Inevitably, performance management through individual performance agreements and assessment became a bureaucratic process. The Minister for Industrial Relations, Peter Reith, had made it clear that the broad role of performance agreements would be to ‘strengthen the commitment to achieving the outcomes set by government,’ and specified that they were to be mandatory, but not prescriptive.^[14] Agencies were permitted to develop their own systems, but these had to operate within both the Public Service Commissioner’s Directions and the Policy Parameters for Agreement-making published by what became the Department of Employment and Workplace Relations (DEWR).^[15] The Public Service Commissioner’s Directions (Chapter 2.12) require agencies to put in place a fair and open performance management and assessment system that covers all employees; guides salary movement; is linked to organisational and business goals and the maintenance of the APS Values; and provides employees with a clear statement of performance expectations and an opportunity to comment on those expectations. Furthermore, this is to be done in a way that is consistent with ‘the APS Value about achieving results and managing performance’. The DEWR Policy Parameters required that salary advancement be guided by performance, and should only occur where an employee’s performance had been assessed as effective or better.^[16]

Linking dollars to performance required the establishment of a rating scale that enabled employees to be graded—usually from 1–4 or 1–5—with each number corresponding to fixed verbal descriptors along the lines of ‘unsatisfactory’, ‘satisfactory’, ‘fully competent’, ‘exceeds expectations’, and ‘outstanding’. Once ratings had been introduced a number of agencies found it desirable to record and adjust their distribution across a normal curve in order to address concerns that those subject to ‘hard markers’ would be treated fairly vis à vis those subject to ‘easy markers’. Ratings distributions in their turn highlighted the need in some agencies for a system of review and moderation to change ratings where necessary. ‘Because of lack of trust and acceptance and concerns about the rating and moderation processes being used’,^[17] the Management Advisory Committee recognised the further need for a system of appeals.

The insertion of performance assessment and pay mechanisms into performance management processes affected the relationship between employee and employer. This is considered at greater length in chapter 5, where the psychological contract between employer and employee is discussed in the context of workplace relations. In brief, so far as the carrot element of individual performance management was concerned, the traditional system for rewarding Commonwealth public servants for superior performance lay within a comprehensive system of promotion through the classification system. From the perspective of the individual employee, performance assessment and pay mechanisms meant that what had been a long-term relationship in which employee commitment was exchanged for skills development and career progression—usually over a number of years—was refocused as a short-term, annualised relationship, in which certain behaviours and outputs were to be evaluated, converted into a single number, and exchanged for additional remuneration (‘a “tit for tat” mentality’).^[18] The expectations of the parties and the nature of the underlying relationship were changed as a consequence. Of course individual performance management did not depend on the introduction of performance pay, but the discipline of performance pay did affect the nature of performance management, as the Secretary of the Department of Defence, who supported one but not the other, pointed out:

So far as the system of performance pay was concerned, individuals’ judgement of their own conduct, and of the public’s interest in their conduct, was secondary to the formal judgement of their supervisors translated into a single summary rating. Where those individuals were on individual workplace agreements (AWAs), ‘a greater proportion of pay [was] generally based on performance and therefore at risk’.^[20] Around 95 per cent of formal performance feedback was delivered from direct supervisors^[21]—a trail that led directly back through a Senior Executive Service almost wholly on AWAs to agency heads who were themselves subject to performance assessment by ministers and termination at any time. Reflecting on the implications of these arrangements for the behaviour of secretaries, Andrew Podger has noted that:

It lay with secretaries and their senior managers to ensure that if there was an excessive or improper focus by ministers on the services they were to receive from public servants, this was not passed down the line through senior managers to staff. Surveys have established a direct correlation between the confidence of public servants in senior managers and their confidence in their own ability to balance the legislated values of responsiveness, apolitical professionalism, and impartiality.^[23] That is at least in part because these senior managers were the people who would determine whether, in their daily conduct, the individual public servants next down the line had been sufficiently responsive to ministers or efficient in managing for results. Some senior managers may have protected their staff; some certainly did not, or did not do so effectively. In 2005, just over half of the respondents to the State of the Service Employee Survey (51 per cent) said that their senior managers led by example in ethical behaviour.^[24] In 2006, the number was 55 per cent.^[25] These figures are the average across both ‘happy’ and ‘unhappy’ agencies, meaning that, in a number of agencies, more than half of all employees surveyed may not have felt that they experienced ethical leadership from senior managers.

