning challenges for the APS. These are not new challenges. They have been identified in previous State of the Service reports and are the subject of a number of reports, most notably, the MAC reports on Organisational Renewal6 in 2003 and Managing and Sustaining the APS Workforce7 in 2005. With the increased awareness of the challenges facing agencies, the need to undertake effective workforce planning could not be clearer. In 2004–05, the ANAO conducted a cross-agency performance audit on workforce planning across APS agencies. The audit surveyed 86 agencies to determine the extent to which workforce planning is underway across the APS.8 The report assessed agencies against four criteria to establish the level of development of workforce planning. The criteria were designed to determine whether: * The agency has assessed the demand for, and supply of, labour in the context of achieving the organisation’s desired capability. Workforce planning is an integral part of the business planning process. * The agency has assessed the potential gap in workforce characteristics and competencies. The agency has undertaken trend analysis of demographic data to provide both descriptive and forecasting models describing how changes will affect the workforce in the absence of management action, and to model the varying impact of possible management actions. The agency has assessed the competencies and skills of the workforce to analyse the differences between the current and desired competency profile. * The agency’s assessments have informed all relevant business strategies including, but not restricted to, HR strategies. * The agency has a measurement framework in place. Incremental progress can be measured on a range of relevant factors, as well as provide links to the overall performance of the agency. The chosen performance measures are clearly and compellingly linked to the success of the organisation. The ANAO found that, while a number of APS agencies are undertaking workforce planning, few, if any, could claim to have successfully embedded workforce planning into their business processes. The ANAO also considered that more could be done by agencies with respect to assessing the demand for, and supply of, labour and relating shortfalls to capability. Like most HR issues, workforce planning is far from being a precise science and, even when the outcome desired is reasonably clear, the process for accomplishing it is not. Accordingly, the agency survey did not directly ask about whether agencies had workforce planning processes in place but about whether agencies had policies, strategies and/or frameworks that aim to ensure they have the skills and capabilities needed for the next 1–5 years. Forty-three per cent of agencies reported having put in place policies, strategies and/or frameworks that aim to ensure they have the skills and capabilities needed for the next 1–5 years (a similar result to 2003–04). Of the remaining agencies, 51% reported that they were in the process of developing relevant policies and 6% did not have relevant policies in place and were not developing them. Of those 42 agencies that reported being in the process of developing relevant policies in 2004–05, 20 agencies had been developing relevant policies for the last three years. It is interesting to note that of the agencies that revealed they were either in the process of developing relevant policies or did not have relevant policies in place, and were not developing them, the majority identified facing workforce challenges during 2004–05. This seems to indicate that these agencies would clearly benefit from investing resources in completing and implementing appropriate policies, strategies and frameworks, and fine-tuning when required, rather than continuing to ‘develop relevant policies’ year in and year out or not having them at all. Because a number of large agencies changed their response from ‘yes’ to ‘being developed’ this year, the proportion of large agencies with relevant policies decreased from 76% in 2003–04 to 62% in 2004–05. Thirty-eight per cent of medium agencies and 34% of small agencies had put in place relevant policies. Workforce planning challenges The agency survey asked agencies whether they had faced any challenges during 2004–05 in a number of areas of workforce planning. Consistent with the 2003–04 survey results, the most common workforce planning challenge faced by agencies was in accessing adequate information to evaluate the effectiveness of learning and development, identified by 54% of agencies. As reported last year, challenges were also experienced in the areas of: * the ability to predict and plan for changes that are likely to impact on the agency’s business (e.g. technological change, greater cross collaboration with agencies— identified by 46% of agencies compared to 54% in 2003–04) * identifying the capabilities required to deliver future workforce needs (41%, compared to 45% in 2003–04). Knowledge about the employment status of employees is also important in the context of workforce planning. As was the case last year, almost all agencies had systems in place to determine the number of non-ongoing employees at any point in time; 81% of relevant agencies had systems in place to determine the number of people employed under legislation other than the Act; and 59% of relevant agencies had systems in place to determine the number of people working in the agency employed by labour hire firms, with a further 9% developing such a system. The Commission’s APSED Internet Interface (APSEDII) provides easy, Internet based access to APSED data, and facilitates workforce planning and benchmarking by agencies. Users are able to run general queries on APSED data—producing tables similar to those in the APS Statistical Bulletin. A second stage of APSEDII allows designated agency personnel to run queries on confidential data about their agency and, for comparative purposes, about other agencies of similar size. This stage allows these users to view unit record data for their agency on APSED, through a secure logon and password procedure. APSEDII is available at https://www.apsedii.gov.au. APSEDII In 2005, agencies were asked whether they had systems in place to determine the number of people working in the agency employed as consultants or other forms of independent contractor. Forty-four per cent of relevant agencies could determine numbers of consultants and 42% of relevant agencies could determine numbers of independent contractors. Forty-one per cent of agencies had systems in place to determine the number of people in other categories (such as secondees). Workforce planning challenges were more commonly identified by medium and large agencies than by small agencies. This may reflect a number of issues, including the greater complexity of planning in larger agencies and the difficulty of assembling and analysing information when dealing with a large number of employees in sometimes decentralised operating environments. DEST is in the process of developing an enhanced workforce capability management framework. DEST is seeking to provide a more useful tool designed to assist managers to better understand, plan and manage their workforce in delivering on current and future business. Key features of the capability management framework and the associated technology systems will include: * more useful, systemic and DEST-relevant capability statements that will serve as a common language across all HR strategies, including workforce planning, performance management, learning and development, recruitment and selection * the capacity to interrogate data on capabilities which will assist in a more flexible approach to the alignment and deployment of capability across the organisation based on business need * a greater opportunity to contribute to the evidence-base for development and evaluation of HR policy and strategy, including target areas for intervention. Through the enhanced capability framework, DEST is seeking a more comprehensive integration of business and workforce planning across the organisation and an improved ability to respond to changing workforce needs through better-targeted HR strategies. agency case sudy The survey asked agencies to identify which measures they had in place as part of a workforce planning process to meet their identified workforce challenges in 2004–05. The most common measure, reported by 78% of agencies, was aligning performance management systems with identified workforce requirements (up from 71% in 2003–04). A further 16% of agencies were developing this measure. The prevalence of this measure is encouraging, indicating that many agencies have recognised the need to link broad business requirements, with the development needs of individuals. Interestingly, of the five agencies reporting that they did not have their performance management system aligned with identified workforce requirements, three had reported in the 2003–04 agency survey that they did, and two had reported that the measure was being developed. The second most common measure in place to deal with workforce challenges, reported by 76% of agencies, targeted attracting and retaining people with critical skills (e.g. by enhanced and/or more flexible pay and conditions, and offering development opportunities), up from 69% in 2003–04. A further 11% of agencies were developing this measure. Agencies that selected this measure were asked to identify from a list of benefits/arrangements/conditions, in addition to those already widely available to employees, those that their agency had used during 2004–05 to attract and retain people with critical skills. The most prevalent condition offered to employees was higher base salaries (reported by 82% of relevant agencies). Other widely used arrangements included development opportunities (e.g. study awards, fellowships, secondments) (63% of relevant agencies), performance-related bonuses (53%) and enhanced conditions (e.g. leave, reunion fares) (40%). Other measures used widely in dealing with workforce challenges included: * learning and development strategies aligned with identified workforce requirements (65%, with a further 30% developing this measure) * recruitment strategies aligned with identified workforce requirements (63%, with a further 28% developing this measure). Succession management strategies linked to future workforce needs are not yet widely used, but the results suggest that a larger number of agencies are working on putting such policies into place. Twenty-four per cent of agencies reported using them now, and another 44% were developing them. Large agencies were more likely than other agencies to use the measures dealing with workforce challenges outlined in the survey, including learning and development strategies and performance management systems aligned with identified workforce requirements, succession management strategies, and measures to attract and retain people with critical skills. Nonetheless, over half of all small and medium agencies use each of these measures (other than succession management strategies). It also needs to be recognised that smaller agencies may be implementing more informally some of the measures that larger agencies include as part of a formal workforce planning process. As well as being asked about measures to address workforce challenges in general, including succession management strategies, agencies were also asked specifically about whether they had a formal approach to succession management. Twenty-eight per cent of agencies indicated that they had such an approach. This shows noteworthy growth on the 20% in 2003–04 and 4% in 2002–03 who stated that they had a ‘formal succession plan’. Formal approaches to succession management were more common among large agencies (57% compared to 43% in 2003–04) than medium agencies (23% compared to 19% in 2003–04) or small agencies (14% compared to 8% in 2003–04). Succession management will become increasingly important with around 70% of SES and 55% of EL2 employees aged over 45. Succession management in Customs is included in the workforce planning component of the Customs Strategic HR Framework and is integrated in regional career assignment arrangements. The key principles of succession management and career management are included in the Career and Succession Management Policy Advice and the Succession and Career Management Toolkit. The toolkit provides several tools to assist individuals in pursuing career paths and to assist managers to apply succession management in their own workplaces. agency case study This year’s survey results indicate that many agencies are planning for succession in a more informal way. The means by which agencies identify potential leaders is discussed in Chapter 10. 6 Management Advisory Committee 2003, Organisational Renewal, Commonwealth of Australia, Canberra. 7 Management Advisory Committee, Managing and Sustaining the APS Workforce. 