Labour Market Reform leading to improved

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Labour Market Reform leading to improved Productivity in the Public Sector ..... Recommendation #6 – Performance Management Framework . .... competition.

Labour Market Reform Commission Technology, Innovation and Productivity Committee Public Sector Productivity Working Group (PSPWG)

Labour Market Reform leading to improved Productivity in the Public Sector First Draft Report

WG Chair: Members:

Mr. Mervyn Eyre Commissioner Silburn Clarke Ms. Sonia Jackson Dr. Vanessa Tennant Dr. Kavian Cooke Dr. Charles Douglas

Date:

Formally submitted to TIP Chair on March 20th, 2016

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Table of Contents Executive Summary ............................................................................................................................ 5 Introduction ................................................................................................................................. 5 The research process .................................................................................................................... 5 Our recommendations ................................................................................................................. 6 Key enablers ................................................................................................................................ 7 Analysis of Impact and Prioritization of Recommendations ........................................................... 8 The role of the Jamaica Productivity Centre .................................................................................. 8 Conclusion ................................................................................................................................... 8 Research Approach and Methodology ............................................................................................... 10 How do we measure productivity? .............................................................................................. 11 How did we perform our analysis? .............................................................................................. 12 Our observations and ideas ........................................................................................................ 12 Developing the key themes ........................................................................................................ 13 Developing our recommendations .............................................................................................. 14 Assessing the impact.................................................................................................................. 15 Key Recommendations for Change ................................................................................................... 17 Recommendation # 1 ................................................................................................................. 17 Recommendation #2 ................................................................................................................. 19 Recommendation #3 ................................................................................................................. 21 Recommendation #4 ................................................................................................................. 23 Recommendation #5 ................................................................................................................. 25 Recommendation #6 ................................................................................................................. 27 Assessment of Impact ....................................................................................................................... 30 Appendices....................................................................................................................................... 32 Appendix 1 - additional Research and Literature Review .............................................................. 32 5.1.1

Recommendation #1 – Knowledge & Data........................................................................... 32

5.1.2

Recommendation #2 – Transform Processes ....................................................................... 32

5.1.3

Recommendation #3 – Collaboration .................................................................................. 32

5.1.4

Recommendation #4 – Change Procurement Policies .......................................................... 33

5.1.5

Recommendation #5 – HR Policies and Practices ................................................................. 34

5.1.6

Recommendation #6 – Performance Management Framework ............................................ 34

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Outputs from Working Sessions ................................................................................................. 35 5.2.1

Whiteboard of Observations and Recommendations............................................................ 35

5.2.2

Interim Top 3 Recommendations report............................................................................... 46

5.2.3

Key Areas and Change and Associated Enablers ................................................................... 47

Glossary of Terms ...................................................................................................................... 56

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Section 1 Executive Summary

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Executive Summary Introduction While the dynamics of the local labour market are undoubtedly complex, it is clear that government has a major influence on its reform through the decisions it takes and its day to day operations. These include:   

Introducing (or amending) policies and laws that are directly related to the governance of the labour market As the largest national employer, creating demand for future skills in the market by transforming itself to become an efficient, modern workplace Creating the required culture, incentives, platform and frameworks that will cause the required shift in local capabilities to support necessary reform in the context of the global, digital society.

The focus of the Public Sector Productivity Working Group (PSPWG) has been to analyze these key government activities with emphasis on levels of innovation and technology adoption, and make recommendations that would meaningfully contribute to the reform of the labour market and public sector productivity.

The research process Given the complexity and multidimensional nature of the public sector, the group was challenged initially in determining the best approach to forming our recommendations, but this was eventually clarified through the development of a single guiding question which anchored our work thereafter: “What recommendations will we make for labor market reform that will enhance innovation and improve the adoption of technology in the workplace, leading to improved productivity in the public sector?” So that we could eventually benchmark the effect of our recommendations, we also used the opportunity, under the guidance of the Jamaica Productivity Centre, to agree on the definition of public sector productivity, how it is measured, and its key performance indicators. Thereafter, the working group followed a continuously evolving, iterative and collaborative process which included the following key steps: 1. Assessing the current state scenario from four dimensions guided by the framework developed by the Organization for Economic Co-operation & Development (OECD) for examining innovation, which include Ways of working; Rules and Processes; Knowledge and People. 2. Through working sessions, making observations of the “as-is” state for each dimension, stating its impact along with specific ideas and recommendations for change. 3. Analyzing all of the ideas presented to develop common themes that would form the basis of our top five or six recommendations that should be considered for implementation, and which cross all of the enabling elements of innovation and productivity in the public sector. 4. Assessing the underlying dependencies that would also have to be addressed for our recommendations to have any impact. Confidential – 1st Draft for review by the Labour Market Reform Commission Only

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5. Supporting the recommendations with research from global experiences. 6. Assessing the potential impact of implementing each recommendation and prioritizing them from the perspective of ease of implementation and impact. This last step is currently work in progress. The details of the research process, approach and methodology along with the outputs of our working sessions are presented in subsequent sections of this report.

