Building a Capable and High-performing Public Service Workforce

Audit context

In this audit, we examined workforce policies, guidance materials, strategies, plans and practices across the employee lifecycle from 3 agencies:

• Department of Families, Fairness and Housing (DFFH)
• Department of Transport and Planning (DTP)
• Victorian Public Sector Commission (the Commission).

The employee lifecycle is a person’s whole journey with an organisation they work for. It has 6 stages:

• attraction: attracting potential candidates for a vacant role
• recruitment: selecting a candidate for a vacant role
• onboarding: setting expectations when an employee starts a new role
• development: building employee capability
• retention: motivating and engaging employees to stay in their role
• departure: seeking feedback when an employee leaves their role

Role of the VPS

The Victorian Public Service (VPS) is part of the broader Victorian public sector. The role of the VPS is to support the government of the day to deliver its agenda.

In accordance with the Public Administration Act 2004 (the Act) and the Code of Conduct for Victorian Public Sector Employees, the VPS: 

• is professional and apolitical
• provides frank and impartial advice to support government decision-making
• implements government decisions.

Department staff – the bulk of the VPS – are the central advisers for ministers and the government in each portfolio. They support the government to create and implement policies, and they manage programs and services.

Each VPS agency is responsible for developing appropriate employment policies and practices to build employee capability and foster a high-performing workforce.

Poor management of the VPS workforce can lead to:

• waste
• loss of confidence in the VPS
• difficulty attracting and retaining high-performing staff
• poor outcomes for Victorians.

Better-practice approaches to building high performing workforces

Better practice is a way of doing something that is seen as a good example of how it should be done. We reviewed academic research into what supports an organisation to build a capable and high-performing workforce. The most common themes of better practice we found are:

• organisational leadership
• opportunities for training, development and career growth
• regular feedback and performance appraisals
• organisational culture and reputation
• continuous learning culture
• clear performance goals and role expectations
• work environment, including autonomy and meaningful work
• work-life balance and flexibility.

We used these key themes to assess whether DFFH, DTP and the Commission's policies and guidance materials support capability and performance.

Our key findings

Our findings fall into 2 key areas:

The Commission could not show that guidance is always informed by research and consultation

The Commission's guidance materials reflect the key themes that contribute to workforce capability and performance that we identified in our review of academic research. 

They also consistently reflect the public sector values and public sector employment principles.

However, the Commission does not have an overarching policy or procedure that outlines its process for developing guidance. 

The Commission told us it conducts research and engages with a variety of stakeholders as part of its standard approach to developing guidance. The Commission also has a plan to engage with stakeholders in updating guidance across the employee lifecycle. 

While the Commission has evidence of some research and engagement, it could not show that it systematically undertook research and consulted stakeholders when it develops its guidance materials. 

The Commission does not review its guidance systematically

The Commission does not systematically or regularly review its guidance materials to make sure they reflect better-practice approaches.

The Commission has a plan to review and update its guidance across the employee lifecycle. It plans to complete this work in the 2024–25 financial year. 

This planned project will initially review the guidance at a single point in time. The plan indicates that the Commission may also review the guidance due to legislative or policy changes, or within 18 months of publication. However, there is no commitment to ongoing and regular review. 

Policies, plans and strategies address capability and performance

All 3 agencies' internal policies and guidance materials consistently address capability and performance. They also consistently reflect relevant Commission guidance and advice, where applicable. 

All 3 agencies also have people-focused plans, strategies and frameworks that address capability and high performance. These materials recognise that it is important to make a dedicated effort to build capability and performance in all stages of the employee lifecycle.