8 ANAO, Workforce Planning, Performance Audit Report No. 55, June 2005, Managing for improved performance Performance management is an essential component of a constructive workplace environment that, from a workforce planning perspective, is intended to identify and develop required capabilities for a capable, adaptive and effective workforce. It is also aimed at: * improving individual and organisational performance over time * providing measures of organisational and individual accountability * planning and monitoring individual performance within the achievement of organisational and business goals * recognising and rewarding good performance, improving average performance and managing underperformance. The 2001 MAC report on Performance Management in the Australian Public Service9 identified three critical success factors for performance management: * alignment of individual performance objectives with agency goals and strategic priorities, based on a detailed understanding of the outcomes sought, the nature of the business and the culture of the organisation * credibility amongst employees through transparency, fairness, simplicity, and Chief Executive Officer (CEO) and management commitment * integration, ensuring that performance management is part of the overall management structure of the organisation, that there is a clear line of sight for staff between their responsibilities and the objectives of the organisation along with careful implementation and adequate training. Systematic approaches to performance management have been in place for some time in the APS. Within the broad framework outlined by the Act and the Commissioner’s Directions, agency heads have the flexibility to develop performance management systems that meet the particular needs of their organisation and employees. In 94% of agencies it is mandatory for all employees to have a formal performance agreement (up from 87% of agencies in 2002–03). Performance assessment and feedback Consistent with the critical success factors identified in the MAC report on performance management,10 an important aspect of setting realistic performance objectives is that employees have a clear line of sight to organisational responsibilities to enable them to see how their work aligns with the agency’s objectives and to ensure relevant and consistent performance information is cascaded through the organisation. In the 2005 survey, employees were asked about their level of agreement with the statement that ‘the links between my agency’s business and my work were made clear in the development of my performance agreement’. Sixty-five per cent of respondents agreed with this statement, 21% neither agreed nor disagreed and 11% disagreed. The proportion of respondents who agreed with the statement in 2002–03 was 72%. This decrease is statistically significant and would suggest that, whilst there is a level of alignment of the objectives set in individual performance agreements with the agency’s business, this is an area which requires further attention. Employees were also asked to rate their agreement with the statement that ‘My most recent performance review will help me perform well’. Less than a half (43%) of employees agreed with this statement, 35% of respondents neither agreed nor disagreed and 20% disagreed. The results of the 2003 employee survey were similar. Seventy-three per cent of employees agreed that they ‘understood the standards used to evaluate their performance’, 17% neither agreed nor disagreed and 8% disagreed. These results were also similar to the results from the 2003 employee survey. The 2001 MAC report on performance management11 saw giving and receiving feedback as an essential component of performance management systems and a fundamental skill that managers need in order to ensure the effectiveness of performance management. It also noted that without effectiveness in giving and receiving feedback, performance management was unlikely to improve individual or organisational performance or be credible to staff. Research by the Corporate Leadership Council (CLC) has found that the provision of informed, positive, fair, accurate and detailed feedback is a strong driver of performance.12 This year 85% of employees reported that they had received formal individual feedback in their agency, down slightly from the 87% in 2003–04. Nevertheless, this year’s result is still higher than the 79% recorded in 2002–03. Of those employees that had received formal individual feedback in their agency in 2004–05, almost all (94%) employees received feedback from their supervisor. The next most common source of feedback was from the supervisor’s supervisor (18%) followed by a peer (16%). These findings are consistent with those reported in previous years. Ninety per cent of employees who had received feedback, and who reported that their performance in their most recent performance feedback session was assessed against a formal performance agreement or work plan, agreed with their supervisor (down slightly from 92% in 2003–04). The view that quality feedback is essential to effective performance management was common in comments provided by respondents to the employee survey. I have never been satisfied with our performance feedback system. Supervisors tend to use it as a tick & flick exercise—there is no detailed assessment of my performance. Worse, supervisors do not give enough feedback between formal assessments. In the case of my current supervisor, if he does give me informal feedback, it tends to be of the negative variety. ” “Whilst the agency has taken a number of positive measures recently to improve the rigour of the performance management system, there is still a tendency for some supervisors to avoid possible tensions and rate staff effective despite concerns over work performance. ” “I believe we have a performance system in place that could achieve all of the above but the managers that are to carry out the performance system are either not trained correctly, see it as a burden or couldn’t care less and see it a meaningless as there is no impact on incentives and is just a tick and flick situation. employee survey Performance and pay The proportion of employees reporting that under their agency’s performance assessment system, any part of their pay was linked to an assessment of performance has decreased from 69% in 2003–04 to 65% in 2004–05. Employees whose pay was linked to an assessment of their performance were also asked about how this link was made. The large majority of these employees (69%) stated that they were eligible for advancement through the salary range for their classification subject to fully competent performance (down from 74% in 2003–04). Eligibility for a one-off bonus was the second most common method of linking pay with performance assessments, and applied to just under a quarter of relevant respondents (24%). Other options, which were less common, included: * eligibility for accelerated advancement through the salary range for the employee’s classification, subject to better than fully competent performance (18%) * eligibility for an increase in base salary (18%) * if covered by an AWA, performance assessments are formally taken into account when renegotiating AWAs (7%) * performance assessment is formally taken into account in selection for promotion (6%). Performance pay in this chapter is used broadly to refer to all of these methods of linking pay to employees’ performance assessment, unless otherwise indicated. Over the last three years the employee survey has sought opinions from employees who had any part of their pay linked to an assessment of performance, on how well the performance pay system operated in their agency. The results from 2003–04 and 2004–05 are reported in Table 8.1. The overall results continue to highlight key issues for APS agencies in ensuring the credibility of their performance pay systems with employees. Although there has been a general decline in relevant employees’ views on the operation of performance pay systems in their agency, Table 8.1 also shows that sizeable proportions of relevant employees continue to neither agree nor disagree with statements relating to the operation of performance pay systems in their agency. This finding would suggest that there is scope for agencies to shift these employees’ opinions from the neutral to a more positive position with better design and management of their performance pay systems. Table 8.1: Relevant employee views on the operation of performance pay, 2003–04 and 2004–05   Agree (%) Neither agree nor disagree (%) Disagree (%)   2003–04 2004–05 2003–04 2004–05 2003–04 2004–05 Operates fairly and consistently 47 39 24 25 26 32 Acts as an incentive to perform well 38 36 27 28 33 34 Ensures performance assessment is managed systematically and regularly 50 47 23 23 25 28 Accurately reflects differences in individuals’ performance 21 20 28 26 46 51 Provides appropriate rewards for top performers 25 21 24 21 48 54 Contributes to a workplace culture in which individuals work together effectively 26 20 35 37 37 40 Contributes to a workplace which upholds the APS Values 35 31 36 35 24 30 Source: Employee survey While Table 8.1 shows that this year’s results generally represent a decline on those reported in 2003–04, Figure 8.2 illustrates the fluctuating nature of some of the indicators over the last three years. Figure 8.2 also shows that a downward trend is starting to emerge on some of the indicators such as ‘acts as an incentive to perform well’ and ‘ensures performance assessment is managed systematically and regularly’. Figure 8.2: Proportion of relevant employees agreeing with performance pay statements, 2002–03 to 2004–05 Source: Employee survey Despite the poor average results, there was considerable variation in opinions about performance pay across large agencies. The variation between agencies’ results was not as high as last year’s, however, with the highest performing agencies this year recording significantly lower levels of agreement; for example, in 2003–04 the ATO recorded 69% agreement with the statement that the performance pay system ‘operates fairly and consistently’, whereas this year the highest level of agreement was in DAFF (54%). In 2005, the largest difference in range was in the level of agreement on whether performance pay systems ‘contribute to a workplace culture which upholds the APS Values’, from a low of 12% to a high of 52% (with the highest levels of agreement at CSA), but there was a broad range of results for most statements, including: * ‘operates fairly and consistently’ (the range in 2003–04 was 19%–69% compared to 20%–54% in 2004–05). The results for the majority of large agencies had decreased from those recorded in the 2004 State of the Service employee survey * ‘acts as an incentive to perform well’ (the range in 2003–04 was 16%–56% compared to 24%–49% in 2004–05) * ‘ensures performance system is managed systematically and regularly’ (the range in 2003–04 was 24%–70% compared to 34%–64% in 2004–05) * ‘provides appropriate rewards for top performers’ (the range in 2003–04 was 6%–51% compared to 9%–48% in 2004–05) * ‘contributes to a workplace culture where individuals work together effectively’ (the range in 2003–04 was 11%–51% compared to 9%–39% in 2004–05). The smallest ranges in opinion were for ‘accurately reflects differences in individual performance’ (the range in 2003–04 was 11%–38% compared to 9%–26% in 2004–05). While results in individual large agencies’ performances varied for different statements, some agencies had higher levels of agreement on some statements than on others. Although there are issues across agencies, it appears that some agencies have established more credible performance pay systems than others. The CSA’s performance was strong across most statements, having one of the three highest levels of agreement against all but one of the statements. As was reported last year, there continue to be some differences in views of performance pay depending on how the link between pay and performance is made—that is, between the views of those who were eligible for performance bonuses (including those who are eligible for bonuses along with some other type of performance pay), and those who are eligible for some other form of performance pay but not bonuses. The proportion of relevant employees in these two groups that agreed with each statement about performance pay is shown in Table 8.2. Table 8.2: Relevant employee views on the operation of performance pay by type of performance pay, 2004–05   Employees that agreed with statement   Employees eligible for performance bonus (%) Employees eligible for other performance pay (%) Operates fairly and consistently 34 41 Acts as an incentive to perform well 36 38 Ensures performance assessment is managed systematically and regularly 48 48 Accurately reflects differences in individuals’ performance 22 21 Provides appropriate rewards for top performers 32 20 Contributes to a workplace culture in which individuals work together effectively 18 22 Contributes to a workplace which upholds the APS Values 24 33 Source: Employee survey Employees eligible for bonuses were more likely than employees receiving other forms of performance pay to have agreed that the agency’s performance pay system ‘provides appropriate rewards for top performers’. This may reflect the fact that where performance pay is linked solely to increments, there are no particular rewards for performance for those on the top increment. In last year’s report employees eligible for bonuses were also more likely than employees receiving other forms of performance pay to have agreed that the agency’s performance pay system ensures ‘performance assessment is managed systematically and regularly’. This year the results have fallen to the same level of agreement as those who receive some other type of performance pay. There were no consistent trends in the views of employees by classification. The