“Factors Constraining Performance; how do we overcome those constraints?”Performance Management & Agency Models In Public Sector ReformAn Approach by Jamaica Government of St Lucia Conference: “Improving Public Service Performance” Castries, St Lucia November 2 – 3 , 2009
Government departments providing services too centralised, bureaucratic & unresponsive to clients needs Government & public unhappy with inefficiency & unresponsiveness, especially with poor quality of customer services Managers had too little control over resources to ensure their departments would perform efficiently Staff poorly trained & competencies low This phase of reform was in the aftermath of financial sector collapse and FINSAC bailout programme Main problems that drove Jamaica’s reforms
Jamaica’s initiatives, rationale & benchmarks • Jamaica sought to achieve through its reforms: • Effectiveness • Efficiency • Economy • and, therefore, to achieve best performance… • Transparency and accountability • envisaged positive impacts from separating policy from operations & granting significant autonomy to managers • GOJ identified UK (Next Steps), NZ & Canadian initiatives as basis for reform • Particular interest in potential from Executive Agencies
Why establish agencies? • New course of direction in policy • Enhance efficiency & effectiveness • Isolate some forms of specific policy or regulation from ad hoc intervention by the executive Source: Rob Laking, Agencies: their benefits & risks (draft OECD paper, 2002)
GOJ’s objectives for Executive Agencies • improve service delivery to internal & external clients/consumers • reduce centralisation of control • delegate authority to managers in civil service departments or agencies • disaggregate public bureaucracies into managerially autonomous agencies • focus on performance management & measurement • staff competencies to produce the outputs determined for each agency • emphasis on outputs & outcomes, not inputs • systems & structures to enhance effective policy & service delivery (shift from process to results in control & accountability) • contract out services that private sector could run more efficiently • enhance efficiency & effectiveness of ministries for policy guidance • divest or abolish functions & services where no need or demand
What is an Agency? • Features include: • negotiated contractual agreements between principals & agents where the principal gives the agent defined amounts of autonomy – through formal delegations of authority – over resources to produce defined results • different organisational & governance arrangements to suit the circumstances • different funding sources (e.g., Consolidated Fund or revenue raising, or a mix) • An organisation under some form of government ownership where the government is principal in the relationship & the organisation is the agent
General Attributes of Executive Agencies • Clear operational responsibilities • Government controls service delivery outputs, not inputs • Accountability arrangements, especially for performance, are direct & clear & CEOs usually report directly to their portfolio Ministers • Operational can be performed separately from policy responsibilities • Should not be requirement to make surplus, especially where monopoly, but full recovery of costs where identifiable customers (i.e., where efficient) • Should define & cost outputs
What Jamaica did that resulted in the Executive Agencies • GOJ commissioned a report that led to: • enabling legislation providing for decentralised management of new Agencies (Executive Agencies Act 2001) • ministers accountable in Parliament for each Agency & its core ministry/department • legislation to override all existing statutes establishing any statutory body & set out clearly CEOs’ responsibilities • reforms aiming to achieve accountability for performance & for use & prudent management of public funds • agencies’ performance to be measurable • ministers to publish relevant Agency outputs • legislation demarcating relationships between Agencies and key Government stakeholders & defining CEOs’ autonomy • interim EAs created immediately under existing, relevant constitutional & legislative provisions • GOJ wanted legislation for clarity of roles & stability of model
Policy decision to modernise existing functions of Government Identify the best options for the future of existing functions How? First undertake the ‘prior options review’ Then complete the detailed diagnostic study (strategic review) of the core functions identified for the new Agency to decide what is needed to perform them Preparation of: Modernisation Plan Medium Term Financing Plan Framework Document Performance Agreement So, how do you get started?
Considerations in deciding option to be chosen? • Economic & allocative efficiency • Equity, justice, fairness • Security • Competitiveness & contestability • Guaranteed sustainability of service where public interest criteria, even in competitive market • Potential failure of privatised services • Transaction costs of contracting • What else?
