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Optimising talent and driving high performance

The most important role for leaders is finding, developing, and motivating people to collectively solve the biggest problems in real time.
– Chris Blake
Executive General Manager, Corporate Affairs and People,
Australia Post
December 2015

Talent management is a top priority for CEOs around the world1. Talent management is a business strategy focused on ensuring that an organisation has the deep bench strength needed to rapidly respond to changing business needs and ensure the right people with the right skills are ready to step
into critical business roles2.

What the APS needs

Talent management is a fundamental and accepted part of business.

  • Senior leaders know who their top talent are and unapologetically differentiate them from the rest.
  • Succession planning is routine and there is a healthy bench of people with the skills and experience needed for business critical roles.
  • Talent management is used strategically to help an agile APS quickly identify and deploy the right people for taskforces, projects and other emerging priorities.
  • Mobility, secondments and development opportunities are highly targeted within agencies, across the APS and with the private sector.

There is a balance between investing in top talent and investing in the 'vital many'.

  • All employees are challenged, engaged and developed.
  • There is a positive and honest feedback culture for everyone.

Business leaders indicate that high potential employees are more than 50% more valuable to the business than core employees… This is because high potential employees exhibit 21% higher performance levels leading to enhanced business outcomes across the organization3.
– Corporate Executive Board

What we found

The APS is not sufficiently developing talent to prepare the business for the future

Despite the clear business reasons for managing talent, not all APS agencies are adequately identifying, developing and managing the career development of their talent.

  • In 2013-14, 61% of agencies reported that they did not have or were still developing a talent management program4.
  • Results from the 2014-15 APS agency survey5 indicate that talent management is one of the least mature capabilities assessed through the survey. Agencies were asked to rate the maturity of their talent management capability.
  • The highest proportion of agencies felt their current level of capability was 'in development'.
  • In the next three years, the highest proportion of agencies aim to have developed and deployed a talent strategy throughout their organisation.

For further data, see the APS HR Snapshot in the Re-designing HR section of this report.

Everyone on our talent management program is on a succession plan — there has to be a purpose to having them on the program.
– Lynda Dean
NAB, September 2015

Talent practices are not sufficiently linked to the long-term needs of the business

Talent management is normally used to address long-term critical business needs, which are identified through workforce planning. In the APS, agencies that have implemented talent management often use practices that are unsophisticated and disconnected from the long-term needs of the business.

  • There is a risk that poor or absent workforce planning means that talent management is not serving the business.
  • Talent management is too often led by HR, which risks a disconnect from future business needs. This is supported by perceptions of APS employees — in 2015, only 30% of employees who responded to an APS-wide census agreed that leaders spent time managing talented people6.
  • Linking talent management to succession planning helps ensure that investing in talent serves a future business need.
  • Where it exists in the APS, talent management is rarely linked to succession.
  • 43% of agency Capability Reviews highlighted succession planning as a specific concern for agencies7.

Poor or immature practices place the APS's investment in talent at risk

Poor identification practices, ranging from self-identification to a tap on the shoulder, risk an investment being made in the wrong people. In particular, there is a risk of investing in high performers who do not have future potential8.

  • Discussions with the private sector, including Telstra and ANZ have reinforced the importance of effective talent identification. In particular they have a rigorous approach for distinguishing between current performance and future potential. The APS Talent Management Guide provides guidance on rigorous talent identification, which is being implemented as part of an APS-wide talent management trial for SES Band 1s.
  • In many instances, talent management is simply a learning program. This risks turning talent management into a short-term activity with a discrete start and end point. Talent management should be an ongoing activity that prepares high potential people for business critical roles in the longer term.

Effective talent management delivers numerous benefits. Organisations that understand which employees have high potential compared with those who are highly valued at level can use these insights to make decisions about:

  • gauging internal bench strength for critical roles, and reducing reliance on candidates from the external market
  • strategically using mobility to prepare talented people for business critical roles or to keep valued performers at level highly engaged
  • quickly identifying talented people for taskforces, projects and other emerging priorities
  • targeting candidates for secondment to the private sector and vice versa
  • more effectively targeting investments in learning and development.

Talent management in the public sector

UK Civil Service

In the UK, there are multiple layers of talent management.

  • A Secretaries Committee centrally manages senior executive talent
  • Heads of Profession lead talent management for their job families (e.g. finance, HR)
  • Agencies manage junior and middle management talent.

Talented employees may be identified in more than one talent pool, e.g. their profession and their agency.

