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Building productive public sector workplacesDecember 2010
UR PART FOUR PART FOUR PART FOUR PA
BOOSTING HRPERFORMANCE IN
THE PUBLIC SECTOR
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1Boosting HR performance in the public sector
CONTENTS
CONTENTS
Introduction 2
Overview 3
HR’s role in leading public service transformation 6
Change management and organisational development 12
Workforce planning and talent development 23
Building HR effectiveness 26
Conclusions 41
References 43
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2 Boosting HR performance in the public sector
INTRODUCTION
Public service reform is one of the main items on the
Government’s political agenda as it tries to reduce the fiscal
deficit. The scale of change set out by the Comprehensive
Spending Review is unprecedented, both in terms of
cuts to budgets and jobs but also in proposed reforms to
public service delivery. Against this backdrop, maintaining
employee morale and engagement to ensure they continue
to deliver quality service, as well as buy in to and drive new
ways of working, will be critical to whether reform succeeds
or fails.
This can only be achieved through effective leadership and
people management, careful change management and
organisational development.
HR in the public sector has been seen by successive
governments as a cost to be managed or a way of making
redundancies and not as a strategic function crucial to lasting
public service transformation.
It is no coincidence that attempts by previous administrations
to create a step-change in the quality of public servicedelivery have failed. This government cannot afford to make
the same mistakes.
The Government’s proposals to improve the autonomy and
empowerment of front-line service workers will fail if front-
line managers are not equipped with the leadership skills
to support these behaviours. The success of the Big Society
through the creation of new employee- or community-led
co-operatives, mutuals, academies or free schools to deliver
public services will depend on enhanced management
capability.
Radical plans to improve co-ordination and collaboration
between local public service providers to deliver more cost-
effective services will founder unless managers have the
ability to manage across organisational boundaries.
In the same way, the Government’s plan to transfer health
service commissioning powers from primary care trusts to GP
consortiums in the face of 45% cuts to management will hinge
on whether GPs are equipped with the leadership and people
management skills that will be so important to their new roles.
How these changes are managed and the extent to which
people feel they are consulted and have a voice will also
be fundamental to whether they understand and buy in to
new ways of working. It is HR’s role to ensure these critical
people management issues that lie at the heart of majorchange programmes are addressed. HR needs to provide the
organisational development strategies to support the business
needs of transforming public services. If policy-makers dismiss
HR as a transactional function that has no real role in engaging
with or influencing the Government’s reform agenda, they
will find that their goals are frustrated and that in four years
another government’s attempt to transform public services has
failed to achieve the ambitions it set.
This paper highlights the core role of HR in engaging with
and implementing the Government’s public service reformagenda. It also provides a series of case study vignettes on
how HR leaders in some public service organisations are
taking the initiative in driving this change.
Of course, HR itself has to be up to the job and this paper
also sets out some of the issues that public sector HR leaders
are tackling to drive up the capability of their functions.
In publishing this paper, the CIPD’s and the PPMA’s purpose is
to provide a helicopter view of some of the shared challenges
facing public sector HR leaders, CEOs and policy-makersin transforming front-line public service delivery against a
background of austerity. In future papers we will explore in
more detail some of the critical issues that are flagged here
in order to share emerging thinking and practice and support
efforts to deliver lower-cost and higher-quality public services.
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3Boosting HR performance in the public sector
OVERVIEW
October’s long-awaited Comprehensive Spending Review
(CSR) clarified the scale of the challenge public services
employers face in delivering service improvements in the face
of swingeing cuts to funding and jobs. Overall funding to
local government will reduce by 26% in real terms by 2014–
15, ‘excluding schools, fire and police’. The NHS budget
will rise by 0.1% a year in real terms until 2014–15, rising
from £104 billion to £114.4 billion. But the Department
for Health will still have to make £20 billion in efficiency
savings to fund an ageing population and costlier treatments.
Other departments, with the exception of the Departmentof Foreign and International Development, will experience
large reductions in their budgets over the next four years –
with average departmental real expenditure falling by 19%,
according to the Institute for Fiscal Studies.
CIPD Chief Economist John Philpott estimates that the scale
of the cuts, which total £81 billion over four years, will mean
that public sector job losses will reach 725,000 by 2015–16.
The CSR has added greater urgency to the public service
reform agenda already under way, because only an increasein efficiency and productivity and a radical review of what
the public sector does can offset the scale of the proposed
budget cuts across the public sector. Though there are some
differences in approach between Westminster and the
devolved governments in Scotland and Wales, the overall
thrust of reform is consistent across the UK.
At the same time as continuing to deliver valuable and in
some cases essential services, public services employers will
have to:
collaborate more effectively, with each other and with
the third and private sectors, to prevent overlap and
duplication and deliver more cost-effective services
identify more efficient ways of working and innovate
identify potential costs savings through greater use of
shared services and outsourcing
focus more effectively on meeting the changing needs of
the public through enhanced front-line autonomy
negotiate new/local terms and conditions of employment
manage and communicate change effectively, involving
the workforce through effective consultation to ensureemployee/union buy-in.
The reform agenda provides both an opportunity and a
challenge for HR. HR can build and establish its reputation
as a key strategic management function if it is at the heart
of managing change, helping to facilitate service delivery
redesign and building the necessary leadership and people
management skills for sustained service transformation to
happen. However, if HR is preoccupied by its traditional
activities such as making redundancies, pay, HR policy
compliance, TUPE transfers and hand-holding for line
managers, it will be left behind and its reputation as a mainly
transactional function will be reinforced.
What is striking about the Government’s public service
reform agenda as a whole is that it is one that depends on
a step-change in the quality of leadership and management
across the public sector if it is to succeed. For example,
proposals to support the Government’s Big Society concept
by delivering public services through community- or
employee-led co-operatives, academies and free schools will
only improve on what went before if the quality of people
management is upgraded. The CIPD report Improving People
Management finds that, despite pockets of excellence, theoverall quality of leadership and people management across
the public sector needs to improve to boost quality and
productivity levels. Simply transplanting existing public sector
management capability into new models of service delivery
will not transform service delivery. John Lewis succeeds not
just because it is based on a co-operative model but because
of the high quality of its people management.
Another key theme is the importance of local authorities and
other local public services working much more collaboratively
in partnership to identify new ways to deliver services thatmeet people’s needs, improve outcomes and deliver better
value for money. The Government looks set to build on
the progress of the Total Place initiative with the creation
of place-based budgets to create opportunities to pool
presently silo-based budgets to reduce overheads and
ensure resources are used most effectively. This place-based
approach to public services will require local authority leaders
and managers who understand how to manage across
organisational boundaries and are able to create positive
working relationships with different parts of the public sector,
including the police and the NHS.
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4 Boosting HR performance in the public sector
NHS leaders, besides having to respond to implications of
the place-based initiative, will also have to adapt to the
challenges set out by the Coalition Government’s White
Paper Equity and Excellence: Liberating the NHS . These
include the abolition of primary care trusts and the shift
of their service commissioning role to newly formed GP
consortia. These changes are being accompanied by a
demand for a 45% reduction in management costs. Again,
it is how change is managed and how well people adapt
to their new roles that will decide how well this radical
reorganisation works in practice. GPs will have to be
equipped with the necessary leadership skills, to take chargeof service commissioning, as well as the people management
skills, to work closely and productively with other key
stakeholders, including hospital doctors, in what could be
quite a fraught change process.
