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Leadership, management and communication

Management

Management encompasses a range of practical day-to-day tasks within an agency that are fundamental to an effective organisation, including financial, contract, project, risk management and managing people. In examining management within the APS, this section focuses on two key areas: how employees view their immediate manager; and performance management (including performance pay and underperformance).

Employees’ views of immediate managers

An employee’s immediate manager is a key driver of an employee’s commitment to their job, organisation and team. A manager’s level of effectiveness can also influence levels of employee engagement and retention.

Immediate managers can also have an impact on employees’ levels of job satisfaction—two in five employees rated good manager in their top five workplace attributes that impact on how satisfied they are with their job—75% of these employees were satisfied.

The Immediate Manager factor, derived from the factor analysis of satisfaction with issues related to employee engagement discussed in Chapter 3,¹³ provides a summary of employees’ views about their immediate manager (see Table 7.1). Employees were generally positive about their immediate manager, with just over two-thirds of employees satisfied with the Immediate Manager factor.

Table 7.1: Satisfaction/agreement with questions comprising the Immediate Manager factor, 2006–07

	Satisfied/agreed %
Generally speaking, my immediate manager acts in accordance with the APS Values in his or her everyday work	86
My manager treats all staff with respect and courtesy	79
My manager demonstrates honesty and integrity	78
My manager works effectively and sensitively with people from diverse backgrounds	75
My manager provides me with the support I need to do my job	74
My manager works with staff to find solutions to problems	73
My manager ensures fair access to developmental opportunities for employees in my work group	70
My immediate supervisor is effective in managing people	68
My manager encourages me to build the capabilities and/or skills required for new job roles	66
My manager stands up for his/her staff when necessary	66
I receive adequate feedback on my performance to enable me to deliver required results	63
My manager delegates work effectively	63
I am satisfied with the recognition I receive for doing a good job	50
My manager appropriately deals with employees that perform poorly	43
Source: Employee survey

Younger employees were more satisfied with the Immediate Manager factor than older employees, as were SES employees compared to employees at other classifications. Employees working in administrative support/clerical roles were most satisfied, while those in regulatory roles were least satisfied. Satisfaction levels also varied between the 45 agencies with individual agency-specific results, ranging from 57% to 81%.

Table 7.1 shows that agreement/satisfaction levels varied for the items that make up the Immediate Manager factor. The results suggest that managers in the APS are perceived by employees to be reasonably strong on attributes related to their ethics and general behaviour, but not as strong when it comes to dealing with employees about matters related to work performance, such as providing adequate feedback, recognising a job well done and dealing with underperformance. They are also perceived by employees to be not as strong on delegating work as on some other attributes. These more negative results are of concern given research findings from a 2002 UK public sector study¹⁴ which highlighted the importance of these issues (i.e. delegation, recognition and communication) in motivating employees, and research from the Corporate Leadership Council (CLC)¹⁵ which emphasises the importance of feedback in driving individual performance.

Employees’ comments about their manager reinforce the connection between good management and staff retention. They included:

My current management is good and the majority of my supervisors have been exceptional, however, I have moved within the department to get away from bad management on one occasion.

The reason I would leave my job is management.

I work with a good group of people dedicated to their work. My immediate manager is responsive and listens to our concerns. Work is innovative and challenging.

My immediate manager is ineffective and does not show any leadership. Conducts endless consultation with staff going over the same ground but in the end cannot make a decision. I work with a great team that manages to maintain its commitment and enthusiasm despite the lack of leadership—but for how long!!

A comparison with other jurisdictions shows that the APS continues to perform well. Over two-thirds of APS employees agree that their immediate supervisor is effective in managing people—this is similar to the result in Western Australia (68%) and above those recorded in South Australia (58%) and Tasmania (59%).¹⁶

Performance management

Performance management practices are an essential component of effective management in the APS. Performance management is used, amongst other things, to improve individual and organisational performance, align individual work with agency goals, recognise and reward good performance, support a culture of continuous improvement, and to manage underperformance.

Managing for improved performance

Systematic approaches to performance management have been in place for some time within the APS. Provisions related to performance management are set out in the Act and the Commissioner’s Directions. Within this broad framework, agencies have the flexibility to develop and implement performance management systems that meet the needs of their organisation and their employees.

At a minimum, the Commissioner’s Directions indicate that a fair and open performance management system should provide each employee with a clear statement of performance expectations and an opportunity to comment on these expectations. Performance agreements are widely used in the APS as one method of documenting such expectations. Most agencies (93%) report that they require all employees to have a formal performance agreement—a similar level to the previous two years.