Senior executive talent management has been implemented incrementally. Secretaries began by assessing the performance and potential of their direct reports. The results were mapped onto a nine box talent grid. This information is being used to move people into new roles to stretch their development.
The same approach has now been rolled out for the next two levels of senior civil servants (around 4,400 people). All departments use the same talent grid to map their next level down (around 40,000 people).

New Zealand Public Service

In New Zealand, the entire top cohort of senior public servants (about 500 leaders) are in the process of being assessed against the Leadership Success Profiles, and for their aspiration, readiness and potential. Chief Executive led Career Boards are responsible for stewarding senior talent. As the
Career Boards mature, the intention is to include representatives from the private sector, opening up opportunities for mobility across sectors.

A range of talent practices have been standardised across 29 agencies. All agencies use a consistent talent toolkit created by a cross-agency team in 2014, and refreshed in 2015. In addition, all agencies are in the process of aligning key HR practices to a single leadership success profile to support
a common language on leadership capability, outcomes and behaviours.

New Zealand is implementing a common Talent Information Management System for all agencies. The system will act as a single repository of talent data about senior leaders, providing a better understanding of current capability, and the ability to determine investment priorities and development needs.
Over time, the data will be compared and contrasted against other key data sets to better predict future leadership needs and gaps.

Queensland Public Service

Over the last two years, almost 600 senior executives across the public service have completed the Executive Capability Assessment and Development (ECAD) Program. The ECAD offers an independent assessment of participants' leadership capability, their readiness for greater leadership challenges, and
provides participants with a tailored development plan.

The Public Service Commission facilitates targeted development opportunities for high-potential, high-performing leaders identified through the ECAD, focusing on its Leader Connect initiative. Leader Connect assists participants to gain intensive, practical experience and stretch their leadership skills
in a different organisation or sector.

Australian Department of Employment

The Department of Employment has a formal approach to talent management. The Executive uses a range of data to understand the performance and potential of its SES and Executive Level 2 (EL2), including career portfolios, length of tenure in role and performance data. Talent data is used to make decisions
about mobility opportunities, development pathways and secondments.


Talent management needs to occur in an environment where there is a positive performance culture for all

There is circumstantial evidence that agencies fear disenfranchising solid performers who aren't identified as top talent. Effective talent management is part of a broader performance and development system that recognises the vital contribution of those who are not included in formal talent programs.
This means avoiding the temptation to treat the 'vital many' as a single generic group by creating a high performance culture focused on providing meaningful work, career development and honest feedback for all9.

In the APS, performance discussions are poorly considered

In the private sector, there is pressure between competing organisations for customers, market share, shareholder returns and talent. At its best, this competition drives continuous improvement and a focus on individual contribution. Performance discussions in the private sector are an opportunity
to highlight achievements and explore career directions. By contrast, APS performance discussions are poorly perceived.

  • Performance processes are often driven by a requirement to complete a form twice a year. In 2015, more than one third of employees rated the level of red tape for performance management processes between eight and 10 on a ten-point scale (10 being the highest level of red tape)10.
  • Performance management is generally perceived to be about managing underperformance, rather than a positive two-way discussion that drives improvement and makes work more rewarding.
  • Managers are fearful that negative feedback will result in claims of bullying and lengthy compensation claims. In part this is due to a lack of understanding of the relevant legal framework.
  • Agency Capability Reviews identified individual performance management as a specific concern for 71% of agencies reviewed11.

A focus on process and compliance comes at the expense of creating a positive performance culture, where managers and employees can have honest conversations about optimising performance, and where everyone is inspired to give their best. A number of agencies are making progress on shifting the performance
culture.

  • The Attorney-General's Department has moved to regular and ongoing performance discussions. All employees have at least four dedicated performance discussions per year. This allows managers to match performance discussions to the evolving priorities of the business and aims to focus discussions
    on continuous improvement for all.
  • The Australian Taxation Office is taking a new approach to performance. To move away from compliance, a coaching focus encourages individuals to be the best they can be through regular, open, genuine conversations. These discuss goals, progress and provide constructive feedback with 'on-track'
    or 'not on track' ratings.

Lift engagement to drive performance

A highly engaged workforce enables organisations to compete for and retain highly sought after talent. Studies show that engagement drives performance. Companies with a more engaged workforce can hire more easily, deliver stronger customer services and have lower voluntary turnover rates12.

A comparison of responses in the APS employee census against private sector median benchmarks indicates that the APS workforce is less engaged on characteristics such as pride and advocacy13.