Just as important for the NHS as the creation of the
new GP consortia to commission services is a renewed
commitment by the Government to the quality, innovation,
productivity and prevention (QIPP) work streams as a means
of driving health service improvement. QIPP is essentially a
development of lean working and involves using employeeand patient insight to continually improve front-line services.
Research into effective lean operating consistently concludes
that enhanced supervisory skills are a prerequisite for success.
Front-line managers involved in lean systems need to develop
their consultation skills and have a participative approach
to management that embraces new ideas and supports
collaborative problem-solving.
Large parts of central government are also having to
adapt as lean operating principles are adopted across a
number of departments, raising similar question marks overwhether existing leadership and management development
programmes are adequate. In addition, central government is
adapting to become a single employer, which will have major
implications for HR capability and headcount.
The public sector as a whole faces renewed pressure to
consider using shared services or outsourcing to deliver HR
services more cost-effectively. This again places additional
emphasis on the need for public service front-line managers
to become better at managing people because HR will no
longer have the same resources to hand-hold managers onthings such as managing conflict, stress and absence, and
performance management generally.
Parts of the public sector will have to renegotiate (potentially
both nationally and locally) changes to established terms and
conditions of employment to facilitate greater efficiency and
provide more bespoke local service delivery.
How this change agenda is communicated and managed will
decide the extent to which employees and unions buy in to
new ways of working and changes to pay and pensions. HR
will need to ensure that effective internal communication
provides a clear narrative on why change is needed, as well
as providing opportunities for meaningful consultation on
proposals and options for change.
The scale of the challenge being laid down by government
to the public services may on the face of it seem quite
daunting. However, it is a transformation agenda that plays
to HR’s strengths if it chooses to use them. In many ways
the success of the Government’s ambition for sustained and
lasting improvement to front-line service delivery depends on
the involvement of HR at a strategic level because without
this, change risks being piecemeal and the key people
management components that lie at the heart of engaging
employees and bringing strategies, visions and values to lifeon the front line will be missing.
The Government itself also needs to understand its own
role in providing leadership and supporting the change
process if it wants to achieve its political objectives. The Big
Society is a compelling vision for many and there is general
political consensus about the importance of improving local
public service delivery through front-line staff empowered
to respond with agility to the changing needs of the people
they serve. However, if this public service transformation is to
happen, the Government also needs to show it understandsthe dynamics, psychology and enablers of change and
organisational performance. Effective and sustained change
will only happen in organisations where senior leaders show
a sustained commitment to building staff engagement
to ensure there is buy-in to change and new ways of
working. The Government-commissioned MacLeod review
of employee engagement identified the key elements of
leadership and people management that need to be in place
to support an engaged workforce:
Senior leaders and managers set out a clearorganisational purpose through a clear narrative that
everybody in the organisation can understand and
support.
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5Boosting HR performance in the public sector
Managers at all levels have the people management skills
to empower and engage people.
Employees have a clear voice and feel their views are
respected and matter.
There is a sense of integrity underpinned by behaviour
throughout the organisation that is consistent with its
stated values.
The employee engagement agenda provides an effective
framework for public service transformation. The
Government needs to embed these foundations for change
across the public sector by leading by example and ensuringthat public sector leaders at all levels have the necessary
capability and are given the time to deliver.
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HR’S ROLE IN LEADING PUBLIC SERVICE TRANSFORMATION
The CIPD’s Next Generation HR research project exploring the
changing nature of HR and some of the best and emerging
HR practice highlights the importance of HR leaders being
able to understand the business agenda in a deep way. This
then enables them to help the business see how critical
objectives can only truly be delivered if the people and
cultural issues are fully factored in.
For the public sector, it is the Government’s reform
programme that is leading the business agenda.
Consequently, only HR leaders that have a real understanding
of the public service reform priorities and issues are fullyequipped to be able to act as a strategic business partner in
the change process.
Speaking shortly after the election of the Coalition
Government in May 2010, David Cameron outlined his
vision of putting the Big Society at the heart of public sector
reform. He said:
We know instinctively that the state is often too
inhuman, monolithic and clumsy to tackle our deepest
social problems. We know that the best ideas come fromthe ground up, not the top down. We know that when
you give people and communities more power over their
lives, more power to come together and work together
to make life better – great things happen.
One way the Government is planning to do this is through
supporting mutuals, co-operatives, charities and social
enterprises and giving them greater involvement in the
running of public services.
Place-based public servicesThe Government is also looking to build on the potential
of the Total Place initiative, which was launched by the
Labour Government in 2009 as a key recommendation of
the Operational Efficiency Programme. The initiative is based
on the principle of putting the citizen at the heart of service
design. It can be described as a fundamentally different
approach to public service reform that puts local authorities
and their partners at the forefront of a drive to redesign
service delivery based on what people actually want and
need. This approach involves local government, the NHS,
police and other public bodies, as well as voluntary and
private sector organisations, collaborating to offer customer-
focused public services. Under the new government, the
Total Place ethos is being delivered by a number of means,
including the National Placed-Based Productivity Programme
run by Local Government Improvement and Development
(LGID).
Stephen Moir, Corporate Director for Strategy and
Democracy at Cambridgeshire County Council, which hasbeen piloting its own version of Total Place, believes HR is
ideally placed to lead the agenda.
Moir, who is also National Adviser: Organisational
Development and Transformation for LGID on the National
Placed-Based Productivity Programme, said:
The Place-Based Productivity Programme is centred
around things like organisational design, organisational
development, culture change, building new
arrangements around performance managementframeworks and creating the leadership climate for
empowered front-line service. So it’s absolutely the space
skilled HR professionals can and should be playing in.
Moir believes that the place-based service agenda has wide
workforce implications if local authorities’ role is expanded to
become a service commissioner and enabler. For example, what
are the implications in terms of the models of employment that
are in place and how to get best use of the direct, contingent
and complementary workforces within an area.
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CASE STUDY
Cambridgeshire County Council is one of the local authorities
that has been taking a lead on the place-based agenda.
Stephen Moir, Corporate Director for Strategy and
Democracy at Cambridgeshire County Council, said the
people function is taking the lead in providing co-ordination
and support for the whole Total Place programme across the
county.
Moir believes there is a real need for technical HR expertise
and input on issues such as front-line supervision and
management, as well as with terms and conditions of
employment, appraisal and performance management.
Under the Making Cambridgeshire Count initiative, the
county council is working with all the key local public
agencies, including the five district councils, the police,
the fire authority and the primary care trust, on eight
pilot projects.
This includes the Places Project, which is focusing on
how services to high-demand families in two particular
locations can be improved through improved co-
ordination and collaboration between the police, fire,
health and social services.
‘We are testing what we’re going to do differently and using
the knowledge of front-line workers to actually inform and
lead that. Essentially this is about how we can make better
use of integrating front-line resources within a place and
how we can free up front-line workers to be much more
empowered and innovative,’ said Moir.
This is illustrated well by another of Cambridgeshire’s place-
based initiatives, which is focused on improving services to
the county’s large gypsy and traveller community.
‘We brought together the key professionals involved insupporting the gypsy and traveller community and did
some process mapping. Six pages of flipchart later the
professionals that have designed these same processes
and systems were absolutely horrified at how long and
difficult it is for a member of the gypsy and traveller
community to access just one council service. It was a
wake-up call that we needed to redesign the services
around the needs of the community. There is a risk that
otherwise we build in unnecessary steps and bureaucracy
for our own needs as professionals and employers rather
than for the best outcome.’