Our recommendations The PSPWG offers six very specific recommendations as follows: Recommendation #1 Knowledge and Data

The rich sources of public sector data and knowledge that currently exist need to be codified and made easier to access across government agencies as well as being made available in a secure manner as “open data” to support innovation. This will require the support of appropriate legislative change.

Recommendation #2 Transform Processes

Public sector processes need to become clearly-defined, outcome-based, crossfunctional, cross-MDA and technology enabled. They need clear end-to-end ownership at the leadership level with better engagement of key process stakeholders and improved use of data for accountability and decision making. They need to encourage collaboration and provide an integrated view of government operations.

Recommendation #3 Collaboration and Partnership

The current ways of working in the public sector need to shift from being individualistic and silo-based, to cross-functional, highly collaborative. New collaborative behaviours are required to support individual and team-level innovation as a means of driving productivity. Additionally, the public sector needs to adopt a public sector private sector partnership (PPP) approach to accelerate reform and to realize better value for government investments.

Recommendation #4 Procurement Policies

Existing procurement policies need to be changed to deliberately encourage the development of the local future skills and SME participation required for innovation and productivity, rather than continuing to depend on the importation of these key capabilities. Also, the public sector procurement processes need to become technology enabled to drive standardization, economies of scale and fair competition.

Recommendation #5 HR Policies

Public sector HR policies and practices need to change to focus on performance, rather than tenure, and make it easier to attract, promote and retain high performers with future skills. Existing policies should be changed to support a few highly skilled employees rather than large numbers of low skilled workers.

Recommendation #6 Performance Management

A performance management framework and information system need to be put in place for public sector leadership to be held accountable to drive future skills development, technology-led innovation, lean processes and productivity outcomes. Also, public sector organizations need to demonstrate clearer

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accountability to key stakeholders in meeting key performance indicators, as any other well-managed business would. The details of each of these recommendations have been presented later in this report, in the form of extracts which succinctly present the following:     

How the recommendations will impact labour market reform How the recommendations will increase public sector productivity, innovation and technology adoption The key enablers that need to be addressed The benefits of implementing the recommendations and the risks of not doing so Proposed next steps

Key enablers As the research evolved, it became clear that there was a common set of foundational enablers that would have to be addressed as change initiatives in their own right for any of the recommendations to be effective. These are equally, if not more important, than the six recommendations themselves, and are captured as follows: 1. As a priority, the profile and capabilities of public sector leaders need to change. Public sector leaders now need to possess the capabilities to drive organizational change, improve technology adoption, lead the process of collaboration and innovation; and create performance frameworks that improve staff productivity. The latter point includes a fundamental change of behaviour where, for instance, even the basic respect for time is evidenced and it is no longer acceptable for government officials, including Ministers and Permanent Secretaries, to consider it acceptable to turn up to meetings late. Government must develop a profile of what the new future leader should look like, and implement a holistic program of staff development if it is to make any substantial progress in reform. 2. A shared IT services platform needs to be implemented with urgency. While individual MDAs may have technology platforms in one form or another, there is no underlying platform in place to support cross government transformation, such as knowledge management, process innovation or secure collaboration. 3. A program of legislative change needs to be introduced. For technology creation and adoption to occur, there are a number of legislative acts that need to be implemented quickly. These include the Data Protection Act and the ICT Act among others. In a digital society, there is a direct relationship between technology enablement and innovation, so legislative change in this area will ultimately impact our ability to reform the local labour market. 4. Reform must be supported with change management and social engagement. Jamaica is now a part of a hyper connected world where most of our citizens are connected through mobility and social media. Lessons from past efforts of reform have proven that effective communication and management of change are critical success factors. Any effort to drive reform of the labour market and public sector productivity must be supported by effective management of change and social engagement. This is now the responsibility of public sector leadership, which reinforces the critical importance of item 1.

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Analysis of Impact and Prioritization of Recommendations Having developed the 6 primary recommendations, the PSPWG has started the process of developing a framework to analyze their potential impact on both Labour Market reform and public sector productivity. Once the impact is assessed, the group will prioritize each recommendation from the perspective of impact and effectiveness. The impact analysis and prioritization will be presented in the next draft of this report.

The role of the Jamaica Productivity Centre While it is the intention of the wider TIP committee to assess the role of the Jamaica Productivity Centre (JPC) once all of the TIP working groups reports have been submitted and reviewed, the PSPWG feels strongly that the JPC should have a major role in supporting the execution of the six recommendations proposed, in particular by driving the following enablers identified in section 1.4:  

Addressing the current public sector leadership gap and driving a program of leadership development and change. Change Management and social engagement

These will be addressed in more detail at the wider TIP committee level.