survey results were also separated into whether employees’ salaries were set out in either a certified agreement or an AWA. Those employees covered by an AWA were more likely to agree with the majority of statements as opposed to those on CAs. Levels of agreement were, however, relatively low for both groups. This year’s survey results add to the evidence presented in last year’s report that the credibility of performance pay systems amongst employees is not high in most agencies and the gap is widening. The seriousness of the ‘credibility gap’ is, however, difficult to assess. It is likely that there will always be at least some employees who are dissatisfied with performance pay, either for philosophical reasons or because of the results of recent performance assessment rounds. Employee survey results presented in Chapter 5, ‘The Values and Workplace Relationships’, show that employees’ perceptions of merit are affected by the results of recent selection processes in which they have participated. It is also possible that a less than expected result in a recent performance assessment round will negatively affect employees’ perceptions of the fairness of their agency’s performance pay system. Employees’ perceptions of performance pay systems within agencies and of whether they operate fairly and consistently may be influenced by a range of other factors, including feelings surrounding the application of merit in selection processes and the negotiation of certified agreements. There is some evidence that employees with longer service, who have experienced different approaches to performance pay in the past and/or commenced in the APS prior to the introduction of performance pay, have greater levels of dissatisfaction with performance pay systems. When views on performance pay are examined in relation to length of service, relevant employees with 1–5 years of service were more likely than those with more than five years of service to have agreed that: * their performance pay system ‘operates fairly and consistently’ (46% compared to 34%) * it ‘acts as an incentive to perform well’ (41% compared to 32%) * it ‘ensures performance assessment is managed systematically and regularly’ (52% compared to 42%).13 Relevant employees with 1–5 years of service were also more likely to have agreed that the performance pay system in their agency ‘contributes to a workplace culture in which individuals work together effectively’ (25% compared to 17% for those with more than five years’ service), and ‘contributes to a workplace which upholds the APS Values’ (36% compared to 26%), but results for both groups were relatively low. There was little difference in views based on length of service about whether performance pay systems ‘accurately reflect differences in individuals’ performance’ or ‘provide appropriate rewards for top performers’, indicating that these areas are considered problematic by a wide range of employees. The variability of large agency results, and particularly the higher results for some large agencies in relation to the fairness and consistency of their system, suggests that there is room for significant improvement in the capacity of the APS to link pay to performance. Provided below are some comments from the employee survey which are indicative of what employees had to say about performance pay. Performance pay is not conducive to collegiality. ” “The trouble with performance pay is its subjectivity and the fact that it does not recognise team/ section/ division/ agency performance. ” “I find that supervisors are more likely to mark a team member as fully effective and that team member gets the bonus even if it is not deserved because of the paper work that occurs when a team member is marked as not fully effective etc. employee survey Integration of performance management systems As mentioned above, the MAC report on performance management14 identified the integration of performance management systems into the overall management structure of organisations as a critical success factor for performance management. Aside from the questions directly identified as relating to performance management, the 2005 employee survey asked respondents to rate their level of agreement with the statement that ‘My agency has achieved its stated objectives over the last 12 months’. Sixty-five per cent of employees agreed with this statement, 20% neither agreed nor disagreed and 7% disagreed. This result, when considered alongside employees’ level of agreement with the statement that ‘The links between my agency’s business and my work were made clear in the development of my performance agreement’ (65% of respondents agreed with this statement), would suggest that whilst integration of performance management into the overall corporate management structure is a challenge for agencies, work being undertaken to address the issue is paying off. To provide further support in the area of performance management, the Commission is developing a guide to assist agencies to reflect upon, review and refine their performance management approaches and systems. It is expected that this guide will be released in late 2005. Underperformance Central to any discussion on performance management and its overall credibility is the management of underperformance. Issues of underperformance were addressed in both the agency and employee surveys. In the agency survey, 39% of all agencies (32 agencies) indicated that they had finalised at least one formal underperformance action during 2004–05. This is an increase on the 30% of agencies that had finalised at least one formal underperformance action in 2003–04. In total, 213 actions were finalised, with 77% of these in large agencies. As would be expected large agencies were much more likely to have finalised at least one underperformance action (71%) than medium or small agencies (35% and 23%, respectively). These figures represent an increase in the level of underperformance action finalised in small agencies (up from 5% in 2003–04). The results of finalised actions undertaken to address underperformance are set out in Table 8.3. It should be noted that each agency could nominate multiple actions. Table 8.3: Results of underperformance actions finalised in 2004–05 Result Number of agencies reporting this outcome Number of times this outcome occurred No action taken 5 16 Development programme instituted 13 60 Satisfactory performance standard attained 13 43 Assignment to other duties 8 15 Deferral of salary advancement 5 25 Reduction in classification 6 8 Voluntary redundancy (including termination of employment with incentive for SES) 6 8 Termination of employment (i.e. without incentive or without voluntary redundancy) 14 37 Other 16 59 Source: Agency survey The most common outcome of underperformance actions was that a development programme was instituted (60 occasions, 28% of actions reported). Satisfactory performance was attained in 43 cases (20% of actions reported). In 45 cases (21%), the employee left the agency, either through voluntary redundancy or as the result of termination. Sixteen agencies reported that there had been outcomes other than those specified in the survey, the majority of which were resignation by the employee. Only five agencies reported that any of the outcomes had been challenged in the AIRC, with a total of seven employees challenging the outcomes of the underperformance process. Six of these cases had been settled or resolved through conciliation, and one was ongoing. The agency survey also asked about the assistance managers and/or supervisors are given in formally assessing whether an employee’s work performance is satisfactory. As shown in Figure 8.3, a wide range of assistance was provided, with all agencies indicating that advice was provided by the HR management area on request, and all but three (96%) indicating they had procedures for managing unsatisfactory performance that could be accessed by all employees. Responses were generally consistent with results from 2003–04. Three-quarters of agencies had at least three forms of assistance available, and half had at least four forms of assistance. Figure 8.3: Types of assistance provided to managers/supervisors relating to assessing work performance, 2004–05 Source: Agency survey The employee survey sought employees’ views on how underperformance was managed in their agency. Forty-five per cent of employees felt that, during the last 12 months, at least one employee in their immediate work team had consistently underperformed. This is consistent with the 2003–04 results. Amongst large agencies, the proportion of employees who felt that someone in their immediate work team had consistently underperformed varied from 29% to 59%. The lowest proportions were in DFAT and BoM. It was most common for the underperforming employee to be a peer (61% of relevant employees), followed by a subordinate (39%) and a supervisor and/or manager (27%). As was the case in 2003–04, the large majority of employees (88%) who had observed underperformance believed that the underperformance had had an adverse effect on their team’s work. Relevant employees continued to be largely dissatisfied with the way underperformance in their work areas was handled. Only 16% of employees observing underperformance expressed satisfaction with the way the underperformance they had observed was dealt with, and 67% of relevant employees were dissatisfied. The 2005 employee survey asked relevant EL and SES respondents if they were involved in supervising or managing an employee who consistently underperformed over the last 12 months. Forty-eight per cent of relevant EL and SES employees responded that they were. This equates to 1 in 5 EL or SES across the APS. Relevant EL and SES employees were then asked whether they had faced any challenges in supervising or managing the underperformer. The biggest challenge identified was managing the impact of the underperformer on team members and/or colleagues (72%), followed by the time required to deal with the underperformance issue (60%). Over half of the relevant employees identified that there was unwillingness on the part of the underperformer to try and improve their performance. Those involved in managing or supervising someone who consistently underperformed were also asked whether there was anything they found particularly helpful. Forty-four per cent indicated they found support from their manager to be particularly helpful, followed by support from their agency’s HR area (25%). Of concern was the finding that 23% found nothing particularly helpful. A number of employees expressed dissatisfaction with the way underperformance is handled. For example: Underperformance is tolerated because no one wants to rock the boat.” “Supervisors/managers don’t want the problem.” “Due to lack of support from my managers and the HR areas, and harassment from others in the workplace who did not bother to inform themselves of the correct facts - I would be reluctant to undertake underperformance procedures again. ” “The stress is extreme on the supervisor/manager.” “Why is it always the staff member who is underperforming and not the manager whose expectations are either too high or totally unrealistic? It would also help if managers stopped being supervisors and became managers i.e. know how to manage staff rather than supervising them by matching staff to jobs developing rapport, providing constructive feedback in a positive manner, emphasising the positive. employee survey Others acknowledge the difficulties surrounding issues of underperformance. There are no hard and fast procedures for dealing with underperformance.” “Each instance involves a person with a complex range of issues which you have to understand and then work through. The solution has to be tailored to the individual. ” “Because of the confidential nature of performance management most staff would have no idea of whether underperforming staff are being managed fairly or consistently. employee survey 9 Management Advisory Committee 2001, Performance Management in the Australian Public Service, Commonwealth of Australia, Canberra. 10 Management Advisory Committee 2001, Performance Management in the Australian Public Service, Commonwealth of Australia, Canberra 11 ibid. 12 Corporate Leadership Council (CLC), Building the High Performance Workforce—A Quantitative Analysis of the Effectiveness of Performance Management Strategies, Corporate Executive Board, Washington. These findings result from research undertaken by the CLC, via a web-based survey of 41,000 employees and managers, and of their performance management database, aimed at identifying the major drivers of individual performance. 13 Those with less than one year’s service were excluded on the basis that they would not have gone through a full annual performance management cycle. 