Moir believes that the place-based approach to local
public services will only work where managers are
equipped with the necessary skills. ‘Managers will need
to be much more skilled and comfortable at managing
uncertainty and change. For me a place-based approach
is more about leadership and change management than
CIPD research emphasises the importance of line managers
having an awareness of all the potential problems of
managing across organisational boundaries. These
managers occupy prominent positions in all organisations,
but in networks they may also have responsibility for
managing workers employed by other organisations.
They must be recognised as crucially important in the
interpretation and implementation of human resource
management. In the cross-boundary context, this becomes
critical if there is to be any likelihood of achieving
consistency in operations. This requires careful selection
techniques that are capable of identifying people who are
good at managing in ambiguous situations, clear induction
programmes in the art of working across boundaries, clear
training on how to deal with systems other than one’s own
and performance management regimes that recognise and
reward their contribution to achieving a successful network.
Source: Managing People in Networked Organisations
(CIPD 2004)
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Managing across organisational boundaries
Some of the same challenges inherent in implementing the
place-based productivity agenda are also being faced by HR
practitioners working in the health service as they consider
the implications of the government White Paper Equity and
Excellence: Liberating the NHS. These include the abolition of
primary care trusts, with their service-commissioning powers
being handed over to GP consortia, at the same time as a
45% reduction in management costs. Kevin Croft, Workforce
Transformation Director for NHS North West London, believes
it is essential for HR leaders to own the wider workforce
and organisational development agenda if real service
transformation is to be achieved.
NEXT GENERATION HR
Where HR is grounded in the business and delivering
the fundamentals well, it is able to engage in higher
value-adding organisation development (OD) and talent-
related activities that speak to the critical challenges
faced by that organisation. Where HR is taking this on
to the next step by offering either insight or challengeto leaders as a matter of course, they are helping to
educate a class of business leaders who are also able to
see business as an applied HR discipline.
Source: Time for change – Towards a next generation for HR
The people management challenges facing NHS North West
London as it moves from PCT to GP service-commissioning are
wide ranging.
Croft said that, because of the way it is structured, NHS North
West London is having to reduce management costs by 67%,
rather than the 45% set by the Government. To save the
required management costs, the first step was to merge the
management teams of the eight PCTs it covers into three cluster
management teams. These management teams will continue
to commission services as an interim arrangement until the GP
consortia are able to take over.
Croft, who is also president of the Healthcare People
Management Association, is working with NHS North WestLondon’s clinical director to support the development of these
GP consortia. He said that there is a huge leadership and
development job to equip GPs with the skills to lead these new
commissioning groups.
This includes raising GPs’ awareness and understanding
about commissioning and the broader healthcare system and
understanding the interdependencies between making one
decision about a local service and how that affects another
service that they might not be thinking about at the same time.
People management skills will also be crucial. GPs will have to
make decisions about training and development of doctors
to facilitate services, which can also have significant service
implications in terms of how resources are used.
Croft said that another key area for leadership and
management concerns the relationship between GPs and
clinicians who are working in hospitals. GP commissioning willfundamentally change the relationship from one where hospital
doctors, because of their specialist knowledge, often have a
higher status in the NHS, to one where GPs have more power
because they have got the money. He added:
This is why people management skills are so important –
being able to manage difficult conversations and say to
hospital doctors ‘actually we don’t want that sort of service
for our people, we want you to do something different. You
may have been doing it for the last 20 years but we think it’s
not right and it doesn’t work.’ You can’t create these newways of working without there being uncomfortable change,
conflict and uncertainty and unless GPs are equipped with
the people management skills to have these conversations
and take people with them, what’s outlined in plans and
strategies and things won’t happen.
The move to GP-led commissioning is just one stream of public
service reform affecting the health service where HR needs to be
taking a lead.
Implementing lean working in the public sectorThe Government’s White Paper also re-emphasised the
Coalition Government’s commitment to the Quality,
Innovation, Productivity and Prevention (QIPP) initiative. QIPP is
based on lean working principles and involves using employee
and patient insight to reduce waste and continually improve
front-line services.
In August 2009, NHS Chief Executive Sir David Nicholson, in a
letter to all NHS chief executives, highlighted the importance of
every NHS leader and NHS trust in engaging and driving forward
the QIPP agenda. In particular he emphasised the need for high-quality leadership and management skills. ‘Sustainable health
systems are created when clinical leaders are empowered to bring
about transformational change supported by managers who back
good ideas, remove blockages to progress and provide support.’
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QUALITY, INNOVATION,
PRODUCTIVITY AND
PREVENTIONThere are 12 QIPP workstreams:
Safe care
Right care
Long-term conditions
Urgent care
End of life care
Back office efficiency and optimal management Procurement
Clinical support
Productive care – incorporating:
o the Productive Ward
o the Productive Mental Health Ward
o the Productive Community Service
o and Productive Operating Theatre
Medicines use and procurement
Primary care contracting and primary case commissioning
Technology and digital vision
Alice Williams, Senior Associate, NHS Institute for Innovation
and Improvement, who helps support the roll out of the
Productive care stream, said it is about delivering evidence-
based approaches to improve quality and efficiency that are
underpinned by lean principles. It involves front-line staff
being empowered to take ownership of improvements
in their operating theatres and community teams using
measurement skills and improvement cycles to look at how
processes can be changed to minimise wasted or duplicated
activity. The productive ward series relies on leadership being
devolved and shared decision-making within clinical teamsto help improve patient care on a day-to-day basis. One
example of how this approach made a tangible difference is
a reduction in the time clinical staff on wards spend handing
over between shifts from one-and-a-half hours to just 25
minutes. The Productive ward initiative has also resulted in
some ward staff reducing the time they spend travelling
between wards or to drug or stock stores by 10% after
reviewing the location of wards and stock facilities. Williams
said that because productive ward empowers and involves
staff it helps improve morale and job satisfaction and reduce
absence levels. Implementing the productive care streamshas delivered sustained improvements in direct patient
facing time, staff satisfaction and reduced levels of agency
staffing.
Dean Royles, Director of NHS Employers, said the QIPP agenda is
critical to helping the NHS achieve a £20 billion cost saving over
the course of the next four years if the service is to respond to a
typical 3% a year increase in demand for resources.
There is a prevailing view that improving quality costs
money but the principle behind QIPP is that you can
improve quality and efficiency at the same time. So if you
can improve the quality in patient care to such an extent
that the outcome is better and they don’t need to be
readmitted, you would also save money.
Royles said QIPP is not just about improving service design andprocess; it is also about ensuring that there is the right skills mix
on staffing to maximise value for money on the front line.
He believes that HR needs to be involved in supporting the
effective implementation of QIPP if it is to be sustainable. He
explained:
Service improvement is most often a professional-led
issue. For example, it is often the nurse director and the
senior nursing that will drive through change and own
it and bring in HR and finance support where needed.However, problems can arise when the individuals that
are passionate about the service improvement and have
driven the change process leave. If HR is fully involved
in the service improvement process from the outset it
can ensure that there is an enduring platform within the
organisation to take you forward into the future.
HR involvement can also ensure that management
development activities support QIPP implementation.
Croft believes that particular parts of the QIPP initiative, such asproductive care, will hinge on people management capability.