Recent research has found that culture and engagement is a priority for 87% of organisations around the world, prompting companies to focus on HR activities that lift workforce engagement: leadership, coaching, performance management, flexible working and career development14.

Foster engagement and performance from the outset

In the APS there is a particular opportunity to consider the role of induction in nurturing employee engagement and top performance from the outset.

  • Research suggests that leading private sector organisations take a centralised approach to common learning requirements such as induction to drive corporate priorities, build a common culture and ensure their people have the management and leadership capabilities they need to excel.
  • The Canada School of the Public Service launched a renewed Public Service Orientation in early 2015 to help drive transformation and lay the foundations for a high-performing organisation. The central program offers a shared foundation for employees across government in a range of big picture
    topics that are relevant to all public servants. Although the new orientation is mandatory for new public servants, it is also available to existing public servants as a way to refresh their public service knowledge.

In the APS, some agencies are failing to prepare new employees properly on high level issues important to working in the APS. In particular, senior external recruits to the APS have identified that induction could be more effective in helping them learn government processes and the underlying rules
of working in the public sector.

The APS has a number of special accountability requirements. Induction is an opportunity for new employees to understand the spirit and intent of these obligations. This will lay the foundation for public servants to meet these obligations confidently, rather than in a risk averse way.

Research shows that effective induction provides a range of benefits including15:

  • reducing the risk of turnover amongst new employees, who are often most vulnerable in their first weeks of employment
  • making the most of early optimism to build employee engagement
  • shaping the employee's understanding of the organisation's purpose, culture and values
  • enabling a new employee to survive and quickly thrive.

An APS induction would add value by covering essentials for success, an introduction to public service craft, public service accountabilities and the nature of the Service. This can be especially relevant for more senior employees coming from private industry.

APS induction should continue to be complemented by agency-specific induction modules. These provide an important opportunity for newcomers to develop the specific knowledge and skills needed in their agency, as well as building an understanding of the agency's context.

Proposed actions

1. Ensure Secretaries are visibly accountable for talent management and succession

When talent is led by HR or line areas, talent management can be driven by a narrow business perspective. The involvement of Secretaries can shift talent from being a HR agenda to a highly focused business strategy directed towards the long-term interests of their agency and the APS. Additionally,
Secretaries are uniquely placed to identify the roles in their agency, in the broader APS and externally, that can offer intensive on-the-job development for talented people.

2. Introduce formal talent management for SES Band 3s and 2s, to be led by the Secretary of the Department of the Prime Minister and Cabinet and the Australian Public Service Commissioner

Senior people have a major impact on organisational culture and performance. This makes it particularly important for organisations to have a healthy pipeline of talented people with the skills and experience needed to lead at the most senior levels.

In the APS, talent management should be routine for SES Band 3s and 2s. Talent management of the Band 3 cohort should inform strategies for:

  • developing top talent with the potential to be future Secretaries or Agency Heads
  • keeping strong contributors engaged, challenged and continually improving
  • selecting the right people for development and mobility opportunities, including high value learning programs, strategic secondments and critical projects
  • initiating discussions with those who are no longer a good fit with the needs of the agency or the APS.

At the Band 2 level, talent management should be focused on identifying and guiding the development of those with the long-term potential to be Secretaries.

The Secretary of the Department of the Prime Minister and Cabinet and the Australian Public Service Commissioner should lead the talent management of these critical cohorts, with support provided by the APSC.

3. Introduce a centrally designed approach to talent identification

Rigorous talent identification processes require an investment in formal assessment tools and professional advice, which can be costly. However, they reduce the risk of poor talent identification resulting in time and money being invested in the wrong people. A common approach should require use of
the APS Nine Box Grid16 to map cohorts, build a shared framework for discussing talent and enable comparisons across agencies. Agencies would be able to supplement the centrally agreed approach with additional agency-specific approaches.

Adopting a standardised talent identification approach will:

  • provide Secretaries with consistent data and a common language
  • assist agencies to understand what talent looks like in the APS, with the ability to tailor to agency needs
  • ensure agencies use proven tools that are reliable and valid
  • enable Secretaries to identify key talent groups and implement targeted development and engagement strategies
  • enable sophisticated data analytics on talent pipelines across the APS.

4. Roll out APS-wide talent councils to make decisions about developing and deploying critical talent across the APS

Whole-of-APS talent management should be rolled out for a small number of critical cohorts and roles. Talent management of APS-wide cohorts would generally involve planned moves across agencies, breaking down agency siloes and working across agency boundaries.

