Review of the Senior Executive Service · Commission engaged Mr Roger Beale AO to take a closer...

Review of the Senior Executive Service Report to the Special Minister of State for the Public Service and Integrity

February 2011

Acknowledgments

In preparing this report I have had a great deal of help from a very able team at the Australian Public Service Commission. While they have offered valuable advice, and carried out considerable research at my request, PwC retain responsibility for the final Report.

Carmel McGregor, Deputy Public Service Commissioner, has worked with me very closely and has been a very valued member of the Reference Group of Band 3 officers who acted as a sounding board in the preparation of the report and the conduct of the audit.

The APSC’s support team was ably led by Patrick Sedgley, and Penny Weir, Debbie Phillips, Robyn Clark, Chris Oates and Kim Moran all contributed materially to the preparation of report.

I would also like to thank the members of the Reference Group (see Appendix A), all the officers who participated in the classification audit which tested the proposed Work Level Standards and Mercer (Australia) who carried out the audit and provided advice on the Work Level Standards.

Finally I have received wise counsel from the Public Service Commissioner, Mr Steve Sedgwick and helpful comments from the Secretaries’ Board under the leadership of Mr Terry Moran AO, Secretary of the Department of Prime Minister and Cabinet.

Roger Beale AO Principal PwC

Contents

Foreword by the Public Service Commissioner

1 Executive Summary 6

2 Summary of Recommendations 12

3 Introduction 14

4 The SES 16

5 Growth of the SES 20

6 Causes of SES Growth 32

7 Agency Classification Management Practices 44

8 An assessment of roles against SES work level standards 50

Conclusions 569 A SES review reference group B SES Review 2010 – APS Agency Participation C History of the SES 64

APS Senior Executive Service Work Level Standards D Australian Public Service Commission – Work Level Standards E

Report to the Special Minister of State for the Public Service and Integrity 3

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Foreword by the Public Service Commissioner

The review of the SES is one of 28 projects based on the recommendations of Ahead of the Game: Blueprint for the Reform of Australian Government Administration (the APS Reform Blueprint), which was released in March 2010. Prepared by an Advisory Group chaired by the Secretary of the Department of the Prime Minister and Cabinet, Mr Terry Moran, the APS Reform Blueprint provided a comprehensive assessment of the forces shaping the Australian Public Service (APS) and the challenges that it faces in meeting them.

In implementing recommendation 6.2, to review the size and growth of the Senior Executive Service (SES), the Australian Public Service Commission engaged Mr Roger Beale AO to take a closer look at factors driving recent high growth in the SES and the management of SES classifications, working with Commission staff and Mercer (Australia).

The flexible deployment of the SES both within agencies and across the APS to meet policy and operational challenges is critical to the efficient and effective implementation of government priorities. Mr Beale’s report provides a strong evidence base and clear recommendations to the Government on how the size of the SES and its classification profile might be managed more effectively, in line with the APS Reform Blueprint’s emphasis on the value of more active management of the APS as a consolidated entity, or as ‘one APS’.

Steve Sedgwick Public Service Commissioner


1 Executive Summary

Introduction The landscape has changed significantly since the creation of the Senior Executive Service (SES) in 1984. With more than 20 years of reformist governments the Australian Public Service (APS) has undergone a major rethinking of its role and the way it carries out the task of public service.

The eighties and nineties saw a progressive emphasis on the accountability of Secretaries and SES staff for the timely, efficient and ethical delivery of outcomes that reflect Government priorities. As a corollary, Secretaries were given much greater flexibility in the way in which they marshaled their financial and staff resources – if they were to be accountable they needed to have to hand all the tools required to deliver outcomes. This included progressively greater departmental level control over SES numbers and classifications.

The recent rapid growth in the SES and the growth within the SES in the number of the most senior staff have led to questions about whether controls on SES numbers and classification levels would help constrain costs and maintain equity at little damage to the public good.

This review examines:

• the rate, geographic location and causes of workforce growth

• the likelihood of classification creep and

• the role of the SES in current classification structures including the development of Work Level Standards for each level of the APS

and makes findings and recommendations in relation to these matters.

6 Review of the Senior Executive Service

SES growth and the reasons for growth The SES did not significantly expand between its establishment in 1984 and 2003. However since 2003 the SES has grown by 50 per cent. This rapid growth is the principal reason for this review.

The Review’s key finding is that there are clear forces driving much of this growth and that to halt or reverse it will require tackling these fundamental causes of growth.

The reasons most frequently given for rapid SES growth are:

• growth in the complexity of work expected of the APS and the number of programs administered

• significantly greater demands for interaction with and response to stakeholders including both Ministers and their offices, other levels of government and business and the community more broadly

• the impact of information communications technology (ICT) and the 24/7 media cycle on the response time for requests and provision of advice including the extension of the ‘working day’ – 42 per cent of SES staff work 50 hours or more per week.1

There is strong evidence for a relationship between the growth in the SES and growth in the number of programs administered by the APS – measured by the number of budget initiatives. New policy and new programs require higher levels of oversight by senior staff. Since 2003 there has been an increasing tendency for the Australian Government to wish to deliver programs directly to the Australian people, bypassing the States and Territories. In all western democracies, there has been a proliferation of programs targeted at increasingly narrow demographic and geographic interest groups in the community. This is regarded as clever electoral politics. But it comes at a price in terms of administrative costs, risk and in particular growth in senior public service numbers in all our comparator political systems.

A heightened national security environment, deepening concerns about border security, the Global Financial Crisis, the complexity of the climate issue, and high levels of immigration have contributed to SES growth domestically and overseas.

Similarly significant pressures on senior skills have been driven by the growth in regulation, the increasing scope and use of administrative and judicial review, increased frequency of cabinet meetings and their location outside Canberra, the number of high level negotiations associated with an ambitious COAG reform agenda and a more fraught and complex international environment.

There is considerable anecdotal evidence of the impact of the growth of ICT on the complexity, density and time sensitivity of the relationship between the APS, the Ministry, the Parliament and the community. There is a strong presumption that this has increased the demand on the Executive and SES levels.

Finally there has been some reversal of the consolidation of Commonwealth machinery of government arrangements which took place in 1987, with increases in both the number of departments and of independent APS agencies under the Public Service Act 1999.

For the reasons outlined above since 2003 the SES has grown more rapidly than total Australian Government expenditure (41 per cent), and more rapidly than the Australian population over the period (22 per cent). It is not possible to quantify the growth in APS ‘clients’ (recipients of payments, tax concessions, taxpayers, subjects of regulatory constraints, users of government services) but it is highly likely that it has been much higher than the population as a whole for the reasons outlined above.

The SES has grown less strongly (50 per cent) since 2003 than did the numbers of APS staff in the Executive Level classifications, which grew by 65 per cent. Over the same period APS 1 and APS 2 staff numbers declined by 13 per cent and 31 per cent respectively, reflecting the impact of technology principally but also the contracting out of some routine tasks.

1 State of the Service Report 2009 – 10


Chart 3.1 – Total SES 1984 to 2010

Num

ber o

f SES

3000

Responsibility for SES profiles

2500

2000

1500

SES FMA Act came created into effect

1000

5001984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average 1984 to 2003

No. of Depts devolved to Trendline reduced from agency heads* 2003 to 2010 28 to 18

* The precise date that responsibility passed from the department of Finance to agency heads is not known.

Chart 3.3 – Growth in employment by classification 2000-2010

250

200

150

100

50

0 2000 2001 2002 2003 2004

The growth of the SES is consistent with the growth in the SES equivalent grades in the United Kingdom and Canadian civil services. They too have grown at a significantly higher rate than for their respective civil services as a whole. This suggests that some of the factors relating to complexity, national security, program proliferation, ICT, media scrutiny and the associated accelerating policy cycle may be common across jurisdictions.

In relation to other Australian jurisdictions the APS has a higher ratio of SES equivalent staff than the State public sectors. However if a comparison is made on a “like with like” basis by excluding the State front line delivery services (teaching, police, health etc) the proportions are very similar between the APS and the Victorian Public Service. There have been cuts in the SES equivalent grades in NSW and Victoria, offset to some extent by growth in senior non-SES specialist staff and greater use of contracting.

SES APS 1-2 APS 3-4 APS 5-6 EL 1-2

2005 2006 2007 2008 2009 2010

It proved impossible to get meaningful comparisons with the private sector in relation to the proportion of SES equivalent staff. Mercer Australia research findings suggests that the key drivers of private sector executive numbers, and changes in them, are:

• business strategy and model (and changes thereto)

• profit ratios & financial results

• executive talent strategy

• business effectiveness, efficiency and cost base, including the issue of span of control

• a new chief executive officer causing a new direction and

• acquisitions/divestitures and further changes as a result of post merger integration or demerger.


Chart 3.13 – Growth in the SES in Australia, the United Kingdom and Canada

200

150

100

50

Canada - growth of the Executive Group Australia - growth of the SES UK - growth of the senior civil service

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

SES classifications and work level standards – the Audit The Review constructed contemporary work level standards for each of the SES levels and tested these with Secretaries and through an audit of positions in a range of agencies. This audit also employed a widely available job assessment tool developed by Mercer.

The audit found that the proposed work level standards were, on the whole, a robust instrument and that most positions were classified appropriately. There was not evidence of widespread classification creep. However, the finding of a significant number of apparently misclassified roles in the audit is at least prima facie support for the view that some SES roles are designed with insufficient regard to job design principles or reference to appropriate work level standards. Few agency heads have developed agency specific work level standards for SES roles, or seek expert advice, to inform classification decisions.

The audit showed a higher proportion of Band 3 SES positions as being apparently over-classified. When these positions were examined a number were found to be in areas of high sensitivity and risk – although their scope and resource responsibilities might not be as broad and significant as more traditional Band 3 roles. The work level standards for SES Band 3 were amended to strengthen the relevance of innovation, policy, political and administrative risk in deciding to allocate positions to this level. This will enable departments to use an SES Band 3 level position to drive change and introduce policy or program innovations with serious risk or to provide close support to a junior minister – when change has been successfully managed and programs are in place and running smoothly these functions can often safely be carried out at the SES Band 2 level. The Review

has recommended that the Australian Public Service Commission (APSC) examine this further before the work level standards are finalised and released for use.

Another possible reason is that points factor job evaluation systems used were predominantly calibrated against major private sector corporations and the State public sector and tend to heavily emphasize job size and decision making independence. Most private sector points factor job evaluation systems tend not to draw heavily on professional services and financial sector data. These sectors are most closely comparable to much of the Commonwealth policy environment, and are most directly competitive with the Commonwealth for senior staff.

To reduce inconsistent classification decisions within and between agencies the APSC should issue SES work level standards based on those developed as part of the review and the Public Service Classification Rules 2000 – the legislative framework for APS-wide classifications – should be amended to require their use by agencies in managing SES classifications. To ensure adoption of the new work level standards, the APSC – supported by independent experts knowledgeable of the APS – should undertake a risk based program of ex post assessments of SES roles in selected agencies.

The APSC should also develop supplementary classification management tools – namely a simple methodology for evaluating SES roles against the work level standards and a workbook to guide agencies in its use. The APSC should provide training to agencies in the use of the methodology. To embed the new arrangements, agencies should be required to undertake a job evaluation against the work level standards in respect of SES roles that become vacant and provide a copy to the APSC prior to a selection process commencing.

The three level structure for the SES continues to be appropriate.


A single three level SES classification structure will accommodate the requirements of the Senior Executive (Specialist) classification stream. Specialist career paths, including SES roles, can also be accommodated by the development of professional and technical capability frameworks without diminishing or detracting from a single flexible SES classification structure. Accordingly the review recommends that, as the Senior Executive (Specialist) classifications are not widely used, they should be phased out. Against this background the formal process specified in the Public Service Commissioner’s Directions 1999 (as amended) for assignments from a Senior Executive (Specialist) classification to an SES classification should be removed. Identical core criteria for SES and Senior Executive (Specialist) roles were adopted in 2000.

Controls for managing the SES – numbers and classification At first blush the dramatic growth in the SES in the last seven years suggests that there could be scope for an across the board cut. At a time of great scrutiny on public expenditure and a drive on fiscal consolidation this could make a minor contribution to savings, but provide a larger signal to the service and the public of the importance the Government places on cost control.

However, the growth in the SES has been closely associated with a rapid increase in new programs and the number and pace of COAG and international negotiations, as well as border and national security issues – these are substantive drivers of demand for SES staff and the audit did not identify significant classification creep. Indeed despite the growth in the SES, the APS has been damaged by some significant failures in program delivery including the Australian Government housing insulation program and the Green Loans scheme, and at an earlier time in relation to immigration and quarantine matters. These failures have in substantial part been attributed by the Australian National Audit Office and other inquiries to insufficient senior management oversight and control.

There is also considerable evidence that poorly managed ‘downsizing’ in government and business, while attractive to voters and shareholders in the short run, results in poor performance over the medium to longer term.

For these reasons the Review is reluctant to recommend an across the board pro rata cut.

Successful downsizing exercises in the private and public sectors are linked to market, strategy, policy and program fundamentals and managed actively to ensure that the right people remain and the capacity of the organisation is not compromised. While there might be a savings goal linked with any overall program of fiscal consolidation, any reduction in SES numbers should flow from a careful review of expenditure, programs and other staffing and delivery expenses rather than being seen as an end in itself.

There are many Commonwealth grants programs where the administrative costs and risks approach or even exceed the value of transfers that take place. There are likely to be significant savings and few welfare losses (but some political pain) from a rigorous approach to program consolidation.

The existing agency SES caps administered by the APSC should continue to apply for a further five years. This will allow program reviews and strengthened arrangements for the use of work level standards to be embedded. A pressure relief valve, in the form of access to review by the Commissioner should continue. Consideration of additional SES positions in the new policy process, and in budgetary savings exercises should be no less rigorous than when agencies make an application for relief from their cap.

Where funding is sought for new SES roles as part of a new policy proposal, a preliminary evaluation of the proposed new roles should be undertaken as part of the costing process, with the creation of the new roles being subject to a more formal evaluation using the draft work level standards and proposed new scoring methodology.

The cost of resourcing the APSC to implement strengthened classification arrangements based on new SES work level standards and supporting tools can be offset by savings resulting from a reduced incidence of misclassified roles.


2 Summary of Recommendations

Classifications Recommendation 1: The three level classification structure for the SES remains appropriate and should be retained.

Recommendation 2: The formal SES classification structure should be streamlined by abolishing the Senior Executive (Specialist) classifications. Roles classified as Senior Executive (Specialist) should be reclassified to the corresponding Senior Executive classification level.

Recommendation 3: The Public Service Commissioner’s Directions 1999 should be amended to remove the process for assignments from a Senior Executive (Specialist) classification to an SES classification

Strengthened classification management arrangements Recommendation 4: APS-wide SES work level standards based on those at Attachment D should be issued by the Public Service Commissioner (the Commisioner) and the Public Service Classification Rules 2000 should be amended to make agency use of the SES work level standards mandatory in classifying SES positions.

Recommendation 5: A simple methodology for evaluating SES roles against the work level standards and a workbook to guide agencies in its use should be issued by the Commissioner – with training of agencies in the use of the methodology to be provided by the APSC.

Recommendation 6: Agency heads should be required to evaluate all SES roles against the proposed methodology and the work level standards

• for established roles, at a minimum, as they become vacant; and

• for all new SES roles – including those sought as part of a new policy proposal – evaluations to be based on the standards but include an assessment of the impact of new roles on existing roles and structures.

Recommendation 7: Agency heads certify before a vacant or new role is filled that the classification for the role is based on an evaluation against the work level standards.

Recommendation 8: A risk based audit program of the classification of SES roles be undertaken by the APSC.


Limiting the size of the SES Recommendation 9: Agency SES caps should continue to apply for five years while strengthened classification management arrangements are put in place for the SES and any reductions in the SES flowing from agency classification reviews and program and fiscal consolidation are implemented.

Recommendation 10: Oversight of agency caps on SES numbers and assessment of agency claims should continue to be undertaken by the Commissioner with agency bids and the Commissioner’s decisions being based on the work level standards.

Downsizing the SES Recommendation 11: Any program for overall reduction in SES numbers be linked with fiscal and/or program consolidation and be managed actively to ensure that the right people remain and the capacity of the APS is not compromised.

Recommendation 12: Savings measures or program rationalisation initiatives that result in a reduction in an agency’s SES numbers be reported to the APSC to allow a downward adjustment to the agency’s SES cap.

Recommendation 13: All agency heads report to the Commissioner each year following the Budget but before 30 June on the adjustments to agency caps necessary to reflect the impact of Budget measures and similarly following the announcement of measures outside the Budget context that affect the agency’s SES numbers.

Recommendation 14: The APSC be resourced to implement the strengthened classification management arrangements.


3 Introduction

Focus of the Review In March 2010 the Australian Government released Ahead of the Game: Blueprint for the Reform of Australian Government Administration (the Blueprint). Recommendation 6.2 proposed a review of the size, capability and work level standards for each level of the Senior Executive Service (SES) before any new net growth in the SES occurs, unless exceptional circumstances are agreed to by government.

RECOMMENDATION 6.2: ASSESS THE SIZE AND ROLE OF THE SES

Complete a review of the size, capability and work level standards for each level of the Senior Executive Service (SES), before any new net growth in the SES occurs.

Lead Agency: Australian Public Service Commission (APSC)

Actions to make this happen

The APSC would review the size and growth in the SES. The process would be completed by late 2010. There would be no new net growth in the SES until the review was complete and provided to Government for consideration, unless exceptional circumstances were agreed with Government.

The review would examine:

• the rate, geographic location and causes of workforce growth

• the likelihood of classification creep

• causes and consequences of pay dispersion among SES and

• the role of the SES in current classification structures.

As part of the review of APS roles and work level standards (Recommendation 6.1), the APSC would consult with Secretaries and relevant stakeholders to develop and articulate clear capability requirements and work level standards for each level of the SES.

The context for the Review is the substantially faster rate of increase in SES compared to total APS employment in the absence of effective APS-wide classification standards and strong central oversight. In particular, during the last 10 years the number of SES grew by 68 per cent whereas total APS numbers overall rose by 38 per cent.

The purpose of the Review is to establish whether this level of growth is justified and, if not, to recommend corrective action.

Review Approach The APSC was allocated budget funding in 2010-2011 to undertake the SES Review. In July 2010 the APSC appointed former departmental secretary Mr Roger Beale AO, of PricewaterhouseCoopers Australia, as an eminent person to guide, advise and oversight the Review, and engaged Mercer Australia to assist.


The APSC convened a Reference Group comprising 12 senior SES from a range of APS agencies, chaired by Mr Beale, to act as a sounding board for key aspects of the task. The Reference Group Terms of Reference and a list of members are at Attachment A.

The SES Review was conducted in four parts:

Part 1 – Literature and data analysis identifying the drivers of growth

The first part involved the preparation of an evidence-base in the form of:

• a literature review and an examination of the factors contributing to SES growth in the APS, including the extent to which it reflects growth in the number of government programs and changes to the nature of work performed by the SES

• comparative analysis of State/Territory jurisdictions, including how they have managed growth of SES equivalents and arrangements for ensuring consistency in work level standards for SES classifications and

• an examination of trends in the most comparable private sector organisations and selected overseas public sectors.

In addition, the APSC conducted a survey of 20 APS agencies that have experienced high levels of SES employment growth. Seven of these agencies were interviewed about the growth in their SES and their classification management practices. Another group of eight agencies that have had relatively stable SES employment were also interviewed, to examine any differences that may have contributed to the variable experiences with SES employment levels among agencies.

Part 2 – Development of draft work level standards

Part 2 was undertaken concurrently with Part 1. Draft work level standards were developed by Mercer for each SES level, having regard to good practice both within the public and private sectors in Australia and internationally. The drafts were developed in close consultation with Mr Beale and the Reference Group. The draft work level standards were submitted to the Secretaries Board at its 6 October 2010 meeting, prior to undertaking Part 3.

Part 3 – Audit of SES roles against new draft work level standards Part 3 involved an audit of a representative sample of SES roles in selected agencies against the agreed draft work level standards. The purpose of the audit, reflecting the overall aims of the review, was twofold:

• to test whether the requirements of SES roles are consistent across the APS and continue to reflect expectations of appropriate work level standards for the SES and

• to test the suitability and ease of application of the draft work level standards across the diversity of SES roles.

The audit examined 238 SES roles selected at random from 30 APS agencies.

The primary criterion for selecting agencies for audit was to identify organisations that have been required to make SES classification decisions over periods of significant SES growth, using data from the APSC’s APS Employment Database (APSED). A number of agencies that had little or no SES growth over the past 10 years were also included to provide comparative data against classification practices in high growth agencies.

The audits were conducted in October and November 2010 by combined teams of Mercer staff and either Reference Group agency nominees or a member of the APSC.

Part 4 – Eminent Person’s draft report to Government This report to Government brings together the evidence and data gathered in Parts 1, 2 and 3 of the Review. A draft of the Report was provided to the Secretaries Board meeting of 1 December 2010.

Governance Mr Beale led the review, which was undertaken by the APSC and assisted by Mercer Australia. A large number of agencies participated in the review, through the Reference Group, the survey and interviews conducted by the APSC and the audit of SES roles. A list of participating agencies is at Attachment B.

The Review would like to thank all of these agencies for their constructive contributions to the process.


4 The SES

Creation of the SES and evolution of its role and functions The SES was established by the Government in 1984 to:

create new arrangements for senior management, with the dual purpose of ensuring a fully productive relationship with government and enabling senior managers to realise their full potential.2

Under the Public Service Reform Act 1984, the new SES was established to provide for a group of officers who:

• may undertake higher level policy advice, managerial and professional responsibilities in departments and

• may be deployed by Secretaries within Departments and by the then Public Service Board between departments, so as best to promote the efficiency of the APS.

Provision was also made in the legislation for:

• a guarantee of freedom from political interference in selection, appointment and promotion in the SES

• an opening up of SES positions to competition on merit from outside the APS

• the capacity for fixed term SES appointments

• SES promotions and appointments to be made by the Public Service Board, within certain guidelines and

• arrangements for the redeployment and retirement of SES officers.