14 Management Advisory Committee 2001, Performance Management in the Australian Public Service, Commonwealth of Australia, Canberra Retention, job satisfaction and people management Earlier in this chapter, the importance of managing for improved performance to enhance individual and organisational performance over time and identify and develop required capabilities was discussed. The retention of employees is another important factor related to these issues. Key factors affecting the retention of employees are job satisfaction and the quality of management. Consequently, it is critical that agencies develop a thorough understanding of employee perceptions around these issues and how they impact on employee intentions to remain in or leave the APS. Employee intentions to leave the APS In 2004–05, employees were asked whether they intended to leave the APS in the next three years. Sixty per cent responded that they had no intention of leaving, 25% were not sure, 4% intended to leave in the next year, 4% intended to leave in the next 1–2 years and 7% intended to leave in the next 2–3 years. Table 8.4 outlines the range of reasons given by employees for their intention to leave the APS. Of those who foreshadowed leaving the APS, the top five reasons were: to retire (38%), lack of job satisfaction (36%), to pursue job opportunities outside the APS (35%), poor management (32%) and feeling under-valued (31%). Table 8.4: Reasons for intending to leave the APS—relevant employees, 2004–05 Reason for intending to leave Relevant employees(a) (%) To retire 38 Lack of job satisfaction 36 To pursue job opportunities outside the APS 35 Poor management 32 Feeling under-valued 31 Under-use of knowledge, skills and/or qualifications 30 Limited career development opportunities in the APS 26 Higher salaries elsewhere 24 Lack of workplace support 20 To relocate (e.g. interstate, overseas) 12 Excessive workload 11 Other 8 End of contract 5 No longer have a contribution to make 2 Note:(a) Includes only those employees who indicated they intend to leave the APS in the next three years. Source: Employee survey Employees aged under 25 years and between 25 and 34 years were more likely to indicate they would leave to pursue job opportunities outside the APS, whilst those in the 35–44 age range intended to leave primarily due to poor management. Those employees aged between 45 and 54 years and over 55 were more likely to leave to retire. Employees located in the ACT were more likely to indicate they would leave to pursue job opportunities outside the APS whereas those located outside the ACT indicated that they were more likely to leave to retire. Job satisfaction As illustrated above, job satisfaction is a key factor in the retention of APS employees. The employee survey once again asked respondents to choose the five workplace factors (from a list of 15) that most affected their level of job satisfaction.15 Respondents were then asked to indicate their level of satisfaction with the factors most important to them. Table 8.5 shows that the top five most important job satisfaction factors, as rated by employees in 2004–05, were the same as in 2003–04. Table 8.5: Job Satisfaction—employees’ most important workplace factors, 2004–05   Employees who nominated factor as important to them (%) Employees who nominated factor as important who were ‘satisfied’ (a) Employees who nominated factor as important to them (%) Employees who nominated factor as important who were ‘satisfied’ (a) Workplace factor 2003–04 2004–05 Good working relationships 55 85 52 84 Flexible working arrangements 47 81 45 83 Salary 45 51 46 49 Regular feedback/recognition for effort 45 52 45 48 Good manager 43 64 44 65 Opportunities to utilise my skills 41 61 42 60 Opportunities to develop my skills 42 58 40 54 Duties /expectations made clear 38 70 38 67 Interesting work provided 39 66 37 67 Seeing tangible results from my work 38 70 37 71 Opportunities for career development 34 32 34 32 Appropriate level of autonomy in my job - - 30 73 Chance to be creative/innovative 31 57 30 51 Chance to make a useful contribution to society 32 69 29 67 Appropriate workload 28 40 26 38 Note: (a) Of the employees who nominated this factor as one of their most important and rated it, the percentage of employees who were either ‘very satisfied’ or ‘satisfied’ with the factor in their current workplace. Source: Employee survey Consistent with last year’s survey results, Table 8.5 indicates that, while the two most important workplace factors influencing job satisfaction (‘good working relationships’ and ‘flexible working arrangements’) had high satisfaction ratings (84% and 83%, respectively), two of the top four most important factors (‘salary’ and ‘regular feedback/ recognition for effort’) continue to have relatively low satisfaction ratings (49% and 48%, respectively). The largest relative fall in satisfaction levels occurred in ‘chance to be creative/ innovative’ (from 57% to 51%). Falls also occurred in ‘regular feedback/ recognition for effort’ (52% to 48%) and ‘opportunities to develop skills’ (58% to 54%). Those factors that experienced the largest relative falls in satisfaction levels last year (i.e. between 2002–03 and 2003–04) either remained the same or fell even further. ‘Opportunities for career development’ remained stable at 32% after falling from 43% in 2002–2003. ‘Appropriate workload’ fell from 49% in 2002–03 to 40% in 2003–04 to 38% in 2004–05. ‘Salary’ fell from 62% in 2002–03 to 51% in 2003–04 to 49% in 2004–05. Levels of satisfaction varied considerably between some of the factors according to sex and classification level. Chapter 9, ‘Workplace Diversity’, contains further analysis of job satisfaction, in the context of examining the job satisfaction factors for particular groups, namely women, Indigenous employees, employees with a disability, people from a non-English speaking background, and older and younger workers. In relation to satisfaction rates, while satisfaction with many of the factors remained fairly constant between the 2004 and 2005 surveys, a number of factors recorded substantial falls in satisfaction ratings. A summary index was again created from the results of the job satisfaction question in the employee survey. The index ranges from zero (the employee was very dissatisfied with all of the factors nominated) to 10 (the employee was very satisfied with all factors). An index of five translates to an employee being, on average, neither satisfied nor dissatisfied with their nominated factors. For all employees, the proportion with a job satisfaction index over five was 71% (down from 74% last year and 76% in 2002–03). As in previous years, the job satisfaction index varied considerably between the 21 large agencies, from over 83% to 62%. There were only two agencies, BoM and DFAT, where 80% or more of employees reported above average levels of job satisfaction. There were five agencies, Customs, ASIC, Centrelink, DEWR and Finance, where less than 65% of employees reported above average levels of job satisfaction. Consistent with the patterns identified in last year’s report, job satisfaction was generally unrelated to age, except for employees over 55 years, who had higher levels of satisfaction (78%). Job satisfaction continued to be higher for employees located in the ACT (75% compared to 69% for employees outside the ACT), and varied strongly by classification levels with the SES (87%) having higher levels of job satisfaction than EL employees (77%) who, in turn, have higher job satisfaction levels than APS 1–6 employees (69%). There appears to be little difference in overall levels of job satisfaction between men and women and between full-time and part-time employees. The following comments made in the employee survey are illustrative of the spectrum of employees’ views about what influences their job satisfaction. It is disappointing that many in the community, including media and political masters, view public servants as easy targets for blame shifting. This impacts on job satisfaction and weighs on individuals considering the benefits of an APS career. ” “I’m not unhappy with my salary, however am aware that staff in similar agencies doing similar work receive a better salary than I do. I see this as an equity issue. ” “Working in a regional office does not allow for as much opportunity for development as is provided in larger city offices. ” “I am very satisfied with my current job, especially the relations we have in our team with our manager and work colleagues. ” “My high rating is due to the manager I have. Managers play a very important role and having a good manager makes all the difference when it comes to job satisfaction. employee survey People management capability As discussed above, many of the factors which impact on employees’ job satisfaction relate, either directly or indirectly, to their manager. Consequently, with this in mind, it is interesting to examine employees’ views about the effectiveness of their immediate supervisor in the area of people management. The employee survey again asked employees about how effective their immediate supervisor was at managing people. Compared to 2003–04, a slightly lower proportion of employees (51% in 2004–05 compared to 53% in 2003–04) rated their supervisor as highly effective at managing people. However, this still compares favourably to 2002–03 when only 47% rated their immediate supervisor as highly effective at managing people. As was the case in 2003–04, supervisors were again more likely to be rated as more effective by younger employees and employees working in the ACT. The SES (55%) were again more likely than EL employees (50%) and APS 1–6 employees (52%) to have rated their supervisor as highly effective at managing people. Supervisors were also rated as more effective by employees who were proud to work in the APS and/or their current agency and by employees who felt that their productivity had increased over the past 12 months. Not surprisingly, employees who listed either ‘having a manager that encourages and manages innovation’, ‘receiving effective feedback from my manager’ and a ‘good working relationship with my manager’ among the five most important factors that helped them increase their productivity were also more likely to rate their supervisor as highly effective in people management. Employees’ different perceptions about their supervisors’ people management skills were also reflected in the comments provided by some employees. Because team leaders are required to also deal with complex technical matters, it seems to me that the people who are promoted to team leader (and middle management in some cases) are promoted based largely upon their technical skills with less emphasis on management/leadership skills. It would seem to me that the agency has a serious lack of team leaders and managers with good management/leadership and interpersonal skills. employee survey Increased attention and efforts by agencies in the area of people management are likely to have a positive impact on employee job satisfaction and possibly on productivity. 15 List of factors changed slightly in 2004–05 Productivity and employee engagement The pressure on the APS to increase its efficiency and effectiveness is well-documented. Some of the commonly understood drivers of productivity include the use of time and labour-saving technology and the use of agreement making to achieve greater productivity. However, there is a growing acceptance that a major driver of productivity— potentially more influential than financial rewards—is employee engagement. The definition of ‘employee engagement’, in the context of this chapter, is discussed in some detail below. Some of the research that is contributing to our understanding of the relationship between employee engagement and productivity is also outlined below. Productivity Although productivity is difficult to measure in the APS context, it is important that APS managers attempt to understand what drives individual productivity. With this in mind the 2005 employee survey introduced a new two-part question around the issue of productivity. Firstly, employees were asked whether they felt that their productivity had increased in their current job over the last 12 months. Overall, 60% of APS employees felt that their productivity had increased over the last 12 months. Twenty-three per cent of employees felt that their productivity had increased markedly during the last 12 months, 37% of employees felt their productivity had increased somewhat over the period, and 21% felt that it had remained the same. Only 6% felt their productivity had declined. The remaining 12% responded that the question was not applicable to them (e.g. they had changed jobs in the last 12 months). To identify what had led to this improved productivity, those employees who indicated that their productivity had increased in the last 12 months were then asked to select from a list of 16 factors, the five most important factors that had helped to increase their productivity over the last year. The results are presented in Table 8.6. Table 8.6: Factors improving relevant employees’ productivity, 2004–05 Factor Relevant employees that nominated factor as helping to increase their productivity (%) Increased knowledge and/or experience in the job 76 Good working relationships with colleagues 60 Good working relationship with my manager 38 Access to the information, resources and/or technology I need to perform my job 37 Working to realistic performance expectations 35 Having a manager who encourages and manages innovation 35 Clear work plans and timetables 33 Receiving effective feedback from my manager 30 Understanding how my work contributes to my agency’s objectives 29 Access to effective learning and development 22 Effective formal and informal communication within my agency 19 Developing effective strategies to deal with an overall reduction in resources 16 Receiving effective mentoring 14 Developing or recruiting high performing staff under my management 10 Good working