APS-wide talent councils would extend talent management beyond the SES Band 3 and Band 2 cohorts. Council members would be drawn from Agency Heads, Band 3s, and Band 2s, who would be charged with making talent decisions in the best interests of the wider APS. The councils would report to the Secretaries
Board.

APS-wide talent councils would only be established for cohorts that are of vital importance to APS business. Critical cohorts that might be considered for APS-wide talent management include recent graduates with the long-term potential to be future senior executives or specific professions where there
are capability gaps or labour supply risks, for example high-level IT skills (Chief Information Officers) or finance skills.

APS-wide talent councils would be responsible for:

  • identifying a small number of critical talent cohorts
  • guiding the career development of identified talent
  • developing tailored engagement and retention strategies for talented people
  • regularly re-assessing identified talent to ensure they continue to have the aspiration and engagement needed to justify ongoing inclusion
  • reporting regularly to the Secretaries Board to provide visibility of the talent pipeline.

5. Centrally develop design principles for a positive high performance culture

In many agencies, a change in process and behaviour is needed to encourage a strong performance and development culture where honest, individualised feedback drives performance improvement.

Consistent performance management principles that have been centrally developed will:

  • assist agencies to refocus performance management to be a
    positive conversation that fits the rhythm of the business
  • support managers and employees to have honest discussions
  • support managers to make decisions that consider risk but are
    not dominated by seeking to avoid it.

6. Introduce a centrally designed induction module that can be adapted by agencies

A centrally designed module should be developed covering APS-wide topics. This can be tailored by agencies to meet their individual needs and will assist them with their own induction program. This will:

  • improve the new starter experience across the APS, bring employees 'into the fold'; and increase engagement, productivity and retention
  • provide consistent messaging on APS-wide matters including the APS Values, Code of Conduct, parliamentary process, briefing ministers and accountabilities.

For an APS induction to build genuine skills and knowledge, agencies will need to commit to new employees spending a period of time undertaking formal, on-the-job and peer-based learning.


1 Groysberg, B & Connolly, K, "The 3 Things CEOs Worry About the Most", Harvard Business Review, March 16, 2015 (based on research conducted in 2013); PwC, 14th Annual Global CEO Survey, 2010; KPMG, Global CEO Outlook 2015;
Deloitte University, Global Human Capital Trends 2015–Leading in the new world of work.

2 Australian Public Service Commission, APS Talent Management Guide, Commonwealth of Australia, 2015.

3 Corporate Executive Board, Business Case for High-Potential Management and Development, Arlington, VA, 2009.

4 Australian Public Service Commission, State of the Service Report 2013-14, p. 162.

5 Australian Public Service Commission, State of the Service Report 2014-15.

6 Australian Public Service Commission, 'Senior Leadership in the APS', State of the Service Report 2014-15. Available: stateoftheservice.apsc.gov.au/2015/08/senior-leadership-in-the-aps/.

7 This includes agency Capability Reviews up to June 2015. It excludes three reviews that are designated cabinet-in-confidence.

8 A study by the Corporate Executive Board found that only 15% of an organisation's highest performing employees have the potential to develop and adapt enough to be successful in more senior, complex roles. Source: Sharkey, L.D & Eccher,
P.H., 2011, Optimising talent: What every leader and manager needs to know to sustain the ultimate workforce. Charlotte, N.C.

9 Dhesi, A.S., "Bucking conventional talent management wisdom",
Talent Management Review, September 2007, pp. 18-19.

10 Australian Public Service Commission, 2015 APS Employee Census, unpublished data.

11 This includes agency Capability Reviews up to June 2015. It excludes three reviews that are designated cabinet-in-confidence.

12 Great Place to Work Institute, What are the benefits? The ROI on Workplace Culture, 2015.

13 APS statistics are from the Australian Public Service Commission, 2015 Employee Census, unpublished data. Private sector benchmarks are from ORC International's Perspectives database, which was used for external benchmarking of
individual questions in the 2015 Employee Census.

14 Deloitte University, "Culture and engagement: The naked organization", Global Human Capital Trends 2015, pp. 35-39.

15 An overview of research on the benefits of orientation/induction programs can be found in: Wesson, M. & Gogus, C.I., "Shaking Hands with a Computer: An Examination of Two Methods of Organizational Newcomer Orientation", Journal of Applied Psychology,
2005, vol 90 (5), pp. 1018-1026.

16 Australian Public Service Commission, "Talent Management Toolkit: APS Nine-Box Grid", APS Talent Management Guide, 2015. Available: www.apsc.gov.au/publications-and-media/current-publications/talent-manag....