The Public Service Act 1999 (the PS Act) – the current legislative framework for the APS – consolidated the functions and roles of the SES. Section 35(2) of the PS Act specifies that the functions of the SES are to:

• provide a group of APS employees each of whom, within his or her agency, provides professional expertise, policy advice, and/or management at a high level

• promote co-operation with other agencies and

• promote, by personal example and other appropriate means, the APS Values and compliance with the Code of Conduct.

2 Dawkins J, Second Reading speech, Public Service Reform Act 1984


The 2005 ‘One APS – One SES’3 statement of expectations released by the former APS Management Advisory Committee reinforced the expectations and the statutory role of the SES. It makes clear the SES should be agile and flexible, collaborative and collegiate, and committed to self-development. The statement highlights that ‘the leadership of any organisation embodies its identity and image’, and recognises that its role is ‘[critical to] ... employee commitment and attracting high calibre young staff’. The Management Advisory Committee statement also recognises that ‘the SES must itself evolve to meet the challenges of the future’.

More recently the Blueprint concluded:

A unified APS-wide leadership group is required to support Secretaries. At present less than 40 per cent of nearly 3,000 SES members ‘definitely see themselves as part of an APS-wide leadership cadre’ rather than as leaders only of their agency.4

The Blueprint made a number of recommendations concerning the strengthening of the APS leadership group, including the creation of an APS leadership group comprising the Secretaries Board, SES Band 3 and selected agency heads (equivalent to SES Band 3). Members of this newly created senior leadership forum – the APS200–are responsible for:

• leadership roles in their organisations and more widely across the APS

• supporting the Secretaries Board by undertaking strategic projects and initiatives as cross-portfolio teams and

• being at the vanguard of cultural change to achieve the innovative, collaborative, open, agile, forward looking and streamlined public service envisioned in the Blueprint.

However, the Blueprint expects that all SES will drive reforms and model appropriate leadership behaviours such as innovation.

SES classifications The contemporary three level Senior Executive classification structure – including the Senior Executive (Specialist) classification – was introduced in 1990. The Senior Executive (Specialist) was included within the new structure to recognise a demand for SES jobs requiring high level professional qualifications and experience while having limited management and policy advising responsibilities and the demonstrably different labour market in which they operated.

APS-wide work level standards for the three level SES classification structure – including the Senior Executive (Specialist) classification levels – were issued in 1990.

The last APS-wide SES work level standards were issued in 1998. Following proclamation of the PS Act responsibility for work level standards was devolved to agency heads in accordance with the Public Service Classification Rules 2000 (the Classification Rules) – a legislative instrument that establishes the classification levels of APS employees, including the SES.

Under the Classification Rules agency heads must issue work level standards for each approved classification used so as to better reflect the type of work being done in the agency. The move to agency-specific work level standards signaled a move away from APS-wide work level standards, including for the SES. However, agencies have been able to draw on the 1998 standards – they continue to be available for research purposes on the APSC’s website.

Since the 1960s the job title ‘Associate Secretary’ has been used on select occasions to describe jobs formally classified as either a departmental Secretary – previously the First Division of the four divisional structure – or a Deputy Secretary – previously the Second Division. More recently, Associate Secretary status has been conferred on SES Band 3 roles with significant responsibilities. However ‘Associate Secretary’ is not a classification level separately identified and described with a work level standard.

3 Management Advisory Committee, One APS-One SES Statement, October 2005 4 Advisory Group on Reform of Australian Government Administration, Ahead of the Game – Blueprint for the Reform of Australian Government

Administration, March 2010 (2010:22)


Capability requirements A major underpinning feature of SES classification arrangements has been the identification of core capabilities required in members of the senior leadership group and their use as part of selection, development and performance assessment.

The first set of five SES core selection criteria were adopted in 1987 and over time have evolved into today’s Senior Executive Leadership Capability Framework (SELCF). The five key elements of the Framework represent the SES core selection criteria for all SES positions, including Senior Executive (Specialist) positions:

• shapes strategic thinking

• achieves results

• exemplifies personal drive and integrity

• cultivates productive working relationships and

• communicates with influence.

In 2004, the APSC released an Integrated Leadership System (ILS) which expands on the SELCF to give a broader framework for executive and senior executive development. Unlike the SELCF, the ILS distinguishes the capability requirements at each level of the SES. The ILS provides capability descriptions and desired behaviours as tools for agencies and individuals to use in their leadership development and has been used at both the service-wide level and in a number of agencies to inform the planning and implementation of leadership growth strategies.

The ILS is not a set of work level standards. It focuses on the skills and behaviours required at each of the three SES levels.

Assessing performance Since 1984 mechanisms for measuring and assessing SES performance have evolved and, with the introduction of performance based pay for the SES in 1990, performance assessment has become a more entrenched feature across the APS.

The shift in focus from productivity improvements at the APS-wide level to the agency level from 1997 onwards resulted in considerable variations in both the scale and detailed nature of SES performance reward and appraisal arrangements within and between agencies.

Setting SES remuneration

Until the early 1990s, all APS employees were covered by APS-wide industrial agreements and awards.

In the early 1990s the then Government’s enterprise and workplace bargaining policies were applied to the APS, and for the first time and within limits, departments and agencies were able to negotiate changes to pay and some conditions to meet agency specific circumstances. This was the beginning of the move away from centralised collective bargaining and uniform pay rates for each classification which had applied since the creation of the APS.

The last APS-wide industrial agreement expired in October 1996 – Continuous Improvement in the APS Enterprise Agreement.

Since 1998 government policy – as it applies to workplace relations arrangements in Australian Government employment including the APS – has been set out in successive bargaining frameworks5. Agency heads are responsible for setting actual pay rates consistent with the bargaining framework and the Government’s workplace relations policy. A key tenet has been that improvements in pay and conditions must be linked to improvements in productivity.

The supporting guidance to the current bargaining framework6 advises that the terms and conditions for SES employees and their equivalents should be reflected in either:

• determinations

• individual common law arrangements or

• where a majority of SES officers in an agency choose, an enterprise agreement.

As at 31 December 2009:

• 2,287 SES employees were covered by individual arrangements – 820 Australian Workplace Agreements, 236 common law contracts, and 1,231 section 24(1) determinations

• 84 by collective 24(1) determinations

• 3 on a collective agreement and

• 5 on ‘Other’.7

5 The Policy Parameters for Agreement Making in the APS until 2007; and the Australian Government Employment Bargaining Framework from 2007 to 2010; and the APS Bargaining Framework 2011

6 Australian Public Service Bargaining Framework Supporting Guidance January 2011 7 2009 APS Remuneration Survey – in which 58 agencies participated covering approximately 84 per cent of SES employees – 2,379 SES employees reported in the Survey, out of a total of 2,845 SES reported in 2008 09 State of the Service Report


Controlling SES growth Historically APS resource control frameworks including those governing SES employees have focused on establishment (ie the number of positions), staffing, and budgets.

The present-day cap on SES numbers has been administered by the APSC since April 2010. It sets an absolute limit on the number of SES employees that an agency may employ at any one time.

Chapter 9 considers whether ongoing controls to regulate SES growth are necessary.

The Public Service Commissioner’s powers and the SES Under the PS Act the Commissioner’s role in selection focuses on ensuring appropriate, merit-based processes are followed – with a representative of the Commissioner to be part of all SES selection panels. The Public Service Commissioner can only decline to approve Secretaries’ recommendations where there is a process inadequacy.

The Commissioner was also given the role of agreeing to financial benefits to be offered as an incentive to retire (s. 37 of the PS Act) and in certifying that termination of SES employees was appropriate.

Under section 36 of the PS Act the Public Service Commissioner must issue directions in writing about employment matters relating to the SES employees, including engagement, promotion, redeployment, mobility, and termination. The Public Service Commissioner’s Directions 1999 are disallowable non-legislative instruments for the purposes of section 46B of the Acts Interpretation Act 1901.

Attachment C provides a more detailed history on the history and evolution of the SES.


5 Growth of the SES

Size and growth of the SES At 30 June 2010, APS agencies reported for SES cap purposes a total of 2,850 SES employees. For SES cap reporting, agencies are asked to exclude short term acting in SES roles (to avoid double counting) and inoperative SES employees (these employees, such as those on long term leave, are not available to discharge their agency’s functions)8.

Historical SES data on this basis is not available, so in presenting data on the growth of the SES, this report (unless indicated otherwise) uses data from the APSC’s APSED that excludes non-SES employees acting in SES roles and includes inoperative SES employees. On this basis there were 2,727 SES at 30 June 2010. This compares with 1,697 SES employees at the inception of the SES in 1984. Growth in the SES since 1984 is depicted in Chart 3.1 below. This indicates that the absolute size of the SES varied by relatively little over the period 1984 to 2002. While there were variations reflecting budgetary shocks (eg the post 1996 drive to return to surplus) or organisational change (eg the reduction in the number of departments in 1987 from 28 to 18) these variations did not exceed 10 per cent of the average over the period. However the SES grew by 50 per cent from 2003 to 2010.

Chart 3.1 – Total SES 1984 to 2010

Num

ber o

f SES

3000

Responsibility for SES profiles

2500

2000

1500

SES FMA Act came created into effect

1000

5001984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average 1984 to 2003

No. of Depts devolved to Trendline reduced from agency heads* 2003 to 2010 28 to 18

* The precise date that responsibility passed from the department of Finance to agency heads is not known.

Source: APSED

The size of the SES has been affected by changes in the coverage of the PS Act. The most notable of these changes have been the departure of the Australian Government Solicitor in 1999-00 with the loss of 85 SES and the arrival of Austrade (gain of 65) and the National Health and Medical Research Council (gain of 8) in 2006-07.

Of the 2,727 SES at 30 June 2010, 2,610 were employed on an ongoing basis and 117 were non-ongoing. Since 1996, the proportion of non-ongoing SES employees has increased from 0.7 per cent to 4.3 per cent.

8 At 30 June 2010 there were 3,167 SES employees – including non-SES acting in SES roles and inoperative staff.


SES employees are concentrated in portfolio departments (1,682 or 62 per cent) and five other large agencies (the Australian Taxation Office, Centrelink, Australian Customs and Border Protection Service, Medicare Australia and the Australian Bureau of Statistics with 481, or 18 per cent). A further 564 are spread over the remaining APS agencies.

The 2,727 SES employees at 30 June 2010 represent 1.7 per cent of the 164,596 total APS staff.

The SES as a share of total employees varies considerably by agency, from 0.3 per cent in Centrelink to eight per cent in the Department of the Treasury and 27.8 per cent in the Office of Parliamentary Counsel.

A major change in the SES over the last 15 years has been the steady increase in the representation of women – from 18 per cent of ongoing SES employees at June 1995 to 37 per cent at 30 June 2010. Women are still concentrated at lower levels in the SES. The gender composition of ongoing SES staff as at 30 June 2010 was 1,641 male and 969 female.

Time series data on hours worked by the SES is only available for the three years from 2008. The survey data for this period indicates that 89 per cent of employees in SES roles typically work 80 hours or more per fortnight.

Relative growth of the SES As a proportion of all APS employees the SES has increased from 1 per cent in 1984 to 1.4 per cent in 2000 to 1.7 per cent in 2010.

In all but six years since its inception, the SES has grown faster than total APS employment. From 30 June 2009 to 30 June 2010, the SES grew by 1.64 per cent compared with growth of total APS employment of 1.7 per cent.

However this needs to be put in context. Much of the apparent rise in the proportionate size of the SES arises from absolute declines and significantly smaller growth in the lowest four levels of the APS. From 2000 to 2010, the level immediately below the SES – EL2s grew 69 per cent, EL1s grew 119 per cent and APS5-6 grew 64 per cent. By contrast APS 3-4 grew by 32 per cent – less than half the growth of Executive and middle management grades – and APS1-2 fell by 33 per cent.

Chart 3.2 – Growth in SES employment and total APS employment 1984-2010, 1984=100

180

160

140

120

100

80

60

40

Total SES Total APS employment

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Source: APSED


Chart 3.3 – Growth in employment by classification 2000-2010

250

200

150

100

50

0 2000 2001 2002 2003 2004

Source: APSED

Distribution of growth across agencies Rates of growth in the SES have varied considerably across agencies. Controlling for machinery of government changes, growth over the last decade has exceeded 100 per cent in the Departments of Education, Employment and Workplace Relations, Finance and Deregulation, Immigration and Citizenship

SES APS 1-2 APS 3-4 APS 5-6 EL 1-2

2005 2006 2007 2008 2009 2010

and a number of smaller agencies. Other large APS employers, such as the ABS and the Department of Veterans Affairs, have experienced low or no growth.

Fifty one per cent of the total growth in the SES over the period 2000 to 2010 is attributable to seven departments and one large agency.9 At 30 June 2010 these eight agencies employed 46 per cent of all SES employees compared with 43 per cent at 30 June 2000.

Chart 3.4 – SES growth 2000-2010 – central agencies

300

250

200

150

100

50

0

Prime Minister & Cabinet Treasury Finance & Deregulation

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED

9 The Departments of Defence, Education, Employment and Workplace Relations, Finance and Deregulation, Foreign Affairs and Trade, Health and Ageing, Immigration and Citizenship, the Treasury and the ATO.


2010

Chart 3.5 – SES growth 2000-2010 – large departments10

300

250

200

150

100

50

0

Defence

Health & Ageing

DEEWR/DEWR/DEST Foreign Affairs & Trade

Immigration & Citizenship

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED

Chart 3.6 – SES growth 2000-2010 – medium departments

300

250

200

150

100

50

0

Agriculture, Fisheries & Forestry

Enivronment, Water, Heritage and the Arts

Attorney-General’s

Veterans’ Affairs

Infrastructure

DIISR/ITR/RET

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED

Chart 3.7 – SES growth 2000-2010 – large agencies

300

250

200

150

100

50

0

Australian Taxation Office

Centrelink

Australian Customs and Border Protection Service

Australian Bureau of Statistics

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED

10 For 2010 the Department of Foreign Affairs and Trade data includes 97 substantive SES positions in Australia’s diplomatic missions overseas – including Ambassadors, High Commissioners, Consul General’s, and Deputy Heads of Mission


2010

2010

2010

300

Chart 3.8 – SES growth 2000-2010 – small agencies

250

200

150

100

50

0

Fair Work O’man/OEA/W’place Authority/O’man AusAID

Office of National Assessments Geoscience Australia

ACCC Productivity Commission

ANAO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED

Chart 3.9 – SES as a share of total employment by agency 2000 and 2010

15.0%

SES

as a

sha

re o

f tot

al e

mpl

oyee

s

10.0%

5.0%

0.0%

2000 2010 Linear(2000) Linear(2010)

Defence ATO Defence

Centrelink

ATO Centrelink

0 2000 5000 10000 15000 20000 25000

Total employees

Source: APSED

Chart 3.10 – SES as a share of total employment by agency 2000 and 2010 (excluding Defence, ATO and Centrelink)

15.0%

SES

as a

sha

re o

f tot

al e

mpl

oyee

s

10.0%

5.0%

0.0%

2000 2010

PM&C

TSY TSY

DFAD

A-G’s

FaHCSIA

DEST BoM

BoM

PM&C

Linear(2000) Linear(2010)

DFAT

DFAD

A-G’s

HS VA VA Immi

ABS ABS

DFAT

DEWR DAFF

DoHa

DEWHA

Customs

FaHCSIA DAFF

Medicare

DoHA

Customs

DEEWR

HS

Immi

0 1000 2000 3000 4000 5000 6000 7000

Total employees

Source: APSED


2010

For most large agencies, growth in total employment SES geographical spread since 2000 has been accompanied by a (slight) increase in their ratio of SES to total employment (ie the arrows in charts 3.9 and 3.10 above point slightly upward).

In medium sized agencies a common trend is less discernable. In the cases of the Departments of Foreign Affairs and Trade and Finance and Deregulation increases in total employment have been accompanied by increases in their SES to total employment ratios. In contrast, increases in total employment in the Attorney-General’s Department and the Department of the Treasury have been accompanied by a decreasing ratio of SES to total employment.

Growth by classification The composition of the SES by classification level has remained relatively stable over the last decade. At 30 June 2010, SES Band 1 employees comprised just fewer than three-quarters of the SES at 74 per cent, with SES Band 2 at 21 per cent and SES Band 3 at five per cent.

Growth in SES numbers since 2000 has been strongest for SES Band 1 at 73 per cent, compared with 63 per cent for SES Band 2 and 35 per cent for SES Band 3.

The bulk of the SES is located in the ACT. At 30 June 2010 76 per cent of SES employees were located in Canberra. This proportion is unchanged from 2000. The share of SES based overseas has risen from five per cent in 2000 to 6.1 per cent in 2010.

Numbers of SES by location at 30 June 2010 were: ACT 2,081; Victoria 172; New South Wales 150; overseas 166; Queensland 64; South Australia 42; Western Australia 29; Tasmania 12; and Northern Territory 11.

Since 2000, the growth in overseas-based SES has been faster than growth in Australia-based SES.

Expenditure on SES remuneration has grown faster in real terms than growth in the numbers of SES, reflecting real increases in remuneration of the SES, and was approximately $650 million in 2008-09.11

Table 3.1 – Growth in the SES by classification 2000-2010

Classification 2000 2010 per cent change 2000-2010

SES 1 1161 2014 73 per cent

SES 2 352 573 63 per cent

SES 3 104 140 35 per cent

Source: APSED

Chart 3.11 – SES by location 30 June 2010

Australian Capital Territory

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Northern Territory

Overseas

Source: APSED

11 APSED and Mercer 2009 Remuneration Survey


Chart 3.12 – SES growth by location 2000 – 2010

250

200

150

100

50

0 2000 2001 2002 2003 2004

Source: APSED

International comparisons Since the mid-1990s, growth in Australia’s SES, the United Kingdom Senior Civil Service and Canada’s Executive Group has been similar, although growth has been faster in Australia since 2003. All jurisdictions have also experienced growth in senior executives as a proportion of total public service employment.

In Canada, agencies are subject to quotas in respect of the two most senior levels of the executive group levels. Departments must seek Treasury Board approval to increase their approved total baseline of these positions.

Australian Capital Territory Total States and other Territories Overseas

2005 2006 2007 2008 2009 2010

In the United Kingdom, positions at pay bands 1 and 2 of the Senior Civil Service are not subject to central controls other than through agency budgets. For positions at pay band 3 (the most senior), the Senior Leadership Committee (SLC) advises the Head of the Home Civil Service on individual appointments.

The United States of America’s Office of Personnel Management centrally controls SES growth by allocating “spaces” to agency heads on a biennial basis. Agency heads are expected to manage their resource needs within the allocated level including “reprogramming” existing spaces to meet high priority and unanticipated needs. As at 30 September 2007 there were 8,096 permanent SES positions: however, not all of these positions were filled.

Table 3.2 – Growth in SES employment – international comparisons

Country 1996 2009 % increase 1996-2009

Australia SES 1779 2683 51%

SES/Total 1.24% 1.66% 34%

United Kingdom SES 3680 4923 44%

SES/Total 0.59% 0.87% 47%

Canada SES 3373 5162 53%

SES/Total 1.66% 2.49% 50%

Source: APSED, Canadian Treasury Board Secretariat, United Kingdom Cabinet Office


Chart 3.13 – Growth in the SES in Australia, the United Kingdom and Canada

200

150

100

50

Canada - growth of the Executive Group Australia - growth of the SES UK - growth of the senior civil service

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Sources: APSED, Canadian Treasury Board Secretariat, United Kingdom Cabinet Office

Australian jurisdictional comparisons At 30 June 2008, the APS appeared to have the highest proportion of executives to the workforce of all Australian jurisdictions after the Northern Territory – refer Table 3.3 below.

Comparisons with and between the APS and State and Territory public sector workforces need, however, to be treated with caution. The responsibilities and occupational groupings that are encompassed in the terms ‘public sector’ and ‘public service’ employment differ across jurisdictions. The Victorian public

sector, for example, is divided into the Victorian Public Service – staff employed under the Public Administration Act 2004 and responsible primarily for providing “Parliament and Ministers with policy and administrative support required by a functioning Government” – and the larger public sector providing direct services in areas such as schooling, health and public order. The Victorian Public Service is much closer to the APS in terms of roles and responsibilities, and the proportion of Executives to other employees (around 1.7 per cent at 30 June 2009), is very similar to proportion of SES to other employees in the APS (1.6 per cent).

Table 3.3 – Senior executives in the public sector 2008

Jurisdiction Aggregate Workforce (Headcount) Executives as proportion of workforce

Queensland 238,987 0.2

Western Australia 131,931 0.3

New South Wales 329,321 0.6

Victoria 237,815 0.7

ACT 18,263 1.0

Tasmania 28,548 1.0

South Australia 53,829 1.5

APS 159,762 1.6

Northern Territory 16,485 2.6

Source: Mercer Australia/APSED


State and territory public sectors differ fundamentally from the APS in that they have a stronger focus on direct delivery of services to their communities.

• States and territories provide frontline services in health and education, and these often involve the bulk of employees in the sector. Sixty-five percent of Queensland Public Service Employees work in education or health, which includes large number of teachers, nurses and health workers. The largest occupational group in the Western Australian public sector is primary school teachers, followed by nurses and secondary school teachers. Seventy-two per cent of permanent Tasmanian public sector employees work in health or education.

• Most State and Territory public sectors include the police and emergency services. The New South Wales public sector also encompasses the fire brigade and corrective services. The Victorian public sector includes the country and metropolitan fire brigades and the ambulance services.

• State/territory public sectors also typically have responsibility in areas such as disability support and community work. In Queensland, nearly 80 per cent of employees “provide services which are directly utilised by the community of Queensland”12 .

• Finally, State/Territory public sectors tend to have many more ‘hands on’ responsibilities in areas such as public works and land management. The Western Australian public sector, for example, currently employs around 3,000 ‘commercial cleaners’.

State public sectors have a stronger focus on front line service delivery and typically require a much higher ratio of staff to management than the APS, whose primary role is policy advice and the development, funding and monitoring of programmes rather than their direct delivery.

