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High performance organisations

Editor’s Note to Readers

Welcome to the seventh edition of Human Capital Matters for2014—the digest for leaders and practitioners with an interest in human capital and organisational capability. This edition focuses on High Performance Organisations.

Human Capital Matters seeks to provide APS leaders and practitioners with easy access to the issues of contemporary importance in public and private sector human capital and organisational capability. It has been designed to provide interested readers with a monthly guide to the national and international ideas that are shaping human capital thinking and practice. The inclusion of articles is aimed at stimulating creative and innovative thinking and does not in any way imply that the Australian Public Service Commission endorses service providers or policies.

Public and Private sector organisations alike seek to be high performing organisations. This edition commences with information about a new tool developed by the Australian Public Service Commission in partnership with the University of New South Wales (Canberra) and the University of Canberra (UC) to help Australian Public Service agencies gauge their performance. This is followed by the South Australian Government’s High Performance Framework. This is a systemic approach to organisational performance management and continuous improvement for the South Australian public sector.

The edition also highlights research undertaken by the Australian Industry Group in 2012 on maximising workforce potential. This highlights common characteristics of high performance organisations. Next, in 2011, the Boston Consulting Group developed a list of 14 people and organisational characteristics that led to sustained performance. The edition concludes with Insync Survey’s 7 organisational habits that drive high performance.

Thank you to those who took the time to provide feedback on earlier editions of Human Capital Matters. Comments, suggestions or questions regarding this publication are always welcome and should be addressed to: humancapitalmatters [at] apsc.gov.au. Readers can also subscribe to the mailing list through this email address.

APS Human Capital Matters: High Performance Organisations

Australian Public Service Commission (APSC) in partnership with the University of New South Wales (Canberra) and the University of Canberra (UC). Strengthening the performance framework-Diagnostic implementation (July 2014)

The Australian Public Service Commission (APSC) has launched anew tool to help Departments and Agencies gauge their performance.

The diagnostic process was developed by the APSC in partnership with the University of New South Wales (Canberra) and the University of Canberra (UC).

According to Strengthening the Performance Framework: Towards a High-Performing Australian Public Service—Diagnostic Implementation, using the framework should enable Agencies to develop performance management systems at the Agency, group and individual levels.

After the input of quantitative and qualitative data, it is claimed that the tool can identify key areas requiring improvement and provide suggestions for actions.

Based on research that found that the achievement of high performance is affected more by the implementation of a performance system, rather than by the system design itself, the Diagnostic process has been developed to enhance APS Agency outcomes.

Using the framework entails reviewing organisational structure, management, administration and systems and, where necessary, making changes to support clear expectations of the standard of work required, offer feedback to employees and enable capability development.

The Diagnostic process was designed to gauge the extent to which an Agency's practices and people capabilities align with High Performance Principles, those principles that have been demonstrated to positively affect performance.

It is also intended to help APS Agencies to assess their baseline condition and identify areas of strength and weakness as well as the actions required to achieve more consistent and better practice.

The Diagnostic framework used to guide the process incorporates both primary and secondary questions to encourage a line of enquiry and reflection on whether an Agency's current processes are supporting the development of high performance.

It is claimed that the use of the Diagnostic process should, over time, enable an Agency to make an assessment of year-on-year improvements.

Government of South Australia, Office for the Public Sector. The High Performance Framework

The High Performance Framework (HPF) is a systemic approach to organisational performance management and continuous improvement for the South Australian public sector.

The South Australian Public Sector Performance Commission began development of the HPF in March 2009 through analysis of the best performance management practices across the world, using examples from the UK, Canada, United States, New Zealand, and Australia. A special group of public sector performance specialists provided feedback and direction throughout its development.

Chief executives have recognised the HPF as a positive and valuable contributor to managing organisational performance. The HPF will continue to evolve and improve over time as it is further embedded into agency practice.

The HPF review process culminates in agencies identifying and implementing improvement initiatives to address areas for improvement. A PDF that provides details of agency improvement initiatives that have arisen from the review process is available here.

The South Australian Office for the Public Sector has been created to provide a central, integrated approach to public sector management.

Australian Industry Group. High Performance Organisations-Maximising Workforce Potential (2012)

The intention of this project was to develop a contemporary view of skills utilisation from the company perspective and then to apply these learnings to a tool which could be used to help interested companies move to become high performing workplaces with high levels of skills utilisation.

Simple explanations of high performance work organisations belie the fact that it is not easy to measure the things that help organisations achieve high performance.