Practices support agencies to build capability and performance

All 3 agencies' practices support them to build capable and high-performing workforces:

• They use capability frameworks and other guidance and communications to:
  • establish expected standards of employee performance and behaviour
  • support a shared understanding of what constitutes high employee performance.
• They ensure employees set performance goals that are clear and aligned to their roles. DFFH and DTP's processes also link performance goals to department objectives.
• They encourage regular, 2-way feedback to foster continuous improvement and learning. Most managers give feedback to their staff through the performance development plan (PDP) process.
• They support employees to identify learning needs and options, and they facilitate employees' continuous learning.
• They focus on organisational culture and employee engagement through various plans and strategies. They monitor staff engagement through the annual public sector People Matter Survey (PMS) and develop initiatives to address the survey results.

At each of the 3 agencies, senior leaders at different levels also monitor performance and progress against team priorities.

Role of the Commission

The Act establishes the Commission to advise and support the Victorian public sector, including on workforce management and development.

The Commission’s roles under legislation are to:

• strengthen the efficiency, effectiveness and capability of the public sector in order to meet existing and emerging needs and deliver high-quality services
• maintain and advocate for public sector professionalism and integrity.

Its functions include to:

• assess and provide advice and support on issues relevant to public sector administration, governance, service delivery and workforce management and development
• conduct research and disseminate better-practice guidance in relation to public sector administration, governance, service delivery and workforce management and development.

Public sector values and employment principles

The Act establishes 7 public sector values that apply to all public sector organisations and employees:

• responsiveness
• integrity
• impartiality
• accountability
• respect
• leadership
• human rights. 

The Act also establishes employment principles that all public sector agencies' employment processes must be consistent with:

• Employment decisions are based on merit.
• Public sector employees are treated fairly and reasonably.
• Equal employment opportunity is provided.
• Human rights are upheld.
• Public sector employees have a reasonable avenue of redress against unfair or unreasonable treatment.
• In the case of the VPS, the development of a career public service is fostered.

Guidance reflects the public sector values, employment principles and better practice themes

Almost all workforce capability guidance on the Commission's website reflected the public sector values and employment principles.

In 60 per cent of cases, the guidance reflected and directly referenced or linked to the values and/or principles.

The values and principles were implicit in the remaining materials (except for 2 resources, which we did not expect to reflect the values or principles). 

This promotes consistent application of the values and principles across the public sector.

The Commission's guidance also consistently reflects the better practice key themes we identified in our review of academic research.

The breadth and depth of guidance is not consistent across the employee lifecycle

The Commission has developed guidance for all stages of the employee lifecycle. However, it has substantially more resources covering attraction, recruitment and development than onboarding, retention and departure.

For example, there are only 2 departure guides on the Commission website. Neither meets the level of detail and practical advice in guides for other stages of the employee lifecycle. 

Some guidance materials overlap, and it can be unclear how different resources relate to one another.

For example, there are 14 guides that address recruitment. But the Commission does not always explain:

• which guide to use in which circumstances
• whether agencies should consider all guides together
• whether certain guides supersede or take precedence over others.

As discussed below, the Commission is currently reviewing its guidance across the employee lifecycle. This is an opportunity to improve consistency, comprehension and clarity on how each resource should be used, and to fill gaps in guidance for onboarding, retention and departure.

The Commission could not show that its guidance is always informed by research and consultation

The Commission has a function to conduct research, provide advice and support to the public sector, and to publish better-practice guidance in relation to workforce management and development.

To support the public sector to implement better-practice approaches across the employee lifecycle, and to fulfil its legislative obligations, the Commission's guidance and advice must itself reflect better practice. This requires the Commission to have a consistent approach to developing guidance, including research and consultation.

The Commission does not have an overarching policy or procedure that outlines its guidance development process. As part of its standard approach to developing guidance, the Commission told us it conducts research and engages with a variety of stakeholders, including VPS agencies, unions, WorkSafe Victoria, and VPS employees and leaders. The Commission also has a plan to engage with all departments during 2024–25 as part of updating guidance across the employee lifecycle. 

This gives the Commission an opportunity to test its guidance and receive practical feedback from the people and agencies who will ultimately be using it.