Nor is it possible to make meaningful comparisons between agencies in different jurisdictions that appear to have similar functions and therefore would be expected to have similar SES profiles. The New South Wales Department of the Premier and Cabinet, for example, has responsibilities that include ‘coordination and planning of significant State events’, a responsibility requiring staffing levels and skills that has no counterpart in the Department of the Prime Minister and Cabinet.

Controls on growth The Blueprint recommended that there be no new net growth in the size of the SES until the SES Review is complete – unless exceptional circumstances are agreed with Government.

The APSC has administratively implemented the cap on SES numbers from late April 2010 and has monitored SES numbers against caps set for each APS agency. Agencies are required to report to the APSC the number of SES roles against their cap at the end of each month. There has not been a freeze on SES recruitment – agencies continue to be able to recruit SES staff, within their cap.

The aggregate SES cap across the APS at 31 December 2010 was 3,004 and the number of SES reported by agencies was 2,837, down from 2,850 at 30 June 2010.13

This lower figure indicates that agencies are operating within their caps and may reflect, in part, the limited recruitment activity that occurred during the extended caretaker period.

The States have also imposed various limits and/or controls on the growth of their SES or equivalent senior management group.

In some States there is evidence that, while such controls are popular politically, they can reduce leadership capacity, particularly in circumstances where the overall size of the service continues to grow in response to Government policies and priorities. In Victoria this has led to the increased use of consultants and non-SES specialist equivalents. Queensland has reported an increased use of fixed term contracts, with remuneration up to SES levels, to address ‘critical business needs’.

New South Wales (NSW)

The size of the SES in NSW has been on a downward trend as a result of steps taken by successive governments to freeze or reduce numbers. For example, in 2008 the NSW Government, driven by the need ‘for a robust ongoing appraisal of SES numbers in each agency, as priorities change and to generate savings’, made a commitment to reduce its SES by 20 per cent. This has resulted in a reduction of 171 positions. Each agency now has a notional limit on SES numbers imposed by the Department of the Premier and Cabinet. It is not clear what impact this has had on the overall performance of the public sector in NSW.

12 Queensland Government, Queensland Public Service Workforce Characteristics: 2009-2010, 7 13 For cap purposes, employees acting in SES roles for a period of less than three months are ignored, as are inoperative SES employees – eg those on long-term leave.


Table 3.4 – SES numbers in NSW

2004 2005 2006 2007 2008 2009 2010

SES (no.) 930 855 n.a.

Source: NSW Department of Premier and Cabinet

A separate senior officer classification exists for Public Service Departments in New South Wales. These positions are not SES positions, but have the equivalent work value to SES.

Victoria

Executive numbers have been almost static for the past 10 years as a result of centrally-imposed constraints that require the Premier to approve any additional position(s). Requests are only considered in the context of new Government initiatives and programs.

There are currently around 664 Executive Officers.

Queensland

The Queensland Public Service Act 2008 requires the number and classification levels of SES jobs to be fixed by the Governor in Council. Any changes to agency SES profiles must be approved by the Governor in Council. A 2009 Government initiated review – to determine the levels of positions needed to manage and administer the delivery of Government services – saw an overall reduction of approximately 12 per cent in SES jobs.

Western Australia

In 2001 the Western Australian Government reduced the number of SES by around 15 per cent. It has subsequently maintained this level through WA Public Service Commission controls that require approval for the creation, reclassification and staffing of SES positions. No specific cap operates for executive officers although the Government has a general full time equivalent cap applicable for the public sector. The previous Government introduced an SES employment target ratio of between 0.38 per cent to 0.40 per cent of the total public sector.

South Australia

The State’s 2010-11 Budget included a 20 per cent cut to the number of SES over the next three years. Half of the reduction is to be achieved as part of broader budgetary reductions to the South Australian public sector. Agencies will be required to achieve the remainder of the reduction through ‘management structure reforms’. Details on how this will operate are not yet available.

840 853 696 708

Tasmania

Agencies wanting to create an SES position must seek the approval of the Premier and this process is claimed to have kept down disproportionate growth. A specific budget objective in 2010 to abolish 25 positions in response to the global financial crisis saw a decrease in its SES of around 9 per cent.

Northern Territory

The Northern Territory has no formal controls over executive numbers other than budget availability. It recently imposed a two year cap on overall agency numbers but this did not specifically address executive roles.

The private sector A survey of a small number of private sector firms by Mercer indicated that executive numbers were determined by:

• business strategy & model

• profit ratios & financial results

• executive talent strategy and

• business effectiveness, efficiency & cost base, including the issue of span of control.

One organisation surveyed undertook “occasional benchmarking” but none of the other organisations formally monitored or benchmarked executive numbers.

Mercer identified three key drivers to changes in executive numbers in corporate Australia:

• changes to the business strategy and/or business model


• acquisitions/divestitures and further changes as a result of post merger integration.

Corporate use of selective downsizing can be a way of reducing cost and increasing cost consciousness among executives while at the same time symbolically reassuring investors after a tough trading patch. For example, in 2005 Telstra embarked on a cull of middle management to improve efficiency by


reducing bureaucracy and simplifying decision-making processes. The move immediately preceded the full sale of Telstra – T3. BHP-Billiton has downsized its corporate headquarters, removing many senior positions. Partly these have been replaced in product divisions, partly they result from reducing the attempt to analyse and control some issues centrally and partly functions have been outsourced to high end consultancy firms. Critically this reorganisation has been related to a change in business strategy to simplify BHP-Billiton’s mission and focus on its key mining strengths. Similar examples of careful reductions in senior executive cadres can be found in the course of Wesfarmers’ and Woodside’s corporate history.

However, some studies (Clark and Koonce14) suggest that almost 70 per cent of all corporate downsizing, restructuring, and reengineering efforts are unsuccessful. This is particularly so when downsizing is not an element of an integrated business strategy and accompanied by careful management of all aspects of both the reduction process and the training of staff remaining. Pfeffer suggests that organisations do not become more profitable or efficient following arbitrary downsizing. According to Pfeffer this ‘…is because in a downsizing, sometimes the wrong people leave and the company has to later bring back laid-off employees as contractors’15 .

As fast as managers are laid off, new ones seem to be needed. As people are laid off, the work they did usually remains. It happens when the focus of downsizing is on body-count reduction, assuming the organisation and the work will somehow take care of themselves. They seldom do, and companies that approach downsizing this way find it hard to stay lean after the immediate economic pressure lets up.16

Instead of increased profitability or efficiency these organisations typically experienced a range of negative consequences such as decreasing employee productivity and morale, and increasing levels of absenteeism, cynicism, and turnover.

In the words of one executive at a large chemical company, it took us two months to decide to do layoffs, two weeks to do it, and two years to recover.17

Unsuccessful downsizing does not address the real underlying issues. In the corporate world these may relate to strategy, market, quality or logistical issues.

Approaching downsizing as a major cost reduction tool to increase share holder returns can undermine an organisation’s ability to position itself for new challenges in the longer term. It is also critical how any downsizing is handled – by management selection of poorer performers and protection of key personnel to meet future challenges or by ‘voluntary’ reduction approaches relying on incentives or the non-replacement of departing staff.

The case of early retirement incentives illustrates this problem. More than 85 percent of firms in an American Management Association survey of 1,005 companies reported the loss of their star performers when early retirement packages were offered. Firms found that this undifferentiated approach to saving costs resulted in the wrong people leaving the system .18

14 Clark, J., and Koonce, R. (1995). Engaging organisational survivors. Training & Development, 49, 8 15 Jeffrey Pfeffer, Downsizing Doesn’t Work, The Washington Post, February 9, 2009 16 Jane Atwood, Ethel Coke, Christine Cooper and Kendra Loria, Has Downsizing Gone Too Far?, A review of the history and results of downsizing, http://iopsych.org/downsize.htm#Table, December, 1995

17 Pfeffer, op cit. 18 Bennett, A. 1991. Downsizing doesn’t necessarily bring an upswing in corporate profitability. The Wall Street Journal (June 6), cited in Douglas H. Harris, (ed) 1994 Organisational Linkages: Understanding the Productivity Paradox


Finding 3.1: The SES has grown rapidly since 2003. It has grown by 50 per cent over the period, that is:

• more rapidly than the Australian Public Service as a whole (25 per cent);

• more rapidly than the Australian population which grew by 22 per cent; and

• much more rapidly than it did between its establishment in 1984 and 2003.

Finding 3.2: Nevertheless the SES grew less strongly over this period than did the numbers of Executive level staff which grew by 65 per cent. APS1 and 2 staff numbers actually declined by 13 per cent and 31 per cent respectively, reflecting the impact of technology principally but also the contracting out of some routine services.

Finding 3.3: Growth in the SES equivalent grades in the United Kingdom and Canadian civil services has been similarly higher than for their respective civil services as a whole suggesting that some of the factors relating to complexity, national security, ICT, media scrutiny and the associated accelerating policy cycle may be common.

Finding 3.4: The APS has a higher ratio of SES equivalent staff than the State public sectors, however the case of Victoria suggests that if a comparison is made on a “like with like” basis by excluding the State front line delivery services (teaching, police, health etc) the proportions are very similar. There have been cuts in the SES equivalent grades in NSW and Victoria, offset to some extent by growth in senior non-SES specialist staff and greater use of contracting.

Finding 3.5: It proved impossible to get meaningful comparisons with the private sector in relation to the proportion of SES equivalent staff. Mercer suggests that the key drivers of private sector executive numbers, and changes in them, are:

• business strategy and model – and changes thereto

• profit ratios and financial results

• executive talent strategy

• business effectiveness, efficiency and cost base, including the issue of span of control


• acquisitions/divestitures and further changes as a result of post merger integration or demerger.

Finding 3.6: Successful downsizing exercises in the private and public sectors are linked to market, strategy, policy and program fundamentals and managed actively to ensure that the right people remain and the capacity of the organisation is not compromised.


6 Causes of SES Growth

Growth in Government The size of the SES since its inception has to a large extent been a function of the size of government, with the periods of strong growth in the SES corresponding to periods of strong growth in Australian Government real payments, as can be seen in Chart 4.1 below.

Chart 4.1 – Growth in the size of the SES and Australian Government real payments (1984=100)

250

200

150

100

50

Total SES Australian Government real payments

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Source: APSED, 2010-11 Budget papers, Statement 10, Table 1

On the revenue side of the Budget, there has been similar growth in the value of tax expenditures. (Tax expenditures are an alternative to direct expenditures as a method of delivering government assistance or meeting government objectives and have an impact on the budget position like direct expenditures.)

The APSC’s survey of high growth agencies identified the main driver of change in agency SES profiles over the past 10 years (both number and level of SES roles) as the expansion or creation of new functions pursuant to government policy priorities.

The growth in Government in recent years has also been apparent in the increasing number of policy measures.

The number of decisions – including tax and savings measures – announced in the Budgets and Budget updates has more than doubled, from 359 in 1997-98 to 825 in 2007-08.

The focus of budget initiatives for successive governments has varied. Under the Howard Government, national security functions received significant additional funding between 2003-04 and 2007-08; whereas the Rudd Government maintained these programs and allocated significant funding to the stimulus package including infrastructure, the environment and education.


Chart 4.2 – Growth in the size of the SES and the value of tax expenditures, 1997-98 to 2008-09 (1997-98=100)

180

160

140

120

100

80

60

Real Total Tax Expenditures SES

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Source: APSED, Department of the Treasury

Chart 4.3 – Growth in the size of the SES and the number of budget measures 1997 98 to 2007 08

1000

900

800

700

600

500

400

300

200

100

Number of measures (LHS) SES (RHS)

2800

2600

2400

2200

2000

1800

1600

1400

1200

1000 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Source: APSED, Department of the Treasury

Change in programs – new programs and the substantial reworking or winding up of old ones – usually requires careful management. Risks are highest when programs are introduced or amended and new administrative systems are being put in place. This has been starkly illustrated by the Australian National Audit Office’s review of two controversial government

programs – the Australian Government’s Home Insulation Program and the Green Loans Program. The report on the Green Loans Program noted that: “(f)rom the start of the program, DEWHA assigned day-to-day program management responsibility to sub-executive level officers who had little program delivery experience. As such, program delivery was devolved


to too low a level within DEWHA without sufficient engagement by executive management”.19 The report on the Home Insulation Program noted in respect of involvement of DEWHA SES in its implementation, that “(t)he demands initially placed on those at the branch and division head levels to deal with a wide range of issues, including implementation of other complex programs, were unreasonable and executive level resources were added too late and only after significant problems became evident”.20

Agencies that participated in the APSC’s survey of high growth agencies reported that higher levels of external scrutiny, combined with ministerial demand for faster turn-around of advice and/or delivery of programs, has led to increased risk and a corresponding need for more senior/experienced people to mitigate that risk.

The strong growth in the number of programs – as proxied by the number of Budget measures

– administered by the Department of Education, Employment and Workplace Relations and the Department of Immigration and Citizenship over the last decade and the growth in real departmental expenses in these agencies, is depicted in the charts below. In each of these agencies, the number of SES more than doubled over this period.

The flow of Commonwealth legislation has grown significantly, and subordinate legislation has increased at a similar pace.

Some of this increasing flow of legislation and regulation has replaced or amended existing legislation and regulation but much is new growth.

The stock of legislation to be administered has grown commensurately – eg the Income Tax Assessment Act has grown from 120 pages in 1936 to more than 7,000 pages today.

Chart 4.4 – Growth in SES, real departmental expenses and measures, Department of Education, Employment and Workplace Relations (including DEST and DEWR) 2000-01 to 2008-09 (2000-01 = 100)

900

800

700

600

500

400

300

200

100

0

Expenses (real increase) SES Measures Reported in the Budget and MYEFO

2001 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED, Budget papers.

Chart 4.5 – Growth in SES, real departmental expenses and measures, Department of Immigration and Citizenship 2000-01 to 2008-09 (2000-01 = 100)

300

250

200

150

100

50

0

Expenses SES Measures Reported in the Budget and MYEFO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: APSED, Budget papers.

19 Australian National Audit Office (2010), Performance Audit of the Green Loans Program 20 Australian National Audit Office (2010), Performance Audit of the Home Insulation Program


Table 4.1 – Pages of Commonwealth acts of parliament passed per year by decade

Total pages Average per Act

1900s 1,072 6

1910s 1,195 3

1920s 1,515 3

1930s 2,530 3

1940s 2,795 4

1950s 5,274 6

1960s 7,544 6

1970s 14,674 9

1980s 29,299 17

1990s 54,573 31

2000-2006 40,266 35

Source: Chris Berg, Policy without Parliament; the growth of regulation in Australia, Institute of Public Affairs, IPA Backgrounder, Vol 19/3, November 2007

Growth of in-house legal teams Data provided by the Office of legal Services Coordination in the Attorney-General’s Department shows that expenditure by Financial Management and Accountability Act 1997 agencies on legal services grew by 117 per cent in real terms between 1995-96 and 2008-09. Expenditure on private firms grew by 456 per cent in real terms during this period and expenditure on in-house practices by 164 per cent. Fundamentally this has reflected the greater litigiousness of Australian society as well as the broader avenues for administrative or judicial review of public service decisions. Factors observed by the Report of the Review of Commonwealth Legal Services Procurement (the Blunn Krieger review) as influencing increases in demand for legal services (and the responsibilities of agencies in meeting them) include:

• compliance with, and in some cases enforcement of, an increasing volume of legislation and legislative instruments

• the expansion of administrative law which has made government decision-making far more transparent

• privatisation of government owned businesses and the consequent growth in regulatory authorities; for example, in the area of telecommunications and

• outsourcing of some functions formerly carried out within government and the associated scrutiny of procurement and tender evaluation processes21.

The demand for continuously available and agency-specific legal services, when linked with devolution of decision-making in relation to the procurement of many legal services to departments, has seen a significant increase in the number of SES staff engaged by agencies in in-house legal teams. It is not clear what the counterfactual would have been – at least some of this growth in APS services must have offset growth in the Australian Government Solicitor, and increased use of private suppliers must also have reduced demand for additional positions.

Freedom of Information and other administrative law reforms The Administrative Decisions (Judicial Review) Act 1977 granted a statutory right to an aggrieved person to obtain a statement of reasons for an administrative decision. The Administrative Appeals Tribunal was established in 1976 to provide independent merits review of administrative decisions made by Government ministers and agencies. The Freedom of Information Act 1982 introduced a new statutory right of access to information in the possession of government. The number of freedom of information (FOI) requests (excluding requests for personal information) has increased over the last decade. The most recent changes in the FOI Act are likely to further increase the demand for access, particularly to policy related material likely to be of public interest.

21 Report of the Review of Commonwealth Legal Services Procurement, 2009


Chart 4.6 – FOI requests – excluding requests for personal information

7000

6000

5000

4000

3000

2000

Growth in the number of Australian Government agencies Since 2002, the number of Financial Management and Accountability Act 1997 agencies has increased by more than 20 per cent – from 81 in 2002 to 105 in 2011. The number of APS agencies peaked at 106 in July 2009.22 The increase in the number of agencies can be attributed to:

• a net increase of three in the number of Departments of State – from 17 to 18 in October 2004, 18 to 19 in December 2007, and 19 to 20 in September 2010 – somewhat reversing the changes made in 1987 which had led to significant SES reductions;

• a net increase of 13 agencies from changes in PS Act coverage – since 2002 a total of 21 agencies moved into and 8 agencies moved out of the APS23; and

• a net increase of six new agencies

– Some agencies were abolished with functions being subsumed into the parent department – eg the National Oceans Office and Australian Greenhouse Office (both abolished in 2004).

– Some agencies were abolished but had successor organisations – eg the Australian Communications and Media Authority (created 2005) assumed the functions of the former Australian Broadcasting Authority and the Australian Communications Authority, both of which were abolished.

1000

02000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Source: Freedom of Information Act 1982, Annual Report 2008–2009 by the Minister for Privacy and Freedom of Information to the Parliament on the Operation of the Act

– Some agencies were created to perform newfunctions or functions previously performed byan Australian Government department or State/ Territory government agencies – eg the former are the Bureau of Meteorology (2002) and Cancer Australia (2006). The Australian Pesticides and Veterinary Medicines Authority (established in 1993) centralised the registration of all agricultural and veterinary chemical products into the Australian marketplace, a function previously undertaken by each State and Territory government.

Over the same period the number of bodies under the Commonwealth Authorities and Companies Act 1997 decreased from 113 to 87. While most CAC Act bodies are not part of the APS – that is they are not staffed under the Public Service Act 1999 – Departments of State interact with and may oversight CAC Act bodies – eg the Arts, Culture and Heritage Group of the former Department of the Environment, Water, Heritage and the Arts worked closely with the national collecting institutions on a range of governance and other matters.

22 Department of Finance and Deregulation flipcharts of FMA Act and CAC Act bodies from 2002 to 2010 23 Australian Public Service Statistical Bulletin State of the Service Series 2008-09, Appendix 4


Changing nature of government and public service The growth in the volume and complexity of statutory and regulatory frameworks reflects the increasing complexity of the challenges facing government and the complexity of the responses required of senior public servants.

Many contemporary public policy challenges involve complex problems that cross organisational and government boundaries. Examples of such challenges include:

• a radically changed national security and border protection environment

• climate change

• tax reform

• water reform

• mental health

• indigenous disadvantage and

• land degradation.

In delivering the 2009 John Paterson Oration, the then Prime Minister, the Hon Kevin Rudd MP, said:

Such problems defy conventional approaches. They require new, collaborative approaches to policy making across departments, across Commonwealth, State, Territory and local governments. They often require partnerships with the private and community sectors. Increasingly they also require us to work with governments abroad. Above all, they require innovative, urgent and practical policy thinking – great ideas, but also ideas grounded in the real world.

The APS has also been required to develop whole of government responses to emergency situations – like the responses to the 2004 Boxing Day Asian Tsunami and Cyclone Larry in Queensland in 2007.

In assessing Australia’s tax/transfer system, the final report on Australia’s Future Tax System noted that:

• “…policy and program complexity has continued to increase, such that the system remains confusing, costly and risky for people” and

• “…the complex objectives of the tax and transfer system, the world in which it operates, and the desire to tailor its impacts to the diversity of people’s lives mean that even a simpler system has the potential to be complex, costly and risky for the people interacting with it”.24

Agencies surveyed by the APSC consistently identified two key changes to SES roles over the past 10 years – increased complexity and the volume of tasks to be managed, and an increased level of required responsiveness to stakeholders.

An IBM study – Capitalising on complexity – found that public and private sector leaders globally believe that:

• ‘…a rapid escalation of ‘complexity’ is the biggest challenge confronting them. They expect it to continue, indeed, accelerate in the coming years’ and

• ‘…events, threats and opportunities aren’t just coming at us faster or with less predictability; they are converging and influencing each other to create entirely unique situations’.25

Commonwealth and State / Territory relations Evidence of the impact these complex problems and whole of government responses to emerging policy issues has had on the demands on the SES is evident in the increase in Council of Australian Governments (COAG) activity.

Policy reforms of national significance and complexity that require cooperative action by Australian governments have increasingly occurred under the auspices of the COAG established in 1992. Under COAG a number of intergovernmental agreements for substantive decisions that require legislation have been settled and signed. Currently there are 15 intergovernmental agreements.

Most of these agreements are implemented through national agreements and national partnerships. The COAG website lists six national agreements – in healthcare, education, skills and workforce development, disability, affordable housing and indigenous reform – and seven national partnerships (with reward payments) – on preventative health, elective surgery waiting list reduction plan, essential vaccines, improving teacher quality, literacy and numeracy, youth attainment and transitions to deliver a seamless national economy.

24 Commonwealth of Australia (2009) Australia’s Future Tax System, final report25 IBM Corporation, Capitalising on complexity – Insights from the Global Chief Executive Officer (CEO) Study, 2010 (2010:3-4)


Chart 4.7 – Number of COAG meetings

5

4

3

2

1

01992 1993 1994 1995 1996 1997 1998 1999 2000

Source: http://www.coag.gov.au/coag_meeting_outcomes/archive.cfm

The October 2010 COAG Compendium lists 33 ministerial councils that facilitate cooperation between the Australian Government and State and Territory governments in initiating, developing and monitoring policy reform under these intergovernmental and other agreements.

