Chapter 1: Institutional stewardship
Stewardship relates not only to financial sustainability and the effective and efficient management of resources, but also to less tangible factors such as maintaining the trust placed in the APS and building a culture of innovation and integrity in policy advice.
The APS assists successive governments to administer laws and deliver services to maintain and enhance the wellbeing and prosperity of Australians. The PS Act sets out the values, rules and frameworks for an apolitical, efficient and effective public service. The PS Act also sets out the stewardship role of departmental secretaries, who are entrusted with the responsibility of ensuring apolitical, efficient and effective service for Australians from within departments, and across the APS (through the Secretaries Board).
The stewardship role of the Secretaries Board is not separate from the responsibility to serve the government of the day. However, stewardship extends beyond electoral horizons, as the APS champions good governance of public institutions over the medium to long term to advance the interests of Australia and all Australians. The ultimate beneficiaries of APS stewardship are the people of Australia, both now and in the future.
At institutional level, stewardship involves objective and collective action to ensure the public service delivers the best results for Australians. A key aspect of this is unwavering focus on policy and program outcomes that deliver public benefit in an effective and efficient manner. As a result, in today’s context stewardship demands the service work more collaboratively on the multifaceted challenges Australia is facing.
Leaders have an important stewardship role in exercising their powers and using public resources, and it is important for leaders to govern public sector entities in a way that sustains strong capacity to serve government and the community over time.
Australian National Audit Office9
Good stewardship encourages the provision of frank and fearless advice to government to inform and assist the design and delivery of government priorities, alongside a focus on the governance, sustainability and productivity of public sector institutions. Ultimately, stewardship provides for accountability to the Australian community that the APS serves.
In policy development and service delivery the APS needs to work together as one organisation so that it is equipped to tackle multidimensional and interrelated issues.
Ahead of the Game: Blueprint for the Reform of Australian Government Administration10
The 1976 Coombs Royal Commission sparked a gradual process of devolution across the APS, leading to a greater focus on agency-level outcomes, performance and accountability. This approach brought clear benefits in terms of responsiveness to government and delivery of services to the community. However, with the benefit of hindsight it is possible to see that agency autonomy has also worked against system-wide perspectives and longer-term management of issues across the APS.
A number of reviews of the APS have highlighted the need for the service to function in a more united and cohesive manner. Ahead of the Game saw APS-wide cohesion as a means for dealing with complex challenges; Learning from Failure presented the idea of one APS in terms of system-wide responsiveness. Priorities for Change11 emphasised the need for the APS to be ‘united in serving all Australians’ and indicated that too much devolution resulted in poorly integrated advice and support to the Government on complex priorities.
‘One APS’ needs to reimagine itself as an adaptive organisation—flexible, experimental, facilitative and agile.
Peter Shergold AC, former Secretary, Department of the Prime Minister and Cabinet12
‘One APS’ is not an end in itself—rather, it is a means to achieving better outcomes for government and for Australians. APS employees already operate under the same APS Values, Code of Conduct and Employment Principles, but the concept of ‘One APS’ goes beyond these legislative frameworks to the very reason the APS exists as outlined in the PS Act: efficient and effective service to Australia and Australians.
There is no simple definition of ‘One APS’ but, fundamentally, as highlighted by Priorities for Change, it is about common purpose—a shared understanding of what it is that sets the APS apart from other organisations. The importance of this is also reflected in the Prime Minister’s call for all APS employees to have a ‘clear line of sight’ between their work and delivery of outcomes to the people of Australia.13
A clear and common purpose fosters stewardship and high performance by organisations and individuals.14 To meet the challenges of a complex, rapidly changing Australia, agencies, leaders and the broader APS workforce must think and work beyond agency boundaries to achieve common objectives. In this context the APS must adapt to new ways of working and display resilience to change while continuing to perform at high levels. High performance—an essential feature of public service stewardship and accountability—is embedded in the APS Values and Employment Principles. ‘Committed to service’ is defined by the PS Act as an APS that is ‘professional, objective, innovative and efficient, and works collaboratively to achieve the best results for the Australian community and the Government’.