If you read the literature around things like lean, Six
Sigma Business Excellence, all of these business re-
engineering type initiatives, they’ve all stumbled on the
same issue, which is the culture and the people changes
that don’t make them sustainable. It is the leadership, the
management, the participative styles, the engagement of
the front line that makes them sustainable and it’s where
the continuous improvement comes from because people
have to wake up every day and look for ways that theycould improve on what they did yesterday. Without the
right sort of management and employee engagement
these sorts of initiatives can’t flourish.
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Croft said that NHS North West London is working with the
NHS Institute for Innovation and Improvement on just this issue.
We are exploring how we can deliver this sort of golden
triangle; being able to deliver quality, productivity and staff
engagement at the same time. The QIPP agenda is a major
opportunity for people management professionals. If HR
people are just focusing on their recruitment processes,
their disciplinary and grievance cases and their sickness
absence figures, they will miss the HR opportunity of
QIPP, which is about leadership, culture change, employee
engagement, training and development around tools andtechniques and team development.
Croft strongly believes that where HR leaders engage in this
wider organisational development agenda they will also
reduce things such as absence, stress and conflict, providing
both HR and managers at all levels with more time to focus
on adding value.
It is not just the NHS where lean working is being introduced.
Parts of central government have also been rolling out lean
working since 2008, including the Department for Work andPensions (DWP), HM Revenue & Customs (HMRC) and the
Ministry of Defence (MoD).
Martyn Craske, Lean Programme Manager for the DWP, said
lean was being implemented across the DWP following initial
pilots in 2007, which had provided evidence on the efficiencies
and improvements to customer service that could be made.
One of the challenges is to embed lean so that it becomes
self-sustaining in different parts of the DWP, such as Job
Centre Plus and the Pensions, Disability and Carers servicewithout the need of a central lean programme to drive it.
Craske believes that HR has a critical role to play in this by
helping to ensure that leaders and managers are equipped
with the key leadership and management skills needed to
embed and sustain Lean and also to design HR policies that
complement and support lean ways of working. For example,
in performance management, reward and recognition and
training, development and talent management.
He said that while lean has realised very significantefficiencies already, its full potential could only be realised
where this was supported effectively by senior, middle and
front-line managers with the necessary capability.
One of the issues for us was the basic skill set of our front-
line managers that perhaps we had taken for granted. Some
managers were not able to hold the morning meetings and
talk to their teams using the information boards, which is
part of the continuous improvement process.
Craske said some front and middle managers also struggled
with things such as sharing ideas, listening and encouraging
other people to come up with the answers.
Senior leaders also need to embrace lean principles through
how they manage to help create a culture in which lean canflourish.
Where managers – particularly middle managers – truly
‘get’ Lean, great things can happen.
Pat Davies, Senior Change Business Partner for Jobcentre Plus
and a lean champion for HR, said the civil service as a whole
is now looking to integrate lean working into management
development programmes across government so it becomes
‘part and parcel of how we do business’.
Recommendations for public sector employers:
review their management development programmes to
ensure they are equipping managers at all levels with the
skills needed to sustain new ways of working, such as
lean and managing across organisational boundaries
ensure that HR policies in the areas of reward,
performance management, learning and development
and talent management are revised to support sustained
behaviour change in implementing new ways of working.
Recommendations for government: recognise that if it wants to deliver service transformation,
a step-change in the quality of people management
across the public sector is needed – simply putting
decision-making closer to the front-line won’t improve
the quality of autonomy and decision-making by front
line staff
initiate a review of people management capability
development across the public sector in recognition of the
implications of its public service reform agenda for public
sector leaders and managers.
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CASE STUDY
Since 2007 Jobcentre Plus has undertaken a journey towards
establishing itself as a lean organisation. Lean is both a set
of behaviours and a set of techniques and by using this way
of working, lean reduces waste, engages staff and improves
efficiency. Jobcentre Plus decided that it would embark on
its lean journey by engaging its people through creating lean
capability and the introduction of development centres. The
cumulative impact of this ensures that everyone in Jobcentre
Plus adopts lean ways of working and that national processeshave the lean tools and techniques applied to them to
eliminate waste and enhance the customer experience.
Additionally, a network of lean champions from all parts of
Jobcentre Plus has been set up to share good lean practice
and resolve common issues.
Creating lean capability
Tim Carter, Head of Design and Change Management
Division in Jobcentre Plus, said:
Already Jobcentre Plus has achieved well over 100 leanexperts and 1,000 lean practitioners. This level of lean
knowledge and expertise is being used to spread lean
capability throughout Jobcentre Plus by removing waste
from processes both locally and nationally, improving
customer service and the staff working environment.
This activity is supported by a lean deployment framework,
which sets out, amongst other things, a lean learning
sequencing for senior leaders through to front-line staff,
as well as lean working benchmark figures against which
progress is measured.
Engaging its people
‘Jobcentre Plus already has well over 20,000 staff who are
applying lean and around 60,000 whose work has been
changed by lean,’ said Sue Venton, Head of Continuous
Improvement in Jobcentre Plus.
In many instances this has happened through the
introduction of layered information centres – an information
centre is a lean tool that enables visible tracking and
reporting of current performance and allows teams to
manage information daily, resulting in effective planning
and resourcing. There are also ten-minute meetings around
the information centres and this enables team members to
celebrate success, raise a concern or put forward an idea.
Venton added: ‘Jobcentre Plus has introduced an ideas
process whereby staff can raise ideas either for local
implementation or those which may have national replicable
potential. This activity ensures that another of lean’s key
characteristics – staff empowerment – is realised.’
Development centres
A network of national lean development centres has
been established across Jobcentre Plus, each focusing on
a specified customer journey, to provide lean expertiseand operational input into improving the design of
existing processes and supporting the design of new ones.
Development centres are operationally managed to ensure
front-line engagement and are supported by a management
board that is chaired by a senior operational manager. Tim
added: ‘The ideas and concerns which are the drivers for
the development centres come from staff from all levels and
usually as a result of their information centre meetings.’
The way forward
Carter said: ‘Work is now ongoing to produce a JobcentrePlus lean sustainability framework with a view to rolling it out
nationally from April 2011. This will further help senior leaders
within the organisation to sustain and embed the lean culture
within Jobcentre Plus so that it becomes business as usual.’
Lean requires enhanced levels of people management if it is
to be sustained and reach its potential.
There are new roles for both operators and managers.
Supervisors in empowered, high-performing organisations
find themselves in new roles, which include coaching
and developing teams and individuals, clarifying business
expectations and responsibilities, managing the interface
between teams and their environment, allocating resources
among teams and ensuring that continuous improvements
are occurring. All of this represents a span of responsibility
beyond that of the traditional supervisor.
Source: Juran Institute’s Six Sigma: Breakthrough and beyond
(p202)
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12 Boosting HR performance in the public sector
CHANGE MANAGEMENT AND ORGANISATIONAL DEVELOPMENT
The public sector reform agenda, highlighted by some of the
policy drivers above, is one of continuous change management
and increasingly puts the onus on public sector employers to
develop their own organisational development capacities. Crude
cost-cutting simply won’t work but will have highly damaging
results unless the focus is on designing new arrangements for
delivering public services. This will mean that staff at all levels
will need to learn new skills and behaviours. Sustainable change
in service delivery will need to be accompanied by a change in
culture if staff are to adjust successfully to new processes and
ways of working.