COAG landmarks include:

• National Competition Policy (1995)

• Intergovernmental agreement on a national water initiative (2004)

• Murray-Darling Basin intergovernmental agreement (2008)

• National counter-terrorism strategy (2006)

• National Reform Agenda (2006)

• National Health and Hospitals Reform Commission (2008)

• Health professions agreement (2008)

• Intergovernmental agreement on federal financial relations (2008)

• Nation Building and Jobs Plan (2009).

As an example of the administrative complexity that these arrangements can entail, the National Health and Hospitals Reform Commission reports directly to the Australian Government Minister for Health and Ageing, and through the Minister to COAG and the Australian Health Minister’s Conference. The latter is supported by the Australian Health Ministers’ Advisory Council which in turn is supported by six principal committees all headed by high-level departmental officials from the participating jurisdictions.

2001 2002 2003 2004 2005 2006 2007 2008 2009

The trend towards the establishment of national frameworks has seen all States referring matters to the Commonwealth – eg the nation-wide referral of corporate matters in 2001 and terrorism related matters in 2002-03. Similarly in 2008 the Murray-Darling basin reforms saw the referral of certain powers from the Basin States to the Commonwealth and in 2009 following COAG agreement regulatory responsibility for consumer credit and finance broking transferred from the States to the Commonwealth.

In 2010 a new national industrial relations system commenced following the referral of powers to the Commonwealth by all jurisdictions, except Western Australia. This culminated earlier unsuccessful attempts. In 1996 Victoria became the first State to refer its powers over industrial relations to the Commonwealth. In 2005 the Howard Government’s Work Choices package unsuccessfully sought to create a national system through a referral of powers by the States. Consequently it relied on the corporations power to greatly extend the coverage of its Work Choices legislation.

The Parliament – inquiries The activity of the Australian Parliament also impacts directly on the APS – particularly agency heads and the APS leadership group, the SES.

The Australian Parliament House website – Current inquiries by subject matter – lists almost 600 Senate, House and Joint current and recent inquiries for the 42nd Parliament. The subject matter for these inquiries is extremely diverse covering the entire breadth of the Australian Government’s jurisdiction – eg inquiries into legislation before the houses of Parliament, reviews of agency annual reports, trade and investment matters, and social policy and environmental policy issues.


Executive government Ministerial staffSection 65 of the Constitution provides for the number of Ministers:

Until the Parliament otherwise provides, the Ministers of State shall not exceed seven in number, and shall hold such offices as the Parliament prescribes, or, in the absence of provision, as the Governor-General directs.

The Parliament increased the number of Ministers of State from seven to eight in 1915. Further statutory increases, including amendments in 2000 to the Ministers of State Act 1952 to allow for the appointment of 12 Parliamentary Secretaries, have brought the number up to the present limit of 42.

The number of Ministers has remained static at 42. However, the number of portfolio groupings and ministerial titles or roles – Cabinet Ministers, other Ministers, Minister Assisting roles and Parliamentary Secretaries – has varied. In successive Howard Ministries the number of Ministerial roles ranged from 45 to 49 – with some Ministers performing more than one role.

Over the 15 years to 2010 the number of ministerial roles has increased by 20 per cent, from a low of 45 (in 2001) to 60 (in 2010). Under the Rudd and Gillard Ministries the number of ministerial roles has grown from 51 in December 2007 to 60 in September 2010.

The increase in the number of ministerial roles directly impacts on the workload of the APS – in particular agency heads and the SES, the two groups with major responsibility for providing advice to Ministers and their offices. The increase in the number of ministerial roles is also likely to result in greater complexity by requiring effective co ordination within and across agencies.

The increasing complexity of government has increased the demands on Ministers to comprehend issues within their portfolios and manage the public presentation of those issues. This is likely to directly affect the work environment of the SES. It may also have indirectly affected the SES through its impact on numbers of ministerial staff. The data for the period 1983 to 2010 in Chart 4.8 below indicates that the Howard and Rudd Governments reduced the numbers of ministerial staff on election. However, with experience in government, the number of ministerial staff subsequently increased under both Governments. These increases may be indicative of the breadth and tempo of policy implementation – particularly as governments mature.

Whatever the reasons Chart 4.8 illustrates the significant growth in the number of ministerial staff between 1983 and 2010.

In relation to Cabinet processes some evidence on the changing demands on the SES was provided in the Review of Government Staffing, prepared by Alan Henderson in 2009 – see Table 4.2 below.

Chart 4.8 – SES and ministerial staff – totals 1983 to 2010

500

450

400

350

300

250

200

150

100

Personal Staff Govt (LHS) SES (RHS)

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1500

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500 Apr-83 Apr-86 Apr-89 Apr-92 Apr-95 Apr-98 Apr-01 May-04 May-07 May-10

Source: Department of Finance and Deregulation


Table 4.2 – Number of meetings: Cabinet and committees of Cabinet

Meeting 2006 2008

Cabinet 34 45

Committees of Cabinet including National Security Committee 62 137

Cabinet and Committees of Cabinet outside Canberra (part of totals above) 5 23

Impact of information and communications technology on the demand for skills The increase in the ratio of SES to non-SES is a reflection of a broader trend which has seen strong growth in the SES and EL levels and a decline in the numbers at the APS 1-3 levels. This trend can be attributed in large part to skill-biased technological change, or the emergence of computer technology that is a substitute for routine tasks such as sorting, filing and retrieving information, and a complement to non-routine cognitive tasks such as diagnosing and solving problems and complex communication26. By taking over routine filing, calculating and transaction processing tasks that were once performed by APS 1-3 level staff, computers have caused a large absolute drop in the number of junior staff and a corresponding increase in the share of the APS workforce that is engaged in non-routine cognitive tasks. A corollary of this trend is that the management of APS staff performing routine tasks has become a less important aspect of SES and EL roles.

Table 4.3 – The changing APS classification profile

Impact of information and communications technology on the SES The substitution of computers for routine tasks has improved the productivity of SES, EL and APS employees engaged in non-routine cognitive tasks. For example, the greater availability of up to date financial information has improved the efficiency of economic policymaking and advising and the capacity to search documents electronically has increased the speed and quality of legal research.

The improved productivity of public servants engaged in problem solving and complex communication has also raised expectations of stakeholders about the level of responsiveness that can be achieved and the level of complexity that can be managed.

However, it is ICT convergence and mobile high speed data, image and voice communication that is likely to have had the most dramatic impact in the last decade. High speed and mobile communications via smartphones, and the near ubiquity of access to home and office-based internet has supported the emergence

Classification % Change 2000-2010

APS 1 -34%

APS 2 -33%

APS 3 56%

APS 4 19%

APS 5 70%

APS 6 60%

EL 1 119%

EL 2 69%

SES 1 73%

SES 2 63%

SES 3 35%

TOTAL 45%

Source: APSED

26 David Autor, Frank Levy and Richard Murnane (2000), The Skill Content of recent Technological Change: An Empirical Exploration http://web.mit.edu/flevy/www/skillcontent.pdf


of new social networking and web-based media. The result has been a rapid growth in interaction with the public and Ministers’ offices and more particularly a progressive contraction in the cycle time on which advice is requested and a response from the APS is expected.

Increasing interconnectedness through advances in communication technology is reducing the timeframes available to respond to emerging issues and simultaneously broadening the range of issues current at any one time.

Case study – Impact of the 24/7 media cycle on the Department of Health and Ageing

The Department of Health and Ageing is a large Australian Government agency. It has four ministers and a diverse set of responsibilities. Its website – www.health.gov.au – lists seven priorities including:

• working together with the States and Territories to reduce duplication and gaps, and to deliver efficient, value-for-money health and aged care services through an adaptable and sustainable health and aged care workforce and

• leading a whole-of-government approach to strengthening Australia’s readiness for disease threats, national emergencies and other large scale health incidents.

An internal advice – Impact on the departmental staff and the SES of media requirements – states:

The continued expansion of the myriad channels and methods to communicate with the public and specific stakeholders, the ongoing expectation that communication materials will be highly detailed and targeted to the needs of any specific user group, and the increasing expectations of many stakeholders (including the media) that public servants will produce highly accurate information in extremely fast timeframes while also doing their primary activities of producing and implementing policy, programs and services for the community, places considerable strain on the resources of departmental program areas and in particular on the senior executive service staff who must authorise the release of the information and ensure its accuracy.

Other than responding to media inquiries, departmental staff and the SES need to be responsive to a range of communications requirements including:

• preparation of materials for draft media releases, speech notes. (The Department produced almost 2000 media releases, speeches and talking points in the last financial year)

• event management briefs

• weekly Prime Ministers Office high profile events and Ministers’ Office announceables lists

• social marketing campaigns (of which the Department currently has 13 and cover a range of Divisions and outcomes) which includes the requirement for the Secretary to certify compliance with the DoFD guidelines and for SES to appear before an Independent Communication Committee to present the campaign at various stages in development prior to their consideration

• website content across more than 50 Departmental websites – many of which are updated daily

• communications and stakeholder engagement strategies (that outline how best to achieve an information or behavioural change objective using a range of communication and influencing channels and opportunities).

27 IBM Corporation, Capitalising on complexity – Insights from the Global Chief Executive Officer (CEO) Study, 2010 (2010:16)


Chart 4.9 – Department of Health and Ageing – SES and workflow indicators 2001-2009

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250

200

150

100

50

0

SES Correspondence received Minutes sent to Minister's Office

Briefings requested Question Time Briefs Senate Estimates' QoN Parts rec'd

2001 2002 2003 2004

The IBM study – Capitalising on Complexity27 noted that “technology is also contributing to growing complexity creating a world that is massively interconnected”.

According to the E-readiness Rankings produced by the Economist Intelligence Unit, Australia ranked sixth out of 70 countries for its ‘e-readiness’ in 2009 – behind Denmark, Sweden, the Netherlands, Norway and the United States of America. Australia was ranked fourth in 2008.

Australia has one of the highest rates of mobile phone ownership in the world. According to the Australian Communications and Media Authority (ACMA), at June 2009 there were 24.22 million mobile phone services in operation, up 9.5 per cent from the previous year. Of these 12.28 million are third generation (3G) mobile services, up 43.6 per cent from June 2008.

3G mobiles or smart phones – such as Blackberries or iPhones – can be used to make telephone calls and send text (SMS) messages, but also have the capability of a personal digital assistant (eg a palm pilot) or a computer – and can send and receive e-mail, access the Web usually at higher speeds, and edit Office documents.

According to the Nielsen Company – a global marketing and advertising research company – the big rise in smartphone ownership and relaxed download caps on mobile phone plans has seen an increase in mobile social networking:

• over one quarter of social networkers (26 per cent) participated in mobile social networking in the past year and

• 66 per cent of mobile social networkers are under 35 years of age.

Of the networking sites accessed by mobiles, according to Nielsen:

2005 2006 2007 2008 2009

• Facebook is the most popular with 92 per cent of mobile social networkers having visited Facebook, followed by YouTube and Twitter (18 per cent) and MySpace (nine per cent).

• Twitter sees the most frequent mobile usage, with half of its mobile users visiting the site daily. In comparison, Facebook saw 36 per cent of its mobile users visit the site daily, while 22 per cent of MySpace.28

At June 2009 there were 8.4 million internet subscribers, an increase of 16.2 per cent from June 2008. The average time per month spent on line at home (June quarter) was 57 hours, a 21.3 per cent increase over the previous year. Australians are downloading ever-increasing amounts of data with more Australians going online for business and personal transactions.

Wireless broad band services grew strongly increasing 162 per cent to reach 2.1 million services and accounts for 25 per cent of all internet subscribers.29

News & Media organisationsICT developments have influenced the way news and media organisations deliver content – eg internet and satellite television enables the media to reach new audiences. It has also fed or driven demand for news – described by the ABC’s The Drum as ‘…relentless and dehumanising noise of the 24/7 media cycle’30.

Today there are a number of dedicated 24-hour news channels – eg Sky News and the ABC. According to Ricketson: Twitter ‘…has certainly become an important element of the media mix in Canberra…’.31

28 Heidi Allen, Digital Strategy, How do Australian use their mobiles, New media in health and Publishing, July 19 2010 – http://heidiallen.id.au/mobile-usage-stats-australia-2010/

29 ACMA media release, Mobile broadband and internet services take off, 12 January 2010 30 Mark Bahnisch, 24-hour media cycle does no favours for our democracy, The Drum, ABC, 24 July 2010 – http://www.abc.net.au/unleashed/stories/s2936265.htm

31 Matthew Ricketson, How the 24/7 media cycle helped kill off Rudd, Crikey, Thursday, 1 July 2010 – http://www.crikey.com.au/2010/07/01/how-the-247-media-cycle-helped-kill-off-rudd/)


Table 4.4 – Growth in the importance of ICT

METRIC 1993-94 2008-09

Total ICT staff (including ICT contractors) 7,879 15,222

Total APS staff 160,900 161,837

ICT staff to total APS staff 4.9% 9.4%

PCs per staff 0.82 1.60

METRIC 1993-94 2010

Number of Office Productivity Suites (FMA Act agencies) 107217 291417

Microsoft Word 66464 253070

Lotus 17627 37000

Apple 2000 252

Wordperfect 14966 220

Open Office 0 875

Other 6160 0

Total APS staff 160,900 164,596

Office Productivity Suites as proportion of total staff 67% 177%

Notes: 1. 1993-94 data is from the Clients First report from the Information Technology Reference Group (March 1995) 2. 2008-09 data is from the 2008-09 ICT benchmarking performed by the Department of Finance and Deregulation 3. Total APS staff is from APSED 4. ICT staff in 1993-94 and 2008-09 includes Information Technology Officers and other IT related staff and ICT contractors 5. Office productivity suites 2010 from the Department of Finance and Deregulation 2010 Common Operating Environment survey

April/May 2010

Source: Department of Finance and Deregulation

Finding 4.1: The reasons most frequently given for rapid SES growth are:

• Growth in the complexity of work expected of the APS and the number of programs administered.

• Significantly greater demands for interaction with and response to stakeholders including both Ministers and their offices, other levels of government and business and the community more broadly.

• The impact of ICT and the 24/7 media cycle on the cycle time for requests and provision of advice including the extension of the ‘working day’.

Finding 4.2: Periods of strong growth in the SES have corresponded to periods of strong growth in Australian Government expenditures, although the 50 per cent increase in the SES since 2003 exceeded the growth in real Australian Government payments of 41 per cent over this period.

Finding 4.3: There is strong evidence for a relationship between the growth in the SES and growth in the number of programs administered by the APS – measured by the number of budget initiatives. New policy and new programs require higher levels of oversight by senior staff. Similarly significant pressures on senior skills have been driven by the growth in regulation, the increasing scope and use of administrative and judicial review, increased frequency of cabinet meetings and their location outside Canberra and the number of high level negotiations associated with an ambitious COAG reform agenda.

Finding 4.4: A heightened national security environment, deepening concerns about border security, the Global Financial Crisis, the complexity of the climate issue, greater Commonwealth involvement responsibilities shared with the States (education, health and water) and high levels of immigration have contributed to SES growth domestically and overseas.

Finding 4.5: There is considerable anecdotal evidence of the impact of the growth of ICT on the complexity, density and time sensitivity of the relationship between the APS, the Ministry, the Parliament and the community. There is a strong presumption that this has increased the demand on the Executive and SES levels.

Finding 4.6: There has been some reversal of the consolidation of Commonwealth machinery of government arrangements which took place in 1987, with increases in both the number of departments and of independent APS agencies.


7 Agency Classification Management Practices

To gain a better understanding of the reasons that may have contributed to growth in the SES and of how agencies manage their SES classifications the APSC:

• interviewed the Corporate/Human Resource executives (at the SES Band 1 and 2 classifications) in 15 agencies and

• surveyed APS agencies to establish whether agency requirements are being met by the existing APS classification structures, including the SES classification structures, and to examine agency classification management arrangements.

Agency classification management practices The agency interviews and agency surveys found that most agency heads have not developed agency-specific work level standards for their SES employees as required by the Public Service Classification Rules 2000. Thus agency heads and/or their delegates do not assess newly created SES roles or reassess existing roles that become vacant against a single objective agency standard.

Of the 15 agencies interviewed, for example, only three agencies reported using documented work level standards to inform classification decisions on new or vacant SES roles. Some agencies, such as the Department of Finance and Deregulation, refer to the former 1998 APS-wide SES work level standards in their corporate documentation while others use the APSC’s Integrated Leadership System as a reference point to assist with classification decisions. Agencies using the Integrated Leadership System acknowledged that it was not designed for classification purposes.

Typically agency heads decide – in some cases in consultation with their senior executive – whether an SES job should be created or filled and the appropriate classification level. The common practice is to benchmark against existing positions within the agency, supplemented sometimes with informal external benchmarking against comparable agencies and/or the private sector.

Nor do agencies routinely engage external expertise to advise on classification decisions, although three agencies indicated new SES Band 1 and Band 2 positions had been created in response to specific recommendations of external reviews or audits.

The 2010 survey on classification structures and agency classification management arrangements found that 66 per cent of respondents indicated remuneration was a consideration in classifications – for skill shortages and/or attraction/retention reasons. This suggests in spite of the increased flexibility given to agency heads to set remuneration that managers may be over classifying some jobs based on the required remuneration outcome instead of the work to be performed. The survey questions did not distinguish between different classification groups or levels within groups or between the SES and non-SES classifications. However, this is more likely to be an issue relevant to the SES where the diversity and relative complexity of roles makes classification less straightforward and attraction and retention concerns more acute.


Finding 5.1: Agency heads typically decide whether an SES job should be created or filled and the appropriate classification level. Few agency heads have developed agency specific work level standards for SES roles, or seek expert advice, to inform classification decisions.

SES classification structure and agency requirements The overwhelming majority of surveyed APS agencies consider the existing APS classification structures, including the SES classifications, meet their business needs – now and in the future.

In relation to SES classifications, there are two issues – the growth in the number of SES Band 3 positions – and the apparently wide range of work levels these roles might span – and the ongoing relevance of the Senior Executive (Specialist) classification. Chapters 3 and 4 explore some of the reasons behind the growth in the number of SES Band 3 roles – ie factors relating to complexity, national security, ICT, media scrutiny and the associated accelerating policy cycle. Chapter 6 reports the findings of an assessment of SES roles against the draft SES work level standards. These and the previous work level standards acknowledge the broad range of work value, different organisational roles and individual jobs comprehended by each SES classification level.

Both the APS-wide classification survey and agency interviews found a marked decrease in the use of the Senior Executive (Specialist) classifications. For example, both the Attorney-General’s Department and the Australian Taxation Office now classify roles previously classified as Senior Executive (Specialist) as SES roles. Of the 15 agencies interviewed, only three agencies indicated they use Senior Executive (Specialist) classifications.

The clear majority of interviewed and surveyed agencies considered it unnecessary to use the Specialist stream – even for roles that require specialist technical expertise or qualifications. The main reasons identified for not using specialist classifications were:

• the existing recruitment framework is sufficiently flexible to ensure candidates possess specialist skills or qualifications where these are considered necessary

• the scope of the SES jobs in the agency encompassed broad senior management responsibilities in addition to any requirement for specialist/technical knowledge

• the adoption of identical core criteria for SES and Senior Executive (Specialist) roles and

• the perception that the Specialist stream restricts SES mobility.

In relation to the latter, the Public Service Commissioner’s Directions 1999 (as amended) specified a formal process for assignments from a Senior Executive (Specialist) classification to SES classifications. The move must be as a result of a competitive selection process or a formal assessment conducted by the agency head with the participation of the Commissioner’s representative and the Public Service Commissioner’s approval. (An identical process applies to move between non-SES and SES classifications.) Given that identical core criteria have applied to SES and Senior Executive (Specialist) roles since 1998-99, this process would appear to be unnecessary.

Agency responses confirm that specialist skills and expertise can be accommodated within the SES classification structure. One agency recommended that the concept of APS-wide specialist classification levels could be captured by grouping job families based on professional categories linked to specified qualifications. The ICT capability framework demonstrates that specialist career paths can be accommodated by the development of professional and technical capability frameworks without diminishing or detracting from a single flexible APS-wide classification structure.


Finding 5.2: Specialist career paths, including SES roles, can also be accommodated by the development of professional and technical capability frameworks without diminishing or detracting from a single flexible SES classification structure.

Recommendation 1: The three level classification structure for the SES remains appropriate and should be retained.

Recommendation 2: The formal SES classification structure should be streamlined by abolishing the Senior Executive (Specialist) classifications. Roles classified as Senior Executive (Specialist) should be reclassified to the corresponding Senior Executive classification level

Recommendation 3: The Public Service Commissioner’s Directions 1999 should be amended to remove the process for assignments from a Senior Executive (Specialist) classification to an SES classification.

Against this background the ongoing benefits of maintaining the separate Senior Executive (Specialist) classification stream appear diminished. Currently agency heads may impose additional selection criteria to particular SES roles to address specialist skill requirements.

However, the formal process specified in the Public Service Commissioner’s Directions 1999 (as amended) for assignments from a non-SES classification to an SES classification remains appropriate – ie the move must be as a result of a competitive selection process or a formal assessment conducted by the agency head with the participation of the Public Service Commissioner’s representative. Unlike SES recruitment, the Commissioner has no role in selection processes for non-SES classifications with responsibility resting solely with agency heads.

Classification of SES equivalents in other jurisdictions

The United Kingdom

The SES equivalent in the United Kingdom is called the Senior Civil Service. The Senior Civil Service Grade structure is:

The Cabinet Office applies a broad management framework to the Senior Civil Service, through which it assists agencies to develop expertise and promote cohesion across the Senior Civil Service. However, responsibility for management of the Senior Civil Service is principally a matter for departments and agencies.

Departments and agencies may determine which positions are included in the Senior Civil Service, provided that they have a job weight score of at least seven, and which staff will fill them.

The Cabinet Office maintains the Job Evaluation for Senior Posts (JESP) model that agencies use to classify Senior Civil Service roles. The JESP was developed by Beamans Management Consultants and introduced in 1994 to support the new corporate Senior Civil Service structure. It is the analytical job evaluation methodology for Senior Civil Service positions. It was revised in 1997, 2003 and 2008 – cosmetic changes to address new initiatives – eg Government Skills agenda – and was examined closely in 2009 as part of the review of Senior Civil Service pay – the Normington report.