Overall there is a commonly held view about the practices of high performance organisations. They use ‘bundles’ of human resources, skills utilisation practices and work organisation arrangements, to increase organisational performance and competitive advantage.

High performance organisations do this by recruiting competent workers, providing them with intensive training, and creating or designing jobs that will provide challenge, responsibility and control. In so doing, they create environments for effective utilisation of skills. High performance organisations flatten their management structures, open channels of communication, share strategic business information with employees and apply performance-related reward and recognition systems (including pay for performance). They empower workers by involving them in quality improvement processes and giving them a voice in company decision-making. Work is organised around principles of teamwork, lean production and quality management, and processes are supported by relevant and current technologies. Such practices help the organisation to make best use of the talents and skills of their workers and in so doing improve organisational commitment and labour retention.

Indicators of organisational success often include financial performance, rates of productivity, employee commitment, job satisfaction, labour turnover and employee well-being.

A review of Australian and international skills development and skills utilisation policies suggests that advanced economies are increasingly focused on the development of high-level skills of their populations to develop a competitive edge in global markets.

Seven major characteristics of high performing organisations were identified through the research and a self-assessment tool—the Workplace Productivity Tool was developed based on these characteristics:

  • Leadership
  • Participatory decision making
  • Team based work systems
  • Developing and utilising the skills of the workforce
  • Quality improvement
  • Learning from others—networking and benchmarking
  • Knowledge sharing.

This research review and survey results are two components of the Australian Industry Group’s High Performance Organisations: Maximising Workforce Potential project. This work was funded under the Commonwealth Department of Education, Employment and Workplace Relations’ Workforce Innovation Program which provides funding for innovative projects that address workforce skills needs.

Boston Consulting Group. High Performance Organisations: The Secrets of their success (2011)

The Boston Consulting Group have compiled a list of 14 people and organisational characteristics that lead to sustained performance. These are summarised below:

  • Leadership—an aligned leadership is effective deep within the organisation
    • High performance teams of individual leaders drive urgency and direction
    • The pipeline is stocked with future leaders with skills matching future needs
    • Middle managers embrace and translate strategy.
  • Design—a lean structure reflects the organisation’s strategic focus and has clear roles and accountabilities
    • Structure and resource allocation reflect strategic trade offs
    • Few layers separate the CEO and the frontline and spans of control are wide
    • Accountabilities, decision rights, and collaboration are constructed with thoughtful consideration
    • Individual capabilities are matched to role requirements.
  • People—the organisation effectively translates business strategy into a powerful people strategy, attracting and retaining the most capable individuals.
    • The employer brand is a core asset
    • Critical roles and key talents are clearly identified and treated with care
    • HR is a strategic partner and enabler of the business.
  • Change management—The organisation has the ability to drive and sustain large-scale change and to anticipate and adapt to an increasingly volatile environment
    • Change is a disciplined cascade
    • The organisation is evolutionary.
  • Culture and engagement—The culture is shaped to achieve strategic goals, and its employees are motivated to go beyond the call of duty in pursuit of corporate objectives.
    • Culture accelerates strategic objectives
    • Engagement is measured and cultivated to generate discretionary effort from employees.

Boston Consulting Group argue that when organisations take a strategic approach to monitoring and improving these characteristics they generate lasting performance gains and a competitive edge.

The Boston Consulting Group is a global management consulting form, advising business on business strategies.

Insync Surveys. The 7 organisational habits that drive high performance

This research identifies the main things (the “habits”) that high performance organisations do month after month and year after year no matter what the circumstances. It identifies the habits that most differentiate high performance organisations from low performance organisations. Many low performance organisations adopt some of the habits some of the time, but they don’t sustain the effort consistently over time. To be truly considered as habits they must be so deeply engrained into the culture and DNA of the organisation that they become its way of life.

The 7 organisational habits are:

  1. Live an inspiring vision
  2. Communicate clear strategies and goals
  3. Develop your people
  4. Go out of your way to recognise your people
  5. Genuinely care for your people
  6. Listen and adapt to your customer’s needs
  7. Continually improve your systems

Insync Surveys notes that each of these 7 organisational habits by themselves are a necessary but not sufficient condition to achieve sustainable high performance. These habits are not a smorgasbord where you choose the three or four you like the most. They are not mutually exclusive by nature, rather they augment each other. If you embed some of these habits you haven’t embedded before, you should increase your organisation’s performance. The desired increase in performance is only likely to be achieved and sustained, however, if all 7organisational habits become your organisation’s new way of life.

Insync Surveys conduct a range of surveys including staff surveys, customer surveys, employee engagement surveys, employee surveys, exit interviews and 360feedback reviews amongst others.