As these systems of individual performance assessment and pay were being bedded down, other measures of responsiveness began to be directly included in the agency’s measures of its own performance. In addition to instituting internal peer review, a number of secretaries also invited Ministers and their advisers to rate briefs that had been prepared for them by public servants.^[26] Ratings scales were similar to those developed for performance assessment and pay systems (i.e. a 1–4 or 1–5 scale). By 2004–5, 44 per cent of the 59 agencies providing regular services and advice to ministers reported having a formal rating system to collect ministerial feedback; 22 per cent reported having had a formal requirement that oral feedback be collected from ministers; 27 per cent had a formal requirement that oral feedback be collected from ministerial staff. The 2004–05 State of the Service Report indicates that, of the 26 agencies that used some sort of formal ratings system to seek formal ministerial feedback, the criteria most likely to be in use were ‘quality of material’ (used by 88 per cent of agencies) and ‘timeliness’ (used by 81 per cent).^[27] Agencies then ‘use[d] ratings provided against briefs from their minister’s offices to provide an indication of policy-advice performance.’^[28]

According to the 2004–05 State of the Service Report, most agencies providing regular services to ministers also included target measures of the level and quality of those services in their portfolio budget statements and then reported against them in their annual reports. Examples drawn from agency annual reports in 2002–03 and cited in Supporting Ministers include:

Other agencies disaggregated the data for internal reporting purposes. In every case, it is clear that once formal systems were in place for collecting such data, agencies had a capacity to attribute poor performance to identifiable organisational units where managers would be able to make the connection to returned briefs prepared by individuals within the unit. Briefs prepared by public servants were ‘graded’ by the minister or the minister’s adviser with feedback provided to officers on the quality of the brief and their briefing performance generally. Some managers ensured the rating system for ministerial briefs became an indicator in their own performance plans.^[30] Everyone concerned would then be on notice that services to ministers would be scrutinised in individual performance assessment processes.

Both the Public Service Commissioner and the Australian National Audit Office have, in the course of their evaluation work, identified formal ministerial ratings systems as an ‘essential element of any strategy to improve service,’^[31] useful for honing quality in terms of analytical rigour and accuracy, timeliness, relevance and usefulness, as well as responsiveness to set policy directions. Nevertheless, there are risks in the system to APS policy advising and implementation at an operational level. If even in the case of departmental secretaries ‘it was evident that the criterion concerning responsiveness to the government dominated in the final assessment’^[32] of overall individual performance, how could that assumption not surface further down the line? And if it does, will those further down the line pursue responsiveness to the point where it ‘permit[s] partisan decisions or decisions that are not impartial’?^[33] Indeed, to some extent public servants are intended to say what ministers are believed to want to hear, if only on the assumption that ministers want advice that is ‘responsive to the directions set by government and committed to the effective delivery of policy positions taken by government’.^[34] From one perspective this is perfectly sensible. The government is the executive of the day and public servants should not waste ministers’ time and invite poor ratings with advice that is not government policy or percieved to be more closely aligned with the policies of the Opposition. On the contrary, public servants should school themselves to provide advice that is framed within policy positions already taken by government, and within the language it prefers to use to characterise those positions.

Take the case of the change of government in 1996. When the Howard Government came to power, the public service knew that the new government would not want briefs couched in the language used by the former Keating Government, which the new Prime Minister, John Howard, had identified, repeatedly, as ‘political correctness’.^[35] It was understood that the new government did not want to hear political correctness in any form, including anything that related to uneven playing fields with particular reference to the ‘few interest groups’ that had, in the Prime Minister’s view, diminished ‘the power of one mainstream’.^[36] Indeed, the Howard Government wished to restore the use of ‘relevant’ descriptors that had been displaced by the politically correct discourse of the Labor Party, which had been characterised as ‘the noisy, self-interested clamour of powerful vested interests with scant regard for the national interest’.^[37] The Labor Party had, generally speaking, believed the reverse, and its preferred discourse reflected that fact.