There are three core pay bands, broadly reflecting the main responsibility levels in most departments and agencies. Departments and agencies have the option of using a fourth band (Pay Band 1A) where there is a business need.

Pay Band/Grade Title

Permanent Secretary Cabinet Secretary

Permanent Secretary

SCS Pay Band 3 Director General

SCS Pay Band 2 Director

SCS Pay Band 1 Deputy Director


The current Senior Civil Service pay bands are underpinned by JESP points ranges as follows:

• Pay band 1 JESP 7-12

• Pay band 1A (if used) JESP 11-14 (nominally)

• Pay band 2 JESP 13-18

• Pay band 3 JESP 19-22.

The Cabinet Office maintains the JESP system and helps to ensure consistency of application and includes, where appropriate:

• training in its use

• working with departments to quality assure their evaluations and participate in JESP scoring panels

• regularly reviewing the methodology

• promoting good practice and

• providing assurance, support, advice and guidance.

Canada The SES equivalent in Canada is called the Executive Group. The equivalent of APS employment is Core Public Administration. The Treasury Board is the employer of public servants in Canada’s Core Public Administration.

The Executive Group comprises positions that have significant executive managerial or executive policy roles and responsibilities or other significant influence on the direction of a department or agency. Positions in the Executive Group are responsible for exercising executive managerial authority or providing recommendations and advice on the exercise of that authority.

There can be up to three hierarchical layers of Executive Group managers below the Deputy Minister (usually the top level of non elected senior official in Canada’s Core Public Administration). In turn these positions may be classified into one of five possible levels – with EX-1 being the lowest level and EX-5 being the highest.

Agencies make classification decisions using the Executive Group Position Evaluation Plan (the Plan), a points factor methodology purchased from the Hay Group comprising a scoring system, guidance on its use and a number of benchmark position descriptions. The Plan has been used to evaluate EX-level positions in the Canadian Public Service since 1980 and is managed by the Treasury Board Secretariat but agencies use the Plan to make classification decisions. Deputy Ministers are authorised to approve the classification of all EX positions at the EX-1 to EX 3 level and the classification of EX-4 and EX-5 level positions within a fixed baseline complement of positions.

The Hay Group does not have any involvement in managing the Plan but provides training to relevant agencies. Staff in agencies must be accredited to use the Plan. Many agencies engage consultants to undertake job analysis for classification purposes.

The Treasury Board Secretariat has two people employed in managing the Plan but does not audit agencies’ use of the Plan.


State and territory jurisdictions New South Wales

In NSW a new SES position can be created by an agency head, subject to a job evaluation being undertaken to establish the level. The position must be determined by the Director General, Department of Premier and Cabinet, who sets a notional limit of SES positions. Once this notional number is established for each agency, it cannot be exceeded without written approval from the Director General.

SES positions may be evaluated using Cull Egan Dell, OCR or Hay job evaluation methodologies. The evaluation of an SES position results in a total point score that determines work value within one of eight levels of the classification and remuneration structure. Evaluations can be done in-house (by qualified evaluators) or by consultants. There is no centralised auditing of evaluations.

A separate senior officer classification exists for Public Service Departments only. These positions are not SES positions. They are covered by the Crown Employees (Senior Officers Salaries 2007) Award and have less flexible work arrangements. Senior Officers Grades 1 to 3 have the equivalent work value to SES Levels 1 to 3 and have equivalent grading and status.

Victoria

The Victorian SES equivalents are called Executive Officers which are classified into three levels. The levels are defined by pay bands, but no formal arrangements are in place to ensure consistency of work value at each level.

Queensland

The number of senior executives in an agency and the classification profile is determined by the Governor in Council on the recommendation of the Premier. Senior Executives are appointed by the Chief Executive of the Public Service Commission and are employed under contract with the chief executive officer of the agency who also sets their level of remuneration within a defined pay range.

Western Australia

Agencies must seek an assessment and endorsement by the Public Sector Commission (PSC) for the creation, variation and/or reclassification of SES positions.32

Agency classification requests are referred by the Public Sector Commission to Mercer (Australia) to undertake the classification and work value assessments. The cost of engaging Mercer is recouped from agencies. The PSC makes classification decisions based on agency submissions and Mercer recommendations.

Tasmania

Agency heads must seek a determination by the Secretary, Department of Premier and Cabinet to create or reclassify a senior executive or equivalent specialist role.33

The request from the agency head must include a duty statement, the organisational context of the office, its relationship to other offices in the agency and a Mercer CED job evaluation summary.

Where the duties are determined to be of a senior executive or equivalent specialist nature, a recommendation will be made to the Premier to create an office to perform the duties. The level of the office is determined from the sum of the Mercer points.

Finding 5.3: The extent of centralised guidance and control of classification of SES equivalents in the United Kingdom and Canada and the Australian States varies. The United Kingdom and Canada both have centrally prescribed position classification standards and implementation guidelines with central control for the most senior level(s). New South Wales, Western Australia and Tasmania require a formal SES job evaluation. Victoria primarily uses its Executive Officer classifications to define pay bands with no current link to formal work level standards.

32 Framework For Executive Classifications (2009) Public Service Commission 33 Ministerial Direction No.17: Senior Executive Service and Equivalent Specialist Officers – Administrative arrangements and Conditions of Service, 21 December 2009


8 An assessment of roles against SES work level standards

SES Work Level Standards The APSC worked with Mercer (Australia) to develop a set of work level standards that describe the work level requirements of SES roles at each of the three SES classification levels. The development of the standards was overseen by a Reference Group chaired by Mr Beale and comprising the Deputy Public Service Commissioner and senior representatives of a number of APS agencies.

The work level standards reflect the leadership capabilities set out in the SELCF and the ILS. They also seek to distinguish SES roles at each level in terms of span of control, the degree of difficulty of stakeholder management responsibilities, the complexity and ambiguity of the job context and environment, the impact of judgements made and the independence with which roles operate.

A key initial premise agreed for the development of the work level standards was that they would be formative rather than prescriptive. This means that the work level standards do not attempt to describe in detail all the possible components of SES roles at their different levels across the APS, a complex exercise that may never have captured the full diversity of SES roles. Rather they focus on the core components that would need to be taken into account in any SES classification decision. This model will require agencies to exercise judgement in applying the work level standards to individual jobs but also give greater flexibility in applying them across the range of APS roles, including atypical ones.

The Reference Group was used to ensure the descriptors in the work level standards reflect the members’ understanding of the requirements of SES roles and the key distinctions between the three levels and between the SES Band 1 and Executive Level 2 classifications.

The draft version of the work level standards developed with the Reference Group was considered suitable for use as a benchmark for an audit of a sample of SES roles.

The audit approach The aim of the audit was to gather comparative data on SES roles across the APS to test:

• whether the requirements of SES roles are consistent across the APS and continue to reflect expectations of appropriate work level standards for the SES and

• the suitability and ease of application of the draft work level standards across the diversity of SES roles.

The 238 SES roles included in the audit were identified through a random selection process.


The first step in selecting SES roles for the audit was to identify agencies that had shown consistent recent periods of significant SES growth. The APSC’s APSED identified agencies that had experienced at least 30 per cent growth in their SES in the 10 years between July 1999 and June 2009. Very small agencies with less than five SES were eliminated from the list and several large agencies, whose growth could not be determined accurately because of machinery of government changes over the time frame, were added. Finally, a couple of agencies that had experienced little or no SES growth over the period were added for comparative purposes.

This resulted in 30 agencies being selected for the audit. The individual SES roles in these agencies to be assessed were then identified using a random selection from the APSED data base that were representative of the overall size and structure of each agency. The sample was able to cover a wide range of SES functions and responsibilities, although a few small adjustments to the sample were necessary, particularly where roles and functions were found to have changed. Six EL2 roles were also assessed.

The audit was conducted by combined APS/ Mercer teams and involved a review of position descriptions (or similar) for the roles, information about reporting relationships and financial and staff management responsibilities and relevant business plan documentation supplied by agencies. It also involved a 30 minute interview during which incumbents were asked a standard set of questions about their role.34 A majority of these interviews were face to face but a limited number of phone interviews were also conducted, mainly when the SES roles were located interstate or overseas. A copy of the audit questionnaire is at Attachment E.

Of the 238 SES roles assessed 43 (30.7 per cent of the total number of SES at that level) were SES Band 3, 51 (8.9 per cent of the total number of SES at that level) were SES Band 2 and 144 (7.17 per cent of the total number of SES at that level) were SES Band 1. The small overall number of SES Band 3 roles in the APS meant that it was necessary to sample a much larger percentage to ensure statistical reliability.

An important caveat to the interpretation of results of the audit and its application to the APS as a whole is that the selection of agencies on the basis of those that had experienced significant growth could bias the audit findings – ie those agencies which have had the highest level of change might reasonably be thought to be at greater risk of classification errors than those which have remained relatively stable.

The draft SES work level standards were the primary assessment tool, with the points-based Mercer CED Job Evaluation System, which measures the relative size of roles by measuring the major components of work value, providing a secondary tool of delineation. Overall Mercer found that both methodologies provided consistent classification outcomes. The Job Evaluation System points-based work value ranges corresponding to the three SES levels as described by the work level standards were identified by Mercer as follows:

SES Band 1: 685–949

SES Band 2: 950–1499

SES Band 3: 1500–2179.

The Mercer CED Job Evaluation System is “…designed to measure the relative size of positions. It measures the major components of job worth to achieve this. This well established method examines the complexity of job demands of individual positions in a way that allows a systematic and analytical comparison of positions”.35

34 For a small number of roles where information was not supplied by the agency, the assessment was based on the interviews with incumbents

35 Mercer Australia, Audit Report, SES Review, 22 November 2010, (2010:29)


Audit findings on the classification of SES roles Overall the audit found that 89 per cent of the 238 SES roles assessed are correctly classified.

Of the remaining 11 per cent, the audit found that:

• 8 per cent (20 roles) were over classified and

• 3 per cent (7 roles) were under classified (or 4 per cent if the three SES Band 3 roles above the notional upper limit of the SES Band 3 range are considered under classified).

The findings in terms of the numbers of roles falling within or outside of the work value points range for their classification are presented below.

Chart 6.1 below provides an indication of the distribution of the overall population of SES roles by extrapolating the distribution of the sample to the population. The work value range for each SES band has been split into quartiles (with an additional section for roles classified above the SES Band 3 range). Again, a significant assumption is that the sample identified for the audit is representative of the APS SES as a whole.

Charts 6.2 to 6.4 identify SES roles that fall within 10% of the point score at the top (“upper”) and bottom (“lower”) of each range.36

It is important to note, in the discussion of classification standards for all three SES bands, that placement of roles at the upper or lower quartiles of each work value range reflects the wide distribution of SES roles across that range and does not necessarily imply that roles have been poorly designed.

SES Band 1

Eight SES Band 1 positions (6 per cent) did not achieve the minimum work value score (685 points) for the SES Band 1 range. Mercer identified the key factors for over classified roles were the breadth and depth of expertise required, and the degree of complexity and novelty, which impact the level of judgement required of the SES Band 1 cohort.

Three per cent of SES Band 1 roles exceeded the maximum score for the SES Band 1 range.

Twenty four per cent of SES Band 1 roles fell within 10 per cent of the bottom of the work value range. According to Mercer, this reflects a strong prevalence of principal specialist positions demanding high expertise requirements in a narrow, specialised field. The outcome may reflect what appears to be an increase in the number of specialist policy advice positions at this level, particularly in the central agencies.

Table 6.1 – SES roles within, below or above range

Classification Classified within range Under classified Over classified Total

SES Band 3 34 (79 per cent) 0 9 (21 per cent) 43

SES Band 2 45 (88 per cent) 3 (6 per cent) 3 (6 per cent) 51

SES Band 1 132 (91 per cent) 4 (3 per cent) 8 (6 per cent) 144

EL 2 6 (100 per cent) 0 0 6

Chart 6.1 – Summary of SES role assessment outcomes

Estim

ated

APS

SES

Pop

ulat

ion

Freq

uenc

y

900

800

700

600

500

400

300

200

100

0 501-546 547-592 593-637 638-684 685-750 751-816 817-882 883-949 950-1086 1087-1224 1225-1361 1362-1499 1500-1669 1670-1839 1840-2008 2009-2179 2179-3586

EL2 SES1 SES2 SES3

SES2 over classified


SES1 under classified SES3 over classified


Under classified

Over classified

SES3 under classified

Mercer CED Points Range (Split into Quartiles)

36 For example, the “lower” range for Band 1 roles ranges from 685 points to 753.5 points


A relatively high level (14 per cent) of SES Band 1 roles fell within 10 per cent of the top of the work value points range. These roles exhibited a higher degree of job environment complexity, and a requirement for long-term strategic development and forward planning relative to the core SES Band 1 cohort.

The distribution of SES Band 1 roles across the relevant points range suggests that the distribution of these roles is skewed towards the bottom of the points range, but that they fall disproportionately into the second quartile.

SES Band 2

Mercer observed that the SES Band 2 group reflects the most varied cohort in terms of focus, ranging from significant program management and delivery, high level/high impact policy advice and principal experts.

Three roles (6 per cent) did not achieve the minimum score for the SES Band 2 range and fell at the upper end of the SES Band 1 work value range. Key factors for over classified roles were the degree of job environment complexity and the requirement for long-term strategic development and forward planning relative to the work level standards that is expected of the SES Band 2 cohort.

Three roles (6 per cent) exceeded the maximum score for the SES Band 2 range. These roles had very significant breadth and scale of operations, impacting both agency and community, and a predominant focus on long-term strategic direction.

Twenty three percent of SES Band 2 roles fell within 10 per cent of the bottom of the work value range. An examination of work value trends and patterns indicates that these roles are predominantly program or policy focused and that while they have an appropriate and even high level of program, policy, strategic or operational responsibility and complexity, Mercer observed that it was across a relatively narrower set of issues. It was also noted that the level of expertise and independence in critical decision making processes for programs, policies and operating circumstances was reduced in these roles relative to core SES Band 2 roles. A further influence is the role’s place in the organisational structure and the governance framework that sits alongside the role’s point of focus. The more roles involved in the delivery/design of a particular outcome, the more diluted the work value for each role will become.

As with the SES Band 3s (below), the distribution of SES Band 2 roles across the relevant points range suggests that the distribution of these roles is skewed towards the bottom of the points range.

Chart 6.2 – Distribution of SES Band 1 roles

0

100

200

300

400

500

600

700

800

900 Lower

Estim

ated

APS

SES

Pop

ulat

ion

Freq

uenc

y

Upper

685 - 750 751 - 816 617 - 882 883 - 949 Mercer CED Points Range SES 1

Chart 6.3: Distribution of Band 2 roles

Estim

ated

APS

SES

Pop

ulat

ion

Freq

uenc

y 300

250

200

150

100

50

0

Mercer CED Points Range SES 2

Lower Upper

950 - 1086 1087 - 1224 1225 - 1361 1362 - 1499


350

SES Band 3

Twenty-one per cent of SES Band 3 roles (9 roles) did not achieve the minimum score for the SES Band 3 range. Key factors for over classified roles were the breadth of focus and complexity of stakeholder management, budget size and impact on agency performance expected of SES Band 3 cohort.

Three SES Band 3 roles exceeded the maximum score for the SES Band 3 range demonstrating work value possibly equivalent to some departmental secretary roles.

Discussion

Because the audit sought to identify broad trends across the APS it focused on the breadth of SES roles assessed rather than the depth of assessments of individual roles, as would be required if strong conclusions were sought for individual SES roles. For example the assessments did not involve an interview with the roles the sampled roles report to or direct reports. The findings are therefore indicative of the broad distribution of work value associated with SES roles but cannot support strong conclusions about individual roles.

The distribution of roles across the work value points ranges are likely to reflect the differences in both the breadth and nature of work within any classification band, differences that will change over time as the complexity and size of particular programs and projects fluctuate.

The finding of a significant number of apparently misclassified roles in the audit is at least prima facie support for the view that that some SES roles are designed with insufficient regard to job design principles or reference to appropriate work level standards. If the assessment process effectively captures classification ‘errors’ and is representative of the total SES population, it would suggest that around 115 SES Band 1 are over classified and 57 under classified; around 33 SES Band 2 are over classified and 33 under classified; and around 26 SES Band 3 are over classified.

If this assessment is accurate the net annual cost to the Commonwealth on the basis of median total remuneration package for each SES classification level would be around $6 million, or about 1.05% of the estimated total annual SES remuneration costs – based on median total remuneration package at each level multiplied by total number of SES. This assumes that both overclassified and underclassified roles receive the median remuneration package for their level. Also, as noted above, an important caveat to the interpretation of results of the audit and its application to the APS as a whole is that the selection of agencies on the basis of those that had experienced significant growth could bias the audit findings – ie those agencies which have had the highest level of change might reasonably be thought to be at greater risk of classification errors than those which have remained relatively stable.

“Classification creep” – a change in the classification profile over time that is not attributable to changes in the nature of the work being performed – is more likely to occur when there is, among other things, no standardised approach in terms of methodology and where internal (agency specific) benchmarks are a major determinant.

Mercer has suggested that the draft work level standards could form the basis of a more standardised approach to the classification process. However, SES Band 3 roles are usually much broader based, in terms of functions and accountabilities, than those at SES Band 1 and 2 classification levels and the work level standards division of SES roles into the four categories of Delivery, Public Policy, Regulatory and Professional/Specialist is of less relevance at the SES Band 3 level. The Reference Group noted that on some occasions SES Band 3 level jobs are assigned to roles not because of the breadth of the role but the political, financial or community risk associated with them. Sometimes these roles are responsible for complex inter-governmental or public private negotiations and policy development, for major innovation and risk, and for the shepherding through of key national initiatives or for the review of critical areas of policy.

Chart 6.4: Distribution of Band 3 roles

Estim

ated

APS

SES

Pop

ulat

ion

Freq

uenc

y

80

70

60

50

40

30

20

10

0

Lower Upper

1500 - 1669 1670 - 1839 1840 - 2008 2009 - 2179 2179 - 3586 Mercer CED Points Range SES 3


Factors such as these may not have been adequately comprehended by the draft work level standards or Mercer’s points factor system. The work level standards were amended subsequent to the audit to provide greater emphasis on these issues at Band 3.

Over the past 20 years there has been a significant trend for SES Band 3 positions to form a line management role coordinating groups of divisions and functions, rather than the ‘off-line’ strategic and departmental secretary’s ‘alter ego’ role they predominantly played before 1987. This might reflect both the consolidation of departments at that time (which has been more or less maintained) and the growing demands on Secretaries’ time to support Ministers, appear before the Parliament and other inquiries, deal with key stakeholders and participate in international and COAG negotiations.

In its report, Mercer canvassed the issue of a revised four level classification structure, based in part on the assessed high levels of responsibility at the top of SES Band 3. However, this is not sufficient justification for a significant revision of the current classification structure.

Consistent with the formative approach agreed by stakeholders at the outset of the development process the work level standards do not and are not designed to reflect fine work value distinctions between roles. Secondary delineation tools such as a work value points factor or a more detailed but not points based system can enhance the identification of these distinctions but agencies would still need to exercise judgments based on specific job and agency knowledge and context in making accurate decisions about the classification of SES roles. This is likely to be particularly the case where roles have elements that appear to equally apply across two levels or where the SES role being assessed is unique, with few comparative features.

Individual agency reports were provided to the 30 agencies involved in the audit of SES roles. Comments received from agency heads have been incorporated into the final draft work level standards at Attachment D.

Finding 6.1: The work level standards produced by the Review are robust in describing the three SES classification levels, however, for the work level standards to be given efficient and consistent effect, by departments will require development of supporting application guidelines and training.

Finding 6.2: In general the audit suggested that classification decisions are being soundly made and apparent ‘error’ rates fall within normal bounds. However, there is some suggestion that SES Band 3 roles might have a higher rate of ‘over classification’ than other SES classification levels.

Finding 6.3: On the assumption that the audit results can be applied to the total APS population – and there are important caveats in relation to the choice and size of the sample – and if classification ‘errors’ could be corrected the estimated net savings to the Commonwealth are around $6 million pa.

Recommendation 4: APS-wide SES work level standards based on those at Attachment D should be issued by the Commissioner and the Public Service Classification Rules 2000 should be amended to make agency use of the SES work level standards mandatory in classifying SES positions.

Recommendation 5: A simple methodology for evaluating SES roles against the work level standards and a workbook to guide agencies in its use should be issued by the Commissioner – with training of agencies in the use of the methodology to be provided by the APS Commission.

Recommendation 6: Agency heads should be required to evaluate all SES roles against the proposed methodology and the work level standards:

• for established roles, at a minimum, as they become vacant; and

• for all new SES roles – including those sought as part of a new policy proposal – evaluations to be based on the standards but include an assessment of the impact of new roles on existing roles and structures.

Recommendation 7: Agency heads certify before a vacant or new role is filled that the classification for the role is based on an evaluation against the work level standards.

Recommendation 8: A risk based audit program of the classification of SES roles be undertaken by the APS Commission.


9 Conclusions

The scope of the problem The recent rapid growth in the SES and the growth in the number of senior SES staff has led to questions about whether this has in part emerged from competition between departments for key personnel and whether tighter controls on SES numbers and classification levels would help constrain costs and maintain equity at little damage to the public good.

The size of the SES remained relatively steady from its inception in 1984 to 2003. The rapid growth of the SES since 2004 has occurred during a period over which real spending has increased strongly, and the Australian Government has faced a range of challenges – in national security, on its borders, in the economy and in the environment – and community expectations that it will take an expanded role over Indigenous disadvantage, health, education, sustainable population growth, infrastructure and communications. The Australian Government has also taken an increasingly direct role in delivering services to citizens over this period.

There is evidence of a relationship between the strong growth in the SES over the last decade and the number of programs administered by the APS, as well as growth in regulation, the number of cabinet meetings, the scope and complexity of international meetings including the development of the G20 and the COAG reform agenda. New policy, new legislation and new programs require higher levels of oversight by senior staff.

