As it now looks likely that the Croke Park Deal or the ‘Public Service Agreement 2010-2014’ will be approved by the public service unions, it is worth noting the radical implications of the deal for public service pay. A key part of the deal is that unions can claim back pay foregone through cuts provided they can point to savings made under the deal. At face value this looks pretty straightforward but it merits closer attention. Clause 1.16 of the Agreement provides that public service pay will be reviewed annually starting in Spring 2011 and that the review will take account of sustainable savings generated from the implementation of the overall Agreement as well as implementation of the agreements in each sector (health, education, local government, state agencies etc). Those savings will be independently verified by an Implementation Body, yet to be established.
Cost savings: if savings are made through staff reductions and elimination of overtime then it’s not rocket science to measure that. But what about savings that are made through less straightforward means? In addition to ‘generic’ changes that fall to be implemented in all parts of the public service such as redeployment, there are specific lists of changes in each part of the public service. In health, for example, there is agreement on a very wide range of changes including an extended working day, a more productive match between staffing and activity levels, reduction in the number of in-patient beds and increases in day cases in order to reduce unit costs, and many more. Certain of these changes may involve significant staff contributions to quality as well as to productivity. Putting a monetary value on such changes is not so straightforward and, truth to tell, it will represent a new departure for public service management and trade unions.
Dynamics of organisational change: the whole dynamic of organisational change and reward will now change if the Croke Park Deal goes through. Trade unions will have a stake in ensuring that changes happen on time and that the value of those changes is measured to their satisfaction. If they are tardy about agreed changes or resistant to them then they will be undermining their capacity to claim back monies foregone through pay cuts. Public service managers will be under pressure not just from the political system and department of finance to deliver on the change agenda but also from the trade unions. A key part of the implementation of the Croke Park Deal will be agreeing formulae for converting performance indicators into monetary values.
Measuring outcomes: public service managers who have worked mainly in the public service to date will have little experience of measuring organisational changes and putting monetary value on them. Those who have recently entered the public service may indeed have such experience. On the other hand, union officials such as those in SIPTU and IMPACT, who also represent employees in the private and commercial state sectors, are likely to have more knowledge and experience of productivity, gain sharing, measuring the value of savings and so on.
We all know that changes to any significant part of human resource systems such as pay determination are likely to have implications for other parts of that system. We will return in later blogs to some of these wider implications.
The future: for the moment it is far too early to speculate on the likely outcomes of this new ballgame. However, the likelihood must be that if it works there will be pressure from government and the department of finance to continue it after 2014. It is worth recalling that there have already been a number of significant attempts to restructure public service pay determination. There were attempts to simply abolish the so-called ‘specials’, then there was public service ‘productivity bargaining’ or ‘grade restructuring under national pay deals, then there was ‘benchmarking’ under later national pay deals.
Are we now entering a phase where a more scientific approach to quantifying the monetary value of organisational change combined with more straightforward cost savings through staff reductions will become central mechanisms in public service pay bargaining?
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Great blog John 🙂 I wonder how many companies quantifiably measure the outcomes of organizational change. What does the research say? Presumably, in many cases (most?), org change is designed to increase revenue. Gets me to thinking about the purposes for org change, how that’s measured, and how that contributes to the mission (making people healthier, creating educated students). Just wondering.
Thanks Abby, we old timers do try from time to time!!
Tensions may arise between officials who have a background in or experience of sectors where inputs are costed and measures and members who are public service insiders.
On the other hand tensions may also arise between departments and agencies seeking long term efficiencies and finance whose role will laways be to spend the least amount.
Yes, there is considerable scope for tensions within the union and employer sides, as suggested in your comment. There is also the issue that some organisations, by definition, must currently be more efficient than others and, presumably, less open to cost savings. This could mean that good management in the past might be ‘punished’ in present circumstances.
However, it might also be argued that working out such tensions and difficulties would be beneficial all round as it would involve the players on both sides of the public service addressing substantive issues around cost savings, productivity etc as well as substantive and important issues around public service outputs such as patient care and safety, pupil progress, care of disadvantaged children, role of local democracy and so on.
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