relationships with other APS agencies 7 Access to performance-related pay (e.g. bonus, advancement) 4 Source: Employee survey Not surprisingly, increased knowledge and/or experience in the job stood out as the most important factor affecting productivity, with 76% of relevant employees rating it as one of the top five factors that helped them to improve their productivity. Good working relationships with their colleagues and their manager also figured prominently, with 60% and 38% of relevant employees, respectively, rating these in their top five. Interestingly, only 4% of relevant employees who felt their productivity had improved, rated access to performance-related pay as one of the top five factors that had helped them to improve their performance. Employee engagement Increased competition to recruit the best talent, retain productive workers and increase employee productivity in a tighter labour market lies at the heart of interest in employee engagement. In addressing workforce challenges and the changing demographics agencies require, not only a systematic and effective workforce plan, but they also need to focus on boosting workforce performance through enabling and engaging staff. ‘Employee engagement’ is a theoretical concept that has gained currency in areas of economics, psychology, communication, management and related disciplines and, more recently, in human resource management. Slightly different definitions are used. Many draw on the characteristics of employees; the Institute for Employment Studies,16 for example, defines engagement as: A positive attitude held by the employee towards the organisation and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organisation. The organisation must work to develop and nurture engagement, which requires a two-way relationship between employer and employee.17 definition The CLC, a research body that conducts best practice research, develops decision support tools and provides executive education, defines engagement as: The extent to which employees commit to something or someone in their organisation, how hard they work, and how long they stay as a result of that commitment.18 definition Different literature uses slightly different terms to group employees into different levels of engagement. The CLC, for example, refers to ‘the highly uncommitted’, ‘neither fully committed or uncommitted’ and ‘highly committed employees’.19 The Gallup Organisation, a market research and consultancy company, describes similar groups of employees as ‘actively disengaged’, ‘not engaged’ and ‘engaged’.20 Research undertaken by CLC in 2004, drawing on a number of large international organisations, including Centrelink, suggests that about one in ten employees is highly committed. Such an employee is nine times more likely to stay with the organisation than the highly uncommitted. A similar proportion of employees fell into the highly uncommitted category. The majority of employees, about seven in ten, were found to be in the neither fully committed or uncommitted category, but quite willing to commit for the right reasons. If agencies can engage this group they may benefit from increased employee productivity and improved employee retention. Other research shows a similar pattern of employee engagement; for example, in a survey conducted in Australia in December 2004, about two in ten employees were found to be ‘engaged’ or ‘actively disengaged’ and six in ten employees fell into the ‘not engaged’ category.21 The Institute for Employment Studies suggests that many factors influencing engagement will be common to all organisations, regardless of sector; however, some variability is likely, and the relative strength of the factors is also likely to be contingent upon the organisation. There also appear to be strong links between employees feeling valued and involved and engagement. Table 8.7: Factors influencing employee engagement   Institute for Employment Studies22 Corporate Leadership Council23 Gallup Organisation24 Learning and Development * Training and development * Career management * Understanding how to complete work projects * Extent to which an employee receives encouragement of individual development * Extent to which an employee had, in the last year, opportunities at work to learn and grow * Extent to which the employee had someone talk to them about their progress in the last six months Communication and input to decision-making * Communication * Internal Communication * Employee understanding the connection between work and organisational strategy * Manager clearly articulates organisational goals * Extent to which an employee knows what is expected of them at work * Extent to which an employee thinks their opinions count Role of Manager * Immediate management * Performance management and appraisal * Manager adapts to changing circumstances * Manager clearly articulates organisational goals * Manager possesses job skills * Manager puts the right people in the right roles at the right time * Manager sets realistic performance expectations * Extent to which an employee has the opportunity to do what they do best * Extent to which an employee has the materials and the equipment they need to do their work * Extent to which an employee received recognition or praise in the last seven days Integrity, Fairness, Equity and Diversity * Equal opportunities and fair treatment * Pay and benefits * Manager demonstrating a strong commitment to diversity * Manager demonstrates honesty and integrity * Organisation has a reputation for integrity   Other * Job satisfaction * Health and safety * Cooperation * Family friendliness * Importance of the employee’s job to the organisation’s success * Extent to which the employee has a supervisor or someone at work caring about them as a person * Extent to which an employee has a best friend at work * Extent to which an employee thinks the organisation’s mission makes their job feel important * Extent to which an employee has fellow employees who are committed to doing quality work Table 8.7 attempts to align some of the factors identified in the research discussed in this section with areas covered in the employee survey. It is not possible to analyse all possible factors identified by the various consultancies or research organisations in this report. The State of the Service employee survey was not designed specifically with employee engagement issues in mind. However, after examining literature on employee engagement and considering this against the areas covered by the survey, areas that may usefully be considered as a proxy for some ‘levers’ of employee engagement have been identified and are discussed. While the area of serving the public, customer focus and service delivery is not included in this discussion, it is an area for exploration in future employee surveys. In examining employee engagement, available data from State jurisdictions (WA, SA, Vic) was analysed to guage the views of APS employees compared to those in State public sectors. However, caution is required with these comparisons because of methodological differences. The WA data is only representative of the views of employees in two WA departments; the Victorian and SA surveys were conducted in 2004; and there was a difference in the wording of one particular question in the SA survey.25 Over time, as the number of jurisdictions participating rises, and comparability of the data improves, it is envisaged that benchmarking will become more indicative. Role of Managers One of the distinctions made in the literature between the concepts of commitment and other forms of organisational behaviour and the concept of engagement is that the latter is a two-way relationship—organisations must expend effort to engage the employee, who then decides on the level of engagement offered to the employer.26 For the majority of employees, the organisation is represented in this relationship by their immediate manager, which means that the role of ‘line’ managers is central in determining the extent of employee engagement.27 The CLC research suggests that, as the key conduit for employee commitment, managers not only influence commitment but are a ‘force multiplier’—meaning that managers who develop employee commitment to the job, team, and organisation are one of the strongest drivers of engagement within the organisation.28 An organisation with an engaged workforce increases its performance across a variety of indicators, one of which is increased employee productivity. As referred to earlier in this chapter, next in importance to the two most commonly identified reasons for increased productivity (i.e. ‘increased knowledge and experience’ and ‘good working relationships with colleagues’), are six factors directly related to the role of managers (bearing in mind that managers are also influential with regard to the two most common responses). In descending order, the six productivity enhancing factors directly linked to the role of the manager are: a good working relationship with my manager (38%); access to the information, resources and/or technology I need to perform my job (37%); working to realistic performance expectations (35%); having a manager who encourages and manages innovation (35%); clear work plans and timetables (33%); and receiving effective feedback from my manager (30%). When the literature on engagement is superimposed on these survey findings, several common components related to engagement emerge; for example, in considering what drives engagement, Robinson, Perryman and Hayday, identify issues associated with encouraging and managing innovation, realistic expectations and clear work plans, effective feedback from managers and overall strong communication. The employee survey data provides broad support for the arguments advanced in the literature about the importance of the managerial role in increasing productivity by improving commitment and engagement. Agencies determined to increase employee engagement need to seriously consider the role of managers in their organisation.29 Employees’ perception of communication and input into decision-making Good communication, information-sharing and involvement in decision-making are commonly identified in the literature as promoting employee engagement.30 Regular staff meetings, if well-run and focused, can be an effective mechanism through which these themes can be implemented at the workplace level. This year’s survey results on workplace consultation were very similar to last year’s (for details, see Chapter 5). Sixty per cent of employees reported attending team and/or section level meetings fortnightly, or more often, and almost three-quarters of employees reported attending such meetings on a monthly or more frequent basis. However, this year employees reported being significantly less satisfied that the meetings they attended provided a forum in which to contribute their views on issues that impact on their work and with the overall say they have in decisions impacting on their work. In this context it is useful to compare the views of APS employees with employees in other jurisdictions. Fifty-five per cent of APS employees either agreed or strongly agreed that their ‘input was adequately sought and considered about decisions that affect me’, which is comparable to WA (62% of respondents either agreed or strongly agreed) and SA (51% of respondents either agreed or strongly agreed).31 These results suggest that simply providing a consultation mechanism is insufficient in promoting employee engagement. If meetings are used then they need to deliver by providing good communication between management and employees and across the organisation, including information-sharing and genuine involvement in decision-making on issues that affect work life. The results of the employee survey suggest that agencies may need to consider enhancing the quality of workplace consultative mechanisms if improving employee engagement is seen as a desirable managerial objective. Chapter 5 canvases consultative issues in the APS in more depth. Employees’ perceptions of integrity International and Australian research links organisational ethics with high levels of employee performance and the capacity to attract and retain staff.32 This literature is explored in more detail in Chapter 6 of the Commission’s publication, Embedding the APS Values.33 However, evidence of the link between ethics and efficiency is not new. Australian research conducted by the Independent Commission Against Crime in 1998 found that the ethical tone of an organisation impacts on efficiency and effectiveness, decision-making processes, employee commitment and job satisfaction, employee stress and employee turnover. On the basis of these findings it was argued that making ethical practices a priority was not just about functioning with integrity or being credible; it was also about optimising the efficient functioning of an organisation. A proxy for a culture of integrity in the APS is the level of agreement of employees that other employees, immediate managers and senior managers act in accordance with the Values. This is explored in Chapter 7, ‘Embedding the APS Values and the Code of Conduct’. Levels of agreement that both ‘colleagues’ and ‘immediate managers’ act in accordance with the Values continue to remain similar. However, employee responses continue to indicate lower levels of confidence that most senior managers act in accordance with the Values, although employee confidence on this issue has steadily increased over the past three years. Compared with the limited WA data available, the APS seems to have a much lower proportion of employees who agreed that senior managers in their organisation lead by example in ethical behaviour (the result for WA was 71% compared to a result of 51% for the APS). However, both WA and the APS have about the same proportion of employees who agree that their organisations actively encourage ethical behaviour by all employees (81% and 82%, respectively). Unfortunately, when this report was being prepared, comparable data from other jurisdictions was not available. However, in the 2004 SA Workplace perspectives survey, employees were asked ‘Do the leaders or managers in your agency model the values and behaviours required by the Code of Conduct?’ In 2004, some 56% of employees responded ‘always’ or ‘usually’. These are clear indicators that improving employees’ perceptions about the extent to which senior management act in accordance with the APS Values and lead by example in ethical behaviour should continue to be a high priority. Employees’ perceptions of fairness and equity In examining employee engagement, the literature discusses the importance of employee perceptions of fairness and equity in fostering commitment among employees. The employee survey asked a series of questions around the application of merit in agencies’ employment decisions, the operation of agencies’ performance pay systems and the management of underperformance. While not the ideal, these questions are a reasonable proxy for employee perceptions on fairness and equity. The only employment decision where more than 50% of staff were confident that merit is routinely applied was for ‘engagement and promotion’ which is the only employment decision category requiring a competitive selection process. Moreover, employee perceptions of whether merit was applied in employment decisions have declined at statistically significant rates across all four decision types compared to last year. When asked if recruitment and promotion decisions in their organisation were fair, 35% of APS employees compared to 53% of the limited sample of WA government employees surveyed agreed or strongly agreed with the statement. When asked if they have confidence in the processes used by their organisation to resolve employee grievances, 34% of APS employees compared to 46% of WA employees agreed or strongly agreed. In the APS, employees with the highest level of job satisfaction were more likely to report higher confidence in the application of merit. Similarly, APS employees who agree that their immediate manager and senior managers act in accordance with the APS Values are more likely to agree that merit is applied than those who don’t agree. The operation of an agency’s performance pay system provides another indicator of fairness and equity. APS employees with the highest level of job satisfaction were considerably more likely to agree that the performance pay system operated fairly and consistently. These findings in relation to performance pay also provide some support for the links made in the literature between employee engagement and perceptions of fairness and equity, as fully engaged employees are more likely to enjoy high levels of job satisfaction and hold positive views about their managers. Conversely, when examining the concept of engagement, in the context of employee perceptions of fairness and equity, it is not only important to consider those issues which promote engagement but also those that inhibit or reduce employee engagement. One such issue is the management of underperformance which was examined in the employee survey. The survey found that, overall, only 16% of relevant APS employees were satisfied with the way underperformance was dealt with in their agency. An examination of open-ended comments assists in situating this statistic within the engagement discussion as many employees feel that inadequate management of underperformance was a serious demotivating factor to other staff. It is a slap in the face that under-performers are slotted in with the majority who receive the middle rating, because it is too hard for their managers to put them on inefficiency proceedings. Management have NO IDEA how demoralising it is for the rest of us. Inefficient people just make us all think ‘why bother trying?’. Everyone seems to be too scared to tell people they are not doing their job to the standard expected—its highly demotivating—why should you work efficiently when you see so many others wasting time! employee survey In general, APS employees’ perceptions around some of the indicators of fairness and equity, in particular the application of merit in employment decisions and the operation of performance pay systems are less favourable compared to last year. These findings suggest a range of issues will need to be considered by agencies wishing to promote employee engagement. Chapter 5 examines merit in more detail, including the effect that employee knowledge and training have on employees’ perceptions of merit, while the operation of agencies’ performance pay systems and management of underperformance are considered earlier in this chapter. Employees’ perceptions of diversity Employees’ perceptions of whether their organisation is diverse and values diversity was identified by CLC as a potential driver of employee effort. Out of the top 50 potential levers it identified, CLC placed the management characteristic of a strong commitment to diversity amongst the top five levers of discretionary effort and the top five levers of employee intent to stay in their organisation. This year the employee survey asked respondents about their organisation’s commitment to creating a diverse workforce. Sixty-one per cent of employees agreed that their agency was committed to building a diverse workforce. Of the EEO groups, women were the only group significantly more positive about their agency’s commitment to creating a diverse workforce. Although this was a relatively positive result, it is not as high as in other jurisdictions. Results for the WA Public Service were higher: 78% of public servants who responded to a 2004–05 public sector climate survey agreed that their organisation was committed to creating a diverse workforce.34 Results for the Victorian Public Service were even higher, with 80% of employees who participated in their People Matter Survey agreeing that their agencies were committed to creating a diverse workforce.35 Access to learning and development Learning and development is commonly reported as significantly influencing the engagement of employees. Learning and development generally, along with leadership development in particular, is examined in more detail in Chapter 10, ‘Leadership, Learning and Development in the APS’. Consistent with results from 2002–03, when the specific issue of employee satisfaction with personal leadership development opportunities was examined, only around one- quarter of employees were satisfied. This is clearly an area where the APS could be doing better. Satisfaction was related to a variety of factors, including age, length of service and classification (these are discussed in more detail in Chapter 10). Learning and development indicators were also included in the questions relating to job satisfaction and increasing individual productivity. While the job satisfaction factors of ‘opportunities to develop my skills’ and ‘opportunities for career development’ are outside the top five job satisfaction factors for all APS employees, over one-third of employees selected each factor as one of their five most important. Of the employees who selected ‘opportunities to develop my skills’ as one of their most important factors, only 54% were satisfied with this factor (this is down from the 58% of relevant employees who were satisfied with this factor in 2003–04). The proportion of relevant employees satisfied with ‘opportunities for career development’ has remained consistently low for the last two years at 32%, dropping from the high of 43% in 2002–03. In terms of increasing individual productivity, 22% of relevant employees rated ‘access to effective learning and development’ as one of the five most important factors that had helped them to increase their individual productivity. While this factor was ranked outside the top five factors overall by all APS employees, ‘access to effective learning and development’ still appears to be important in improving employee productivity. While much of the learning and development data seems to be relatively stable, it is concerning that relevant employee satisfaction with the two job satisfaction indicators related to learning and development has fallen over time. 16 An independent HR research and consultancy centre, based at the University of Sussex, UK. 17 D. Robinson, S. Perryman & S. Hayday 2004, The Drivers of Employee Engagement, the Institute for Employment Studies, Sussex, UK, 18 Corporate Leadership Council 2004, Driving Employee Performance and Retention through Engagement: A Quantitative Analysis of the Effectiveness of Employee Engagement Strategies, CLC, Washington DC. 19 ibid. 20 J. Sasaki & M. Norquist, ‘Grim News for Japan’s Managers’, Gallup Management Journal, 14 July 2005, 21 ibid. 22 Robinson, Perryman and Hayday, The Drivers of Employee Engagement. 23 Corporate Leadership Council, Driving Employee Performance and Retention through Engagement. The CLC research has identified a large number of factors that would have the greatest impact on employees’ discretionary effort. The 12 most influential factors are listed in Table 8.7. 24 J. Thackray, ‘Feedback for Real’, Gallup Management Journal,15 March 2001, 25 The data for WA for 2004–05 represents two non-metropolitan Departments of Education and two non-metropolitan Departments of Health. This is not representative of the WA jurisdiction for comparative purposes. The South Australian survey was conducted in September 2004 across public sector agencies employing staff under the Public Sector Management Act 1995. The SA data is reported as a percentage of respondents who answered the questions with the exception of responses to questions where respondents were given multiple options to respond to and allowed to make more than one response. 26 Robinson, Perryman and Hayday, The Drivers of Employee Engagement. 27 Gallup Organisation, 2005 ‘The Gallup Path to Business Performance’, 28 Corporate Leadership Council, Driving Employee Performance and Retention through Engagement. 29 Gallup Organisation, ‘The Gallup Path to Business Performance’. 30 CLC research showed that communication was estimated to have the greatest impact on discretionary employee effort when 14 cultural traits of organisations were compared. 31 In SA, respondents were asked if their ‘input was sought and considered about decisions that affect my job’ (not ‘affect me’). 32 F. Vogl, ‘Corporate Integrity and Globalisation—The Dawning of a New Era of Accountability and Transparency’ (lecture delivered at the Pennsylvania State University, 23 March 2001) quoted in Australian Public Service Commission, Embedding the APS Values, August 2003, 33 Australian Public Service Commission, Embedding the APS Values, August 2003, 34 Office of the Public Sector Standards Commissioner, Western Australia, Public Sector Climate Survey, 2004–05. 35 Office for the Commissioner for Public Employment, People Matter Survey 2004, Key chapter findings As has been pointed out in previous reports, many of the APS workforce challenges centre around the demographic challenge of the ageing of the APS workforce combined with the projected tightening of the labour market which is already leading to skill shortages in some areas—a situation which is likely to deteriorate further. These trends are all consistent with the issues identified in the recent MAC report, Managing and Sustaining the APS Workforce.36 Whilst the vast majority of agencies are investing effort in workforce planning, many are still in the development phase when it comes to developing workforce planning policies. The survey findings documented in this chapter support MAC’s identification of an urgent need for systematic workforce and succession planning processes. The workforce planning actions specified in the MAC report, including the requirement that agencies report to MAC on their progress, should help to ensure that further progress is made on this front. Despite substantial work in the area of performance management, the issues surrounding the credibility of agencies’ performance pay systems remain a cause for concern. The general decline from last year in employees’ views, and the emerging downward trend on some indicators surrounding the operation of agencies’ performance pay systems, indicates a continuing need for agencies to focus on developing a culture that is built around constructive workplace relationships. Managers would be assisted by the provision of further support mechanisms and development opportunities in the area of effective people management skills. Given the tightening of the labour market and looming skill shortages, agencies are likely to face challenges in attracting the ‘right’ people with the ‘right’ skills. Consequently, it is important that agencies explore all possible avenues for developing and maximising the productivity of existing employees. The analysis of this year’s data