Other contributing factors for which evidence exists – albeit much of it anecdotal – are the growth in complexity and political risk associated with the administration of programs, significantly greater demands for interaction with and responsiveness to stakeholders, including Ministers and their offices and the impact of advances in ICT and the emerging 24/7 media cycle on expected response times for the provision of advice.

Pressure on the time of Secretaries has increased significantly – and this may have increased demand for senior SES support.

Relative growth in the SES equivalent grades in the United Kingdom and Canadian civil services has been similar, suggesting that some of the factors relating to the growth in programs, complexity and the accelerating policy cycle may be common.

The flexible deployment of SES resources, including the creation (and abolition) of roles in line with policy and operational priorities is a necessary part of an efficient and effective APS. However, evidence from the audit of SES roles suggests that in a devolved setting, agencies may have created SES roles, or maintained existing SES roles, that operate at a level below the range of recognised work level standards for their SES classification, particularly at SES Band 3. This is perhaps not surprising in the light of the findings of APSC surveys, and the Review that:

• few agencies use documented work level standards to inform classification of new SES roles or to test existing classifications

• there is no detailed common guidance, or independent audit or review of classification decisions and

• for two thirds of agencies, “remuneration required to attract or retain occupant” is a factor in classification decisions.


Getting better value from SES roles The Review has found that most SES roles in the APS deal with a level of complexity and risk, exercise a degree of independence and have the involvement and impact expected at their classification level and that many do so in excess of these expectations. However, there is evidence from the audit of SES roles that the work value of some existing roles has been diluted and some newly created roles do not meet the work level standards for their classification. Overall the APS could obtain better value from all of its SES by giving greater attention to ensuring the “size” of SES roles matches their classification levels.

Better sizing of SES roles to get better value for the APS does not mean increasing the volume of work undertaken by roles, but may in some cases mean shedding lower value tasks and accountabilities and replacing them with higher value tasks and accountabilities in order that roles better reflect the relevant work level standards.

While the potential budget savings are not large – the Review has estimated them to be in the order of $6 million pa – if significant action is not taken it can confidently be expected that these costs will increase over time.

Limiting the size of the SES Evidence that some newly created SES roles do not meet the work level standards for their classification and the very strong growth of the SES over the past decade suggests that until stronger arrangements for applying work level standards are in place it would be prudent to retain some central control over the size of the SES.

Downsizing the SES There may be scope for some reduction in the number of SES roles to occur. Various States have implemented cuts in their SES equivalents and, apart from the symbolic value of such exercises, they may serve to raise cost consciousness across the senior levels of the public service. The potential for savings to the budget is not large. The direct savings in the cost of SES remuneration from a 10 per cent cut in the SES would be in the order of $65m per annum – not counting the cost of any offsetting redundancy benefits and the likely increase in the number of EL2 roles.

However, over the period of significant growth in SES numbers, the APS has been damaged by some significant failures in program delivery – failures that have in substantial part been attributed by the Australian National Audit Office and other inquiries to insufficient senior management oversight and control.

Recommendation 9: Agency SES caps should continue to apply for five years while strengthened classification management arrangements are put place for the SES and any reductions in the SES flowing from agency classification reviews and program and fiscal consolidation are implemented.

Recommendation 10: Oversight of agency caps on SES numbers and assessment of agency claims should continue to be undertaken by the Commissioner with agency bids and the Commissioner’s decisions being based on the work level standards.


Previous Commonwealth experience suggests that effective and sustainable downsizing occurs when it is driven by expenditure reductions identified as part of the Government’s fiscal consolidation strategy. A potentially fruitful area of administrative expenditure reduction that would not substantially reduce benefits to the community would be through consolidating the plethora of small Commonwealth grants programs. Often small programs cost more to administer than they deliver in benefits, and yet involve significant political and fraud risk. Similarly, consolidation of back office support for small agencies could garner savings and reduce corporate SES overheads.

To protect the quality of the SES and the capacity of agencies to deliver key government priorities, any across the board downsizing should be management initiated and not rely on purely voluntary separations or natural wastage. A targeted approach to SES reductions would involve linking reductions to program reviews and specific savings measures. This would help ensure that SES roles could be created where needed but that where savings are achieved by scaling back or abolishing programs, SES roles are reduced commensurately.

Against this background the Review is reluctant to recommend an across the board cut to SES numbers.

Recommendation 11: Any program for overall reduction in SES numbers be linked with fiscal and/or program consolidation and be managed actively to ensure that the right people remain and the capacity of the APS is not compromised.

Recommendation 12: Savings measures or program rationalisation initiatives that result in a reduction in an agency’s SES numbers be reported to the APS Commission to allow a downward adjustment to the agency’s SES cap.

Recommendation 13: All agency heads report to the Commissioner each year following the Budget but before 30 June on the adjustments to agency caps necessary to reflect the impact of Budget measures and similarly following the announcement of measures outside the Budget context that affect the agency’s SES numbers.

Recommendation 14: The APS Commission be resourced to implement the strengthened classification management arrangements.


A SES review reference group

Terms of Reference To contribute to the development by the Australian Public Service Commission of new work level standards and capability requirements for each SES level as required by recommendation 6.2 of Ahead of the Game: Blueprint for the reform of Australian Government Administration.

These standards and requirements will have regard to:

• good practice both within the public and private sectors in Australia and internationally;

• the suitability of each option to be expanded more broadly to other non-SES classifications in the APS;

• the Blueprint’s vision for the future for:

– new work level standards linked to classification structures that ensure fairness through similar remuneration for similar work; and

– frameworks that establish APS-wide work level standards and articulate the core skills and competencies required for APS roles.

The role of the Reference Group will include:

• provide feedback on options prepared by the consultant on methodologies for developing work level standards for the SES and a new capability framework for the SES, including how the two concepts might interact as a mutually reinforcing framework;

• provide feedback on draft work level standards and capability requirements for the SES prepared by the consultant.


Membership

Mr Roger Beale AO, Chair

Ms Carmel McGregor, Deputy Chair Deputy Public Service Commissioner Australian Public Service Commission

Professor Warwick Anderson AM Chief Executive Officer National Health and Medical Research Council

Mr Shane Carmody Deputy President Department of Veterans’ Affairs

Mr Gary Dunn Deputy Chief Executive Officer, People and Operations Department of Human Services

Mr Martin Hoffman Deputy Secretary Department of Resources, Energy and Tourism

Mr Bruce Hunter Deputy Secretary and Chief Operating Officer Department of Families, Housing, Community Services and Indigenous Affairs

Dr James Johnson Chief Onshore Energy and Minerals Geoscience Australia

Mr Simon Lewis PSM Deputy Secretary, Defence Support Department of Defence

Ms Renee Leon Deputy Secretary Strategic Policy and Coordination Group Attorney-General’s Department

Mr Ewen McDonald Deputy Secretary Department of Education, Employment and Workplace Relations

Ms Mary Murnane Deputy Secretary Department of Health and Ageing

Mr Richard Murray Executive Director Policy Coordination and Governance Department of the Treasury


B SES Review 2010 – APS Agency Participation

Agencies 41 Ref Grp 12 Survey 20 Interview 15

Audit 30

Attorney-General’s Department ü ü

Australian Crime Commission ü ü

Australian Customs and Border Protection Service ü ü

Australian Transaction Reports and Analysis Centre (AUSTRAC)

ü ü ü

Dept of Agriculture, Fisheries and Forestry ü ü

Australian Quarantine and Inspection Service ü

Dept of Broadband, Communications and the Digital Economy

Australian Communications Media Authority ü

Dept of Defence ü ü ü

Dept of Education, Employment & Workplace Relations ü ü

Comcare ü ü

Dept of the Environment, Water, Heritage and the Arts

(from 1 November 2010: Dept of Sustainability, Environment, Water, Population & Communities)

Australian Antarctic Division

ü

ü

ü ü

Bureau of Meteorology ü ü

Great Barrier Reef Marine Park Authority

Dept of Families, Housing, Community Services and Indigenous Affairs

Dept of Finance and Deregulation

ü

ü

ü ü

ü

ü

Australian Electoral Commission ü ü

ComSuper ü

Dept of Foreign Affairs and Trade ü ü ü

AusAID ü ü

Dept of Health and Ageing ü ü ü

Australian Institute of Health and Welfare ü ü ü

National Health and Medical Research Council ü ü

Therapeutic Goods Administration ü


Agencies 41 Ref Grp 12 Survey 20 Interview 15

Audit 30

Dept of Human Services (including Centrelink, Child Support Agency, Medicare Australia)

ü ü ü

Dept of Immigration and Citizenship ü

Dept of Infrastructure, Transport, Regional Development and Local Government ü ü(from 1 November 2010: Dept of Infrastructure and Transport)

Dept of Innovation, Industry, Science and Research

IP Australia ü

Dept of the Prime Minister and Cabinet ü ü

Australian National Audit Office ü

Australian Public Service Commission ü ü

Office of National Assessments ü

Office of the Commonwealth Ombudsman ü

Dept of Resources, Energy and Tourism ü

Geoscience Australia ü ü

Dept of the Treasury ü ü ü

Australian Bureau of Statistics ü

Australian Competition & Consumer Commission ü ü

Australian Taxation Office ü ü

Productivity Commission ü

Dept of Veterans’ Affairs ü ü


C History of the SES

Creation of the SES and evolution of its role and functions The SES was established by the Government in 1984 to:

create new arrangements for senior management, with the dual purpose of ensuring a fully productive relationship with government and enabling senior managers to realise their full potential.37

The Government sought to achieve this by reshaping the then Second Division into a more ‘unified, cohesive senior staffing group with general leadership and management skills which could effectively be assessed and flexibly deployed in accordance with the requirements and priorities of the Service’.38

Under the Public Service Reform Act 1984, the new SES was established to provide for a group of officers who:

• may undertake higher level policy advice, managerial and professional responsibilities in departments and

• may be deployed by secretaries within departments and by the then Public Service Board between departments, so as best to promote the efficiency of the APS.

Provision was also made in the legislation for:

• a guarantee of freedom from political interference in selection, appointment and promotion in the SES

• an opening up of SES positions to competition on merit from outside the APS

• the capacity for fixed term SES appointments

• SES promotions and appointments to be made by the Public Service Board, within certain guidelines and

• arrangements for the redeployment and retirement of SES officers.

The creation of the SES in 1984 marked the beginning of a period of public sector reform that has led to fundamental changes in the way the APS operates. The reforms to the APS over this period were driven by four key themes:

• a new management ethos;

• a new principles based statutory framework

• the need for new leadership capabilities and

• a renewed focus on embedding a cohesive senior leadership group.

The establishment of the SES occurred early in a period of intense change for the senior public service characterised by moving through the following phases:

37 Dawkins J, Second Reading speech, Public Service Reform Act 1984 38 Dawkins J, Reforming the Australian Public Service, December 1983, Canberra


• an emphasis on devolution or ‘letting the managers manage’ within central specified guidelines

• a change in focus towards ‘management for results’ and

• increased responsibility and accountability or ‘making the managers manage’.39

Each of these directions directly affected on the roles and responsibilities of the newly created SES.

Letting the managers manage underpinned the Hawke Government’s desire to reassert political control over policy making, while letting agency heads run their organisations. The reforms progressively delegated and then devolved responsibility for personnel management, policy development and financial management from central agencies to agency heads. The reforms also placed greater emphasis on responsiveness to government, the Parliament and the community.

Managing for results had its genesis in the public sector reforms of the 1980s as increasingly governments focused on improved efficiency and effectiveness and a stronger emphasis on results. Consistent with the increasing focus on managing for results, financial reforms replaced process compliance with performance control. Underpinning these financial reforms were the principles of the devolution of management to agency heads, improved corporate and business planning, increased public accountability, and greater emphasis on the evaluation of effective performance. Managing for results remains a central focus of the SES with the Australian Government’s Budget providing a strong link between agency strategic plans and agency funding.

According to a former Secretary:

The counterpart of devolution to allow the managers to manage were changes to make the managers manage by improving accountability for their

performance. In particular, the standard of reporting to parliament was greatly improved…while the quality of Annual Reports was raised and the information was presented in a more accessible form than previously.40

The Public Service Act 1999 (the PS Act), the current legislative framework for the APS, consolidated the functions and roles of the SES. Section 35(2) of the PS Act specifies that the functions of the SES are to:

• provide a group of APS employees each of whom, within his or her agency, provides professional expertise, policy advice, and/or management at a high level

• promote co-operation with other agencies and

• promote, by personal example and other appropriate means, the APS Values and compliance with the Code of Conduct.

The 2005 ‘One APS – One SES’41 statement of expectations released by the former APS Management Advisory Committee reinforced the expectations and the statutory role of the SES. It makes clear the SES should be agile and flexible, collaborative and collegiate, and committed to self-development. The statement highlights that ‘the leadership of any organisation embodies its identity and image’, and recognises that its role is ‘[critical to] ... employee commitment and attracting high calibre young staff’. The Management Advisory Committee statement also recognises that ‘the SES must itself evolve to meet the challenges of the future’.

More recently the Blueprint concluded:

A unified APS-wide leadership group is required to support Secretaries. At present less than 40 per cent of nearly 3,000 SES members ‘definitely see themselves as part of an APS-wide leadership cadre’ rather than as leaders only of their agency.42

39 Report from the Senate Standing Committee on Finance and Public Administration, Development of the Senior Executive Service, Canberra 1990, (1990:10)

40 Keating, M, The Public Service and Management of the Public Sector, in Ryan, S and Branston, T (Eds), The Hawke government: a critical retrospective, Melbourne 2003 (2003:372-3)

41 Management Advisory Committee, One APS One SES Statement, October 2005 42 Advisory Group on Reform of Australian Government Administration, Ahead of the game – Blueprint for the reform of Australian Government

Administration, March 2010 (2010:22)


The Blueprint made a number of recommendations concerning the strengthening of the APS leadership group, including the creation of an APS leadership group comprising staff at or above the SES Band 3 level, ie. Deputy Secretaries and equivalent. Members of this newly created senior leadership forum – the APS200– are responsible for:

• leadership roles in their organisations and more widely across the APS

• supporting the Secretaries Board by undertaking strategic projects and initiatives as cross-portfolio teams and

• being at the vanguard of cultural change to achieve the innovative, collaborative, open, agile, forward looking and streamlined public service envisioned in the Blueprint.

However, the Blueprint expects that all SES will drive reforms and model appropriate leadership behaviours such as innovation.

Classification of SES rolesPrior to 1984 senior staff in the APS were in the Second Division – part of a four divisional structure. Classification structures were introduced for senior staff by the then Public Service Board in 1926, including the use of the title Assistant Secretary. Classification structures within the Second Division were reviewed in the early 1960s focusing on policy advising and top management responsibilities, rationalising the structure into six levels, and standardising classifications at the Branch, Division and Deputy Secretary roles.

In relation to the Branch, Division and Deputy Secretary structure, the Public Service Board’s 1978 Annual Report states:

During the 1960s the Board’s approach to top structure was developed on the concept of divisions and branches as organisational units formed by grouping of related activities to distribute the top level workload and management responsibility evenly among senior staff. This allowed the adoption of simplified structures in many departments and the development of some common classification structures.

A key element in all departmental structures is the concept of a division. Under the permanent head, division heads are fully responsible for managing the affairs of their divisions and participating in the general managing of the department. Within each division, work to be done is organised into branches. Where the workload at permanent head

level is too great for one person to carry, one or more positions of deputy secretary may be introduced. These positions have been intended to operate in a way which does not introduce an additional management level between the permanent head and division heads.43

By the 1980s the Board had modified its approach somewhat.

Recognition of the significance of the division head role was associated in the early 1970s with the approach that there should be no organisational barrier between the permanent head and division heads. Deputy secretaries were seen as alter egos to the permanent head, intended, under delegation to share in the exercise of permanent head responsibilities.

In many cases, however, deputy secretaries have assumed, de facto, the superintendence of defined areas of their department’s responsibilities. While this has interposed, to some extent, an organisational level between the permanent head and division head concerned, the deputy secretary in these circumstances should usually have authority to take matters to finality, and, in reality, stand in the place of the permanent head. The Board’s concept of a deputy secretary is not one of him/ her being a ‘super division head’ but, of course, in reality, whether that is so or not will depend on the permanent head’s managerial approach.44

In response to the increasingly heavy workloads of permanent heads, by 1982 all permanents heads had been provided ‘…with an injection of additional senior management capacity…’ through the allocation of at least one position at the deputy secretary level.45

Remuneration arrangements were also rationalised with a single rate of remuneration introduced for each classification level. Work level standards for the new six level structure were issued by the Public Service Board.

In 1989 the six level SES classification structure was amended in a decision of the Australian Industrial Relations Commission and reflected legislatively the next year to the three levels currently in use. As part of these changes, the position of Senior Executive (Specialist) was included within the new structure to recognise a demand for SES jobs requiring high level professional/technical qualifications and experience, while having limited management and policy advising responsibilities and the demonstrably different labour market in which they operated. Like the generalist SES stream the SES (Specialist) stream has three classification levels – Band 1, 2 and 3.

43 Public Service Board Annual Report 1978, Canberra 1978 (1978:20) 44 Top Management Structures and Management Tools, Public Service Board Memorandum No 15 to the Review of Commonwealth Administration, October 1982 (1982:3)

45 Ibid 1982:3


Agencies that used initially at least the Senior Executive (Specialist) classification stream included the Attorney-General’s Department and the Australian Taxation Office – for legal roles, and for roles requiring particular knowledge of tax related matters, including tax law, respectively.

Under the new arrangements, the relevant award specified a minimum and maximum salary for each SES classification level. Secretaries had the discretion to determine an annual salary rate at any amount within the band limits.

APS-wide work level standards for the three level SES classification structure – including the Senior Executive (Specialist) classification levels – were issued by the then Department of Finance in 1990.46

These standards acknowledged the broad range of work value, different organisational roles and individual jobs comprehended by each SES classification level. They also allowed for the qualities or competencies of the occupant to influence placement within these broad bands.

A basic principle underlying classification in the Australian Public Service is that jobs are classified on the basis of the work to be performed in the job rather than the particular qualities of the individual performing it. The banded SES structure provides, however, for decisions on precise placement of a job within a salary band to be taken with regard to the capabilities of candidates to the extent that they can demonstrably affect the level (in terms of work value criteria) at which the job will be performed.47

The last APS-wide SES work level standards were issued in 1998.

The PS Act made provision for, among other things:

• the Public Service Minister to make rules about the classification of APS employees under section 23 – the Classification Rules and

• the identification of SES employees by reference to the Classification Rules – section 34 states that SES employees are those APS employees who are classified as SES employees under the Classification Rules.

The Public Service Classification Rules 2000 (the Classification Rules) are a legislative instrument establishing the classification levels of APS employees, including the SES. One purpose of the Classification Rules is to enable employees and duties to be classified under a common APS-wide classification system.

The three level SES classification structure, including Senior Executive (Specialist) stream, are approved classifications under the Classification Rules.

Under the Classification Rules agency heads must issue work level standards for each approved classification used so as to better reflect the type of work being done in the agency. The move to agency-specific work level standards signaled a move away from APS-wide work level standards, including for the SES. However, agencies have been able to draw on the 1998 standards – they continue to be available for research purposes on the APSC’s website.

Associate Secretaries Since the 1960s the job title ‘Associate Secretary’ has been used on select occasions to describe jobs formally classified as either a departmental Secretary – previously the First Division of the four divisional structure – or a Deputy Secretary – previously the Second Division. Contemporary Deputy Secretary titles in departments include Executive Director – used in the Department of the Treasury – and Chief Operating Officer – used in the Department of Finance and Deregulation amongst others. None of these titles including the title of ‘Associate Secretary’ have a legislative basis – ie. they are not formally approved classifications.

In 1964-5 the Public Service Board and the Department of the Treasury opposed a request from the Secretary of the Department of Trade for a First Division Associate Secretary position – ie. a second Secretary level position – on the premise that all positions within a department be subject to the permanent head.

In the late 1960s the Board once again opposed a request from the Secretary of the Department of the Prime Minister for an additional First Division office. It agreed, however, for the Secretary to designate an existing Second Division officer at the Deputy Secretary level – a contemporary SES Band 3 classification – as ‘Associate Secretary’. A higher salary was determined for the officer in recognition of his additional responsibilities as Cabinet Secretary: however, the job continued to be formally classified as a Second Division position.

In the late 1970s the then Secretary of the Department of the Prime Minister and Cabinet introduced the title of ‘Under Secretary’ for Second Division officers.

46 Responsibility for classification policy transferred from the Public Service Board to the then Department of Finance in the 1987 machinery of government changes. It subsequently transferred to the Department of Industrial relations in the early to mid 1990s.

47 Department of Finance, Australian Public Service Senior Executive Position Classification Standards, Introduction TS/3


In the 1987 machinery of government changes the number of departments was reduced from 28 to 18 and ten Secretaries and the three commissioners of the abolished Public Service Board (all First Division officers) were displaced.

Former secretaries who did not receive fresh appointments retained their rank. Nine were assigned to particular departments with the designation of Associate Secretary; this number included two who had been commissioners of the Public Service Board.48

The use of the title for unattached Secretaries may have been done for the purpose of providing such Secretaries with appropriate status. The Associate Secretary concept was based on the United Kingdom’s Civil Service practice of appointing Second Permanent Secretaries in mega departments and the Cabinet Office. In 1987 Associate Secretaries had responsibility for significant issues and/or elements of a department’s responsibilities: however, the title established an unambiguous command hierarchy from the Secretary to the Associate Secretary.

More recently, Associate Secretary status has been conferred on SES Band 3 roles with significant responsibilities, similar to the original approach adopted by the Department of the Prime Minister in the 1960s. For example, in 1999 the Secretary of the Department of Defence designated as Associate Secretary an SES Band 3 employee responsible for defence procurement. The role subsequently became the Chief Executive Officer of the Defence Materiel Organisation and continues to be classified at the SES Band 3 level.