The Commission gave us examples of its consultation approach for its flexible working guidance. Forty per cent of the Commission's guidance also directly cites research, collaboration and engagement. 

However, the Commission could not demonstrate a consistent and systematic approach to research and consultation when it developed the remaining guidance materials.

The Commission does not review guidance systematically

It is important to regularly review guidance materials. Better practice changes over time, and guidance needs to be updated to reflect modern approaches to remain practical and useful.

The Commission does not have a systematic approach to reviewing its guidance. It could not show us when it last reviewed each of its resources across the employee lifecycle.

It was also clear that 5 (20 per cent) of the Commission's resources have not been updated for between 11 and 17 years.

These resources display the branding of the State Services Authority, which the Commission replaced on 1 April 2014.

The Commission plans to review and update guidance

The Commission has developed a plan to review and update its guidance across the employee lifecycle.

The project will update its guidance across each stage of the lifecycle in 4 tranches from the 2023–24 financial year to the end of the 2024–25 financial year. It aims to pull all guidance together into a single location called the Employee Lifecycle Toolkit for human resources teams across the public sector.

The toolkit will incorporate common policies from Industrial Relations Victoria. It will also incorporate whole-of-Victorian-Government decisions about better-practice human resources processes on people development. 

The plan does not say if academic research or other jurisdictions' approaches have informed the Commission's decisions about better-practice processes.

The Commission has identified an opportunity to collaborate with DTP on new recruitment guidance. This is a good first step towards collaborating with other VPS agencies. 

The Commission also plans to consult with other agencies via the Human Resources Director Committee, the Organisational Development Executive Group, and the Public Sector Administration Committee. 

Although the Commission's plan to review guidance and create the toolkit is a positive step, the plan does not commit to ongoing and regular reviews and only indicates that the Commission may review guidance due to legislative or policy changes, or within 18 months of publication. The Commission also does not have an overarching policy or procedure relating to guidance review. 

Without committing to implementing a long-term, periodic and systematic review process, both for the toolkit and for the Commission's guidance more broadly, the Commission is missing an opportunity to ensure its guidance stays current into the future.

Policies and guidance address capability and performance

Agencies need effective policies and guidance materials to build capable and high-performing workforces that deliver high-quality programs and services to Victorians.

DFFH’s and DTP's policies and guidance materials consistently address capability and high performance and reflect relevant Commission guidance. 

Figure 1 shows the percentage of internal guidance materials that address the better practice key themes we identified in our research, and which reflect the Commission's guidance and advice. 

This shows that, at the policy level, both departments have a consistent focus on approaches that can support them to build capable and high-performing workforces.

Figure 1: Guidance addressing capability and high performance and reflecting Commission advice

Strategies, plans and frameworks include a focus on capability and high performance

As well as their policies and guidance materials, all 3 agencies have workforce strategies, plans and frameworks that include a focus on capability and high performance. Examples include:

• DFFH's leadership performance framework (outlined in the case study below), People Strategy 2020 and the draft new People Strategy
• DTP's Strategic Plan 2023–27 and Enterprise Workforce Strategy 2021–24
• the Commission's people and culture plan.

DFFH and DTP also have strategies and plans that include a focus on workforce planning and talent management.

Case study: DFFH leadership performance framework

DFFH's leadership performance framework outlines common performance goals for leaders. It encourages leaders, through various channels, to develop performance goals aligned to this framework.

DFFH also has a goal library, which includes suggested measures for each performance goal in the framework. The framework includes a focus on building capability and high performance, including through 10 goals focused on people and performance.

The Commission's development guidance focuses on managers and executives

There are 12 publicly available guides on the Commission website that include sections on the development stage of the employee lifecycle. Of these, 7 are specific to managers, while the remaining 5 apply to both employees and managers.

Development guidance for managers covers a broad range of topics and targets both new and established managers. 

