Organisational productivity

Key chapter findings

The APS has experienced significant improvements in productivity in recent years. These have been necessary to absorb the annual efficiency dividend and to fund wage increases, which have been higher than the relatively low wage cost index adjustment under the current funding arrangements. Through these mechanisms, each agency annually achieves productivity gains which compare very favourably with the general growth of labour productivity in the economy more broadly. Employees’ positive views about their own levels of productivity are consistent with these results.

It is reasonable to expect the APS to have a strong focus on productivity growth into the future. Given the size of productivity improvements required annually, however, these may become increasingly challenging to achieve for some agencies.

In achieving productivity improvements, traditional methods such as implementing new technology, increasing knowledge and experience, and identifying more efficient work practices through productivity-based workplace agreements will continue to be important.

However, these methods need to be complemented by a focus on the gains that can be realised by increasing employees’ levels of engagement with their work and their organisation.

The analysis of employee survey results suggests that the biggest gains in productivity in this area are likely to be achieved by sustaining employees’ high levels of satisfaction with their current job, their understanding of their present role and their satisfaction with the way diversity is managed within the organisation; and by improving the relatively low levels of employee satisfaction with senior leaders. The employee survey results also suggest that agencies should have a particular focus on EL employees’ perceptions of their productivity.

From a people and culture perspective, one of the most effective ways agencies can increase their productivity and levels of employee engagement is by maintaining a focus on learning and development. A strong commitment to investing in people and the systems they need to do their jobs is a key plank in building and sustaining organisational capability. The majority of employees appear satisfied with their access to learning and development. However, employee satisfaction for the summary Learning and Development factor was lower than for many other factors relating to employee engagement, which suggests that there is still room for improvement.

Of particular concern are the consistently lower levels of satisfaction and effectiveness reported by employees working outside the ACT regarding learning and development. With around two-thirds of APS employees working outside the ACT, it is particularly important for agencies to enable their employees in these areas to further develop their capabilities to deliver effective outcomes to the community. On a more positive note, the levels of dissatisfaction with learning and development reported by employees working in regulatory areas last year were not as strong as in 2006–07.

Another finding of some concern is that one-third of SES employees continue to report that their learning and development needs had not been identified and agreed to with their manager. This result should be considered in the context of the higher overall levels of satisfaction that SES employees reported for learning and development—especially the high level of satisfaction they had about their own access to learning and development. However, given that developing capability in the senior leadership group was identified in last year’s report as one of the challenges facing the APS, there appears to be potential for a much more strategic approach to identifying SES learning needs. SES employees need to take responsibility for ensuring that they invest in themselves so they can operate at their full potential.

There is also scope for agencies to take a more vigilant approach to monitoring and managing workplace absences. Although there are methodological issues associated with comparisons of absence levels between sectors and jurisdictions, it appears that absence levels for the APS are comparable to those in other public sector organisations and follow the international trend of being higher than the private sector. There has been no significant change in absence levels in the APS since ANAO’s 2003 audit report on absence management in the APS.

It is important for agencies and managers to understand that a certain level of workplace absence is a normal feature of a healthy work environment. It is also important to recognise the trade-offs employers face. Although the APS often finds it difficult to compete with the private sector on the remuneration front, it can gain a competitive advantage in attracting and retaining talented employees by providing leave provisions for employees to achieve work-life balance and cover legitimate absences.

This does not mean, however, that all absences are unavoidable and that managers cannot influence the attendance of employees. Agencies with sustained lower levels of workplace absence report that the key to success is strong employee job interest and skills alignment to their work. These findings accentuate the importance of selecting the right person for the job and encouraging employees to engage actively with their work and their organisation. Although each agency’s business needs and circumstances will be different, there is potential for more APS agencies to review their policies and procedures with the aim of ensuring that they foster a strong attendance culture.

One of the emerging themes from this chapter is the central role that corporate areas within agencies can play in driving productivity improvement.

Corporate areas play an important role in driving improvement in all of the areas touched on in this chapter—increasing efficiency and effectiveness, learning and development, and absence management. Corporate areas also play key roles in assisting employees understand their current roles, and in the management of diversity and communication with senior leaders. Effective corporate areas are also needed to support performance improvements in issues covered in other chapters, including attraction and retention, governance, and leadership capability.

The fact that almost half of SES and EL 2 employees believe that streamlining administrative processes within their agency is one of the most important actions in achieving greater efficiency and/or effectiveness, suggests that corporate areas sometimes act as a barrier to performance improvement, creating unnecessary layers of internal processes.

In order to meet current and emerging challenges, agencies need to ensure that their corporate areas have the quality and depth to support the achievement of organisational strategy and business outcomes. They also need to ensure that corporate areas take a modern and streamlined approach to their work that balances the need for accountability and due process, with achieving business outcomes in the most efficient and effective way possible.