Sustainable change takes time to implement. Employers need to
be aware of promising more than they can deliver if they are to
avoid staff becoming frustrated and disillusioned. CIPD research
has shown that change has a negative impact on employee
attitudes and employees generally believe that change is badly
managed. This poses a significant challenge to public sector
leaders to reconcile the conflicting demands on them and chart
a course that will command the support and enthusiasm of
staff. The focus needs to shift from meeting short-term targets
to long-term outcomes.
CASE STUDYThe Royal Bournemouth and Christchurch Hospitals
NHS Foundation Trust has put staff involvement and
engagement at the heart of its approach to change
management as it looks to improve service delivery and
value for money.
The trust, which employs more than 4,500 staff working
on two sites in Bournemouth and Christchurch, is on
a drive to improve efficiency and productivity against a
backdrop of trying to make £30 million of operational
savings over the next three years.
One of the drivers of change has been the trust’s chief
executive Tony Spotswood, who is also the national lead
on the NHS’s quality, improvement, productivity and
performance (QIPP) programme on back-office efficiency
and optimal management.
The trust’s HR director, Karen Allman, said a wide-ranging
transformation programme under the heading Protecting
our future is looking at all areas of service delivery to try to
identify process improvements. This has included a focus
on service line reporting – a way of analysing operational
processes across an organisation – to identify possible
efficiencies in the delivery of clinical services.
The trust is also using diagnostic analysis to understand
how it makes best use of all its key resources, for example
its radiological equipment. Radiology has been redesigned
to maximise both efficiency and job quality.
One work stream is looking at how to improve the
medical and clinical pathways to ensure that consultants’time is used as effectively as possible.
Other work streams are focusing on how to improve
administration and clerical efficiency, and how patients and
staff access relevant health records.
Allman believes it is crucial for HR to be at the heart of
organisational change if it is to be lasting and to ensure
that staff understand and buy in to new ways of working.
HR invests a lot of time and effort in communicating andconsulting with employees and unions over change. There
are a wide range of methods used to communicate with
staff, including a core brief, which goes out once a month
and is delivered by managers. There is also a bi-monthly staff
newsletter Buzzword and a monthly ‘Ask the Exec’ session
where the chief executive and directors attend a Q&A session
with different groups of staff. In addition, there is a weekly
email from the chief executive’s office. Staff can also access
all the communications on the intranet.
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13Boosting HR performance in the public sector
The CIPD’s new tool Approaches to Change: Building capability
and confidence suggests practitioners clarify the rather vague
concept of organisational change by thinking about it in terms
of two things: rate of change and scope of change.
Rate of change
The rate of change can be continuous – for example,
increasing motivation, engagement in the workforce or
addressing the ongoing need to become more efficient and
effective. Or the rate of change can be intermittent – a project
that addresses a current major problem or opportunity such as
solving a quality issue or introducing a new product line.
Scope of change
The scope of change can be organisation-wide or business
unit or team change that is radical and transformational
involving new knowledge or technologies and processes. This
might include at organisational level, a major restructuring
and reshaping that dismantles an organisation’s structure and
culture, for example from the traditional top–down, hierarchical
structure to a collaborative structure with self-directing teams.
Alternatively, the scope can be about increments or adaptations
to existing knowledge, processes and technologies atorganisation-wide, business unit or team level.
In many cases there will be overlaps between these different
types of change. In one of the case studies for the CIPD’s
change management tool, the HR manager at AkzoNobel
commented:
What we’ve noticed is that a radical change is followed
by a period of continuous change that builds on the
radical. We are currently looking at ways to make
incremental, continuous change for the organisation.For example, every time someone leaves we ask if it’s
necessary to fill the role. Can work be done differently?
Can someone be developed into the role?
Public sector employers are faced with a similar challenge,
with the change needed a combination of both continuous
and radical change in order to transform all parts of
the organisation, as well as intermittent change to
incrementally make adaptations across the organisation to
improve service delivery.
How this degree of change is managed will decide the extent
to which efficiencies and improvements to organisational
effectiveness are made. Research by Said Business School for the
CIPD suggests that a majority of reorganisations fail to deliver
significant improvements in performance. About a third ofreorganisations fail to generate any improvements in financial
and competitive success measures.
Leadership is also of course central to effective change.
According to the CIPD Approaches to Change tool, leaders must
be able to make a powerful and persuasive case for change and
then act as a role model and help drive change.
Central to sustainable change is also creating a situation
where people feel they can contribute positively to the change
and can have some involvement in the process. The CIPD’s Approaches to Change tool highlights the importance of
involving employees affected by change on an ongoing basis
and emphasises the need to ensure people are fully aware of
the case for change and understand it. It also cites the value of
ensuring people’s psychological and emotional responses are
considered and addressed as change progresses.
Finally, change programmes need to be monitored closely to
ensure they remain on track or identify where they need to be
fine-tuned. Often the nature of change means that what is
originally planned has to adapt to external or internal pressuresor developments.
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14 Boosting HR performance in the public sector
CASE STUDYJobcentre Plus (JCP) has created the role of HR change
business partner to ensure that the people management
aspects of all cross-organisation projects are fully considered.
Pat Davies, Senior HR Change Business Partner for
Jobcentre Plus, said her role ensures that issues such as
workforce planning, employee relations, learning and
development and TUPE are fully considered when change
is being implemented.
She ensures that HR milestones are factored into project
management plans and that the people management
issues are included in the risk register.
One project she is working on is helping to support the
development of JCP’s personal advisers to enable them to
provide a more personalised service for customers who
find it more difficult to get back to work. The project
is closely aligned with the Government’s wider welfare
reform agenda.
It is about treating everyone as an individual. Really
listening to people and finding out what are the individual
barriers that prevent them from getting a job. Are people
receiving the support and training they need and how can
we work together to ensure that they do?
In order to deliver cost-effective training for JCP personal
advisers, the organisation is developing an ‘endorsed
learning’ offer.
NVQs can be expensive and we cannot afford them
for everyone. As an alternative we are working with
an awarding body to endorse our own personaladviser learning. This will be supported by a personal
adviser online learning centre to provide ongoing
support. What we want to do is to have the awarding
body endorse the PA learning centre and our own
internal learning against their standards and then use
the line managers’ role as coaches and in providing
quality assurance to sign off competence.
This approach enables us to develop our advisers to
provide a more bespoke and personal ised service
for customers and at the same time develop thecoaching and performance management skills of
our managers.
It is clear from our research that many HR departments in the
public sector have gone well beyond their traditional comfort
zone and are leading the drive for greater effectiveness and
efficiency across their organisations. Building on their experience
of managing relations with internal stakeholders, they are
engaging with clients and suppliers and making change happen.
HR departments are also the natural home for the whole processof managing change and authorities are making increasingly
effective use of their in-house OD skills. Transforming the
HR function has been the springboard in many instances for
transforming the organisation.
Essex County Council and Kingston Borough Council are good
examples of local authorities where HR is helping to bend
and shape broader organisational change (see case studies on
pages 15 and 16).
HR is also central to the debate about whether long-termefficiencies can best be sought through greater use of ‘shared
services’ such as HR between different councils or whether a
more effective solution is to be found through outsourcing.
We found examples of both. However, it is evident from our
discussions that neither offers a panacea or a ‘one size fits all’
solution to the need to make radical cost savings within support
functions. We explore these issues in more detail under the
heading Building HR effectiveness.