For example, the Commission has developed:

• a comprehensive 71-page guide for new managers
• a 44-page guide full of tools and templates to help with personal development planning
• a collection of 13 manager development guides covering topics ranging from understanding and developing yourself to advanced interpersonal skills and contributing to public policy.

Gap in VPS-wide employee development guidance

There is a gap in the Commission's guidance on how employees can embed learning and development practices in their work.

The main piece of development guidance for public sector employees is the Victorian Public Service Capability Framework. This framework defines the capabilities the VPS needs to achieve its objectives. There is a corresponding employee user guide, capability self-assessment tool and career development plan.

None of these reach the level of detail that is in the guidance for managers. Nor do they have as many practical tools, tips and templates.

Like their managers, employees need support to identify their learning needs, consider their career ambitions and proactively plan for their own development. 

VPS agencies also need access to better-practice guidance on how to support employees to actively participate in their learning.

DFFH and DTP employee development guidance

DFFH and DTP have developed guidance that goes beyond matters the Commission covers. 

This includes guidance to support employees to take an active role in their own development, which addresses the gap in Commission guidance.

Examples include:

• a DFFH fact sheet on blended learning and development options (see Section 2) 
• DTP's capability toolkits (outlined in the case study below). 

DTP has also developed a spreadsheet that maps relevant LinkedIn Learning courses to different capabilities under the Victorian Public Service Capability Framework. This supports employees to find training to develop specific capabilities.

These guidance materials are useful resources for DFFH and DTP employees. Although the guidance includes information that may be unique to the respective department, it could readily be adapted for use across the VPS.

Because the Commission has not published similar guidance, there is a missed opportunity to promote consistency across the VPS and create efficiencies. This includes leveraging existing work to make sure other agencies understand better practice.

Case study: DTP capability toolkits

DTP has developed a series of capability toolkits to support employees to identify learning options.

Each toolkit relates to a capability under the Victorian Public Service Capability Framework and covers a specific capability level (foundational, applied, accomplished or leading). The toolkits outline learning options to build the relevant capability under the 70/20/10 model of learning.

Under this model:

• 70 per cent of learning should occur through on-the-job experience
• 20 per cent should occur through exposure and learning from others
• 10 per cent should occur through education (such as training).

Figure 2 shows an example of experiential learning options for the 'applied' proficiency level of the flexibility and adaptability capability.

Figure 2: Extract from DTP capability toolkit

Source: VAGO, based on information from DTP.

DTP told us that the inspiration for developing these toolkits stemmed from its organisational development team and their commitment to empowering employees to take charge of their own development. 

The toolkits support this objective and are a resource to support employees to practise continuous learning.

Performance development and review processes

Under the Victorian Public Service Enterprise Agreement 2020, all VPS employees must participate in a performance development and review process.

This involves:

• developing performance goals they will be assessed against
• setting learning goals to support their continuous development
• taking part in feedback conversations.

All 3 agencies' employees document their performance and learning goals in a PDP and record feedback they receive throughout the year.

The PDP process is an important mechanism to manage employee performance. It can support approaches we identified as contributing to a capable and high-performing workforce by:

• reinforcing role clarity and expectations
• helping employees understand how their role contributes to the agency's objectives
• providing a mechanism for formal, documented performance feedback.

People Matter Survey

Each year, the Commission runs the PMS across the Victorian public sector.

The survey captures employee opinions on their experiences at work. It includes questions on:

• outcomes
• senior leadership
• organisation and workgroup climate
• job and manager factors 
• negative behaviours. 

Agencies support role clarity

It is vital that employees understand the expectations of their roles. In the literature we reviewed, this was one of the most cited themes that contribute to building capable and high-performing workforces.

All 3 agencies clearly establish performance expectations and make sure employees' performance goals align with their roles. They give clear guidance and communication about goal setting, roles and responsibilities through the performance management process.