Conclusion Considering the gap between the “as-is” and “to-be” states for each of our recommended areas of change; the current constraints of government, as it operates today; and the required pace of reform to drive productivity, the working group was forced to ask three fundamental questions: 1. Will the current structure of government have to be changed in order to meet its goals for reform? 2. What is the role of government in the future (e.g. legislator and regulator, as well as service provider)? 3. Is government capable of providing all of the services it has committed to? As an example, in defining what the profile of the future public service leader should look like, will such a person be able to fit in the current government compensation structure? Additionally, in transforming public sector processes, should government shift to outsourcing these selectively to the private sector (stimulating growth in the process) and become an aggregator of services instead? While these may be challenging issues to address, the working group believes that leadership should confront them quickly. In the meantime, there is the potential to initiate key elements of the recommended areas for change and start implementing them across selected MDAs in the short term.

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Section 2 Research Approach and Methodology

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Research Approach and Methodology The TIP working group arrived at the proposals articulated in this document through a continuously evolving, iterative and collaborative process, as outlined in figure 2-1 below.

Key Steps

Artefacts

Sources of Input

Figure 2-1 - Summary of 6 step research process Confidential – 1st Draft for review by the Labour Market Reform Commission Only

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How do we measure productivity? Guided by and starting with the focus question [“What recommendations will we make for labour market reform (policy, legislation and initiatives) that will enhance innovation and improve the adoption of technology in the workplace, leading to improved productivity in the public sector?”], the question that followed was: “How will we measure productivity?”. Influenced by the work of the Jamaica Productivity Centre (as presented in Figure 2-2 below), we defined productivity as the combination of public sector efficiency and public sector effectiveness.

Figure 2-2 - Jamaica Productivity Centre model of Productivity assessment

The articulation of productivity then dovetailed into “What are the key indicators of labour market performance?”. To understand this, we decided to use the International Labour Organization (ILO) definition of what it calls “KILM”, or key indicators of the labour market, which touch on employment and other variables such as the lack of work, the characteristics of jobseekers, education, wages, labour productivity and working poverty. Taken together, the KILM indicators gave a strong foundation from which to begin addressing key questions related to productive employment and decent work. So, too, did the World Economic Forum (WEF) measures of the labour market, which included cooperation in labour‐employer relations, redundancy costs, pay and productivity, reliance on professional management, and

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brain drain. Both the KILM and the WEF data sets facilitated international comparisons of labour market issues, and were useful to our understanding of labour market policies.

How did we perform our analysis? With the foundational and researched elements in place, we then asked “How will we conduct our analysis?”. Embracing the Organization for Economic Co-operation & Development (OECD)’s framework used for analysing innovation in the public sector, we decided to assess the current state of innovation and productivity in the Jamaican context from each of the OECD’s 4 influencing factors – Knowledge, People, Ways of Working, and Rules & Processes. Group members were assigned to lead research, identify areas of concern, and make recommendations from each of the 4 perspectives.

Figure 2-3 -OECD Framework for assessing innovation

Our observations and ideas Using the approach “Our observation is… The impact is… Our recommendation is… The benefit will be…”, our work progressed through many stages of drafts and discussions, and the 4 influencing factors evolved into other areas of concern. Collectively, these culminated in a December 2015 draft of 3 preliminary recommendations (see section 6.2), which included what we viewed as a key influence on innovation – Leadership:

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Table 2-1 – Sample of 1 of 3 of the TIP Working Group’s Preliminary Recommendations

Developing the key themes After lengthy and considered conversation about our outputs to date – in the context of the original focus question and the issues facing the Jamaican environment – we, in our last meeting before the close of 2015, ultimately landed on what we believe is THE fundamental question: “What must happen in order for there to be true labour market change?”. We agreed that, essentially, there are 6 areas that will bring about the needed innovation, productivity and change: 1. 2. 3. 4. 5. 6.

Knowledge Management Process Transformation Collaboration Procurement Policies Human Resources Policies and Practices Performance Management

We also concluded that, to truly come to fruition, these areas of change and influence are dependent on 4 crucial enablers: 1. 2. 3. 4.

