CONSULTATIVE WORSKSHOPS CONSULTATIVE WORSKSHOPS

Organisational Design Principles and Organisational Design Principles and Processes Processes

March March 20112011

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Presentation Outline

PurposeIntroduction and BackgroundLegislative Framework Triggers of Organisational Structuring Organisational Design Framework Organisational Design Principles Organisational Structuring ProcessesApproval processesRoles and ResponsibilitiesConsultation RequirementsChallengesApproaches to ensure Design and Grading consistencyConclusion

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Purpose of the Presentation

The presentation seeks to provide an understanding of:The legislative framework on organizational design and job grading.

Current challenges regarding organizational design and job grading.

Capacitate OD practitioners and decision makers in terms of the requirements, principles for organisational design and job grading.

Proposals to address inconsistencies regarding organizational design and job grading.

To obtain further inputs in strengthening the processes governing organisational design function.

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Introduction and Background

The DPSA’s support to departments with organisational review and redesign processes forms part of government’s performance agreement for service delivery:

Outcome 12: An efficient, effective and development oriented public service.

Output 3: Business processes, systems, decision rights and accountability.

Sub-output 5: Delegations and decision rights.Sub-output 7: Organisational Design. Activity 1: Review of the MPSA Directive on

changes to Organisational Structures.Activity 2: Organisational design training manual.Activity 3: Development of generic Organisational

Structures (Edu, Health, OTPs, EAs Offices and Social Dev).

Legislative Framework In terms of the Public Service Act (PSA) an executive authority has all those powers and duties necessary regarding the internal organisation of the department concerned, including its organisational structure and establishment …

The competency of EAs regarding the internal organisation of department, is exercised within the norms and standards determined by the MPSA. The MPSA gives effect to the norms and standards by issuing regulations, directives and determinations.

Public Service Regulation 1(III)B.2 provides that an EA authority shall determine the organisational structure of a department after consultation with the Minister of Public Service and Administration. A directive was issued in July 2006.

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Legislative Framework..2

In terms of the PSR the MPSA shall determine a Job Evaluation System that must be utilised in the Public Service.

The practical grading of jobs has been devolved to EA which is done using the Code Of REmuneration (CORE) as the guideline.

Prior to 1999, the creation of SMS posts was based on a uniform prescriptive norm applicable to provincial administrations (Chapter J of the pre-1999 Public Service Regulations). This approach was repealed by the commencement of amendments to the Public Service Act, 1994, and the Public Service Regulations, 1999.

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Triggers to Organisational Structuring

Splitting of departments – process as described by the Public Service Regulations (PSR). Transferring a function between departments - process as described by the PSR.Establishment and abolition of departments and government components - process as described by the PSA and PSR. Organisational structuring based on executive decision: high-level diagnosis should be conducted to inform the business case.Structuring based on amended mandate or change to the strategic: high-level diagnosis should be conducted to inform the business caseStructuring based on organisational performance improvement: high-level diagnosis to inform the business case.

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Organisational Design Framework

Government Mandate delivery vehicle is based on the Constitution and Promulgation in terms PSA.

The Design in the Public Service is informed by the following Corporate Forms:

Work Location level i.e. national/provincial/ local/ institution

Shared Services

Government Components

Agencies

State Owned Enterprises

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Organisational DesignFramework

The departmental strategy must be informed by the electoral and legal mandate of the department.

The design of the organisation structure must be paved by an understanding of the approved strategy.

An organisation structure is not an end in itself, but it is an implementing tool and a means to achieve a particular strategy and to drive improvements.

The design of the organisation structure must also be paved by an understanding of the documented business processes and service delivery model of the department.

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Organisational Design Principles

The design of the structure must consider the life cycle of the current organisation e.g. New, Developmental, Mature or Decline to be able to design.

The design should be based on the three distinct dimensions of Policy and planning, Operations and Coordination and Support to clarify the responsibilities of different performer levels.

The design should also be informed by VARICE elements for decision making - Verifying, Authorizing, Responsibility, Informing, Consulting , Executing to clarify roles and accountability issues.

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Organisational DesignPrinciples

The design should also take cognizance of the influential contextual factors and realities of the departments such as geography, technology, environment, reporting, relationships, delegations, leadership managerial skills, dependencies, workforce diversity, flexibility and mobility of staff, as well as ethical conduct and risks.

Ensure efficiency, effectiveness and economy of scale in terms of unit costs and timeliness.

Ensure durability, sustainability and flexibility of Quality of services, products or processes and how they are to be delivered

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The Role of the Structure as an Organisational System

To facilitate co-ordination of activities and to control the actions of employees, based on the following operating platforms for the design choice and elements:

Complexity - in terms of vertical, horizontal and spatial differentiation within an organisation informs the degree to which the activities can be decomposed from key to basic.

Departmentalisation - The grouping of activities by functions performed in functional units i.e. divisions/directorates informed by process flow and value chain, specific services and product lines, as well as citizen segmentation and location.

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The Role of the Structure as an Organisational System

Formalisation- the degree to which rules and procedures are utilised to standardise job boundaries and parameters.