Classification groups In 1998 all APS classifications were categorised into eleven work value or Classification Groups. The Classification Groups sought to ensure that staff movements between agencies in the APS that were transfers, prior to the devolved system of pay fixing, remained transfers. The Classification Rules retain the Classification Group concept.

In relation to the SES classifications there are three Groups – Groups 9, 10 and 11 – and each Group also includes a number of non-SES classifications.

• Group 9 – includes Senior Executive and Senior Executive (Specialist) Band 1 classifications and the non SES classifications of Antarctic Medical Practitioner Level 3, Chief of Division Grade 1, Chief Research Scientist Grade 1, and Medical Officer Class 5

• Group 10 – includes Senior Executive and Senior Executive (Specialist) Band 2 classifications and the non SES classifications of Chief of Division Grade 2, Chief Research Scientist Grade 2, and Medical Officer Class 6 and

• Group 11 – includes Senior Executive and Senior Executive (Specialist) Band 3 classifications and the non SES classifications of Chief of Division Grade 2 and DAFF Band 4.

These classifications are often referred to as SES-equivalent classifications: however, they are not part of the SES. The retention of SES equivalent classifications as separate APS classifications dates back to the late 1990s and was based on demonstrated agency requirements.

Capability requirements A major underpinning feature of SES classification arrangements has been the identification of core capabilities required in members of the senior leadership group and their use as part of selection, development and performance assessment.

The first set of five SES core selection criteria, adopted in 1987, were drawn from a list of skills needed for successful performance in SES positions which were identified through developmental work on SES performance appraisal. They were:

• human relations skills

• strategic thinking

• conceptual, analytical and creative skills

• adaptability/flexibility and

• achievement orientation.

An APSC review of the core selection criteria resulted in a new set of five selection criteria being agreed and put in place from 1 January 1991. The review, which included surveying the SES group and agency heads, identified ten key areas. This was regarded as too many, resulting in the key elements of the ten areas being extracted and incorporated into a new set of five criteria:

• corporate management skills

• representation and interpersonal skills

• leadership

• conceptual and analytical skills and

• judgment.

48 John Nethercote, Research Paper 24 of 1998 99 – Departmental Machinery of Government Since 1987, Politics and Public Administration Group, Parliamentary Library, 29 June 1999


Following the introduction of the Senior Executive (Specialist) classifications in 1990, three core criteria for these roles were identified. These criteria – communication skills, judgment, and conceptual, analytical and strategic skills – incorporated elements of the standard SES core selection criteria, while recognizing the limited management and policy advising responsibilities, and could be supplemented by additional job specific criteria to reflect the particular professional/technical expertise and experience relevant to the role.

In 1998-99, work undertaken by the APSC resulted in the establishment of the Senior Executive Leadership Capability Framework (SELCF), which is still current. The five key elements of the Framework below were adopted as a new set of SES core selection criteria for all SES positions, including Senior Executive (Specialist) positions:

• shapes strategic thinking

• achieves results

• exemplifies personal drive and integrity

• cultivates productive working relationships and

• communicates with influence.

These capabilities were reviewed in 2001 and 2004 in consultation with agencies and confirmed as accurately identifying the capabilities required of SES employees.

Application of the core criteria to all SES selections was introduced through Secretaries’ agreement. The criteria can be complemented by up to two agency or role specific criteria. More generally, the criteria have also been used as a framework for development programs, assessment of development needs for the SES and feeder groups and 360 degree feedback processes. The framework is widely used within agencies as a basis for leadership development activities.

In 2004, the APSC released its work on an Integrated Leadership System which expands on the SELCF to give a broader framework for executive and senior executive development. Unlike the SELCF, the ILS distinguishes the capability requirements at each level of the SES. The ILS provides capability descriptions and desired behaviours as tools for agencies and individuals to use in their leadership development and had been used at both the service-wide level and in a number of agencies to inform the planning and implementation of leadership growth strategies.

In the census of the SES conducted by the APSC in August 2009, employees were asked to consider the relevance of the executive leadership framework to the work they were currently doing and to the work they anticipated doing in five years. They reaffirmed its relevance and agreed that all five capabilities are important for today’s SES, and were likely to be required in five years’ time. SES employees strongly agreed that the need for two capabilities – strategic thinking and cultivate productive relationships – would increase markedly in five years.49

The Integrated Leadership System is not a set of work level standards. It focuses on the skills and behaviours required at each of the three SES levels.

In relation to leadership capabilities, the Blueprint states:

Consultations also identified a need to improve senior leadership and management more broadly across the APS. In the State of the Service Report, employees identified several gaps in the performance and capability of their senior leaders. People management skills, the capacity to steer and implement change and the capacity to think strategically were the top three capability gaps identified within agencies for the key leadership groups – the SES and SES feeder group.50

The Blueprint concludes that the APS needs to place a stronger emphasis on management of performance as a key leadership skill.

Assessing performance The managing for results ethos gave the SES clear responsibility for their agency’s performance and, consistent with this, mechanisms for measuring and assessing SES performance also evolved.

A key focus of the Government’s intentions in the 1984 reforms was the establishment of an appraisal scheme for the SES, on the basis that department heads and the Public Service Board would only be able to take a more active part in the placement and development of senior staff if reliable information about their performance, qualifications, experience and abilities was available. The Board developed an approach to appraisal in conjunction with Secretaries and coordinated the introduction of pilot schemes. The Management Advisory Board developed an agreed model for service-wide implementation to be put in place by agencies, with the APSC providing advice and support. With the introduction of performance based pay for the SES in 1990, performance assessment became a more entrenched feature across the APS.

49 McDermott, K, Senior Executive Service Census Survey: the next five years (2009), 2009:8 50 Advisory Group on Reform of Australian Government Administration, Ahead of the game, Blueprint For The Reform of Australian Government

Administration, March 2010, (2010:22)


In 1996 the new Government released a discussion paper, Towards a Best Practice Australian Public Service, outlining the cultural and structural reforms it saw as necessary for an effective and modern public service.51

The discussion paper raised the possibility of explicit written employment agreements and the use of annual performance agreements as dynamic tools to ensure that the intention of government reforms to the public service framework were actually put into practice.

The shift in focus from productivity improvements at the APS-wide level to the agency level from 1997 onwards resulted in considerable variations in both the scale and detailed nature of SES performance reward and appraisal arrangements within and between agencies.

The Blueprint recommends that the APSC develop a strengthened performance framework that supports all employees, including SES employees, in identifying strengths and areas for improvement and promotes constructive feedback from relevant sources, for example, from supervisors, peers, subordinates and stakeholders as appropriate to the nature of the role.

Setting SES remuneration

Until the early 1990s, all APS employees were covered by APS-wide industrial agreements and awards. During this period and up to 1997 the terms and conditions of SES employees derived from:

• the APS Enterprise Agreement supported by various section 82D determinations under the 1922 PS Act and the Australian Public Service, Senior Executive Service (Salaries and Specific Conditions) Award 1995 and

• other provisions of the 1922 PS Act that specifically applied to SES employees.

In the early 1990s the then Government’s enterprise and workplace bargaining policies were applied to the APS, and for the first time and within limits, departments and agencies were able to negotiate changes to pay and some conditions to meet agency specific circumstances. This was the beginning of the move away from centralised collective bargaining and uniform pay rates for each classification which had applied since the creation of the APS.

The last APS-wide industrial agreement expired in October 1996 – Continuous Improvement in the APS Enterprise Agreement.

Since 1998 government policy – as it applies to workplace relations arrangements in Australian Government employment including the APS – has been set out in successive bargaining frameworks52. Agency heads are responsible for setting actual pay rates consistent with the bargaining framework and the Government’s workplace relations policy. A key tenet has been that improvements in pay and conditions must be linked to improvements in productivity.

The supporting guidance to the current bargaining framework53 advises that the terms and conditions for SES employees and their equivalents should be reflected in either:

• determinations

• individual common law arrangements or

• where a majority of SES officers in an agency choose, an enterprise agreement.

As at 31 December 2009:

• 2,287 SES employees were covered by individual arrangements – 820 Australian Workplace Agreements, 236 common law contracts, and 1,231 section 24(1) determinations

• 84 by collective 24(1) determinations

• 3 on a collective agreement and

• 5 on ‘Other’.54

SES remuneration outcomes

The devolution of responsibility for setting SES pay and employment conditions to agency heads in 1998 coincided with the progressive move from collective to individual bargaining for SES employees. Under the devolved bargaining framework there are no APS-wide SES pay rates or employment conditions. Some data on SES remuneration is available from the APS Remuneration Surveys.

The 2009 APS SES Remuneration Survey is based on the remuneration data of 2,284 SES employees. The distribution is based on individual SES employee’s reported salary.

51 P. Reith November 1996, Towards a Best Practice APS – Discussion Paper, Commonwealth of Australia, Canberra 52 The Policy Parameters for Agreement Making in the APS until 2007; and the Australian Government Employment Bargaining Framework from 2007 onwards.

53 Australian Government Employment Bargaining Framework Supporting Guidance September 2009 54 2009 APS Remuneration Survey – in which 58 agencies participated covering approximately 84 per cent of SES employees – 2,379 SES employees reported in the Survey, out of a total of 2,845 SES reported in 2008/09 State of the Service Report


Table C.1 – 2009 SES Remuneration outcomes – total remuneration package

Classification Number of individuals

Quartile 1 Median Quartile 3

SES Band 1 1,690 $193,020 $203,136 $213,509

SES Band 2 483 $241,339 $254,222 $266,457

SES Band 3 111 $312,103 $325,125 $343,225

Source: 2009 APS Remuneration Survey

Notes

(a) Total remuneration package is base salary plus the value of any benefits such as superannuation and motor vehicles, plus FBT on all benefit items. It does not include any bonus payments.

(b) Quartile 1 is the midpoint in the lower half of the sample. That is, the first quartile is the score where 25 per cent of cases fall below and 75 per cent of cases fall above.

(c) The median is the midpoint in a range of figures. It is calculated by sorting all values into ascending order then locating the value where 50 per cent of the scores fall above and 50 per cent fall below. The midpoint is calculated by summing the minimum and maximum values of a full range of figures and dividing this value by two.

(d) Quartile 3 is the midpoint in the upper half of the sample. That is, the third quartile is the score where 75 per cent of cases fall below and 25 per cent of cases fall above.

Comparisons with benchmarks Successive APS remuneration surveys have benchmarked SES outcomes against equivalent jobs in the State and Territory public services and in the private sector.

In 2009 SES remuneration outcomes continued to be above those of the combined State and Territory public sectors. The APS median for SES Band 1 was approximately 17 per cent above the combined public sector midpoint and, for SES Bands 2 and 3, 16 per cent and 13 per cent higher respectively.

The SES Band 1 median total remuneration package has been positioned above the relevant combined public sector midpoint since at least 1999, the SES Band 2 from 2000, and the SES Band 3 from 2004.

In relation to the private sector, in 2009 the SES Band 1 and Band 2 total remuneration packages were competitive against the 25th percentile or Quartile 1 benchmark – ie. the bottom quarter of the private sector market – but all SES medians continue to be below the private sector median benchmark.

Table C.2 – 2009 total remuneration package benchmarks

Classification APS State & territory public services

Private sector

Median Median(a) 25th percentile Median

$ $ per cent $ per cent $ per cent

SES Band 1 203,136 173,733 86 180,075 89 217,743 107

SES Band 2 254,222 219,231 86 257,804 101 317,534 125

SES Band 3 325,125 288,292 89 404,576 124 485,043 149

Notes:

(a) Mid-point total remuneration package of equivalent positions in the combined State and Territory public services and percentage of the APS median total remuneration package

Source: Mercer Consulting 2009 Broader Market Comparison – APS SES and Non-SES


Chart C.1 – Median SES total remuneration package comparison with private sector medians

100

80

60

40

20

0 2000 2001 2002 2003 2004

Traditionally the remuneration outcomes for most APS classifications have been around the 25th percentile as confirmed by successive APS remuneration surveys. However, the SES Band 3 classification level is an exception. It has and continues to be remunerated well below the private sector 25th percentile and, below the Secretary level, it is at the SES Band 3 classification that the gap between the private sector and the APS is the widest.

By comparison the SES Band 1 median total remuneration package positioning has improved. In 2000 it was around the private sector 25th percentile but is now 11 per cent above this and 7 per cent below the private sector median.

In the ten years since 2000 overall SES remuneration movement has exceeded the general market. SES Band 1 remuneration has increased by 64 per cent overall which is 20 per cent higher than the general market, SES Band 2 by 71 per cent which is 25 per cent higher than the general market, and SES Band 3 by 81 per cent which is 31 per cent more than the general market.

SES remuneration movements may reflect the changing focus of agency executive remuneration strategies. According to the 2009 APS Remuneration Survey, 74 per cent of agencies had a formal SES remuneration strategy which was used as a basis for pay decisions. A significant majority of agencies reported benchmarking against the survey and/or selected APS agencies

SES 1 SES 2 SES 3

2005 2006 2007 2008 2009

at the median, and around half of the agencies surveyed regarded private sector organisations to be key competitors for the attraction and retention of SES talent.

Greater responsiveness to private sector pay settings may also have been influenced by the increasing number of lateral recruits into the SES – these have increased from 38.2 per cent of all engagements in 2000 to 54 per cent in 2009.

The SES cadre is also a highly skilled workforce. Most ongoing SES employees have tertiary qualifications – 86.2 per cent of ongoing SES employees as at 30 June 2010. Postgraduate qualifications are also becoming more common – 43.1 per cent as at 30 June 2010. Approximately 56 per cent of ongoing non SES employees also have tertiary qualifications. The trend towards higher levels of graduate qualifications reflects the shift to increasingly skilled work in the APS.

Between 1996 and 2009 the maximum remuneration for SES employees increased at almost double the rate of non SES employees. The maximum remuneration for SES Band 1 and 2 employees increased by 122 per cent and for SES Band 3 employees by 165 per cent. By comparison the maximum remuneration for non SES employees increased by 66 per cent for APS1-6 employees and 76 per cent and 82 per cent for Executive Level 1 and 2 employees respectively.


Chart C.2 – APS percentage pay increases 1996-2009

SES 3 SES 2 SES 1 EL2 EL1 APS 6 APS 5 APS 4 APS 3 APS 2 APS 1

Increase at min 132% 105% 98% 69% 61% 61% 57% 59% 54% 55% 27%

Increase at max 165% 122% 122% 82% 76% 66% 66% 66% 69% 66% 66%

0%

50%

100%

150%

200%

Increase at min Increase at max

Source: Mercer 2009 APS Remuneration Survey

Note. Based on 5th and 95th percentiles

The Remuneration Tribunal has expressed concerns that growth in SES remuneration constrains the Tribunal’s capacity to set what it considers to be appropriate remuneration for office holders:

The Tribunal has commented frequently on the significant movements in remuneration, over a sustained period, of Senior Executive Service (SES) employees in the Australian Public Service; they have outstripped, by a considerable margin, adjustments determined by Tribunal.55

In its 2010 report – Executive Remuneration in Australia – the Productivity Commission found that the average remuneration of executives in ASX100 companies grew in real terms at an average annual rate of around six to seven per cent between 1993 and 2009. This equates to an increase of 170 210 per cent over the period, or an increase from 17 times average earnings in 1993 to 42 times in 2009. Executive pay grew significantly more strongly in the 1990s, with slower (but still positive) growth from 2000-07.

The Productivity Commission also found that there is a strong positive relationship between the remuneration of executives and the size of the companies that employ them, that the size and structure of executive remuneration packages vary across market sectors and that pay has grown more strongly for executives with more complex roles.

Under the devolved wage setting arrangements, agency heads are able to pay differentially between and within SES classification levels for job weight, performance and market factors.

Between 1996 – when the last APS-wide industrial agreement expired – and 2009 the gap between the minimum and maximum pay points in SES salary ranges has significantly increased for each SES classification level.

Dispersion of SES pay has mirrored similar developments in the broader labour market and has helped to preserve the capacity of the APS to attract highly capable individuals, including specialists.

55 Remuneration Tribunal, 2010 Review of Remuneration for Holders of Public Office


Chart C.3 – SES pay dispersion 1996 to 2009 – gap between the minimum and maximum salaries

SES 1 SES 2 SES 3

1996 20.4% 23.7% 27.9%

2009 34.8% 33.8% 46.1%

0%

10%

20%

30%

40%

50% 1996 2009

Source: Continuous Improvement in the APS and APS remuneration surveys

Changes in control mechanisms APS resource control frameworks including those governing SES employees historically focused on establishment (ie. the number of positions), staffing, and budgets.

From the late 1950s until 1971 the central mechanism for controlling APS staff numbers was establishment – the authority over the creation, salary classification and abolition of ‘offices’ (positions) against which staff were employed.

The Public Service Board – in its role as the central personnel authority for the APS – was responsible for making recommendations on the creation of permanent positions to the Governor-General in Council and for determining temporary or exempt positions, and paid particular attention to agency top structures and Second Division positions. Establishment control was exercised primarily through a case by case examination by the Public Service Board of departmental proposals for the creation and abolition of Second Division positions.

From 1971 onwards staff ceilings complemented establishment in controlling the number of APS staff. Between 1971 and 1984 some form of staff ceiling applied almost continuously and staff ceilings became the primary control mechanism. Staff ceilings took the form of:

• a limit on growth over a specified period – usually a financial year or

• a requirement to reduce staff to a target number or by a certain percentage – usually by 30 June in a specified year; or

• an absolute limit on staff numbers.

Until 1984 controls over staff numbers were administered by the Public Service Board. In its submission to the Review of Commonwealth Administration the Public Service Board stated:

Staff ceilings are demonstrably effective as a way of controlling the absolute size of departments and authorities but their administration is not without difficulties. The Board has from time to time sought the agreement of Government to modifications in ceiling control arrangements. Changes have been directed towards achieving sensible working arrangements to avoid ceilings having unintended and unwanted effects.56

56 Top Management Structures and Management Tools, Public Service Board Memorandum No 15 to the Review of Commonwealth Administration, October 1982 (1982:5)


The present-day cap on SES numbers has been administered by the APSC since April 2010. It sets an absolute limit on the number of SES employees that an agency may employ at any one time.

Controls over average staffing levels have also been used. Compared with staff ceilings, average staffing levels provided agencies with greater flexibility to meet seasonal or other peak staffing needs. Under an average staffing level approach an end of year ceiling is set but monthly staffing levels can vary in accordance with changing workloads.

The average staffing level concept was introduced in 1979-80 for selected agencies and was integrated into the financial budgeting process as part of the Government’s APS reforms, from 1984 onwards. Responsibility for advice to the Government on staff numbers also transferred from the Board to the then Department of Finance, and salary profile controls and limits on total numbers of staff determined by the Minister for Finance replaced establishment and staff ceilings. The logic of these changes was that it would ensure that the same priorities would be applied to the financial and staffing resources necessary to ensure the government’s objectives could be delivered.

For budget funded agencies the Department of Finance monitored:

• the number of continuing positions to be staffed at each SES classification level and

• the total SES salary budget.

The Department of Finance Annual Report 1983-84 stated:

• profile and their bands are not used to control staff. They do, however, have a range of objectives, such as:

– an aid to improve estimation of the salaries appropriations

– the encouragement of the development of systems in departments reflecting the integration of financial and staffing considerations; that is, ensuring that officers with responsibility for the personnel, finance and program functions communicate

– assisting in monitoring of expenditure throughout the year

– identifying changes to a department’s structure involving increased cost commitments and

– discouraging ‘classification creep’.57

The Department of Finance had responsibility for approving SES funding and position profiles within agencies until the early 1990s.

The Public Service Commissioner’s powers and the SES An essential element in the 1984 concept of the SES was the more centralised management and development of the senior leadership group. The then Public Service Board was given responsibility for approving the selection, redeployment and retirement of SES officers and it was to take a greater role in their training and development, facilitation of mobility and encouragement of more regular performance appraisal.

Under the 1984 Act responsibilities for the management of the SES was shared between the Board and secretaries of departments to ensure that service-wide needs, as well as the immediate needs of departments, were taken into account in staffing the SES. The Public Service Board (and later the APSC) had the statutory responsibility of making all SES appointments and promotions on recommendation of secretaries.

The Explanatory Memorandum to the Public Service Bill 1999 stated:

The essential characteristics of SES employment, as established by the Reform Act in 1984, have remained in place. The changes effected by the Reform Act were directed toward the establishment of a more unified and cohesive group of senior executive staff to undertake higher-level policy advice and managerial and professional responsibilities in APS agencies. The amendments also emphasised the nature of the SES as an APS-wide management resource with provision for its members to be deployed in and between agencies and for a greater degree of central management, leadership and involvement in the selection, development and placement of senior staff.

Under the 1999 PS Act the Public Service Commissioner’s role in selection continues to focus on ensuring appropriate, merit-based processes are followed – with a representative of the Commissioner to be part of all SES selection panels. The Public Service Commissioner can only decline to approve Secretaries’ recommendations where there is a process inadequacy.

The Public Service Commissioner was also given the role of agreeing to financial benefits to be offered as an incentive to retire (s. 37 of the Act) and in certifying that termination of SES employees was appropriate.

Under section 36 of the PS Act the Public Service Commissioner must issue directions in writing about employment matters relating to SES employees, including engagement, promotion, redeployment, mobility, and termination. The Commissioner’s Directions are disallowable non-legislative instruments for the purposes of section 46B of the Acts Interpretation Act 1901.

57 Department of Finance Annual Report 1983-84, Australian Government Publishing Service, Canberra 1984:5


1984

1987

1990

1992

1997

1999

2004

2005

2009

2010

SES timeline

Year Milestone

The beginning of a period of intense change for senior public servants as responsibility for personnel management, policy development and financial management are progressively devolved from central agencies to agency heads.

• The SES is established to ensure inter alia a fully productive relationship between the leadership cadre and government and a focus on implementation and results.

Staff ceilings are replaced by ‘average staffing levels’ and responsibility for staffing numbers transfers from the Public Service Board to the Department of Finance.

The Financial Management Improvement Program emphasises a shift away from compliance towards performance control (including program budgeting which is phased in during the mid-1980s).

The SES core selection criteria are introduced.

Secretaries displaced by the machinery of government changes are called Associate Secretary.