Leadership Agile ICT Services Rapid Legislative Change Social Engagement and Communication

Our Framework for Labour Market Reform is articulated in Figure 2-4 below:

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Figure 2-4 - Labour Market Reform Commission, Technology, Innovation and Productivity Committee – Framework for Labour Market Reform and Change

Developing our recommendations During the course of the first 2 months of 2016, we met weekly or biweekly and, in between these working sessions, individuals populated the areas of change and enablers, using the framework provided by the PSPWG Chair. The work done by team members was discussed at length in working sessions, and revised on the spot, or after the meetings. See section 6 for the detailed outcomes from the working sessions. A snapshot of one of the many iterations of our work products is provided in Table 2-2 and Table 2-3 below:

Table 2-2 - Sample of Key Area of Change

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Table 2-3 – Sample of Key Enabling Platform – Leadership

The depth of content was then integrated into a core format – offered by the Chair, and agreed to by the team – that would best capture and present our recommendations, and their rationale and intent. As an evidence-driven group, team members conducted and provided research to support the proposals. It is hoped that the recommendations – meticulously prepared with care and contemplation, and substantiated by research – are received in the same spirit with which they are intended: to collaboratively ensure the success of labour market reform, and contribute to the transformation of the nation.

Assessing the impact Having established the basis of measuring Public Sector productivity, there are a range of possible approaches in determining the impact of the six recommendations. One possibility, for example, is to look at each of the 18 ILO Key Indicators of Labour Management (as well as the 10 WEF indicators) and determine, where feasible, through discussion or calculated analysis, whether each indicator would improve, decline, or not change. Another possibility would be to use the Alphonso, Romero and Monsalve (ARM, 2013) framework (validated by the JPC) which uses composite indicators for public sector performance (PSP) and public sector efficiency (PSE) to measure the impact of different policy interventions based on sequential-type analysis. It shows the contribution of different observable variables to the composite indicators. For example, the framework clearly shows that countries with small governments have been observed to have better PSP and PSE scores. As the process of assessing impact is matured by the PSPWG, the results will be presented in section 4 as part of the next official draft of this document.

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Section 3 Key Recommendations for Change

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#1

Public Sector Data and Knowledge needKey to Recommendations be managed and for shared in Change order to drive efficiencies, Recommendation #1 innovation and growth in employment.

The Recommendation in Brief What needs to be done:

The rich sources of public sector data and knowledge that currently exist need to be codified and made easier to . access across government agencies, as well as being made available in a secure manner as “open data” to support innovation. This will require the support of appropriate legislative change.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

In a service-based knowledge society, information and knowledge are at the centre of a vibrant labour market; they will support the development of “knowledge workers” and the creation of “knowledge rich” jobs. Easy access to “open data” has the potential to create local demand for new future skills and create new technology based jobs.

Access to information and knowledge, with the support of enabling technologies, will encourage innovation and entrepreneurship at the individual and team levels. Shared knowledge is also at the core of process transformation and productivity.

What the research suggests The research shows that 67% of knowledge management initiatives used in developed countries such as Singapore, Japan and Australia, are geared at maximizing productivity, while enhancing service delivery. These initiatives include: 1. Maximize efficiencies across all public services by connecting silos of information across different levels of government and across borders 2. Develop new systems, or consolidate outdated ones, to improve overall performance and capitalize on a broader, more integrated and easier accessible knowledge base 3. Improve accountability and mitigate risk by making informed decisions and resolving issues faster, supported by access to integrated, transparent information across all organizational boundaries 4. Deliver better and more cost effective constituent services, such as enhanced partnerships and responsiveness to the public.

“Data is the 21st century’s new raw material. Its value is holding governments to account; in driving choice and improvements in public services; and inspiring innovation and enterprise that spurs social and economic growth.” HM Government Open Data White Paper, June 2012

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Key Enablers Leadership

Information Technology

Legislation

Engagement & Communication

Public sector leaders need to become custodians of public data and be held accountable for realizing its potential value; they need to take the lead in transforming MDAs to become learning organizations, and; they need to assume personal responsibility for introducing the relevant Information Technology to manage and share data securely, such that it provides business insights and knowledge. MDA leaders need to implement IT Systems to support Knowledge Management. To support this, the National CIO should ensure that standards for data are established for the integration and sharing of databases across agencies. This will further allow users to make greater sense of information so as to make more knowledgeable decisions. Government should repeal the Official Secrets Act, and pass an Act that is more in keeping with modern operations such as the Privacy Act of New Zealand. Additionally, public sector leaders should implement a data management and sharing policy for application among all MDAs. Public sector leaders must actively champion, participate in, and facilitate knowledge management and sharing, and communicate to staff, other public sector parties and the private sector, its importance, benefits and role. Public sector employees need to be sensitised to, and trained, where appropriate, in what constitutes their roles and responsibilities as creators, users and facilitators of data and data sharing, including issues of privacy and security. Lastly, the private sector needs to be made aware of the policies and standards associated to open data.

Making it Happen Step Description 1. 2. 3. 4. 5.

Accountable

Develop leaders who, as role models, foster sharing, and launch awareness program Develop a Knowledge Management Framework to drive pervasive adoption of KM practices Develop standards and policies for data management and integration, including open data Deploy a shared IT service platform with the appropriate database management and BI tools Implement a formal reward and recognition system for knowledge sharing across government

CPO/MOFP/MIND Cabinet Cabinet/CIO CIO/MESTT CPO/MOFP/Cabinet

The economic benefits of adoption …

The risks of not.