Centralisation- where decision-making authority lies and how decision-making networks operate.

Decentalisation- where lower level manager at tiers/spheres provide input or are given discretion to make decisions which impact on local outputs and service delivery.

Differentiation- the degree to which individuals in different functional divisions vary their orientation in how they perform their functions.

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The Role of the Structure as an Organisational System

Division of Work – the degree of specialization and productivity

Matrix and integration – to incorporation dual or parallel reporting line, authority, decision-making and communication channels.

Integration- the degree to which employees can achieve unity of effort within a strong or weak matrix.

The organisational structure should be able to shape the behaviour and attitude of employees, facilitate communication and decision making, as well as people and performance management and development.

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The Role of the Structure as an Organisational System

The organisational structure clarifies: Reporting Line- indicates responsibility in terms of accountability and performance management.

Authority/Delegations - rights inherent in a position to

accept and direct work to subordinates.

Responsibility- an obligation to perform.

Chain of Command- supervisor-subordinate authority

Relationship.

Span of Control- number of subordinates that a manager can directly and efficiently and effectively manage. The reasonable span of control is 6-8.

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Organisational Design Process in the Public Service

The Process has 6 Distinct Phases Phase 1: Diagnose: Phase 2: Determine Requirements and define

the Service Delivery ModelPhase 3: DesignPhase 4: Plan for Implementation Phase 5: Implement the new structurePhase 6: Monitor and Evaluate

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Organisational Structuring Process..1Phase 1: Diagnosis

Assess the environment, organisational capacity and current business processes to identify challenges, successes.

Define the problems and identify areas of improvement.

Decide whether it is a structural or non-structural problem.

If the problem is process related, focus on improving business processes.

If the problem is only on organisational structure, and structuring is necessary, develop a business case for change.

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Organisational Structuring Process..4

Phase 2: Determine Requirements Define the organisational design process to be followed.Confirm the Service Delivery Model informed by the mandate, strategy and processes. Confirm services and products, as well as the delivery mode and location that respond to access issues.

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Organisational Structuring Process..5Phase 3: Design

Processes and value chain should inform functional configuration to ensure integration.

The functional structure should provide a feel of size, tiers, span of control and chain of command.

Capacity modeling should be conducted to determine requirements and gaps with regard to financial and physical resources.

The redesign or creation of posts should be informed by: the type and volume of work, processes, as well as the degree of complexity of the job demand and the skills type required to execute activities.

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Organisational Structuring Process..7Phase 4: Planning

Finalise the business case

Develop an implementation plan:

Risks management.

Resource requirements.

Evaluation plan.

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Organisational Structuring Process..7

Phase 5: Implementation (Step 11)Convene the implementation team (champion, HR, change drivers and content owners.Review implementation plan activities:

Managed as a project, continuous communicationsProgress reporting and change managementDeal with HR issues and risks (post follow functions and resources)Implement the structure /make adjustmentsTraining and awareness.

Monitor implementation and address challenges. Sign off and end the cycle.

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Approval Process 1…Head of the Department should ensure that relevant forums and all staff members are consulted.

Organised labour should be informed of the rationale, processes to be followed, outcomes and implications.

The review team should prepare an Organizational Review and Design Report, which includes advice from the Chief Financial Officer on financial implications in line with the MTEF baseline.

The Head of the Department must submit to the EA to support the proposal.

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Approval Process 2The EA must the submit proposal to the MPSA for consultation (concurrence).

Inputs by MPSA to EA.

Consideration by EA and final approval.

Final copies of the approved organisational structures should be submitted in both hard and electronic copy format for the purpose of updating the database to inform future consultations.

Each page must be signed by the EA to avoid unauthorized changes after approval.

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Roles and Responsibilities Executing Authority: To support the proposed changes before forwarding the consultation request to the MPSA for concurrence. The EA approves the final organisational structure, after the concurrence by the MPSA.

The Chief Financial Officer, advised by Provincial /National Treasury: To advise the project team and the EA on the available funding for the proposed changes based on the MTEF projections, through the provision of baseline allocation information.

In the case where there is a need for additional funding, advice should also include information on how proposed additional funding will be acquired.

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Roles and Responsibilities..2

Head of the Department : To champion the organisational review and change management process.

Offices of the Premier: To coordinate provincial approval processes and to ensure quality assurance on the proposed organisational structures before they are forward for consultation.

MPSA: To concur and provide inputs/advice on the proposed changes to the organisational structures of Departments.

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Roles and Responsibilities..3

The approach is to finalize all organizational design aspects at departmental level between the DPSA and the relevant department or OTP.

Only aspects that cannot be resolved between officials will be escalated for resolution between the MPSA and EAs.

Departmental Internal Audit and Risk Management Units and the Auditor-General to conduct audits, identify risks and monitor compliance with issues pertaining to the implementation of the structure i.e. to curb the practice of filling unfunded posts.

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Consultation RequirementsConsultation analysis is based on the following organisational design principles:Consultation request should be from the EA to the MPSA. If

such function is delegated, a copy of such delegation should be attached.