Recommendations for public sector employers: Develop organisational development and change management
skills to help senior managers respond to pressures for
dramatic improvements in efficiency and effectiveness.
Consider how to help lead a radical transformation of the
model for delivering customer services in partnership with
external organisations.
Consider carefully the pros and cons when choosing
between sharing back-office services between different
public employers and outsourcing to a commercial supplier.
A wide range of factors will need to be taken into account,
including the extent to which there are genuine economiesof scale to be made from sharing services between different
organisations (see Building HR effectiveness).
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15Boosting HR performance in the public sector
Ensure legal and employee relations issues are considered
carefully in moving to new models of service delivery –
applying a purchaser/supplier model to local government
may mean transferring large numbers of employees
across organisational boundaries and setting up new
trading bodies. This is likely to have longer-term
implications for employees’ terms and conditions, and
in the short term represents a significant management
challenge in ensuring that legal and employee relations
issues are dealt with.
CASE STUDY
Essex County Council is a large employer: in addition to
its 10,000 employees, the HR function provides support
to schools employing a further 30,000. The council wants
to be at the leading edge of HR practice, anticipating
and supporting broader organisation change. To meet
a perceived capability gap in the local authority sector,
they have recruited HR talent from outside, including
the financial services sector, as well as developing their
in-house talent, to build internal consultancy skills and
support OD and change management activity.
Faced with the need to make major financial savings,
the council has embarked on a radical process of service
transformation. This means a new target operating
model and the authority becoming almost purely a
commissioning, rather than delivery, organisation. The HR
function was asked to lead the transformation process
for the whole organisation, giving a powerful signal to
the organisation that people matter. This was within a
‘shrinking envelope’ as posts were taken out of the HR
function: Essex now has a ratio of slightly more than one
HR person to every 100 employees .
The new operating model has meant that service clients in
the area of employment and inclusion are now customers
of a trading company that operates in practice as a
separate commercial entity. Some 750 council employees
have been shifted across into the company. The trade
unions were impressed by the way in which this major
TUPE transfer was handled. Converting library services
into a trading company is currently under discussion.
Essex is working collaboratively with other public sectorproviders and voluntary services to deliver service reform.
This involves working with a number of agencies to put
together customer contact channels that are currently
managed by different bodies as far as possible into anew combined ‘front end’, with the aim of producing
savings of £300 million over five years. One example is
the partnership agenda with the local mental health trust.
Some 200 staff are currently seconded to the trust but
there are issues with remote management; to resolve
them Essex is intending to transfer the staff involved into
the trust. There are also further opportunities to integrate
services with local primary healthcare trusts or with GPs in
a new commissioning role.
Other examples of the HR contribution to producingsignificant financial savings include the use of higher
OD and change management skills to reconfigure the
management overhead, saving some £19 million. There
is a targeted further saving of £20 million to be got from
‘new ways of working’, looking at business processes,
technology and releasing office space. There is a drive
to keep costs down by negotiating tighter prices with
suppliers, getting the costs of temporary workers under
closer control and planning future staffing needs so as to
make better use of internal staff. Adopting best practice
on employee engagement from the commercial sectorhas produced an extraordinary turnaround in engagement
levels, which have risen to more than 70% in challenging
times.
Essex has placed all of its HR transactional activities into a
shared service unit. Back-office functions including HR are
being joined up and shared across the organisation and
the council is open to suggestions for partnership with
other local authorities that may wish to use these shared
services. It is not, however, obvious that there are major
advantages of scale to be gained by joining up back-officeservices with other organisations and outside providers
might in many cases offer a more cost-effective solution.
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CASE STUDY
In 2009, Kingston Borough Council (KBC) embarked on
a four-year plan, ‘One Council, One Kingston’. Some £14
million of savings are required, to be achieved by ‘doing
less but better’. The aim is to plan, conceive and deliver
services as a single council, in combination with partners.
The approach has been designed ‘to deliver our vision
and make people’s experience of our services as easy and
positive as possible by acting as one council’. Essentially
this means looking at service delivery from the customer’sperspective and eliminating unnecessary duplication –
adopting ‘one way of doing things, and doing things once’.
Projects within the ‘One Council’ programme include:
‘Customer first’ – looking at all staff who have
customer contact with the aim of minimising
unnecessary staff contacts, dealing with queries
straight away and exploiting use of the Internet, for
example for paying and booking online. A separate
project will increase investment in ICT and reducestaff over the period of the programme.
‘Community hubs’ – bringing together local clusters
of services that could be provided by the council,
health, voluntary organisations and other partners.
‘Commissioning’ – aims at ‘right sourcing’ rather
than outsourcing, and getting best value from
procurement.
‘Organisational dynamic’ – recognises that getting
structures right is not enough. Human Resources
Manager Marie Gadsden says the key is ‘making the
organisation culture work, getting the right peoplein place and getting the right behaviours’. Staff
workshops have identified the characteristics of a
‘gold medal winning’ OD function, to be achieved
by 2012.
There are £7 million of savings needed to be achieved in
the current year and some 200 staff jobs are on the line.
Despite the financial situation, staff attitudes have not been
badly affected and there is an active programme of staff
engagement. Change ‘champions’ have been appointed
and younger staff are being asked for their ideas.
The ‘Programme Management Office’ project is the
transformation team. This includes external partners such as
the CEO of Kingston PCT. However, the NHS has different
finance, structures and governance and there is no prospectof a full-blooded merger. KBC is talking to adjacent councils
Sutton and Merton about possibly linking HR/payroll
systems with a joint partner, and other functional areas may
also be included in the discussion. Many questions currently
remain to be answered, including whether establishing
closer links will save money, but Marie is confident that
‘over time we can do it’.
Leadership and management are a major focus of attention.
A ‘Strategic Leadership’ project aims to improve the way
the top team operates. A ‘One Council Manager’ project islooking at what a manager is at Kingston. A leadership and
management framework has been developed and training is
in hand. The aim is to get more consistency in defining who
‘line’ managers are, reducing their number and limiting the
title to those with significant spans of control.
HR is heavily involved in all the projects: there is an HR
business partner on every project team. KBC is now using
business partners successfully, not just in HR but also in, for
example, finance. HR business partners at Kingston could be
seen as ‘organic mechanics’, with a flexible remit to improveorganisation structures and behaviour. Business process
reviews are being undertaken with an external consultant,
using customer surveys to map processes and eliminate
overlapping activities between departments.
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Managing the employment relationship
If HR is to play its part in steering the public sector through
the tough months and years ahead and in managing and
implementing change, it will need to focus closely on the
effectiveness of employee communication and engagement
and see it as a key lever in winning support for change. The
public sector reform agenda will mean large parts of the
public sector workforce will have to adapt to very different
ways of working, as well as to significant changes in how
they are rewarded.
Trade unions understand that successful communications
start from the creation of a persuasive narrative about what
is going on. Private sector employers have been catching
up fast, and public sector employers who fail to follow suit
will risk losing the game. The involvement of the senior
management team in creating and sustaining a narrative on
the case for change is vital.
Employers in the public sector have particular problems to
deal with due to the political context. Messages about public
sector jobs, pay and pensions will be seen in the context ofthe need to make cuts in public spending, and are in any
case likely to be targeted more at the general public than
at public sector employees. But employers need to take
responsibility for getting messages to their own workforce,
emphasising themes such as the need for comparability
between the private and public sectors, and the risk of
damaging the recovery if borrowing is not brought down.