The ability of managers to provide effective formal and informal feedback is fundamental to the success of performance management systems. Both the MAC report Performance Management in the Australian Public Service: A Strategic Framework,¹⁷ and research by the CLC stress the importance of managers providing informed, positive, fair, accurate and detailed feedback as a strong driver of individual performance.

Employee survey results suggest that performance management systems are now well-embedded in APS agencies. The large majority of employees (86%) indicated that they had received formal individual performance feedback in the last 12 months. This is a significant improvement from four years ago when 79% of employees reported that this had occurred. These results are also consistent with the levels of feedback being reported by managers. Of the 30% of employees who reported that they had direct supervisory responsibility for employees, 87% reported that they had provided formal individual feedback to employees in the last 12 months.

Agencies are actively supporting managers to implement performance management systems. All agencies reported having at least two measures in place to assist managers. In 2006–07, all agencies offered advice from corporate areas and almost all (98%) provided consistent guidelines and forms for establishing performance agreements. Other commonly used support mechanisms were self-nominating (77%) and mandatory (36%) training on aspects of the performance management systems.

Almost all agencies (92%) had at least one mechanism in place to ensure line managers are accountable for implementing their agency’s performance management system. Agencies were most likely to include mechanisms in more senior managers’ (72%) and in line managers’ (68%) performance agreements. Only 36% of agencies tested compliance in staff surveys.

Of employees receiving formal individual feedback in the last 12 months, the majority (85%) were assessed against a formal performance agreement or a work plan agreed with their supervisor. This means that seven in ten APS employees had their performance assessed against an agreed plan.

Employees who had received formal feedback in the last 12 months were generally positive about their experience of this process, and levels of satisfaction are increasing. Compared to 2005–06, this year relevant employees were more likely to agree that:

• the feedback session provided them with the assistance/guidance they needed (68%, up from 64%)
• the feedback session would help them improve their performance (59%, up from 48%)
• their learning and development needs were adequately considered as part of the performance feedback discussion (66%, up slightly from 64%).

Employees’ views about the effectiveness of the feedback they received were also generally positive. Sixty-three per cent of employees who had received feedback believed that this feedback was adequate to enable them to deliver required results.

Views about performance feedback varied considerably between different groups of employees. SES employees were generally more positive than employees in other classifications as were employees working in administrative support/clerical roles; those working in regulatory roles were generally least likely to agree.

Understanding the connection between work and organisational strategy and objectives

A formal approach to the provision of performance feedback is important in helping employees to understand the connections between the work they do and their agency’s strategy and objectives. This is an area where the APS has been very successful. Satisfaction with the Understanding Current Role factor emerging out of the factor analysis of issues related to employee engagement¹⁸ was the highest for all the factors (83%).

ELs, however, recorded lower levels of agreement than employees at other classification levels. This result partly reflected the particularly low results for ELs on one component of the factor, namely whether employees feel that they have the necessary delegations to do their job effectively.

Employees in smaller agencies were more likely to be satisfied with the Understanding Current Role factor than those in larger agencies, as were those employees working in legal, administrative support, service delivery, and programme design and/or management roles. Employees working in research and policy roles were less likely to agree.

Employees were also very positive about their understanding of how their work group’s role contributes to their agency’s strategic directions. Four in five employees agreed and only 6% disagreed. Almost all SES employees (96%) agreed that they had a clear understanding of how their work group’s role contributes to their agency’s strategic directions, compared to 79% of APS 1–6 employees. Employees working in programme design and/or management roles were most likely to agree, while those in research roles were least likely to agree.

Overall, the results in relation to employees’ understanding of their role and its connection to organisation strategy and objectives are very positive. The results are likely to reflect agencies’ efforts in recent years to align business planning with individual performance agreements and to take a more rigorous approach to performance management. Continual effort in this area is likely to have a positive impact on employee satisfaction and performance.

Underperformance

MAC’s report, Performance Management in the Australian Public Service, and a number of previous State of the Service reports have identified the management of underperformance as one of the key elements in the overall credibility of performance management. It is important that underperformance is addressed and incorporated into an agency’s overall performance management strategy.

Despite employees’ generally positive views about the handling of performance feedback, employees were much less positive about the management of underperformance in their agencies. One in five employees thought that their immediate manager did not deal appropriately with employees who perform poorly and 36% thought that their agency did not deal with underperformance effectively, compared with 43% and 24%, respectively, who thought they did. This is despite the fact that most managers (91%) (i.e. employees with direct supervisory responsibility) reported that they usually confront and deal with performance management issues as they arise.