Complete copies of the current and proposed organisational structures to be able to track the changes.

Provide an indication that functional analysis was conducted to ensure that the functions of the department are aligned to the mandate and legal boundaries.

Ensure clear separation of the core from support functions.

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Consultation Requirements…1

The DPSA continues to monitor organisational changes of departments and provide advice and assistance to departments on proposed organisational structure changes affecting post level 9-16 and not only the top three tiers in a department.Limiting large scale organizational reviews to a single exercise during the first year of the term of government. For the rest of the term organizational design must only focus on realignment to changed mandates and strategic objectives. In-turn organizational reviews should only be focused on enabling the implementation of major policy reforms or new and amended legislation.

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Consultation Requirements…2

A copy of the strategic plan must be included as part of the submission to ensure alignment of the proposed structure to the vision and strategy of the department.

The report must include the findings of organisational capacity assessment/diagnostic that identified areas of improvement, and whether the proposed solutions / outcomes of the review have the potential to address identified challenges.

Provide an indication of the understanding of the business processes informing the operations of the department, and how the improvement thereof has been taken into account.

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Consultation Requirements..3

Outline the approved service delivery model and indicate how the configuration respond to the model.

Ensure that departmental tiers/levels considered the service delivery model, access, responsibility and accountability issues.

Organisational structures must indicate post establishment information i.e. number and designation of posts in each component, as these information informs the costing.

Avoid over-emphasis on support/corporate services functions over line/core functions, as the practice leads to the bloating of the number of corporate services posts at the expense of the core business.

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Consultation Requirements…4

If there is a need to create new posts, illustrate how the strengthening of human resource capacity is aligned to the human resource strategy of the Department.

In the case of creation of new posts, Departments should provide information with regard to the number and levels of existing funded posts (filled and vacant).

This will assist in assessing the number of new posts against the vacancies in the department and unfunded posts on the structure.

Job evaluation should be conducted before consulting with the MPSA.

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Consultation Requirements..5

Detect and deal with duplications and overlaps.

Ensuring that the configuration of HRM functions should be aligned to the HR Repositioning Model as approved by Cabinet.

Ensuring that organizational structures are aligned to sector specific generic organizational structures, where the MPSA has issued directives in this regard.

Ensuring that the nomenclatures respond to the functions to be performed by a particular unit and that the posts nomenclatures are in line with the public service prescripts to ensure uniformity.

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Consultation Requirements..6

There should be logical flow of purposes and functions to inform functional analysis decomposition.

There should be appropriate grouping and location of functions, based on functional relationship between units.

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Consultation Requirements…7

Ensure that the process to create posts considers the MTEF baseline budget process, to promote affordability by implementing organisational changes over the MTEF

The analysis focuses on how the staff establishment and budget has increased in relation to:The overall number of posts

The number SMS posts

Post differences between corporate and line functions

Current and new financial implications (cost)

If there is a need for additional funding, the department must include information on how the proposed additional funding will be acquired, and the implementation plan thereof.

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Continuous Challenges

Departments which ignores MPSA advice or implement new structures before consulting with MPSA.

Delays in finalising consultation requests due to complete information

The utilization of the organizational structures to address individual performance and administrative issues.

Creation of posts do not consider the MTEF baseline budget information, and departments approve structures consisting of lots of unfunded posts.

Using job evaluation system to evaluate people not the job.

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Continuous Challenges…1

Lack of consistency with regard to levels of similar posts in departments, designation and nomenclature of posts, inconsistencies in capacitating differences offices of Executive Authorities and Heads of Department.

Compensable worth and comparable worth of PS jobs is unknown in the absence of a uniform job grading system.

There is also a growing tendency to employ staff additional to the establishment (on contract) and out of adjustment, which contributes to a disproportionately high growth in the wage bill as these are not usually core mandate positions (permanent) and do not appear on the approved organogram.

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Continuous Challenges..2

Lack of norms and standards with regard to the provisioning and creation of funded posts on SMS level leads to over-creation of SMS posts and very little emphasis is placed on ring-fencing funds to create operational and professional positions to drive core business. (e.g. Posts at SMS levels have for instance increased from 3821 in 1999 to 8951 in 2010 and is still growing due to lack of norms and standards).

There is a lack of proper control in creating other lower level posts, as the number of funded posts below SMS level grew marginally from approximately 1,1 million to 1,3 million between 3821 in 1999 .

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Approached to Address Design and Grading Inconsistencies

A more consistent approach, based on national norms and standards, to improve control over the grading of jobs.

The development of norms for the creation of posts in the seniormanagement service, as well as corporate services, and will be applicable to both national and provincial departments. The grading of SMS jobs to be managed by the DPSA to promote consistency in the grading of similar jobs across the public service. Strengthening the role of the Offices of the Premier.

Development of standardised sector specific organisational structures that clearly define the functions of national and provincial departments in a sector.

There is a need to amend the Public Service Act and Regulations, as well as additional capacity in the DPSA.

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