From the perspective of the public service, what was clear was that the dominant advisory paradigm had changed; the kinds of things that could be said and the way they could be said had also changed. When, for example, briefings considered the interactions of the parties when establishing terms and conditions of employment, the Government expected the words ‘bargaining’ and ‘negotiation’—which assumed an ‘adversarial’ relationship and a role for unions—would be replaced with the term ‘agreement making’, which smoothed over any little differences between the interests of the parties and reinforced the direct relation between employer and employee. In fact, the language of policy and the policy options necessarily ‘made sense’ of each other. Stewart argues that the use of such exclusive language ‘eliminates alternatives even before they are considered … by forcing policy discourse into a particular frame, which privileges some values over others, and forces participants to ‘speak the same language’.^[38] This is arguably consistent with the Westminster system, which presumes that the policy alternatives and mandates have already been established through the election.

It is also consistent with the Westminster system for ministerial advisers to advise public servants on what to put into briefs. ‘It is true,’ Dr Shergold advised in 2004, ‘that the development of policy advice will be informed and improved by ongoing discussions with political advisers: on occasions they will have a keener sense of the range of issues that need to be addressed.’^[39] Not only do they have a keen sense of the range of issues that need to be addressed, they also have a keen sense of what the minister may want to hear and/or what they themselves may want the minister to hear. And although advisers are not entitled to instruct public servants as to what policy positions should go into briefs, they can make it uncomfortable for those who do not treat their advice as if it were instruction. Formal ratings systems give advisers the capacity to punish and reward public servants, either directly on the minister’s behalf or by advising the minister about the rating deserved by the advice provided. In more extreme cases, such ratings may disguise and reinforce bullying or discrimination by advisers. This is not meant to occur, but that does not mean that it does not.^[40]

It is also important to understand that these interactions are ongoing: public servants can expect to have their policy advice ‘improved by ongoing discussions with political advisers’ time and again, over a period of years. In addition, since much advising work is broken up by subject-matter areas, particular advisers will work repeatedly or continuously with the same public servants (in ways that can over time naturalise party political positions as objective best policy). The same sorts of ongoing relations are also established between public servants. Policy advising involves more than advising government; it also involves collaboration with other people engaged in the same line of work. Under such circumstances, pressure to behave improperly can be gradually ratcheted up. The Public Service Commissioner has offered a number of examples of how this occurs:

What do you do when those who are doing this are your managers and are responsible for the assessment of your performance? Supporting Ministers, Upholding the Values proposes strategies for public servants who find themselves at the wrong end of inappropriate requests from ministers and their advisers, but that advice tends to assume that managers are not themselves part of the problem. Responses to State of the Service Employee Surveys noted above suggest that such is not always the case.^[42] This is not to argue that policy advising in the public service as a whole has been forcibly politicised, just that the system itself does not, in its operation, support a balance between managing for results and managing for apolitical professionalism, while public servants are nevertheless required to find one.

Like their policy-advising colleagues, public servants administering programs and delivering services may also experience ‘challenges’ in handling briefing on the administration of particular grants and the management of particular appointments processes:

Characteristically, the advice provided to public servants in response to these questions goes to the quality of individual decision making, rather than to the decision-making framework. The challenges outlined by the Commissioner, however, tend to arise at relatively senior executive levels in agencies whose main work is not policy advising. For the vast majority of public servants exercising regulatory responsibilities or administering programs, responsiveness is not directly linked to interactions with Parliamentarians—especially once the Government put in place a network of Local Liaison Officers to ‘provide faster and more coordinated support for Senators and MPs when constituents raise issues with them concerning any DHS [Department of Human Services] agency’.^[44] Instead, responsiveness is built in through formal performance agreements which establish ‘a clear line of sight’ between the individual public servant and the agency’s goals, as agreed with the portfolio minister, and the payment of employees according to pre-established indicators of efficiency and effectiveness for their contribution to delivering on those goals.