Public sector employers need to build a new psychological
contract emphasising the wider value and benefits in
working for the public services that still exist despite the
pressures being placed on the sector.
Key themes from a recent CIPD report, Harnessing the Power
of Employee Communication, include:
the need to create a shared sense of purpose
senior leaders need to own the message
line managers need to give consistent support.
HR needs to work with other functions, including internal
communications, to see that messages are delivered
effectively. They also need to work with the seniormanagement team on developing the message, since it has
to be their message that is being delivered. A wide range
of media are available to reinforce the message but at least as
much effort needs to be put into getting the message right
and ensuring that it will resonate with staff as into techniques
for putting it across to employees. Meaningful consultation
with employees can also be crucial to securing their buy-in. This
means genuinely giving employees an opportunity to input their
views and have those views considered before decisions are
made. A cosmetic consultation exercise will alienate staff and
damage trust in senior management.
In creating a new psychological contract, HR needs to emphasise
the critical role of mutual trust and respect if communication is to
be effective. Messages that get across have to be believable, andthis underlines the importance of authenticity (see box).
From employee engagement to organisation
authenticity
The great work that many organisations are doing to
create engaged employees is being taken to the next level
based on two linked propositions.
The first is that trust needs to be deepened to
unprecedented levels and this will create a much deeperlevel of emotional loyalty. The creation of talk-straight,
transparent and dialogue-centred cultures is being given
real priority. The building of adult cultures, leaving behind
the paternalism of the past, is seen as a driver of short-
term effectiveness and long-term loyalty.
This is about helping people develop trust in what the
organisation stands for as well as a day-to-day experience
that reinforces this in numerous ways. It appears that
this ability to truly ‘tell it as it is’, without fear, enables
organisations to go beyond the rhetoric of espousedvalues to learning how to live them in the heat of battle.
Source: Time for Change – Towards a Next Generation
for HR (CIPD 2010).
Top management has a key role in setting a culture in which
communications are credible and believed. This is about
openness and consistency and sorting out relationships across
the organisation, as well as top management visibility. Public
differences of opinion within the top team, or between differentlayers of the management hierarchy, can damage the credibility
of the message.
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Managing the relationship with trade unions is generally in
the hands of specialist employee relations staff. Any skills
gaps in this area may need to be addressed by coaching or
external training. Establishing successful partnership relations
with unions on both a local as well as a national level is likely
to become even more important. Public sector employers
are likely to receive encouragement from the Government
to push for greater local autonomy and renegotiate terms
and conditions of employment where necessary to cuts
costs and provide more bespoke local service delivery. The
Government’s White Paper Equity and Excellence: Liberating
the NHS states that in future all healthcare employers ‘willhave the right, as foundation trusts have now, to determine
pay for their own staff’. Local government employers can
already negotiate pay at a local level if they have opted out
of national pay bargaining.
The CIPD (2010) policy paper Transforming Public Sector Pay
and Pensions concludes there needs to be a shift in emphasis
from pay structures to pay progression and from the value
assigned to a job and its pay to one that better recognises
the achievement of the person in that job, if service delivery
is to be improved.
Dean Royles, Director of NHS Employers, agreed that healthcare
employers will increasingly have to start to make local
agreements with trade unions to manage employment costs
more effectively.
I think what you will increasingly see is employers
starting to work with local trade unions to identify a
consensus about ways that pay costs can be brought
down and productivity increased.
One area that many NHS employers are looking at is the
incremental pay increases that NHS workers receive each yearuntil they reach the top of their pay band, regardless of any
NHS-wide pay freeze.
There are examples of NHS trusts that have linked incremental
pay increases to levels of sickness or to whether individuals have
completed their mandatory training.
Stephen Moir, Corporate Director for Strategy and Democracy
at Cambridgeshire County Council, believes the scale of the
change will place a renewed emphasis on public sector HR
professionals being equipped with negotiating skills to helpmanage the relationship with the unions and, wherever possible,
build partnership and consensus or manage any tensions.
CASE STUDYKaren Allman, HR Director at the Royal Bournemouth and
Christchurch Hospitals NHS Foundation Trust, said that
traditionally the relationship with the unions has been a
positive one, with the trust’s quarterly partnership forumworking well. This is supported by a monthly sub-group
meeting that is used to review and change policies.
She cited the recent example of the introduction of electronic
rostering for nursing staff. The Royal College of Nursing
representatives have helped support the change and sent
out guidance making it clear that some people might have
to compromise on some of their traditional informally agreed
working patterns.
The only example of a recent dispute was over plans bythe trust to retain its flexible working allowance, which
was a payment for people working anti-social hours. The
trust wanted to retain the allowance because it was much
less bureaucratic than the national system under Agenda
for Change. Despite agreement with local officials,
national union representatives ultimately prevented the
allowance being retained. ‘They saw it as the thin edgeof the wedge and thought we would start to think about
moving away from the national pay system, which we
had no intention of doing.’ However, Allman believes
that foundation trusts should have much more flexibility
to negotiate terms locally. She cites the example of the
annual pay increment NHS staff receive under Agenda
for Change, which means that regardless of the national
pay freeze, staff get an annual 2.5% to 3% pay increase
until they reach the top of their pay band. In addition, she
believes that there should be much greater flexibility over
what staff earn when they are off duty but ‘on call’ incase of emergency that takes into account their likelihood
to be called out.
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Integral to the employment relationship is the extent to
which employees feel valued and engaged. Where public
sector employers focus on building the drivers of employee
engagement they will also support positive employee
relations.
The MacLeod review of employee engagement identified four
core drivers of engagement as:
senior leaders and managers setting out a clear
organisational purpose through a narrative that
everybody in the organisation can understand andsupport
managers at all levels having the people management
skills to empower and engage people
employees having a clear voice and feeling their views are
respected and matter
a sense of integrity underpinned by behaviour throughout
the organisation that is consistent with its stated values.
This framework for engagement is also one that supports
effective change management and restructuring and can help
people feel they are agents of change, rather than victims ofchange. A focus on supporting the key drivers of employee
engagement can also help maintain morale and ensure that
essential service delivery does not suffer during periods of
change and uncertainty.
The CIPD’s 2010 HR Outlook survey shows that the
public sector was the only one not to include employee
engagement within its top three HR priorities for the
coming 12 months. The survey reveals that the focus for
respondents in the public sector is an understandable
one on ‘process-oriented’ areas such as restructuring theorganisation and strategically planning the workforce.
However, at a time when the public sector is facing huge
pressure in terms of budget and headcount reduction, it is
important that employee engagement is also regarded as
a priority. Without such a focus the impact of pay freezes,
reductions in pension entitlement as well as job losses is
likely to undermine employee well-being, motivation and
commitment, which will have a knock-on effect on the
quality of service delivery.
HM Revenue & Customs has analysed its employee survey
to establish the different levels of engagement in the
organisation and has segmented its workforce into five main
categories of engagement, recognising that a sophisticated
understanding of the drivers and obstacles of employee
engagement is key to developing a coherent employee
engagement strategy (see case study on page 21). In the
private sector, Tesco has pioneered a similar approach.
Crucial to employee engagement is fairness, trust and an
adult-to-adult relationship between employer and employee.