Knowledge management can be a powerful tool in economic development – but only if we can harness its power to the unique needs of economic development activities. Potential benefits include:

The shift to a digital, knowledge-based economy is changing what business and governments need as inputs to the production process. The risks of government not adopting a knowledge management approach are serious:





   

Improved public sector effectiveness and efficiency through increased business intelligence Enhanced innovation and the creation of new entrepreneurial opportunities Uncovering and developing local intellectual assets Acceleration in the development of local future skills Improved quality of life

  

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Inability for government to meet its economic targets due to lack of timely, accurate business intelligence Lack of competitiveness in the global economy leading to increased poverty Accelerated deterioration in global e-readiness and “ease of doing business” rankings Disempowered workers and labour market deterioration

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#2

Transform processes with digital technology to enhance public sector Recommendation #2 effectiveness, create a modern workplace and drive demand for future skills.

The Recommendation in Brief What needs to be done:

Public sector processes need to become clearly-defined, outcome-based, cross-functional, cross-MDA and technology . enabled. They need clear end-toend ownership at the leadership level with better engagement of key process stakeholders, and improved use of data for accountability and decision making. They need to encourage collaboration and provide an integrated view of government operations.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

Transformed government processes will contribute to making the public sector a “modern workplace” and will accelerate the shift of the local labour market becoming knowledge based. It will give public sector employees a greater sense of purpose, a clearer sense of achievement. and change the focus of the workforce from tasks to outcomes.

Process transformation and business innovation are essential requirements for public sector productivity and citizen-centric outcomes. Technology enabled processes will drive analytics and better use of business data, to support public sector transformation, effectiveness and measurable productivity.

What the research suggests Government agencies can make game changing advances by improving a wide range of processes. Focus on a single process can yield incremental progress, but will fall short of sustainable transformation. Evidence has shown that lean, cross functional integrated processes;   

Reduce cycle time by 30%-50% Improve front line productivity by 15%-30% Reduce quality error rate by 30%-50%

The Australian Government in its “Business Process Interoperability Framework” suggests that “Whole of Government is the public administration of the future. It offers links and connections to the global community of ideas, knowledge and understanding essential for the ability to face the governance challenges of the 21st century. It extols team-based approaches to solving the wicked problems that are endemic to public policy”.

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“Australians increasingly expect that the delivery of government programs and services should be simple, seamless and connected. Implicit in this expectation is that government business processes will be managed appropriately and that agencies will work together constructively in the search for innovative solutions to complex issues.” The Australian Government Business Process Interoperability Framework.

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Key Enablers Leadership

Information Technology

Legislation

Engagement & Communication

Public sector leaders need to be held accountable in assuming end-to-end ownership of processes across MDAs and ensure they provide an integrated view of government; they need to ensure all processes deliver valuable outcomes which are aligned to relevant KPIs and overarching government performance cycles (e.g. budget), and they need to take personal responsibility for the successful adoption of technology based solutions to drive end-to end process transformation (e.g. BPM, ECM etc.) MDA’s should ensure key processes are Identified and qualified, and that IT is utilized to automate and extend these processes across government agencies. Ensure the development of capability of use, in the sense that processes should serve a purpose and be useful. These processes should be understood, learned, used and attractive to users – both within the public sector and general citizenry – when applied under specified conditions. Government needs to review and update all the Acts, such as the the Electronic Transaction Act and the Evidence Act, that impact the use of electronic/digital data for storage and dissemination of information. Pass Acts – for instance the Data Protection Act, the Cybercrimes Act, the ICT Act – that are urgently required for efficient operations in the arena where ICT technology tools are being used. Public sector leaders and employees, along with citizens at large, need to be made aware of their role in supporting process transformation, including best use of supporting information systems. Process change needs to be supported with effective change management, communication and training plans.

Making it Happen Step 1. 2. 3. 4. 5.

Description

Accountable

Define and initiate government wide “process transformation” project Identify key cross MDA value streams that focus on customer satisfaction Define the responsibilities of MDA leadership for process transformation and hold them accountable for better process outcomes Implement a performance management system aligned to transformation goals Align people and work better, build capabilities and support front line needs

Cabinet /MOFP Cabinet /MOFP/MDAs Cabinet /MOFP/MDAs Cabinet /MOFP/MDAs MDAs/JPC

The economic benefits of adoption

The risks of not

Technology enabled, lean, integrated processes offer enormous potential for improving public sector performance including:  Lower transaction costs and improved fiscal management  Improved return on investment from IT adoption  Increased customer satisfaction and improvements in delivering services to business  Increased productivity through improved employee engagement, satisfaction and the ability to focus resources on high value activities.

