Summary of General Lessons and Good Practice
from the Research
31. This section summarises the main findings from our research and draws out some of the potential implications for the Civil Service in Hong Kong. The section starts by highlighting some general lessons before discussing in more detail the main research findings for each of the five key areas of interest set out in our terms of reference.
General Lessons from the International Research
32. Perhaps the first important point to note from our international research is simply that all five of the countries we surveyed have implemented wide ranging pay and grading reforms. With the exception of Canada, where major reform is now being addressed, it would be no exaggeration to say that the countries we have studied have radically transformed their pay and grading arrangements over the last 10 years or so. The general perception of the Governments concerned is that these reforms have, together with other public sector management improvements, had a substantial positive impact on overall Civil Service performance, in terms of more flexible and effective resource management, improved efficiency and service quality, greater transparency and accountability, reduced numbers and total salary outlays, and the engendering of a more ‘customer focused’ performance culture.
33. So, what are the main lessons to be learnt from this international experience? We think the first general lesson is that pay and grading reform cannot and should not be implemented in isolation from the broader Civil Service reform agenda. In all five of our survey countries, pay and grading reform has been positioned – and implemented - as one, albeit important, element of broader HRM reform. Similarly, HRM reform has in turn been implemented as an integral part of the broader public sector reform agenda.
34. More specifically, one clear learning point is that the successful implementation of major pay and grading reform depends critically on complementary reforms being implemented in a number of other areas, for example:
· The broader delegation of HRM responsibilities to Departments and Agencies so that they have effective control of their staff
· The delegation of financial management and control responsibilities so that senior staff have the ability to manage resources in order to achieve results
· The development of supporting performance measurement and management frameworks to ensure that pay and grading reforms can be applied fairly and consistently.
35. The opposite is also probably true, in that our survey countries appear to have concluded – rightly or wrongly - that their broader public sector reform agenda could not be implemented fully without supporting pay and grading policies that promoted flexibility and encouraged more focus on performance.
36. A second general lesson is that successfully implementing major pay and grading reforms requires a long term view. Typically, the Governments we surveyed embarked on their reform programmes in the mid/late 1980s, prompted by a range of pressures: economic recession, rising inflation, perceived Civil Service inefficiency and concerns about Trade Union power. They responded by implementing a wide range of reforms embracing all main aspects of pay and grading policy. However, as far as we can tell, none of these countries followed an overall masterplan or blueprint. Rather, they developed a broad set of overall policy objectives and then progressively implemented changes and reforms, with each successive ‘wave’ of reform building on the experience and lessons of the previous one(s).
37. In doing so, the factors underpinning success appear to have included the following:
· Sustained top level commitment and support – both at the political level and from the highest echelons of the Civil Service
· Adopting a phased approach to implementation, rather than a ‘big bang’ philosophy. The exception to this has been New Zealand, where rapidly introduced far reaching changes in the early 1990s were driven by a prevailing sense of crisis at that time. More recently, some of the more radical reforms have been wound back significantly in the light of concerns about their effectiveness
· Using pilot studies to try out proposed new approaches before implementing more widely in order both to reduce risk and to help build capacity within the Civil Service.
38. The third general lesson we have taken from our research is that achieving buy-in and commitment to change through the involvement of key stakeholders is critical to success. The approaches taken in our survey countries have included:
· Early consultation with all key stakeholders, particularly Civil Service managers and staff
· Ensuring that steps are taken to build internal competency and experience. While overseas Governments often used external support in the initial stages to provide expertise and resources, they also sought to progressively transfer this expertise to the Civil Service to build capacity and commitment to change
· In some countries, reforms were initially introduced on a voluntary basis (either for the individuals or Departments concerned). In Australia, for example, Departments were given delegated freedom to change their pay and grading systems but they were not required to do so. In practice, many Departments started by simply transposing the previous centralised policies and rules but then, over time, reviewed and changed them to better fit their particular needs.
39. The fourth general lesson from our research is that successful implementation of pay and grading reform requires a major investment of resources. All the countries we have researched have invested heavily in:
· Training and skills development for their staff, particularly in performance management skills
· Communications and public relations initiatives
· Broader change management to help to overcome the inevitable resistance to change, shift mindsets and encourage the development of a performance culture
· Providing funding for the additional costs involved in transitioning to new systems.
40. The fifth, and final lesson, is that the experience of making significant changes to pay and grading arrangements, within the context of wider reforms, inevitably involves pain as well as gain. While Governments and, indeed, other stakeholders have identified a range of significant potential benefits from implementing pay and grading reforms, it is also important not to underestimate the inevitable challenges and set-backs that are involved in such a major undertaking. For example:
· The need to overcome considerable resistance from staff and their representatives to any changes to the status quo
· Reduced morale and motivation of some staff, in the face of loss of security and assured pay progression (although other staff will see the such reforms as offering a valuable benefit)
· Lack of available funding in practice to fully support the effective introduction of new arrangements, eg differential performance awards to really motivate enhanced performance
· A challenge to the cultural coherence and the sense of an integrated and cohesive Civil Service, as a consequence of pay delegation. For example, in the UK, as individual Departments have established their own pay levels and grading arrangements, the ability to easily re-deploy staff across the Civil Service, other than at the most senior level, has become an issue.
41. Having described these general lessons, the remainder of this section summarises in more detail our research findings. For convenience, we have grouped these under each of the five key areas of interest set out in our terms of reference.