Peter Barnard, registrar at Grimsby Institute of Further and
Higher Education from 2001 to September 2010, thinks
employee engagement can only flourish in an environment
where performance is managed effectively and consistently
(see box).
Barnard said the institute places a lot of emphasis on
developing the capability of its managers at all levels across theorganisation to ensure performance is managed consistently.
It has tackled the issue of teacher and lecturer performance
through frequent observations for less experienced or
underperforming staff. He said:
Over time we’ve become more and more prepared
to conduct observations at short notice. It used to
be you received about four or five months’ notice;
however, we now reserve the right to walk in, and do.
Managers can go in to the classroom at any time and
certainly for new staff we would expect managers tobe going in on a regular basis. Of course, no one likes
being observed and we put a lot of effort into getting
it right so people are more likely to see it as a positive
process which is about helping them improve and fulfil
their potential rather than as someone always peering
over their shoulder.
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Recommendations for public sector employers: Recommendations for government:
Engage in honest, open and frequent dialogue with Promote and support the recommendations from the
employees about organisational change. MacLeod review of employee engagement across the public
Focus on identifying and supporting the drivers of employee sector as part of the drive to make efficiencies and improve
engagement across the workforce. front-line effectiveness.
Improve performance management capability of managers to
help employees reach their potential and deal with under-
performance consistently where it occurs.
Develop negotiating skills to help manage the relationship
with the trade unions and wherever possible build
partnership and consensus or manage any tensions.
CASE STUDY
Grimsby Institute of Further and Higher Education has
reduced employee absence levels through a twin-track
approach of investing in the people management capability
of managers and also by taking a fairly prescriptive approachto managing absence.
Since 2001 the institute has developed and implemented a
health and well-being strategy. The strategy is underpinned
by extensive communication with staff to ensure they have
clear expectations of what approach the institute adopts –
which is a caring one, balanced with the business need for
people to be at work.
Peter Barnard, registrar at the institute between 2001 and
September 2010, said the college invests in the managementcapability of its managers to ensure they can motivate,
develop and support their people; however, it also has a clear
HR policy framework that supports attendance.
It’s our job as HR to equip managers through systems,
training, information, advice, and support so they do
the job they are actually paid to do, which is to manage
people. However, people working here also know that
we will actively manage absence. For example, we don’t
pay people who go off sick while we are disciplining
them. This starts with the investigatory interview stageand covers all subsequent stages, including if someone
goes off sick after receiving a penalty.
Before introducing the policy Barnard consulted with
managers about how the existing policy had been working,
as well as the unions. ‘Although the sick pay policy was not
contractual, we did give three months’ notice of the change.
The unions made some useful comments about taking
account of disability issues, which we embedded.’
The institute has won several significant national awards
for its work on health and well-being, including the Orange
National Business Awards for Health, Work & Well-being,
and a Business in the Community Big Tick award for its
holistic approach to managing absence. This includes a
proactive health and well-being team (HR, health and safety,
occupational health and a physiotherapist), which ensures
early intervention and support for staff.
In 2009, 46% of staff had 100% attendance, showing thatthe investment in management capability and the health
and well-being of staff had brought about clear business
benefits, not least driving up the quality of the learners’
experience since their lecturers and other staff are more
likely to be at work.
Sickness absence levels have reduced from 10,000 working
days lost (for 1,000 staff) in 2001 to 4,266 working days
lost (for 1,300 staff) in 2007, with absence levels since then
remaining constant at less than 3.5 days per employee per
year, compared with a national average for the educationsector of 6.2 days per employee per year according to the
CIPD 2010 Absence Management survey .
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CASE STUDY
HM Revenue & Customs (HMRC) was formed in 2005,
following the merger of Inland Revenue and HM Customs
and Excise Departments. As part of a strategy to improve
its efficiency by 5% year on year to 2011, it has made
significant reductions in staff numbers and currently employs
the equivalent of 68,000 full-time people.
Employee engagement surveys have shown a continuing
need to motivate and engage HMRC staff. At the end of2009, the department began developing an employee
engagement strategy and recognised the need to include
colleague segmentation to support the communication
and embedding of a wider customer-centred business
strategy. Focus groups and one-to-one interviews were
held with staff at different levels and almost 6,000 people,
in all grades and from a range of locations across the
UK, completed an online survey. Drawing on the survey
findings the results were used to establish what staff
attitudes and motivations really were and provide a deep
level of insight into the drivers of colleague engagement.
It emerged that initial assumptions that employee
engagement levels might be adequately reflected, by
aggregated scores on motivation or desire to stay in the
organisation, were incorrect. Measuring engagement by
people’s alignment with organisational objectives, or their
willingness to ‘go the extra mile’, failed to do justice to the
range of factors that influenced their behaviour. What was
needed was to look beyond the results for the workforce
as a whole and focus on the attitudes and motivation of
individual employees.
The research was undertaken jointly by the HR department
and behavioural, evidence and insight team in the individual
customer directorate with experience of working on the
HMRC customer segmentation. It demonstrated that
employees identified, not so much with HMRC, but with
their team or work group. Many were committed public
servants, enjoyed their work and took pride in what they did,
but others were angry and frustrated by the way their work
was organised.
There are many approaches to segmentation, but by basing
the segmentation on the core dimensions of passion
and engagement, researchers were able to segment the
workforce into five coherent, relevant and mutually exclusive
groups united in their attitudes:
committed enthusiasts (high engagement/high
passion)
frustrated enthusiasts
dependable contributors
quiet advocates
disconnected (low engagement/low passion).
All of the segments have clear demographic characteristics
such as grade, location, directorate or length of service.
HMRC believe they are the only government department
that has so far adopted this segmentation approach to
explore employee engagement. Many departments use a
linear segmentation model but in the current challenging
climate it is not realistic to expect to drive people up the
segments from highly disengaged to highly engaged.
HMRC’s model provides much more granularity.
The five colleague engagement segments developed by
HMRC are distinct, unique and mutually exclusive and
encourage managers/leaders to take a bespoke approach to
employee engagement.
The segment portraits, which have been developed, offer an
explanation of what gets each ‘out of bed in the morning’,
their differing motivations and how they feel about working
at HMRC.
The segments are portrayed objectively with a view tohighlighting key differences between the segments in
a positive manner as distinguished by their differing
motivations and behavioural drivers.
The results mean that the HR department can help line
managers to take a more tailored approach and focus their
efforts where they will be most effective. It may for example
be more useful to work with the one staff member in five
who is a ‘frustrated enthusiast’ rather than with ‘dependable
contributors’ since, although across the organisation as a
whole there are more of the latter, the former are more vocaland likely to bring other staff with them. To get messages
(continued)
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CASE STUDY (CONTINUED)
across to different members of their team, line managers
may need to use different language and be more
thoughtful about how to communicate. HR Director
Dorothy Brown says:
We wanted to know what got our people out of
bed in the morning, wanting to come to work.
The findings showed that, although many have
enthusiasm or passion for their work, in some cases
this is being overshadowed by negative feelings. Our job now is to help managers channel this passion into
more productive attitudes and behaviour.
Another major plank in HMRC’s developing employee
engagement strategy is its employer brand, work on which is
due to be completed shortly. Dorothy says:
It’s a lot about reputation and how we position ourselves
as an employer – not so much what we say in recruiting
but how we talk to our staff. The core of our employer
brand is our employment value or career pro