Existing disconnected, inefficient, task based manual processes will contribute to deteriorating public sector and economic performance including:  High costs of operating government  Increased transaction costs and costs for service delivery  Migration and loss of potential future skills  Stagnant labour market dynamics  Disengaged public sector employees  Poor ROI on capital spent on Information Systems

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#3

Drive a culture of Collaboration as an Recommendation #3 essential behaviour in the public sector workplace and the global labour market.

The Recommendation in Brief What needs to be done:

The current ways of working in the public sector need to shift from being individualistic and silo-based, to cross-functional, highly collaborative. New . collaborative behaviours are required to support individual and team-level innovation as a means of driving productivity. Additionally, the public sector needs to adopt a public sector private sector partnership (PPP) approach to accelerate reform and to realize better value for government investments.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

Collaborative ways of working, including PPPs, will accelerate the development of future skills required to deliver public sector services, in the context of a global knowledge economy. Cooperation across the public sector will also influence the development of collaborative behaviours in the local labour market, and across all sectors.

Empowered, knowledgeable public and private sector workers who collaborate effectively will be more productive, and have a higher tenacity to create or adopt technology, as well as innovate.

What the research suggests Complex service needs, coupled with rising costs have driven more cooperation and collaboration across public service boundaries.  In the US, approximately 96% of public-sector employees polled by GovDelivery believed that stronger relationships with consultants, other agencies and the public would be beneficial.  Public services can tap into the power of their scale by leveraging shared services. For example, Singapore launched its shared services centre, Vital.org, in 2006, serving more than 100 government agencies and 80,000 public servants. As a result, employee engagement and customer satisfaction have increased by 39% and 17%, respectively, attrition has dropped by 40%, and 34,400 man-hours have been saved.  Public-Private Partnerships (PPP) are seen as a solution to overcome many of the obstacles and challenges faced by government. For example, the state government of Andhra Pradesh in India developed the e-seva PPP project consisting of community one-stop shops all over the state where citizens can conduct e-government transactions (e.g. pay taxes, register births and deaths, etc.). Confidential – 1st Draft for review by the Labour Market Reform Commission Only

“Government should be collaborative. Collaboration actively engages Americans in the work of their Government. Executive departments and agencies should use innovative tools, methods, and systems to cooperate among themselves, across all levels of Government, and with nonprofit organizations, businesses, and individuals in the private sector.” The White House – Transparency and Open Government Page 21

Key Enablers Leadership

Information Technology

Legislation

Engagement & Communication

Public sector leaders need to set the example for open, transparent collaborative behavior both inside and outside of government, be prepared to proactively share information and knowledge across MDAs, and take charge in implementing the policies and best practices to ensure that ICT is effectively adopted as the primary platform for collaboration and innovation (e.g. office tools, messaging, voice, social media etc.). A common public sector collaboration platform – that is, email, voice, messaging and other tools – needs to be established and implemented as a shared service by public sector leaders. The office of the national CIO needs to accelerate existing programs for shared IT services to support the program of shared corporate services, so that government can be viewed, and operate, as one entity. A collaborative approach should be adopted in the drafting of bills in order to reduce the number of amendments. Similarly, public sector leaders need to engage the private Bar in the drafting of legislation to hasten the delivery of urgently needed legislation. The culture of silos within and outside of each MDA needs to be broken down through leadership, training, discussions, reinforcement, and the use of technology. Additionally, polices associated to the creation and adoption of collaboration platforms need to be clearly defined, to include information security, agency collaboration in developing systems that ”talk” to one another, and expectations of new collaborative behaviours. Culture and behaviour change, along with policy development, should be supported with effective change management and communication plans.

Making it Happen Step 1. 2. 3. 4. 5.

Description

Accountable

Develop policy framework for collaboration and inter-operability across MDA’s Implement plan to identify and remove any legislative hurdles to collaboration Define key roles and responsibilities for public sector leaders in driving collaboration and execute HR development and change program Implement a common, shared IT platform to enable collaboration and sharing of data/knowledge Implement a system of incentives and rewards for individuals and agencies who collaborate well

CIO/MESTT/Cabinet Cabinet/MDAs/AG CPO/MOFP/MDAs CIO/MESTT/Cabinet CPO/MOFP/Cabinet

The economic benefits of adoption

The risks of not

Collaboration enables organisations to access complementary features of other organisations or sectors to solve problems that the public (or any other) sector cannot solve on its own. Collaboration, whether internally or externally focused, helps the public sector to:  Overcome budget constraints in the face of rising citizen expectations  Grapple with increasingly complex community needs  Better manage risk  Enable Innovation and improve public sector effectiveness

Collaboration is an essential behaviour for doing business in a hyper connected society. Governments that fail to collaborate internally and externally will:  Miss key opportunities to derive value from local labour  Retard the process of developing future skills locally  Lose societal trust and engagement  Miss opportunities for growth based funding  Miss opportunities for innovation  Struggle to reduce operating costs  Become increasingly ineffective in service delivery

Put simply, public sector collaboration is a critical dimension of being ‘open for business’. Confidential – 1st Draft for review by the Labour Market Reform Commission Only

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#4

Change procurement policies to Recommendation #4 deliberately encourage the rapid development of future skills and SME participation in the local labour market.