in terms of current theory relating to employee engagement is a preliminary attempt to add to the APS conversation around this complex issue. The preceding discussion in this chapter refers to some of the apparent links between retention, job satisfaction, people management and productivity. Real or perceived, employees’ assessments of the quality of management, communication and input into decision-making, integrity, merit and diversity are crucial to their overall engagement. In addition, the role of managers, generally, and access to learning and development, cannot be underestimated. The State of the Service survey data has been analysed with a view to identifying appropriate proxies for some of the identified ‘levers’ of employee engagement. Despite the limitations of this data, there seems to be considerable room for improvement in most of these areas. Of some concern is the overall finding that employee perceptions across a range of areas are either stable at less than ideal levels, or worse still, are declining (e.g. job satisfaction, merit, performance pay). Given that the factors impacting most on employee engagement are organisation-based, and not demographic, it is important that agencies look to their own agency-specific data and information to gain an insight into employee engagement in their organisation. A sophisticated approach to workforce planning would seek to encapsulate strategies aimed at addressing these organisational factors. The Commission will continue to explore employee engagement issues and will review its State of the Service survey questions for next year with this in mind. 36 Management Advisory Committee, Managing and Sustaining the APS Workforce. Chapter 9: Workplace diversity The APS is likely to face increasing difficulty in meeting its demands for skilled employees as the labour force ages and the proportion of new entrants to the labour market declines. Drawing on the breadth and diversity of the labour market is a key to meeting this challenge. The business case for workplace diversity becomes even more important in a tightening labour market. Workplace diversity involves recognising the value of individual differences and managing them in the workplace. The concept of workplace diversity also includes the principle of equal employment opportunity (EEO). Policies based on this principle address disadvantage experienced by particular groups of people in the workplace, including women, Indigenous Australians, people with a disability and those who suffer disadvantage on the basis of race or ethnicity. These policies remain an important foundation for workplace diversity policy.1 Considering workplace diversity within the broader context of the Values and organisational capability in the APS can make a positive difference where agencies want to ensure that a range of perspectives and ideas are being brought to bear on issues where it is important that there is effective consultation with stakeholders, or an understanding of community agendas, or where service delivery mechanisms need to be established on the ground. In addition to the strong business case for a diverse workforce, the legislative framework makes it clear that diversity in the APS also encompasses equity in employment. Agencies are required to take measures to ensure that, among other things, employment related disadvantage on the basis of sex, Indigenous status, disability, race and ethnicity is eliminated. While employment related disadvantage is not defined in the legislation, it includes access to employment opportunities, salary, promotions, and management positions. As Chapter 8, ‘Managing, Sustaining and Engaging the APS Workforce’, indicates, agencies are putting more effort into workforce planning for corporate and business outcomes. Recognising the contribution workplace diversity can make to achieve those outcomes is an important part of this process. A strategic approach to workforce planning that takes account of the diversity of the Australian community will ensure that agencies are better placed to attract and retain the skills they need to achieve their goals in the context of a competitive and ageing labour market. This is the third year that the Commissioner’s report on diversity in the APS (as required under clause 3.5(2) of the Commissioner’s Directions) has been included in the State of the Service report. This chapter draws on APSED data and on responses to the agency and employee surveys. It also incorporates, where appropriate, conclusions, case studies and other material from an evaluation of agencies’ written workplace diversity programmes that was carried out by the Commission this year. The chapter begins by briefly outlining the legislative framework for workplace diversity in the APS, and presents the key findings of the evaluation of written workplace diversity programmes. Key issues in collecting and analysing diversity data in the APS are then examined, as are employment disadvantage in the four EEO areas specified in the Commissioner’s Directions, together with age diversity and work-life balance issues for the APS. 1 Australian Public Service Commission, Guidelines on Workplace Diversity—Working Together No.2, January 2001, Legislative framework The legislative provisions relating to workplace diversity in the APS are part of a wider framework of Commonwealth laws that, among other things, support and promote equal opportunity and equity in employment. They include the: * Racial Discrimination Act 1975 * Sex Discrimination Act 1984 * Human Rights and Equal Opportunity Commission Act 1986 * Disability Discrimination Act 1992 * Workplace Relations Act 1996 * Age Discrimination Act 2004. The Public Service Act 1999 Section 18 of the Act requires agency heads to establish workplace diversity programmes to assist in giving effect to the Values. Section 12 of the Act provides that agency heads must promote and uphold the Values. A number of the Values are particularly relevant to workplace diversity. These include: * s. 10(1)(b)—the APS is a public service in which employment decisions are based on merit * s. 10(1)(c)—the APS provides a workplace that is free from discrimination and recognises and utilises the diversity of the Australian community it serves * s. 10(1)(j)—the APS provides a fair, flexible, safe and rewarding workplace * s. 10(1)(l)—the APS promotes equity in employment. Public Service Commissioner’s Directions The Values relevant to workplace diversity are supported by the Commissioner’s Directions2—in particular Directions 2.4, 2.13 and 3.1–3.6. These Directions set out the measures that agencies must take in relation to workplace diversity and include requirements for establishing, reviewing and evaluating workplace diversity programmes. A more detailed description of the legal framework within which workplace diversity programmes operate is set out in the Commission’s publication, Guidelines on Workplace Diversity—Working Together No.2.3 2 The Commissioner’s Directions are available at 3 Australian Public Service Commission, Guidelines on Workplace Diversity. Workplace diversity programmes As noted above, the Act requires that agency heads establish workplace diversity programmes to assist in giving effect to the Values. This year in response to the agency survey 78 agencies (95%) indicated that they had a workplace diversity programme in place. Those agencies without a programme were all small agencies. Twenty-eight per cent of workplace diversity programmes are currently being reviewed and 23% were reviewed during 2004–05. An audit of agency workplace diversity programmes in early 2005 found that 79% of the eighty programmes held by the Commission were current. During 2005, the Commission carried out the second of its rolling evaluations of APS agencies’ written workplace diversity programmes. The evaluation looked at how effectively the requirements set out in the Commissioner’s Directions have been incorporated into a sample (24) of APS agencies’ written programmes. The methodology used was similar to that used in 2004, and can be found in Appendix 3 of the report. Evaluation of written workplace diversity programmes The evaluation found that most agencies in the sample had taken substantial and positive steps towards meeting the requirements for workplace diversity programmes, though room for improvement remained. The key findings are as follows: Workplace diversity programmes—General The overall quality of written workplace diversity programmes in the sample was inconsistent, with only a few programmes taking a consistently high-quality approach to all measures required to be included under the Commissioner’s Directions. However, the majority of agencies addressed most of the measures required to be included in workplace diversity programmes to some extent. Some have invested considerable effort into articulating the measures required under the Commissioner’s Directions to reflect their own organisational context. Large agencies consistently presented more comprehensive workplace diversity programmes than did small and medium agencies. As a group small agencies’ workplace diversity programmes were generally of a similar quality; there was a much bigger range among workplace diversity programmes for medium and large agencies. In some cases agencies’ workplace diversity programmes consisted of a range of documents, rather than one comprehensive document. Diversity strategies were included in agencies’ Indigenous employment strategies, disability action plans, certified agreements and/or agencies’ people management strategies. This adds an additional level of complexity to the evaluation of agencies’ written workplace diversity programmes. Often, there were few cross-references between the documents that sit under the workplace diversity banner. This may limit the value of such workplace diversity programmes as planning, monitoring, evaluation and promotional tools. Commitment to diversity Nearly all agencies in the sample had made some links to their corporate documentation in their workplace diversity programmes, although in some cases workplace diversity programmes only referred to the relevant documentation, while in others cross references were more extensive. The most commonly-linked documents were the agencies’ certified agreements followed by their HR policies and then their corporate plans. Linkages to other corporate documentation such as workforce plans and business plans could be further developed, bringing about stronger integration of workplace diversity into the agency’s business. Most agencies have adopted a broad and inclusive definition of diversity. Most workplace diversity programmes sought to demonstrate a commitment to workplace diversity and recognised the link between diversity and agency performance. Half of the agencies in the sample outlined what they saw as ‘workplace diversity principles’. Quality of overall measures and performance indicators Most agencies were identified as having ‘excellent’ or ‘high quality’ measures in their workplace diversity programmes—that is, they had made or sought to make links between workplace diversity objectives and specific measures, though there was still room for improvement. The quality of performance indicators was generally much poorer than the quality of measures (a similar finding was in last year’s evaluation). Most workplace diversity programmes in the sample included some performance indicators designed to measure the effectiveness of workplace diversity programmes, but the quality of these indicators varied considerably. Agencies need to place a stronger focus on better articulating performance indicators for the success of workplace diversity objectives to ensure that they are measurable. Reporting on the effectiveness of workplace diversity programmes The Commissioner’s Directions provide that an agency head must evaluate and report annually on the effectiveness of its workplace diversity programme, although they do not specify where this reporting should occur. Few agencies indicate in their workplace diversity programmes where they report on the effectiveness of workplace diversity measures; the annual report appears to have become the default vehicle. There is limited reporting on diversity outcomes in many agencies’ annual reports, even though most agencies mention workplace diversity in their reports. In many cases, for example, the reporting is confined to a simple statement that a workplace diversity programme exists. Internal reporting of diversity within agencies was not assessed by the evaluation. Some agencies mention internal reporting in their workplace diversity programmes. This could be assessed through future State of the Service agency surveys. Impact of quality of workplace diversity programmes There is a strong link between the quality of workplace diversity programmes and EEO representation, with high-quality workplace diversity programmes more likely to be associated with above average representation of EEO groups. However, other factors may also contribute, making direct causal links difficult to determine. Unlike last year, there was no clear link between employees’ views of their agencies’ commitment to workplace diversity and workplace diversity programmes rated as being of higher quality. evaluation APSED and the quality of EEO data The provision of EEO data by APS employees to their agency is voluntary. Therefore, as with any large voluntary data collection, APSED tends to under-represent the actual number of employees in those groups. Last year’s employee survey results showed that 10% of those employees who were offered the opportunity to provide EEO data actively chose not to do so. Yet, of the data supplied to APSED at 30 June 2005, only one-third of employees actually had comprehensive EEO data: Indigenous status was provided for only 48% of employees, while data on disability was provided for 47%. The quality of data on race or ethnicity was somewhat better. There was no improvement on last year but there has been a slight improvement on data provided in 2003. To ensure robust analysis, it is important that agencies place a strong emphasis on encouraging employees to provide complete data where possible, as well as ensuring that HR systems can effectively capture this information and report it accurately to APSED. Employees for whom no data is available are included in the population for calculating percentages. Therefore, the percentages provided on representation of EEO groups in the APS may under-estimate the actual proportions in agency and APS populations. In examining diversity, available data from State jurisdictions (WA, SA, Vic) was analysed to gauge the views of APS employees compared to those in State public sectors. However, caution is required with these comparisons because of methodological differences. The WA data is only representative of the views of employees in two WA departments; the Victorian and SA surveys were conducted in 2004; and there were differences in the wording of some questions in the SA survey.4 Over time, as the number of jurisdictions participating and the number of comparable data items increases, and the comparability of the data improves, it is envisaged that benchmarking will become more indicative. 