Public Services Reform, Canada

In 2011–12, the Canadian government was forced to implement budget cuts in response to the global economic downturn. This made it necessary to reduce the size of the public administration as well.

The downsizing program followed a merit-based approach and required active participation from the Human Resources (HR) department. It was a transparent process where employees were given the opportunity to demonstrate that they possessed the necessary competencies for a particular job. Given the sensitivity of the issue, communication was key and it was essential to treat employees with dignity and respect. Affected employees were provided with options such as voluntary departure, job swapping or education and retraining allowances. Potential challenges were anticipated and dealt with appropriately. For instance, organisational priorities were realigned, and detailed information was provided to ensure effective response to adjustment issues. Resistance from employees was pre-empted by familiarizing them with the proposed changes. Interaction with media and workers’ unions helped in carrying the message further and building consensus around the issue.

Through this carefully drawn process, the government was able to reduce its workforce from 216,000 to 200,000. Canada’s experience provides us with certain lessons highlighting the importance of effective communication in change management. Engaging managers and making them aware of the details of the reform process is necessary for a smooth transition to a new system. At the same time, involving media and workers’ unions is vital to building consensus and an environment conducive to change. As a pre-requisite, the administration must have the required infrastructure and tools in place before disclosing the intent and objectives of proposed reforms. Consultations with stakeholders and parties directly or indirectly affected as a result of the proposed changes due to the reform processes is of immense importance. Establishing a ‘Community of Practice’ helped to bridge the organization–central agency gap and allowed capacity to be scaled up quickly and effectively. A merit-based approach to workforce reduction also allowed redeployment of skilled and experienced employees and infused greater efficiency in the system where roles could be assigned to the most capable staff members based on their core competencies.

Performance Framework Reform, United Kingdom

The global recession and the need to bring down public borrowing were two of the main issues for the 2010 General Elections in the United Kingdom (UK). The government that came to power advocated moving from a ‘big government’ to a ‘big society’ approach through decentralization of power. This was to be achieved through local action by equipping people with the necessary skills and tools to make a lasting difference in their communities. The administration felt it was important to reduce unnecessary red tape and bureaucratic hurdles that prevented civil society from getting involved in public service delivery. A new taskforce was set up to do this. A ‘payment by result’ framework was introduced. This led to increased competition and choice and also helped enhance democratic accountability.

UK’s experience highlights certain important lessons that should be kept in mind while introducing performance framework reform. One, political commitment and appropriate incentives are crucial for the success of reforms. Two, a strong leadership with clear vision is in a better position to provide direction and momentum to reforms. Three, cooperation between political leaders and the administration is essential. Four, planning must be long- term, forward looking and flexible enough to handle the complexities of the implementation process. Five, the culture of the organization and motivation of employees must be factored into any reform plan. When employees are motivated and empathize with the population they serve, their output is of a higher quality and solutions tend to be more innovative. Six, measurement of management performance is necessary to ensure results. Seven, the same approach cannot be applied in different contexts and appropriate changes must be made keeping in mind the culture of the country.

Promoting Budget Management, Singapore

Since 2000, the Ministry of Finance in Singapore has implemented a series of budget reforms to improve the overall management of the budget.

Singapore’s fiscal leadership approach sets quantifiable goals in fiscal management, draws up a road map for reaching there, and lays down the principles to be followed on the way and the priorities to be set. There is a focus on long term sustainability of initiatives and officials are encouraged to prepare for contingencies. The country’s fiscal policy aims at achieving a balanced budget, cushioning the economy in downturns, supporting investment through a competitive tax environment and achieving long term competitiveness through R&D and human capital investments. It also seeks to benefit the community through social transfers. Budget management relies on vertical and horizontal coordination to achieve whole of government strategic outcomes. it also helps avoid duplication of effort by multiple agencies. Accountability is essential, and departments are asked to explain in case they fail to meet pre-determined targets. When employees successfully achieve targets, they are rewarded. In fact, civil servants even receive a proportion of the country’s GDP as a bonus, to help ensure their stake in the country’s overall growth. This helps foster a spirit of oneness amongst the administration.

Flexibility is incorporated in the system through block budgeting wherein funds are allocated over a 3–5 year horizon and officials can optimize spending based on their priorities. They are allowed to save excess budget for the following years and borrow against their future allocations. Departments are also required to contribute 1% of their budgets to a common Reinvestment Fund. This fund seeks to promote innovation in dealing with priority areas of the government. Departments must submit proposals in order to get access to the money in this Fund. The contribution is supposed to help underscore the principle of common sacrifice. Since departments can collaborate with each other to form proposals, this exercise can also promote cooperation between divisions.

Long-term sustainability requires investing in basics like housing, healthcare and education. The government is also encouraged to ‘Think big’ and take risks to achieve high returns in the future. Singapore has been successful in implementing these policies on account of a stable government for the last 50 years. Going forward, the administration anticipates challenges in the form of decreasing revenue as expenditure grows steadily. Singapore’s experience makes a case for a continuous performance tracking system rather than a system with an annual review. Continuous performance tracking allows for course correction in a timely manner. The Reinvestment Fund has been able to bring innovation and efficiency into the public system. Also, preparing for contingencies in the budget makes for good planning and helps avoid unrealistic goals.

Civil Services Reform, Ghana

The Public Services Commission (PSC) of Ghana introduced the Performance Management System (PMS) to address the problem of a deteriorating appraisal system for public servants. The PMS sought to provide continuous feedback and ensure employee development.

Based on experience with performance management systems in the past, it was realized that performance cannot be measured solely on results and that employee’s effort must also be taken into account. The new system focused on accountability, transparency, equity and ownership. The aim was to establish a system wherein all employees were accountable to their superiors and evaluated on well-laid out parameters in a transparent manner. The assessment process was to be made impartial and equitable and to be completely owned by all stakeholders involved. The new approach included recognition for rewards, sanctions, trainings, as well as career development for the employees. Managers were trained in HR practices to better implement the approach. Mid-year reviews were introduced to allow people to alter behaviour in a timely way rather than waiting for their annual ratings. Details and results of the appraisal process were communicated to appraisers and employees alike.

A successful PMS must be careful about setting out clear goals for employees and aligning them with the key result areas of the institution. Sustainability of the initiative requires consensus amongst all stakeholders. Ghana set up a governance structure for PMS with representation from officials of all levels and departments. The PSC made sure that its approach was tailored to the local context and not simply replicated from global practices. Pilot tests were conducted before rolling out the new system to the entire workforce. This helped in identifying implementation issues and addressing them beforehand. The government shared the details of the reform process with the public through radio programmes and published and circulated all government statements. In the interest of transparency, civil servants were given the right to appeal in court if they felt their appraisal was unjust. In addition, the PSC was given the right to terminate employees on grounds of non-performance.

Key Takeaways

The success of reform processes depends on certain key features that are common across country experiences.

  • The requirement and feasibility of undertaking deep and wide reforms are determined by local context and organizational culture.
  • Communication plays an important role in conveying key messages across stakeholders and people adjust to changes and accept new systems.
  • The nature of reforms must be discussed with all stakeholders and consensus must be achieved. No reform can succeed unless those implementing it and affected by it are fully on board.
  • For best outcomes, the key result areas and performance linked rewards of employees should match the objectives of the organization.
  • To ensure sustainability of efforts, it is advisable for governments to identify certain basic areas where investment is non-negotiable irrespective of the party in power. Some countries like Columbia and Brazil have included such provisions in their constitutions and it is likely that more nations will follow suit in the future.