The Recommendation in Brief What needs to be done:

Existing procurement policies need to be changed to deliberately encourage the development of the local future . skills and SME participation required for innovation and productivity, rather than continuing to depend on the importation of these key capabilities. Also, the public sector procurement processes need to become technology enabled to drive standardization, economies of scale and fair competition.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

A more efficient, technology enabled, fair, open and competitive procurement process, that favours the development of local skills and SME participation, will accelerate the development of the local labour market. This will result in the increased availability of local, affordable future skills to support innovation and productivity in both public and private sectors.

The availability and access to affordable local future skills will encourage technology-led innovation and productivity. A technology enabled procurement process will quicken the execution of contracts, allowing the anticipated value to be realized faster, while adhering to legal and commercial requirements.

What the research suggests: Effective national procurement policies have an important developmental effect on countries, as they offer local economic opportunities through their employment generating activities.  In 2012, the People’s Republic of China Ministry of Finance and Ministry of Industry and Information Technology outlined a number of preferential procurement policies for SMEs to boost their development. These include requiring government departments (i) to set aside at least 30% of annual budgets for SME procurement, with not less than 60% of this amount reserved for SMEs; (ii) to apply SME price preferences of between 6%–10% in particular instances; and (iii) to encourage larger businesses not only to subcontract but also form consortiums with SMEs.  In the United Kingdom, the Department for Business, Innovation and Skills has recently announced a new policy which requires bidders for major government construction and infrastructure projects to show their commitment to developing the quality of their current and future workforce and meet target levels of workforce training.

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“Bolton maintains that, as a policy tool, public procurement may be viewed as a means of “wealth distribution” (i.e. using procurement to channel funds to discrete categories of economic actors, such as was the case in South Africa).” Public Sector Transformation Processes and Internet Public Procurement

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Key Enablers Leadership

Information Technology

Legislation

Engagement & Communication

Public sector leaders across all MDAs must drive the change in procurement policies and practices to ensure they are more open, efficient, fair, and that they encourage SME participation as well as the development of local skills. They should also ensure that procurement processes are simplified and enabled through standards and a common government technology platform. Finally, they must ensure that their respective organizations have the capacity and capability to execute procurement projects before they start. MDA leadership need to understand their role in the implementation of the government e-procurement system. It is a tool to improve transparency in public procurement; transparency plays a role in deterring a culture of corruption and creating conditions for open competition, which provides greater opportunities for entities such as SMEs to participate in the procurement process. Public sector leaders must ensure the review and amendment of procurement legislation and procedures so that they better facilitate the participation of the SME sector, provide openness and transparency, and allow for electronic submission of proposals. All key public and private sector stakeholders need to be engaged for the full project life-cycle of the development and implementation of new procurement policies, and the associated e-procurement system. In addition, the citizenry, and other stakeholders such as funding agencies, need to be sensitised to the new policies and system.

Making it Happen Step 1.

2. 3.

Description

Accountable

Review current procurement polices so as to maximize opportunities for SMEs, and to address the need for equal treatment, non-discrimination, transparency and proportionality. Identify future skills required for the local market and implement procurement policies that favor bidders that show their commitment to local development. Accelerate the public procurement system through innovative procurement methods supported by increased use of technology including comprehensive process reengineering prior to automation.

The economic benefits of adoption

The risks of not

Procurement should be used as a means of promoting economic growth and future skills development and will result in:

If this recommendation is not accepted:





 

A more skilled and productive workforce supporting economic sustainability A vibrant SME sector through increased participation in economic development Innovation & Entrepreneurship and increased employment for young professionals



 

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There will be supply constraints in the local labour market leading to increased labour cost inflation. The economy will continue to be forced to import future skills. The economy will continue to experience brain drain and loss of social capital. SME’s will struggle to compete for and participate in government funded business

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#5

Change existing HR Policies and Recommendation #5 Practices to improve the quality of leadership and labour in the public sector and drive demand for the required future skills.

The Recommendation in Brief What needs to be done:

Public sector HR policies and practices need to change to focus on performance, rather than tenure, and make it easier to . attract, promote and retain high performers with future skills. Existing policies should be changed to support a few highly skilled employees rather than large numbers of low skilled workers.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

The public sector will become a more attractive place to work and will positively influence the local labour market by creating demand for future skills that drive productivity and innovation. The public sector as a major employer will be able to compete for and retain skilled labour, leading to reduced staff attrition.