4 The data for WA for 2004–05 represents two non-metropolitan Departments of Education and two non-metropolitan Departments of Health. This is not representative of the WA jurisdiction for comparative purposes. The SA survey was conducted in September 2004 across public sector agencies employing people under the Public Sector Management Act 1995. The SA data is reported as a percentage of respondents who answered the questions, with the exception of responses to questions where respondents were given multiple options to respond to and allowed to make more than one response. Representation of EEO groups At June 2005, women accounted for 54.2% of ongoing staff. This was a relatively large increase over the previous year (53.1% at June 2004). For people from a NESB1,5 there was growth in both actual and proportional representation (up from 5.2% at June 2004 to 5.3% at June 2005). The proportion of Indigenous Australians continued to fall this year to 2.2% of ongoing staff, down from 2.4% in 2004. Last year we reported that 2.3% of ongoing employees at June 2004 were Indigenous. The proportion for last year has been revised upwards, due to an improvement in the quality of historical data on Indigenous status. Representation of people with a disability fell from 3.9% to 3.8% over the year. Both these groups declined in actual numbers as well, despite an increase in overall ongoing staff numbers. The proportional representation of each of these groups is presented in Table 9.1. Table 9.1: Representation of EEO groups among ongoing employees, 1996 to 20056   1996 (%) 1997 (%) 1998 (%) 1999 (%) 2000 (%) 2001 (%) 2002 (%) 2003 (%) 2004 (%) 2005 (%) Women 47.7 48.1 48.6 49.0 49.9 51.4 51.9 52.8 53.1 54.2 Indigenous Australians 2.6 2.6 2.7 2.7 2.6 2.6 2.6 2.5 2.4 2.2 People with a disability 5.4 5.3 5.1 4.8 4.5 4.2 4.0 4.0 3.9 3.8 NESB1 5.5 5.5 5.4 5.3 5.3 5.3 5.3 5.1 5.2 5.3 Source: APSED Trends in representation for each of these groups are discussed in the following sections. 5 In the absence of alternative measures, the concept ‘NESB’, representing people from a non-English speaking background, is used with APSED. This captures information about first language spoken, place of birth and parents’ language. NESB1, the measure used here, includes people born overseas whose first language was not English. NESB2 has previously been reported in addition to NESB1 and includes children of migrants, including those who were born overseas and arrived in Australia before the age of five and did not speak English as a first language, those who were Australian born but did not speak English as a first language and had at least one NESB1 parent, and neither of whose parents spoke English as a first language. Analysis of APSED data has found that this group does not have a substantial disadvantage compared to other workers, and it is therefore not reported on here. 6 Due to improvements in the quality of historical data, proportions in this table may differ from those published in previous years; for example, last year we reported that 2.3% of ongoing employees were Indigenous Australians. NESB1 data has also increased due to a revision in the calculation of this group’s representation. Agency commitment to workplace diversity This year the employee survey asked respondents about their organisation’s commitment to creating a diverse workforce. Sixty-one per cent of employees agreed that their agency was committed to building a diverse workforce. Some State jurisdictions report a much higher response rate compared to the APS rate in relation to agencies’ commitment to creating a diverse workforce. The WA Public Service also asked employees in two non-metropolitan departments about their organisation’s commitment to creating a diverse workforce. Seventy-eight per cent of these respondents, agreed that their organisation was committed to creating a diverse workforce.7 Results for the Victorian Public Service were even higher with 80% of employees participating in their People Matter Survey agreeing that their agency is committed to creating a diverse workforce.8 Of the EEO groups, women were the only group that was significantly more positive than employees not from these groups about their agency’s commitment to creating a diverse workforce. Younger workers (25 years and under) were also more positive than workers over 25 years of age. However, older workers (45 years and over) were less positive than workers under 45 years of age. Evaluation of workplace diversity programmes As with last year’s evaluation, there was some indication that a broad approach to workplace diversity may be adopted at the expense of implementing specific strategies to remove employment-disadvantage for the specified EEO groups. No workplace diversity programmes contained specific measures for all four EEO groups and five agencies had no specific measures at all. Indigenous Australians and people with a disability were the most frequently addressed EEO groups in workplace diversity programmes, with specific measures included to address the employment and retention of these groups. However, there was no clear correlation between the inclusion of specific measures for Indigenous Australians and people with disabilities and increased representation for these groups (although there was a link between the overall quality of the workplace diversity programme and EEO representation). Only one workplace diversity programme contained initiatives designed to address employment related disadvantage for employees from NESB. evaluation Employees in medium agencies (57%) were less likely to agree that their agency was committed to creating a diverse workforce compared to small agencies (66%). Sixty-one per cent of employees in large agencies agreed that their agency was committed to creating a diverse workforce. Of the 21 large agencies, employee agreement ranged from a low of 38% to a high of 75%, with the highest scoring agencies being DEST, DFAT and DIMIA. 7 Office of the Public Sector Standards Commissioner, Western Australia, Public Sector Climate Survey, 2004–05. ‘The data for Western Australia for 2004–05 represents 2 non-metropolitan Departments of Education and 2 non-metropolitan Departments of Health’. 8 Office for the Commissioner for Public Employment, Victoria, People Matter Survey 2004, Women in the APS The representation of women in the APS continued to rise this year, indeed, at a faster rate than in the past. At 30 June 2005, women represented 54.2% of all ongoing staff, up from 53.1% the previous year. Women represented 58.0% of engagements in 2004–05, compared with 46.3% of separations. If this trend continues, it will lead to an increase in the feminisation of the APS. The proportional representation of men and women varies strongly between agencies. Of agencies with more than 1000 ongoing employees, BoM had the highest proportion of men (81.3%), followed by Defence (64.4%), while CRS (83.8%) and CSA (74.0%) had the highest proportion of women (see Figure 9.1). Figure 9.1: Representation of women and men in agencies with more than 1000 ongoing employees, June 2005 Source: APSED As Table 9.2 shows, women continue to be under-represented at higher classifications, although there have been significant gains over time. Table 9.2: Ongoing staff: proportion of women by classification group, June 2005   1996 (%) 2004 (%) 2005 (%) Trainee & Grad APS 51.4 50.7 52.0 APS 1-2 55.4 52.8 62.0 APS 3-4 58.9 64.3 65.0 APS 5-6 41.6 50.8 51.8 Executive 27.5 39.3 40.3 SES 19.3 31.5 33.0 Total 47.7 53.1 54.2 Source: APSED Women represented 40.3% of EL employees at June 2005 (up from 39.3% in 2004). As Figure 9.2 shows, while women comprised only 33.8% of engagements to EL classifications, they represented 46.8% of promotions to these classifications. In addition, women made up only 34.7% of separations, so further increases in the representation of women in these classifications can be expected. Figure 9.2: Ongoing staff: Engagement and promotion rates for women, June 2005 Source: APSED At June 2005, women represented 33.0% of the SES (up from 31.5% in 2004). This increase in representation can be expected to continue, given that 28.0% of engagements and 45.7% of promotions to, and within, the SES were women compared to 23.9% of separations. Table 9.3 shows that women’s representation in both the EL and SES classification groups is higher for younger age groups, adding further to the evidence that the representation of women at these levels will continue to increase over time. Table 9.3: Ongoing staff: Proportion of women by age group in EL and SES classifications, June 2005   Under 40 (%) 40-44 (%) 45-49 (%) 50 & over (%) EL 50.4 42.6 36.2 29.9 SES 39.5 43.4 33.6 26.8 Source: APSED Overall, the positive trend towards increased representation of women at higher levels of the APS is continuing, or possibly accelerating, with no sign of stalling. However, despite the appointment of several women to the role of agency head in the last year, there is still room for improvement in the representation of women at this level. More broadly, the variation in the representation of women at higher levels across agencies suggests that quite a few agencies could be more pro-active in encouraging women to apply for more senior positions. Agency support for the employment of women The employee survey asked about employees’ perceptions of whether their agency supported the employment, development and promotion of women, Indigenous employees, people with a disability and employees from a NESB1. Employees were most likely to have agreed that their agency supported the employment, development and promotion of women and people from all cultural backgrounds. The majority of employees (79%) agreed that their agency actively supported the employment, development and promotion of women, and only four per cent disagreed. Of the 21 large agencies, only one large agency had a particularly low level of agreement (59%). The level of agreement for all other large agencies varied from 72% to 87%. The majority of women responding to the employee survey (74%) agreed that their agency actively supported the employment, development and promotion of women. However, women were less likely to have agreed than men (74% compared to 84%) and more likely to have disagreed (6% compared to 2% for men). Some employees commented on their agency’s support for women. My agency consists mainly of women yet there is a huge under-representation of women in management. ” “I don’t believe women should be classed as a minority or a group requiring special consideration. ” “The agency needs to do more to support the employment of women, this is really about the erosion of entitlements such as carer’s leave, part-time employment and home based work. ” “The women who are groomed for promotion do not seem to have the family responsibilities of a lot of women in the workplace. employee survey This year the survey also asked whether employees thought that their agency needed to do more or less to support women. Only one-fifth of employees felt that their agency needed to do more (16%) or much more (4%) to support the employment, development and promotion of women. Of interest are the results for large agencies with low representations of women, which do not show significant differences from other agencies with respect to the need to provide more support for women. The majority of employees (69%) were satisfied with the level of support provided to women. Twenty-seven per cent of women, however, felt that their agency needed to do more to support them, compared with 12% of men. Job satisfaction and other employee indicators—women The