This disparity between managers’ and employees’ views might be partly explained by the fact that employees are not necessarily in a position to know how underperformance is being dealt with. It may also be that managers do confront performance management issues but are not able to take them further because of a lack of adequate support and/or guidance from their HR area or senior managers. There appears to be substantial room for improvement in this area. To assist managers and agencies to improve performance management systems, the Commission has developed the guide, Sharpening the Focus: Managing Performance in the APS.¹⁹

Performance pay

Performance pay can be an important aspect of an agency’s performance assessment system to recognise and reward good performance. Most employees continue to report that under the performance assessment system in their agency, a part of their pay is linked to an assessment of their performance. In 2006–07, almost two-thirds of employees (62%) reported that this was the case. The most common approach to linking pay to performance was employees being eligible for advancement through the salary range of their classification, subject to fully competent performance (70% of relevant employees). One-quarter of relevant employees reported that they were eligible for a one-off bonus depending on performance (including a bonus being paid if they are at the top of their salary range).

There have been significant improvements in relevant employees’ perceptions of the operation of performance pay systems in their agency over the last few years (see Figure 7.6). More than half of relevant employees now agree that the performance pay system ensures performance assessment is managed systematically and regularly (56%), and that it operates fairly and consistently (54%). Almost half (46%) agree that it acts as an incentive to perform well. For the first time this year, relevant employees were also more likely to agree than disagree with the statement that the performance pay system contributes to a workplace culture in which individuals work together effectively (33% agreed compared to 30% disagreed).

Despite some improvement in agreement levels, relevant employees continue to be more likely to disagree than agree that the performance pay system provides appropriate rewards for top performers (42% disagreed compared to 29% who agreed) and that it accurately reflects differences in individuals’ performance (40% disagreed compared to 29% who agreed).

Views of performance pay systems varied among different groups of employees. Employees aged under 45 years, new employees (five years or less in the APS), SES employees, employees from large agencies and those who work in administrative support and/or clerical roles, all recorded higher levels of agreement on all statements than their colleagues. As was the case last year, EL employees tended to be the most negative about the performance pay system and were least likely to agree on all statements.

There was considerable variation in opinion about performance pay systems across agencies with individual agency-specific results. The largest difference related to whether performance pay systems ensure performance assessment is managed systematically and regularly— agreement levels ranged from 12% to 75%. However, there was considerable variation in agreement levels between agencies for most statements, including:

• provides appropriate rewards for top performers (6% to 62%)
• acts as an incentive to perform well (24% to 71%)
• operates fairly and consistently (25% to 71%)
• contributes to a workplace culture which upholds the Values (17% to 61%).

Relevant employees in two agencies, Medicare Australia and Treasury, stood out as being particularly positive about their agency’s performance pay system, recording above average agreement levels against all statements. The positive results in these agencies with very different business focuses demonstrates that employees will support performance pay where it is effectively managed. The large variations in agreement levels between agencies indicate, however, that for many agencies there is still scope for further improvement.

 

13 Full details of the factor analysis, including details of the methodology and questions used, are set out in Appendix 4.

14 UK Public Services Productivity Panel—a small group of public sector and senior business leaders established to advise the UK government on improving the efficiency and productivity of public sector departments and agencies. The group has now been disbanded.

15 Corporate Leadership Council 2002, Building the High Performance Workforce—A Quantitative Analysis of the Effectiveness of Performance Management Strategies, CLC, Washington D.C., Corporate Executive Board, <http://www.corporateleadershipcouncil.com>

16 The jurisdictional comparison data from surveys conducted in 2005–06 and 2006–07 was provided to the Commission by the Department of Premier and Cabinet, South Australia, on behalf of the Commissioner for Public Employment (Workplace Perspectives Survey 2006); Tasmania (State Service Employee Survey 2005); and the Office of the Public Standards Commissioner, Western Australia (Climate Survey 2006–07). The South Australian survey covers all employees employed under the Public Sector Management Act 1995 and the Tasmanian survey covered all employees employed under the State Service Act 2000. The Western Australian Climate Survey involved 14 separate agencies in 2006–07. Each year 10–15 agencies are surveyed with each agency being surveyed approximately once every five years.

17 Management Advisory Committee 2001, Performance Management in the Australian Public Service: A Strategic Framework, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au/mac>

18 Full details of the factor analysis, including details of the methodology and questions used, are set out in Appendix 4.

19 Australian Public Service Commission 2006, Sharpening the Focus: Managing Performance in the APS, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au>