The six level SES classification structure is rationalised into the contemporary three level structure and a Specialist stream introduced. Draft SES work level standards are issued by the Department of Finance.

The Senate Standing Committee on Finance and Public Administration report – Development of Senior Executive Service – is released.

Performance pay is introduced for SES employees.

Workplace agreement allows for productivity reforms and agency-level bargaining.

Agency heads become responsible for agreement-making with employees and, for the first time, can enter into collective or individual agreements with their employees.

Package of new financial management legislation comes into effect – under the Financial Management and Accountability Act and Commonwealth Authorities and Companies Act 1997.

The Public Service Act 1999 consolidates the roles and functions of the SES.

The APSC launches the Senior Executive Leadership Capability Framework.

The APSC launches the Integrated Leadership System.

The One APS – One SES statement on the role of the SES is released by the APS Management Advisory Committee.

The SES celebrates its 25th anniversary. A census of SES employees predicts two capabilities – strategic thinking and cultivate productive relationships – will be critical in the next five years.

The Prime Minister establishes an Advisory Group to review Australian Government administration and develop a blueprint for reform.

The Government endorses the Reform Advisory Group report – Ahead of the Game: Blueprint for the Reform of Australian Government Administration – that recommends interconnected ways for the public service to meet future challenges.

A key Blueprint reform aimed at creating a stronger one APS transfers responsibility for Australian Government employment workplace relations, including remuneration and classification policy, from the Department of Education, Employment and Workplace Relations to the APSC.


D APS Senior Executive Service Work Level StandardsThe following Work Level Standards (WLS) have been developed as a basis for determining classification of Senior Executive Service (SES) roles within the APS. They are intended to provide a broad framework which will apply to all SES roles across the Service. Definitions should be regarded, in this context, as general in nature and will require some level of interpretation depending upon specific role circumstances.

The SES provides leadership at both agency and whole-of-APS levels. All SES must demonstrate behaviours and actions that model and promote the APS Values and Code of Conduct. Similarly, the SES represents the APS and government externally to stakeholders. All SES roles are characterised by a high level of accountability for outcomes. The Integrated Leadership System (ILS) identifies the skills and behaviours required at each of the three SES levels.

These WLS are structured in such a way as to provide a degree of differentiation between the levels of SES roles, i.e. at SES Bands 1, 2 and 3, including in those dimensions where the degree of differentiation may not be obvious. For this reason, the WLS are intended to be viewed in their entirety for purposes of making a classification determination. To assist this process, particular distinguishing characteristics have been identified at each SES level which seek to capture the fundamental differences.

The diversity of roles which comprise the SES structure is significant. SES roles, at Bands 1 and 2 in particular, may include the direction of program or project-based delivery functions, development or implementation of public policy, development and implementation of compliance and enforcement programs, or the provision of

expertise which ensures the integrity of decision making and planning processes of government. Typically, although any single SES role may incorporate many of these elements, the role may have been established on the basis of a more significant contribution in one of these directions. Material contained in the Bands 1 and 2 WLS often logically relates more strongly to one of four elements, and it is useful to consider where a given role has a stronger fit with one of these four contribution elements. In the first instance, when considering a specific SES role at these levels, it may be useful to identify this natural alignment, in order that most value can be gained from the content of the WLS themselves, and interpretation of descriptors. Subsequent consideration of secondary contributions may then provide useful verification of the initial interpretations.

Delivery Public Policy Regulatory Professional / Specialist

The most significant contribution of roles is outcome delivery and/or effective resource management. This may include development of delivery responses for policy objectives. Roles are accountable for a measurable impact on the agency or APS as a whole (eg, achievement of objectives through the management of financial, human and physical resources). This may be directed to an ongoing delivery program, integration of multiple programs for delivery or to a finite government initiative.

The most significant contribution of roles relates to the provision of policy advice, reflecting research and analysis of financial and other implications and stakeholder views obtained through consultations, and articulation of policy in policy statements, regulatory or financial measures and legislation.

The most significant contribution of roles relates to information gathering and risk assessment, and the design and implementation of compliance and enforcement programs within a governance framework.

The most significant contribution of roles is the provision of technical, professional, specialist, or strategic advice. This advice has a primary influence on adopted strategies, plans and targets and outcomes in terms of effectiveness or efficiency.

APS Work Level Standard SES Band 1

Leadership Capabilities Stakeholder Management Job Context & Environment

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Roles at SES 1 are usually expected to perform an importantleadership role in the control of an organisational unit andare responsible for the achievement of results, includingthrough innovation and managing risk, in line with corporate orprofessional goals.

Roles develop the strategic direction for the organisational unit,ensuring elements integrate to support higher level organisationalobjectives. Roles require the collection and analysis ofinformation, policies and procedures in order to describe thestatus quo and develop or modify systems, operational plans,broader agency-wide policies and/or specialised projects.

Responsibility is beyond immediate priorities and is focusedon creating an environment that can respond to changingneeds and circumstances, ensuring that there is a high level ofintegration with the broader context, including the organisation’sdirection and role within government.

In smaller agencies or parts of organisations roles at this levelmay assume accountability for a number of recognised functions,activities or programs, however it is not uncommon for SES rolesat this level to be more singularly focussed on one program orinitiative, providing comprehensive leadership and direction onthat area of focus.

A key feature is the need to work through others in order toachieve outcomes and build the capability, including the humancapital of the organisational unit.

Roles are actively involved in influencing andconvincing others in the pursuit or achievementof specific and set objectives and representingthe agency and government authoritatively.

Stakeholder engagement on sensitive issues, in orderto share or seek information, and/or to advocate aparticular position, is a regular feature of roles at thislevel. Focus tends to be at a detailed level involvinghigh order technical or content appreciation.

Roles actively build sustainable relationships within theagency, within the Minister’s office, across the APS and withexternal parties. Roles are responsive to stakeholder needsand engage stakeholders during times of change, resolvingconflict and managing sensitivities within constrainedtimeframes. Focus is often on achievement of desiredobjectives and ensuring negotiations remain on track.

Where roles manage a team/branch or unit, they willbe required to manage interactions and influenceprocesses and outcomes through others.

The operating environment is both complex anddiverse. Direction would be specified in terms of broadorganisational objectives. Roles may embrace a rangeof activities and/or operate in a complex, specialisedenvironment. Focus can be national and/or international,representing the organisation or government.

Roles are required to understand a range of externalfactors affecting the agency, and regularly monitorand respond to a changing operating environment.This extends to understanding contemporary andemerging cross-jurisdictional and international issues.

Work is characterised by the regular requirement to improveor revise established techniques, methods, systems orpolicies, or the relating of precedent to new situationsto propose solutions that usually have enduring effectswhich extend beyond the immediate work environment.For many roles there will be a requirement to adapt ordevelop new systems, methods and processes.

Diversity/Span Judgements and Independence

Roles usually embrace several related activities which need to be coordinated with otheractivities within a related function, or other functions not under the control of the role.

Professional / specialist roles operate across the full range of a recognised discipline or asa specialist, and may, in addition, have thought leadership or managerial responsibilitiesfor a range of professional / specialist roles.

Position objectives and operating policies are broadly defined with established methods,procedures and processes.

At this level a variety of alternatives must be considered before choices can be made. Problemresolution may need to take account of established management systems, professional standards,budget parameters or known equipment capacity.

Complete information may not always be available, requiring roles to make effective judgementsunder pressure, anticipate and manage risk, consider alternative courses of action, addressproblems in the work environment, devise action plans and advocate new approaches

Delivery roles are governed by clear objectives and/or budgets. Compliance with regulatory andreporting requirements is a key feature. Within this framework, the role independently manages theday-to-day activities of staff to ensure efficiency and effectiveness of service delivery and proposescreative solutions to problems.

Policy and professional/specialist roles provide advice and recommendations within the frameworkof broad policy parameters and required standards of professionalism and objectivity.

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Delivery roles build and maintain the capabilityof an organisational unit to ensure the effectivedelivery of government policies, strategies andprograms aligning with the corporate plan andwithin budget parameters; for example:

• Achievement of performancestandards and measures

• Financial and human capital andother asset management

• Leadership in implementation and delivery ofstrategic/major agency activities and initiatives

• Collaboration and negotiation withState/Territory governments

Policy roles provide intellectual leadership andwhere necessary marshal expertise in the areaof operation, while also understanding theimpact of the environment, whole-of-governmentpriorities, and community and stakeholderinfluences and interactions; for example:

• Lead policy development and review activities

• Provide expert advice in one or moreareas of government policy

• Analyse policy options and preparematerial for policy statements

• Consult on policy options andassess stakeholder feedback

• Prepare and/or sign off on briefs/advice toMinisters within broad policy parameterswithin a defined area of government policy

Regulatory roles build and maintain thecapability of an organisational unit toeffectively implement compliance programs,gather and assess intelligence andmanage risk and threat; for example:

• Stakeholder education to supportimplementation of regulatory requirements

• Lead enforcement and compliance programs

• Contribute to the establishment andmaintenance of governance frameworks

• Foster and maintain standards of independenceand professionalism in audit and assurance

Specialist roles provide intellectual leadership andwhere necessary marshal expertise in the useof complex though conventional methods andtechniques of a particular area; for example:

• Exercise influence within theagency and across the APS

• Provide a key escalation point for professional/technical matters related to the specific discipline

• Participate in cross-agencycoordination/collaboration

• Provide advice on legislative interpretation

Distinguishing Characteristics

• Focus of interactions, while often across the agency or directed inwardly with staff reporting to therole, extends to broader corporate leadership, and cross-governmentand external representation

• Takes responsibility for performance outcomes for a specific program, initiative,or for quality of advice provided

• Takes responsibility for the management and development of all staff in anorganisational unit

• Leads an organisational unit in implementing programs, projects and initiatives

• Contributes to one or more elements of organisational governance

• Recommends decisions on performance improvement initiatives and options

• Plans and manages budgeted resources

• Influential source of advice related to a specific area of knowledge or practice,which will form a key input to agency decision making processes

• Primary planning focus assumes an immediate current year focusbut with an understanding of future implications.



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Roles at SES 2 strategically lead the implementation of programsand initiatives. It is rare that roles will operate within a single frameof reference, as they are more likely to drive a range of activities andinitiatives, with a requirement to tactically balance resources in orderto optimise both the efficiency and effectiveness of activities andfunctions under their control. Some roles, however, will have a morelimited range of focus to deal with particular issues of high complexityor risk, often for a specified time frame.

Roles are characterised as requiring extensive knowledge and skills,and advanced professional/specialist/public administration expertise.Roles at this level have a strategic understanding of the organisation’srole, considering multiple issues for both the organisation and itsstakeholders.

Roles are largely focused on strategic activities which align withgovernment objectives and anticipate future requirements.

Roles focus on activities that support organisational sustainability,including the development of human capital, facilitate informationaccessibility and sharing, monitor resourcing pressures and implementstrategies to ensure the best results are achieved. Roles accept fullaccountability for projects or funding in their charge.

Position holders are seen as influential leaders within the agency, andcontribute to the development of organisational strategies to meetgovernment objectives. Roles directly influence the development ofpolicies and the delivery of programs, committing the agency to aparticular course of action or policy relating to the standard of serviceor implementation of government policy.

Roles effectively lead and oversee stakeholder engagement andinfluence outcomes, including through leading and motivating othersto cooperate over priorities, the use of resources, managementdecisions, policy frameworks and technical concepts and processes.

Roles proactively develop productive working relationships across thebroader APS and actively engage, inform and advise a diverse rangeof major stakeholders across a range of complex issues. Interactionswill extend to external stakeholders domestically and internationally,as a principal representative of government and advocate of keyroles. While content appreciation is important, the focus is largely onachieving satisfactory outcomes.

Effectively responding to and anticipating the needs of keystakeholders, and providing advice persuasively in an environmentof time pressure, divergent views and conflicting priorities are keyfeatures.

Roles operate in an environment where there is a requirement toidentify long-term opportunities, consider emerging trends and thewhole-of-government agenda, and formulate strategies, plans andpriorities which are underpinned by robust analysis and investigation.

The issues are complex and may be characterised by any one orcombination of the following: problems and issues arising frequently;new methods are regularly required; resolution of issues breaks newgrounds of knowledge; or there is no available source of advice orguidance.

Roles are required to consider multiple options to resolve complexproblems and develop innovative and realistic solutions. Roles willefficiently and effectively assess environmental factors, identifyingrelationships between complex issues and developing contingencyplans to mitigate risks to the achievement of government priorities.


Roles would manage a total function or professional discipline at a whole-of-agency level withaccountability for the integration of a number of functions. Roles are likely to oversee the implementationof multiple, integrated change initiatives with outcomes which significantly impact communities, stakeholders and services.

Roles would typically include function heads of organisational units with extensive corporate resourceaccountabilities, and/or policy advisory accountabilities, and/or substantial/specialised knowledgedemands.

Roles would work with a large degree of independence as to methods, procedures and processes withina framework of broadly established policies, priorities, and goals.

Roles are often responsible for significant change initiatives which will have agency and/or cross-agencyimpacts. Whilst operating within an existing policy and practice framework, roles will have considerablefreedom to determine how to achieve results.

Roles make statements of behalf of the agency in accordance with policy parameters. Roles areaccountable for program development, planning including resource negotiation, implementation,effectiveness review and professional and objective standards of assurance.

Roles directly influence the development of policies, and initiate new developments in either policy andprogram delivery, or professional practice, which establish precedent for the agency.

Delivery roles will either substantially influence the allocation of resources or allocate resources in theshort term, and make medium to long-term commitments where there are defined precedents.

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Delivery roles manage the capability and resourcesof a function at a whole-of-agency level

• General management andbroad executive direction

• Responsibility and accountability for adefined part of agency’s outcomes

• Financial, physical and humancapital management

• Major program management

• Leadership in implementation and deliveryof strategic/major agency initiatives

Policy roles provide highly critical advicein the area of operation and represent the agency on those matters

• Establish policy development frameworks

• Provide authoritative policy advice in oneor more areas of government policy

• Consult on policy options to achieve outcomes

• May provide direct advice to Minister ona specific program or policy issue

Regulatory roles provide highly criticaladvice in compliance, risk management andintelligence gathering and assessment

• Lead evaluation of effectiveness of regulatorypolicies, operational frameworks and guidelines

• Engage stakeholders during analytical stagesof problem solving and risk assessment

• Assess emerging issues and trends whichmay impact on regulation management

• Establish and maintain standards ofindependence and professionalism

Specialist roles provide highly criticaladvice in the area of expertise

• Exercise influence cross-APS,or cross-jurisdictionally

• Ultimate escalation point forprofessional/technical mattersrelated to the specific discipline

• Drive strong external peer networkwithin function/discipline


• These roles usually require extensive professional/administrative management experience

• Integration of diverse activities or multiple functions at agency level

• Contributes to organisational leadership and to overall governance processes

• Compared to Band 1, focus is more often across agency or on the external context

• Contributes to shaping and implementing overall corporate strategy

• Places organisational unit activities into broader whole-of-APS and environmental context.

• Primary planning focus assumes a 4-year horizon and beyond.

• Recommends decisions on significant strategic alternatives to Secretary/Deputy

• Authority to plan and manage organisational resources, linking capability to business planning

• Typically represents the level accountable for aggregation of functionsand activities to determine priorities, and argue the case.

• Impacts on whole-of-agency performance outcomes

• Principal and authoritative source of advice related to a specific area of knowledgeor practice upon which the organisation and Ministers depend.



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Roles at SES 3 are characterised as requiring knowledgewhich is developed as a result of extensive and advancedprofessional or executive management experience.

Roles at this level have a governance focus and are consideredfundamental to the agency’s performance delivering policyor program outcomes. Position holders would be seenas policy/program innovators and generally manage asubstantial multi-disciplinary workforce that includes theidentification and management of risk at agency level.

Roles require considerable proficiency in management in amulti-disciplinary and diverse context and provide strategicleadership in building organisational capability. In some cases,roles may involve overall responsibility, under the agencyhead, for most or all aspects of agency management.

At this level the major activity is forward planning or strategicdecision-making: for example, evaluating the environmentand identifying the fundamental issues to be resolved.Influencing factors are diverse. Problem resolution will focuson complex matters which have substantial, strategic impactfor government. This requires a synthesis of facts, detailedanalysis, interpretation, the conceptualisation and evaluationof alternative approaches to the problem. Projects requireversatility and innovation to define/redefine strategy, developstandards, guidelines, methods, new techniques or criteria.

Roles at this level would be accountable for a number ofintegrated functions or operations and the comprehensiveintegration and coordination of major line and/or staff functionsin a large complex, agency-wide or APS-wide activity. Someroles ,however, will have a more limited range of focus todeal with particular issues of very high complexity, innovation,political sensitivity or risk, often for a specified timeframe.

Roles will be principal government representatives, with authorityto negotiate and/or resolve conflict with stakeholder leadership.Negotiation often occurs in an environment of conflictingpositions, technical, policy and legal complexity and divergentviews amongst government’s most critical stakeholders. Thisrequires sensitivity and advanced skills to understand thepositions of all parties, gain participation in resolving issues andeffectively advocate a preferred course of action. Focus is largelyon strategic longer term outcomes or particularly sensitive/contentious matters with whole-of-government impacts.

Direct liaison and advice to Ministers would be expected, oftenspanning multiple agency outcomes. Roles assure the qualityof advice provided to Ministers by establishing and articulatingappropriate frameworks for others.

The absence of precedent and clarity of direction within anambiguous context are key features.

Roles at this level operate within an environment where there isa strong requirement to identify and define corporate issues oremerging issues of major community, professional or governmentconcern. It would be expected that roles at this level would behighly adaptable in order to define core agency service deliverystrategy or policy positioning, develop new programs or policyinitiatives and to manage strategic change with government-wide,community-wide, whole-of-sector, national or international impact.

Role objectives are broadly established through agency/organisation or government policy although guidelines, strategiesor tactics are often ill-defined or incomplete, allowing forconsiderable flexibility in interpretation and adaptation. Existingguidelines or policies may be inadequate in dealing with complexor unusual problems and it is likely that the lack of precedentis a significant feature in the majority of activities pursued,thereby requiring the management of risk and innovation.

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Roles would manage a function or professional discipline with a whole-of-government focus withaccountability for the integration of a number of functions where operations may be diverse in terms ofgeographic location, program/service and clients. Workforce accountabilities would typically be extensive.

Some roles may have high level cross-agency, cross-sector,national or international coordination responsibilities

Focus of decisions is more about strategic outcomes and outputs as opposedto technical content, and assumes a long term frame of reference.

Roles are subject to broad policy, operational and commercial constraints, budgets and practices.Roles have substantial freedom to draw upon resources to achieve planned results.

Roles that exercise statutory independent functions require high levels of professionalism and objectivity.

At this level, roles are often required to develop strategies and policies to supplement and reinforceexisting policy direction and frameworks and would regularly advise and brief at Ministeriallevel. Conceptual challenges arise from the need to provide clarity and direction, and identifycritical long term risks and strategies for mitigation in the context of significant ambiguity.

Roles may exercise substantial independence in the management of a significant professionaloffice or organisational unit which operates separate from other units in the agency/organisation and which accounts for a substantial proportion of agency operations.

Policy experts would give guidance on and make judgements about proposed new standardsand new areas of policy or expertise put forward by subject and technical experts. Thisincludes making judgements about the value of alternative sources of advice.

Specialised professional roles may be required, where necessary, to challenge, establishor alter standard concepts, theories, objectives or previously formulated requirements, andmay be responsible for the integrity of overall legislative and regulatory frameworks.


• These roles usually require advanced professional/executive management experience

• Substantial contribution to agency governance and culture

• Integration of diverse activities or multiple functions in largest agencies,with key impacts on whole-of-agency strategy and planning

• Provides whole-of-agency organisational leadership

• Focus of role largely on broader and more complex issues ofexternal context with national/international influence

• Decide corporate strategies within policy parameters, with a long term focus

• Strategic development and evaluation of long term alternatives and decision making

• Authority to plan and manage organisational resources

• Impacts on whole-of-agency or whole-of-government performance

• Principal and authoritative source of advice upon which the organisation and Ministersdepend, spanning multiple agency outcomes or on issues of very high risk and complexity

• Effective management of parliamentary, political, and public service environment

E Australian Public Service Commission – Work Level Standards

Stakeholder Consultations: Questionnaire Purpose:

• To test the suitability and ease of application of the draft WLS across the diversity of SES roles; and

• To test whether SES roles are being correctly classified by agencies

Questions

1. Describe the overall context and priorities for your department.

2. Describe the focus of your role and its major contribution (e.g. delivery, policy, regulatory, professional/specialist)

What we are after here is a purpose statement / mission statement. A one sentence summary of why the role exists.

3. Please explain where your position fits within the organisation’s structure.

To whom do you report?

Number of your direct reports:

Their levels and roles:

Your Peers:

Total staff and FTE:

4. What are the 4 key (most significant) accountabilities of your role?

Eg key accountabilities. If unclear, establish time horizon and key results role for which role is accountable.

5. What are the main challenges for your role both now and into the future?

6. What are the critical judgements required by your role?

If unclear, establish the typical situations in which the role applies judgement.

7. What are the role’s key relationships within and outside of the organisation, either within the agency/department, APS, the Minister’s Office, other jurisdictions, overseas or outside of government?

Stakeholder management: for each of the key relationships – what is involved and the relative impact, e.g. negotiation, representation, conveying an agency/government position etc

Within agency/department Other government jurisdictions

Within APS Overseas

Minister’s Office Outside of government

8. What is your role’s financial responsibility?

Identify operating/recurrent budgets, project/capital expenditure, funds/grants managed for 2010/11.

9. Are there specific professional or technical knowledge or skill requirements related to this role? If so, what are they?

10. Is there anything else you’d like us to be aware of pertaining to your role?


pwc.com.au

PwC Roger Beale AO Phone +61 2 6271 9256 Fax +61 2 6271 9856 [email protected]

Australian Public Service Commission Patrick Sedgley Phone +61 2 6202 3808 Fax +61 2 9455 5532 [email protected]

© 2011 PricewaterhouseCoopers. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers a partnership formed in Australia, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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