Modernisation Plan (3 – 5 years) • Detailed plan to provide for all the needs & requirements for an existing public body to become an Executive Agency, including: • Change management • Performance & accountability definition • Human resources management & organisation structure • Financial resources management • Management Information Systems, including Information Technology & Systems (business process) • Legislative & regulatory • Physical resources
Overview of current financial position of the existing entities Expenditure forecasts for the modernisation programme (including equipment, accommodation, “rightsizing” through recruitment & replacement, accommodation) Medium Term Financing Plan (3 – 5 years)
Prepare for accountability arrangements • Framework Document • Performance Agreement • Portfolio PSs to monitor & review Executive Agencies’ performance & advise Minister but no direct contractual relationship between PS & CEO (viz., policy & operational/ service delivery functions separated)
Framework Documents Accountability for performance… • Framework agreement between Minister & Executive Agency CEO setting performance requirements & expectations between them for the Agency (including rewards & sanctions) • Governance & accountability arrangements including internal & external stakeholders • Mission, strategic objectives, key performance (& change management if any) indicators, outputs • HR, financial & support systems requirements • Provisions for review of Framework Document & for appointment of Advisory Boards
Performance Agreement • PA primary mechanism to help parties reach agreement on ingredients of CEOs’ individual performance requirements, covering personal responsibilities, assessment & evaluation & should: • be used as basis for informal mechanisms for parties to exchange information on progress; • codify the ‘one-on-one’ relationship between Minister & CEO, covering reciprocal responsibilities of each to the other; and • be prepared annually & be amended to reflect necessary & unscheduled changes in outputs
The HRM framework – structuring & improving Executive Agencies’ capability (1) • The reformers determined • strategic positioning, core businesses & performance basis • eliminate or ‘right size’ non-core activities • analysis of new Agencies’ needs for delegated authorities, resulting in: • detailed proposals for new jobs & remuneration • simplified pay classification systems • basis for performance-based remuneration (e.g., 25% contract gratuities). • CEOs & second tier managers on fixed term performance-based employment contracts • performance management & appraisal systems established • EA staff conditions of appointment simplified
The HRM framework – structuring & improving Executive Agencies’ capability (2) • Agreement with Ministry of Finance: • for EAs to have sustained supply to perform & to compensate staff commensurately & • to enable EAs to ‘vire’ funds among recurrent expenditure to reallocate when necessary • Production of generic HR Manual to guide new EAs in performance regime • Involvement of portfolio ministers & PSs directly in Agency modernisation, as well as the Unions
Jamaica’s Executive Agencies From 1999 • Registrar-General’s Department (RGD) • Office of Registrar of Companies (ORC) • Management Institute for National Development (MIND) • Administrator-General’s Department (AGD) From 2001 • National Land Agency (NLA) • National Environment & Planning Agency (NEPA) • National Works Agency (NWA) • Jamaica Information Service (JIS) • Child Development Agency (CDA) • From 2005 • Passport, Immigration & Citizenry Agency (PICA) • Forestry Department (T) • Fisheries Division (T) • Island Traffic Authority (SM)
Policy Ministries & Delegations to Permanent Secretaries/HODs • Policy Ministries Established • Ministry of Transport and Works • Ministry of National Security • Policy Ministry in Transition • Ministry of Education • Ministries with delegated HR authority • Cabinet Office • Office of the Prime Minister • Ministry of Finance and the Public Service • Ministry of Education • Ministry of Transport Works • Ministry of Foreign Affairs and Foreign Trade • Other entities with delegated HR Authority • Customs Department • Revenue Entities • Local Government Department
DELEGATED AUTHORITY TO PERMANENT SECRETARIES • Since 2000, six Ministries/PS’s have been given delegated authority for appointments to all levels below that of PS • Written Instruments of Delegation signed between the G-G (OSC) and the PS • The PS can take all HR actions – recruitment, appointment, promotion, transfer, training, discipline, separation . • There are guidelines to be followed for disciplinary procedures. • In order to have this delegation certain requirements must be met: • An HR committee must be in place – this committee provides advice and conducts certain activities • The committee is a staff committee with a mix of HR and non-HR personnel. It must have 2 union reps and usually has some key directors • The PS appoints according to a model, and chairs the committee • Prior training for PS and Directors in managing the delegation • The PSC has general oversight and conducts audits of delegated authority and produces an annual report on implementation. • The PSC hears appeals and also gives technical advice, guidance and development • The Constitution (Section 127.4) provides for the revocation of the delegation in cases of abuse.
Much improved service performance • All Executive Agencies improved service performance • Significant outcomes for community in terms of service delivery and customer satisfaction • More efficient processes • Better focus on each Agency’s mission; thus • Better value for money
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