Upholding this value includes:
- managing change effectively
- promoting continuous improvement
- supporting collaboration and teamwork
- identifying and managing areas of risk
- encouraging innovative thought
- supporting innovative solutions.
These are all approaches that build strong foundations for high-performing organisations and an effective and efficient APS.
In the 2019 APS employee census, employees were asked to rate their agency’s success in meeting its goals and objectives on a 10-point scale (where 1 means no success, 5 means usual levels of success and 10 means the best the agency has performed). Employee perceptions on this question have remained relatively stable, increasing from 6.7 in 2018 to 6.8 in 2019.
Cross-referencing 2019 APS employee census data reveals that employees who do not believe strongly in the purpose and objectives of their agency rate their agency’s success in meeting its goals and objectives noticeably lower on average, at 4.6 out of 10. This suggests there is a relationship between perceptions of agency performance and employee engagement. Further drivers of performance are discussed in Chapter 7, under organisational capability.
To deliver strong outcomes for the Australian community, agencies use a range of strategies, business plans and individual performance agreements to document the outcomes and outputs against which performance is measured. The APS Employment Principles require effective performance from each employee, and this demands a clear understanding of how their work contributes to their agency achieving its outcomes.
The Australian Public Service Commissioner’s Directions 2016 were amended in July 2019 to clarify the obligations of agency heads, supervisors and APS employees in achieving, promoting and fostering a high-performance culture. The Commissioner’s Directions emphasise that effective performance is a shared responsibility.
The amendments [to the Commissioner’s Directions] are about achieving optimal performance across all agencies. They also hold all APS employees accountable for upholding the APS employment principle that requires effective performance from every employee.
Peter Woolcott AO, Australian Public Service Commissioner15
A high-performance culture is a system that promotes and incentivises effective performance and fosters talent. Performance expectations are clear, alongside a focus on performance improvement and prevention of underperformance. A high-performance culture also promotes active management of performance issues and requires mutual accountability for achieving effective performance.
Organisational culture is critical to fostering high-performing workforces and organisations. Leaders need to ensure that employees can ask for support and raise concerns, and that they feel trusted to do their jobs. Where this is promoted, employees feel confident in giving and receiving feedback, remain flexible and adaptable to change, and feel empowered to facilitate conversations on effective performance.
Effective performance management systems and processes form one aspect of a high-performance culture and the 2019 APS employee census elicited various data on agency-level performance management. As Figure 1.1 illustrates, respondents were broadly very positive about their supervisor’s involvement in performance management processes.
Figure 1.1: APS employee perceptions about supervisor involvement in performance management processes in the past 12 months
Source: 2019 APS employee census
While performance conversations are occurring across the APS, other APS employee census data raises questions about the quality of these discussions. In 2019, 61 per cent of APS employee census respondents agreed that the performance expectations of their job were clear and unambiguous—a drop of six percentage points from 2018. Sixty per cent of respondents agreed that support from their supervisor had helped improve their performance. Less than half of respondents (48 per cent) agreed that their overall experience of performance management in their agency had been useful for their development—unchanged from 2018 (Figure 1.2).
Figure 1.2: APS employee perceptions of performance management in the past 12 months
Source: 2019 APS employee census
When it comes to managing underperformance, more than one third (37 per cent) of 2019 APS employee census respondents disagreed that their agency deals with underperformance effectively. The two most commonly cited reasons for this were managers’ reluctance to have difficult conversations and their lack of confidence in addressing underperformance.
Performance management systems must be supported by strong leadership for increased effectiveness. APS employee census data over a number of years confirms that employee perceptions relating to performance-related questions are more positive when supervisors and Senior Executive Service (SES) managers are more effective communicators.
The recent amendments to the Commissioner’s Directions on performance management explicitly address the role of senior leaders and supervisors in developing and sustaining a high-performance culture across the APS.16 This includes rewarding and recognising talent, and managing underperformance when required.