DFFH and DTP's guidance and communications also encourage staff to align their goals with:

• organisational objectives
• strategic plans
• other team business plans, strategies and goals. 

The Commission's PDP process and guidance do not link employee performance goals to organisational objectives. The Commission told us this is because many of its roles are inward-facing support roles that do not directly contribute to its vision for the entire public sector.

However, one of the 4 key outcomes in the Commission's Strategic Plan 2023–2026 is 'a capable and credible Commission that supports the Victorian public sector to deliver'. Internally focused roles would support this objective.

This is a missed opportunity to help embed strategic direction at all levels of the organisation and ensure employees understand how their roles contribute to the Commission achieving its objectives.

Oversight of performance goal setting

Some agency leaders are expected to have more oversight of employee goal setting to make sure each employee's goals are fair, consistent and appropriate to their role.

Agencies promote regular feedback to support continuous improvement

All 3 agencies' PDP policies and guidance highlight the importance of, and encourage, using regular feedback and performance conversations to:

• discuss an employee's progress against their goals
• clarify expectations for performance and behaviour
• support employees to build their capabilities and celebrate achievements. 

Although the Commission's guidance encourages regular feedback, it does not focus on 2-way feedback as much as DFFH and DTP.

Using performance goals to make people managers more accountable for giving feedback

The Commission and DTP have sought to make managers more accountable for providing feedback.

DFFH is introducing mandatory goals for people managers in the 2024–25 PDP cycle. Performance measures will include giving regular feedback and supporting staff to grow their capability.

Agencies support continuous learning for employees

All 3 agencies support staff to identify learning needs and apply the 70/20/10 model of continuous learning.

DFFH and DTP also offer or facilitate access to many learning opportunities for staff. These include their own learning offerings and opportunities through memberships and contracts with external organisations. Both agencies have a current focus on leadership-related learning.

The Commission supports staff to identify their learning needs and learn continuously through the PDP process. It has also supported staff to attend external training courses.

DFFH's blended learning fact sheet

DFFH developed a fact sheet about blended learning and development. It outlines contemporary learning theory, different learning options, and definitions, examples, benefits and considerations for each option.

Figure 3 is an extract from the fact sheet about learning through reflection.

Figure 3: Extract from DFFH fact sheet: Blended Learning and Development – Learning through reflection

Source: VAGO, based on information provided by DFFH.

Agencies have a focus on organisational culture and engagement

High employee engagement is important to building high performance. Engagement can increase employee wellbeing and productivity. Engaged employees are more likely to stay in their roles.

All 3 agencies:

• use the PMS to monitor employee engagement each year, and they discuss and analyse survey results at different levels of the agency
• take steps to improve engagement, including through initiatives to address the PMS results
• reiterate senior leaders' responsibility for improvement actions
• have plans and strategies that focus on building engagement and good organisational cultures.

One DFFH division also runs additional quarterly staff opinion surveys to complement the PMS. This allows it to monitor employees' experiences throughout the year beyond the point-in-time PMS.

Initiatives responding to PMS results

Figure 4 shows some examples of the work DFFH and DTP have done to address PMS results and seek to improve organisational culture and engagement.

Senior leaders monitor performance and progress against team priorities

In our review of academic research, organisational leadership was the most common theme that contributed to capable and high-performing workforces.

Senior leaders at all 3 agencies:

• monitor progress against team priorities, including through board- and division-level performance reporting, and other division-level leadership committees
• told us they regularly discuss their teams’ performance and consider strategies to address performance issues.

We saw some examples from all 3 agencies of strategies implemented to address performance issues and build performance. Figure 5 shows an example from each agency.

Figure 5: Example strategies to build performance

Source: VAGO, based on information provided by DFFH, DTP and the Commission.

We could not determine how regularly senior leaders discuss their teams’ performance. Senior leaders do not always keep records of meetings. Discussions about performance may also vary across and within agencies based on individual teams’ needs and circumstances.