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Leadership & Workforce Development

How well does the agency develop its workforce (including its leadership)?

How well does the agency anticipate and respond to future capability requirements?

PERFORMANCE

RATING Performance Rating: Well placed

People development activities are well aligned to Inland Revenue’s (IR’s) business strategy through the Corporate Strategy Set 2010-2014. A People Capability Strategy is part of that set. IR has also undertaken an initial assessment of its future workforce requirements, based on the capability Strategy.

This analysis broke the workforce into six segments and discussed future workforce requirements in terms of both capability and capacity. It also took account of IR’s proposed changes to the design of frontline service delivery. Frontline delivery roles (real-time inquiry, process inquiry, and compliance interaction) make up two thirds of IR’s workforce, with another three segments (administration support, internal specialists and external specialists – thought leaders), making up the remaining third.

The initial report found that IR will require a different mix of skills in the future as a result of transformational change in the nature of its business. It will need a balanced approach between developing capability in-house and external recruitment.

There is high awareness and effort put into planning for future capability requirements at both the national and business unit level. To progress this planning to the next phase requires more detail on the large change projects coming up. An update on future capability requirements is due to be considered by the senior management team in June 2011.

There is a strong commitment to staff and management learning and development, with extensive courses, good online tools and a significant staff resource. Learning and training opportunities are seen as important to staff. Improvements are being made to lift the impact of this learning and development effort, in recognition of an apparent over-reliance on training and questions over impact. These issues were raised in a comprehensive review of learning and development in 2009. Significant improvement has been made since in terms of monitoring and measuring training impact and coordinating effort across IR.

We explored how IR undertakes succession planning and whether there are appropriate plans in place for key policy and IT roles. Succession plans for critical roles were identified in structured discussions with senior managers in November 2008. These have been updated regularly.

Management of People Performance

How well does the agency encourage high performance and continuous improvement among its workforce?

How well does the agency deal with poor or inadequate performance?

PERFORMANCE

RATING Performance Rating: Well placed

IR refreshed its performance management and remuneration systems last year. The changes support IR’s future direction, and include removing formulaic pay movement processes, de-emphasising the link between training courses and remuneration, and putting more focus on the ‘line of sight’ linkage between organisational and personal staff development objectives.

As noted previously, the majority of IR’s staff are in service delivery roles. The Service Delivery Group has developed detailed service performance metrics over the past year in conjunction with Finance and Planning staff. This provides regular (weekly) performance data to the Group’s managers and is currently being further refined and developed.

The Service Delivery Group leadership would like managers and team leaders in future to have real-time performance information available at individual staff member level (as is the case in comparable private sector organisations) but this will depend on the introduction of appropriate IT tools. We consider that while IR seems already to be at the leading edge of the State sector in respect of these developments, there is much to be gained in terms of productivity improvement. We are mindful, however, that this may put further pressure on an already stretched IT infrastructure.

In addition, IR has a strong focus on continuous improvement. It has employed skilled operations managers from the private sector in the Service Delivery Group and is using Lean Six Sigma business management tools to identify where further performance, and hence productivity, improvements can be made.

These performance tools are seen not only as a way for managers and team leaders to manage their work programmes proactively but also to enable both managers and staff to ensure that jobs are well defined, with appropriate performance goals, thus potentially leading to greater job satisfaction. They will enable managers to deal better with issues of mediocre or poor performance and work with staff on the means for improvement.

Our interviews indicated that there may be pockets in the organisation where staff performance has not been well managed in past years and recent reports indicate that sick leave usage is high in comparison to other public service agencies. The existence of an ‘entitlement culture’ may be an issue here, in common with other processing operations and call centres in both the private and public sectors. IR is taking steps to explore the reasons for, and potentially to, deal with this, in consultation with the Public Service Association (PSA). It was also evident that IR’s management and leadership have been proactive in dealing with any breaches of its Code of Conduct.

engagement with Staff

How well does the agency manage its employee relations?

How well does the agency develop and maintain a diverse, highly committed and engaged workforce?

PERFORMANCE

RATING Performance Rating: Well placed

IR has been very successful in managing employee relations over the last 12 months – it is considered to be doing well in this area.

There is a high union presence with over 60% of staff being members (primarily the PSA). Employee relationships have been very well managed, with successful negotiation of three collective agreements last year, including improvements in performance management and remuneration systems, with no additional fiscal impact. IR is perceived as a role model in terms of employee relations and negotiations across the State sector.

Health and safety is well managed, with good systems and processes in place. IR is accredited with ACC, in relation to its health and safety practice.

We have not been able to make an up-to-date assessment of the extent of employee engagement. A Gallup survey has recently been completed for IR, and the results are currently being collated. A drop in employee engagement in IR’s last Gallup survey (2009) may have been the result of the considerable change processes then under way. In that survey, IR was positioned at around or just above the median compared to like public sector organisations. IR has in the past year undertaken extensive consultation with staff through a series of workshops about the future vision, mission and values for Ir and has just launched its new directional statement: ‘IR for the Future’. These workshops were led by IR’s senior management team, which will have increased its visibility to the organisation.

This fully consultative programme also included a restatement of organisational priorities and desired culture of the organisation, as well as the future key features of IR’s business. Our impression is that this programme of consultation and engagement has been well received by staff and managers. Ongoing employee engagement will be hard to maintain but IR is committed to it, and is taking a positive approach.

ORGANISATIONAL MANAGEMENT SECTION