The EY New Zealand Productivity Pulse™

Government productivity improvements will come from four areas

Closing the $280 million public sector productivity gap

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The next wave of productivity improvements for the Public Sector will arise from:

  1. Empowering managers to become more accountable for productivity gains
  2. Strengthening employee relations to achieve outcomes
  3. Accessing and developing capability via commissioning/contestability
  4. Resourcing for optimal productivity

Public sector organisations must ensure they have the management capabilities and employment practices required to support a productive workforce.

We believe the next big wave of productivity change in the public sector will come, not through redundancies, but through improvements to the way workers are managed and motivated. This will include:

Empowering managers to support productivity

The Pulse showed that, right across the workforce, managers are ill-equipped to drive a team’s productivity. Only 22% of workers say their manager encourages them to go above and beyond in their role. Only a third of all workers believe their manager is competent or works as hard as they do. Male employees are also less likely than female employees to feel that managers have their best interests at heart.

These findings get worse in the public sector, where noticeably fewer workers are satisfied with their managers (21% versus 29%).

Unsurprisingly, there is a close alignment between managers’ sense of responsibility for their workers’ productivity and the manager’s own perceived personal productivity. Super Achiever managers are far more likely than any other manager to be seriously concerned to improve their teams’ productivity.

Government agencies need to ensure managers are on the ball in terms of productivity and have a clear directive to deliver productive teams. In particular, managers need to be given the skills and incentives to support productivity. This includes:

  • Supporting workers in carrying out their roles by giving them autonomy
  • Giving regular feedback to improve productivity
  • Rewarding productivity
  • Making workers feel their skills and efforts are valued
  • Improving planning capabilities
  • Removing bureaucracy
  • Communicating how individual work fits into agency or departmental plans

Strengthening employee relations

Of the 26% of public sector workers who believe government is holding back productivity, 43% suggest that their agencies and departments adopt better employee relations. A sizeable 33% also suggest that their employers adopt more flexible working practices, followed by 32% suggesting greater workforce participation.

This is highly concerning. Significant gripes appears to exist in the public sector around people management, and as we are aware, ‘people’ factors are more important for addressing underperformance than any other single factor. Flexibility especially is one area where the public sector has always been ahead of the private sector.

Agencies must consider what’s driving this finding. While the public sector has a strong core of Solid Contributors, there is evidence that workers who could be highly productive are being held back – by poor planning, management, by bureaucracy and continual cost-cutting – all of which  strains relations between leaders and employees.

Public sector organisations must attribute responsibility for productivity back to managers and put in place workforce practices that motivate workers to perform at their personal best.