A recurrent theme of this report is the increasingly complex public policy and service delivery challenges that governments are facing. The APS cannot assume that existing policy settings and delivery approaches remain the most suitable options for today, let alone that they are appropriate for future settings. To ensure high performance, the APS needs to promote a culture of evaluation and evidence-based decision making, recognising that good management requires outputs and outcomes to be measured.
Monitoring and evaluation encompass the systematic collection and analysis of information to answer questions about the effectiveness, efficiency and/or appropriateness of a program, policy or regulatory intervention.17 Evaluation also enables a culture of organisational learning, public accountability and performance. These integral features of the APS stewardship role ensure that programs and services deliver value to the Australian public over the longer term.
Citizens have a right to know how their money is used and what difference that is making to their community and the nation—what outcomes are being achieved, how, and at what price. Insightful performance reporting goes beyond simply measuring activities. It goes to measuring outcomes and impacts (the value created by these activities).
Elizabeth Alexander AM and David Thodey AO18
In the APS context, evaluation involves assisting key decision makers and government to understand:
- the continued relevance and priority of objectives in light of current circumstances (the appropriateness of a program or policy)
- whether outcomes achieve stated objectives (effectiveness)
- whether there are better ways of achieving the objectives (efficiency).19
The ANZSOG Evidence and Evaluation Hub suggests that organisations that embed a culture of evaluative thinking and organisational learning are more likely to be equipped to understand what they need to achieve and how; to monitor their performance and improve their services; and to deliver and communicate success.20 Iterative evaluation practice is also important where program or policy outcomes may not be observed for some time.
As outlined in Ahead of the Game, a culture of continuous improvement, driven by evaluation and performance measurement, will lead the APS to become a more flexible, innovative institution, in tune with the needs and requirements of the Australian public.21 The APS is maturing its practice in these areas, which have advanced with the introduction of the Public Governance, Performance and Accountability Act 2013 (Cwlth) and the positive duty the PGPA Act imposes to demonstrate how agencies have achieved their purposes. This shift should be further accelerated following the Prime Minister’s stated intention to set performance targets for policy, focused on outcomes. The quality measurement of public sector performance and impact of government policies over both the short and long term is critical to demonstrating accountability and may assist to counteract diminished levels of trust in public institutions.
Concerns about the quality of evaluation processes across the APS were highlighted in a paper developed by ANZSOG for the Independent Review of the APS. The paper indicates that evaluation activities do not currently add value because of: a narrow focus and not asking the right questions; poor methodology; limited data; and lack of independence.22 The Australasian Evaluation Society has also suggested there is a broad lack of capability in evaluation and performance measurement across the APS, and highlighted the impact of this on program and policy related decision-making processes.23
There is very little data currently available on APS-wide evaluation capability, but there is little doubt that improvement is required. Assessments of agency performance statements by the Australian National Audit Office (ANAO) have highlighted the need to improve quality of performance monitoring to demonstrate impact.24 Engagement with the Australian community will be increasingly important, to obtain feedback on their experience of public sector performance. As the APS moves through a significant period of reform to respond to increasing citizen expectations and rapid changes to the operating environment, borrowing from previous success and learning from failure will be essential.
An important aspect of the stewardship responsibilities of the APS involves having a constant eye to the future of Australia and the future needs of the Australian community. Reform initiatives and approaches are under way to ensure the APS remains relevant and well equipped to deliver its role: service to the Government, the Parliament and the Australian public.
The Independent Review of the APS, the first root and branch review of the APS since the Coombs Royal Commission in 1976, was a significant focus in 2018–19. The Review panel was given an explicit mandate to identify an ambitious program of transformational reforms. The panel’s approach was characterised by an emphasis on evidence and engagement and included consultation across the full spectrum of public sector stakeholders: APS employees, ministers and their staff, academics, not-for-profit organisations, the business community and Australian citizens.
The panel released an interim report in March 2019, outlining four priorities for change to ensure that the APS is fit for purpose in the decades to come:
- strengthening the culture, governance and leadership model
- building a flexible operating model
- investing in capability and talent development
- developing stronger internal and external partnerships.25
The panel’s final report was delivered to the Australian Government on 20 September 2019.
