- Title page
- PART 1: ANNUAL REPORT OF THE STATE SERVICES COMMISSIONER
- State Services Commissioner's Annual Report on the State Services
- Remuneration of Public Service and State sector senior personnel
- PART 2: ANNUAL REPORT OF THE STATE SERVICES COMMISSION
- Section 1: Chief Executive's overview
- Section 2: Performance
- Section 3: Further information
State Services Commissioner's Annual Report on the State Services
The global economic downturn has significantly altered the operating environment for New Zealand's State Services. Chief executives are being asked to improve frontline service delivery to New Zealanders while managing within existing or shrinking baselines. Projections from the Treasury suggest that this period of fiscal restraint will be an extended one. Agencies across the State Services will need to adopt innovative approaches for improving productivity and performance in order to continue to meet New Zealanders' expectations.
The three central agencies - the Department of the Prime Minister and Cabinet, the Treasury and the State Services Commission - have a leadership role in ensuring that the public management system responds effectively and efficiently to these challenges and that agencies and sectors are given the support and guidance they need to continue to deliver quality services to New Zealanders.
Early in the new Government's administration, chief executives worked with Ministers on line-by-line reviews of their agencies' work programmes. At the same time, the State Services Commission worked with the Government to develop a cap on the number of core government administration personnel. These initiatives were the first steps in a refocusing of the State Services as agencies adjusted to the priorities of the new Government and to the changed fiscal conditions.
Throughout 2008/2009 the State Services Commission, along with the other central agencies, has focused on four critical areas across the public management system. This focus will continue during the coming year.
1) In the way that I discharge my statutory responsibilities in negotiating conditions of employment for employees in the Public Service and the Education Service.
In workplace relations my priorities have been, and will continue to be, to provide enhanced support for Ministers, and to facilitate a coordinated approach to State sector wage bargaining to enable the Government to manage through the current economic downturn. This will include providing advice and options for Ministerial oversight and coordination of the critical negotiations, the role of central agencies in managing risk, and the role of the State Services Commission in monitoring bargaining and settlements.
2) Through pay restraint as I appoint and performance manage the Public Service chief executives, and the other chief executives about whose remuneration I have a role.
I gave an undertaking earlier this year that there would be no increase in the Public Service wage bill for chief executives. The increases shown in chief executive remuneration from the 2007/2008 Annual Report, to this 2008/2009 Annual Report, reflect decisions made in June 2008, prior to the deterioration of New Zealand's fiscal and economic situation. Any increases in remuneration for Public Service chief executives in the 2009/2010 financial year will be modest and will result from strong performance. The total salary budget for Public Service chief executives will not increase. In addition, I have conveyed to Crown entity chairs my expectation that they will take a conservative approach to Crown entity chief executive remuneration.
The Department of the Prime Minister and Cabinet, the Treasury and the State Services Commission have a role in supporting performance improvement across the State Services. By providing a single comprehensive way of looking at performance and indicators of what constitutes good performance, we can ensure a consistent approach to evaluation and identify actions necessary to improve performance. Work on the Performance Improvement Framework - an initiative to drive performance improvement across the State Services - commenced in 2008/2009.
The Performance Improvement Framework consists of four components: a comprehensive model for performance improvement at an agency, sector and system level; a cycle of formal performance assessments that identifies priority areas for action; an improved central agency approach to assessing, supporting, informing and focusing performance across the State Services; and, an analytical tool that will identify strengths and weaknesses in individual agencies, sectors and ultimately at a system level.
The Performance Improvement Framework is currently in pilot phase to test the robustness and explore the value of the framework. The pilot and its evaluation will run from June to September 2009. A decision will be made in late 2009 on a wider implementation of the Performance Improvement Framework.
This performance information will strengthen the range of other performance measures that the State Services Commission oversees, including the Kiwis Count research into New Zealanders' experience of their State Services and other research including the Human Resource Capability Survey.
One of the drivers for improved productivity and better service delivery to New Zealanders is an engaged and committed workforce. Literature based on private sector evidence overseas suggests that higher levels of employee engagement fuel performance, and also help manage costs such as those associated with staff turnover.
The State Service Commission has continued to encourage agencies to adopt a common employee engagement tool which measures the level of engagement within an agency. The results of these surveys can be used for benchmarking across the State Services, and as a guide to effecting change within each agency.
Levels of employee engagement provide some insight into the level of management capability and it is the development of leadership capability that has been a second focus of our activity around people and productivity.
There are more than 220,000 State servants. By independent assessment, we have the most corruption-free public sector in the world. Transparency International's Corruption Perceptions Index and the Gallup Worldwide Corruption Index consistently rank New Zealand first in their annual surveys. We haven't arrived at this position by accident, and we are unlikely to remain there without investing significant effort in a trusted State Services. High levels of trust in State servants by the public are critical given the significant powers that they exercise on behalf of the community.
The lead up to the general election last year and the transfer of office to the new Government meant that the State Services Commission was providing guidance to chief executives across the system about how to continue to ensure the impartiality and neutrality of the State Services. In the coming financial year the State Services Commission expects to complete the rollout of the Standards of Integrity and Conduct across the State Services.
State Services Commissioner