Boosting HR Performance in the Public Sector

8/9/2019 Boosting HR Performance in the Public Sector

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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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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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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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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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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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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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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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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)


23/45


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

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