In line with the panel’s original mandate, the final report is likely to propose wide-scale changes to ensure a more joined up, people facing, data enabled, capable and trusted public service that can deliver effectively now and into the future. The Prime Minister has asked the Secretaries Board to consider the final report and report to Cabinet on relevant issues and findings. Any subsequent implementation of the recommendations will be a priority for the year ahead.
A large part of the value of the Independent Review of the APS has been in ensuring a series of conversations across the service, including through the Secretaries Board, about what the future requires of the APS. The APS leadership recognises fully the need for change, and is committed to making it happen.
Future reform initiatives will also build on the work that has been done recently by the APS Reform Committee, a subcommittee of the Secretaries Board. The Committee has implemented a number of projects as part of a Roadmap for Reform launched in May 2018.
The roadmap focused on short to medium-term strategies in six streams of work designed to improve:
- citizen and business engagement—ensuring more effective engagement between the public sector, citizens, business, and innovators when designing and delivering policies, programs and services
- investment and resourcing—better aligning funding to deliver government priorities and meet service delivery expectations
- policy, data and innovation—making the best use of data to support policy development and decision making and improve innovation
- structures and operating models—ensuring APS operating models support integration, efficiency and a focus on citizen services
- workforce and culture—adopting workforce practices that will meet future needs, including through strengthening talent management, data analytical capability and digital skills
- productivity—developing the best contemporary measures for public sector productivity and using this to improve administration.
This work will be taken forward by the Secretaries Board in conjunction with the Government’s response to the recommendations of the Independent Review of the APS.
8 Advisory Group on Reform of Australian Government Administration. (2010). Ahead of the Game: Blueprint for the Reform of Australian Government Administration, 15.
9 Australian National Audit Office (2014). Public Sector Governance: strengthening performance through good governance, 10.
10 Advisory Group on Reform of Australian Government Administration. (2010). Ahead of the Game: Blueprint for the Reform of Australian Government Administration, 10.
11 Commonwealth of Australia, Department of the Prime Minister and Cabinet. (2019). Independent Review of the APS: Priorities for Change.
12 Shergold, P. (2015). Learning from Failure: Why large government policy initiatives have gone so badly wrong in the past and how the chances of success in the future can be improved, xi.
13 Morrison, S. (2019). Speech, Institute of Public Administration. Retrieved 3 October 2019 from https://www.pm.gov.au/media/speech-institute-public-administration
14 Wilson, C. (2015). Designing the Purposeful Organization: How to inspire business performance beyond boundaries. Philadelphia: Kogan Page.
15 Woolcott, P. (2019). Performance Management in the APS. Retrieved 8 October 2019 from https://youtu.be/bpUSykt49lI
16 Australian Public Service Commissioner’s Amendment (2019 Measures No. 1) Direction 2019. (Cwlth).
17 Australasian Evaluation Society. (2017). Submission to the PGPA Act 2013 and Rule—Independent Review.
18 Alexander, E. and Thodey, D. (2018). Independent review into the operation of the Public Governance, Performance and Accountability Act 2013 and Rule, 11.
19 Tune, D. (2010). Evaluation: Renewed Strategic Emphasis. Retrieved 8 October 2019 from speaking notes for David Tune presentation
20 Australia and New Zealand School of Government. The Importance of Evidence and Evaluation.
21 Advisory Group on Reform of Australian Government Administration. (2010). Ahead of the Game: Blueprint for the Reform of Australian Government Administration.
22 Gray, M. and Bray, R. Australia and New Zealand School of Government. (2019). Appendix B Evaluation in the Australian Public Service: current state of play, some issues and future directions.
23 Australasian Evaluation Society. (2017). Submission to the PGPA Act 2013 and Rule—Independent Review.
24 Australian National Audit Office. (2018). Implementation of the Annual Performance Statements Requirements 2016–17.
25 Commonwealth of Australia, Department of the Prime Minister and Cabinet. (2019). Independent Review of the APS: Priorities for Change.