The quality of public sector leadership will improve to be more aligned to future capabilities, including those of driving change. A higher skilled public sector workforce is easier trained in the use and adoption of technologies, and is more likely to innovate.

What the research suggests Efficiency and effectiveness in government’s performance depend on the talent of public employees and the quality and knowledge of their skills.  The New Public Management applied in New Zealand resulted in departmental CEOs being appointed on five-year fixed term contracts with annual performance agreements with the relevant minister, but with greater managerial authority and discretion.  Departments in NZ are required to use financial planning models to address strategic issues and non-financial matters affecting their departments.  The Department of Education, NY centralised HR functions and created a one-stop service centre for HR and centres of excellence to support effective service delivery.

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Administrations have now realized that success of the organizational changes depend on how they design and implement a people strategy. 87 % of participants claim that their HR strategy is integrated within their governmental plan and policies. Human Resources management strategies to support organizational changes – PWC, 2005

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Key Enablers Leadership

Information Technology Legislation

Engagement & Communication

Public sector leadership must lead the necessary changes in policy, governance, attitudes, skills and behaviours to change the culture of MDAs from that of being rewarded for tenure, to being rewarded for performance. They must also lead the process of changing the organizational structures and associated review processes to support the goal of productivity, adopting technology, where appropriate, to support the transformation. The GOJ must implement, with the appropriate IT governance and sponsorship from MDA executives, a common, government-wide HR IT platform that is a shared service and supports the implementation of new HR policies and practices. MDA leaders need to have more autonomy in recruiting personnel and administering HR Policies. They should also ensure the codification of HR policies and the education of employees on HR policies and legislation. Government should review and update employment legislation, such as the staff orders for the public service, to ensure that the operating procedures conform to the proposed way of working. New HR policies and practices need to be communicated to public sector leadership and employees, along with the associated rewards for compliance, and consequences of non-compliance. The policies must also be standardised so as to be utilised across MDAs, be transparent, and encourage and engender rewards for innovation, performance and productivity. Implementation of new policies, and the IT systems that support them, need to be buttressed with effective change management and communication plans.

Making it Happen Step 1.

Description

Accountable

2. 3.

Define the profile of the future public service leader and implement a government wide program to identify and select future leaders. Assess the performance of MDA HR Divisions to determine their effectiveness Simplify existing regulations related to the appointment of public officers

4. 5.

Pilot the new order, competency based job structures in one ministry & evaluate Implement shared HRMS platform with standard policies & procedures

MOFP/CPO/ Cabinet Office MOFP/CPO/Cabinet MOF/CPO/AG MOF/CPO/PS MOF/N-CIO/eGov/MESTT

The economic benefits of adoption

The risks of not

There is a direct relationship between the quality of public sector leadership and public sector performance. Adopting the recommendation will:

By not improving the quality of public sector leadership and skills

    

Improve the quality of public sector governance and reduce the risks of inefficiencies & corruption. Enable better business planning in government. Provide sharper performance management. Support better recruitment and use of future skills. Accelerated economic growth.

     

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Public sector transformation will fail Economic reform will fail The country will continue to be globally uncompetitive The required future skills leave The reform of the labour market will not take place Citizens and Enterprise will lose confidence in government and the quality of life will fall

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#6

Urgently introduce an effective Recommendation #6 performance management framework that drives labour productivity and outcomes in the public sector.

The Recommendation in Brief What needs to be done:

A performance management framework and information system need to be put in place for public sector leadership to be . held accountable to drive future skills development, technologyled innovation, lean processes and productivity outcomes. Also, public sector organizations need to demonstrate clearer accountability to key stakeholders in meeting key performance indicators, as any other well-managed business would.

How this will support the reform of the Labour Market:

How this will increase Productivity, Innovation and Technology Adoption:

With increased focus on performance, the quality of public sector leadership will improve, as will the adoption of best practices in performance management. Also, the performance standards of public sector labour will be lifted, positively influencing the labour market in general.

Clear accountability for measurable outcomes, along with industry based productivity KPIs, will force/cause the necessary technology-led innovation.

What the research suggests Successful performance management in the public sectors requires a number of elements including effective performance management frameworks — public managers need clear lines of accountability and access to good and relevant data to measure and explain performance.  



OECD member states use performance information in the budget process and have linked funding with measureable results; Evaluations and assessments of performance are critical elements in the broader governance framework as they contribute to three main functions – accountability, allocation of resources and institutional learning; There is the need to institutionalise the evaluation process ad develop the skills within the public and private sectors.

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With clearer goals, objectives and performance reviews, employee output and motivation will improve, leading to creativity and innovation.

“Now is the time for governmental leaders to ensure that the organizations they lead are taking responsibility for achieving results that matter to the public – by practicing performance management.” A Performance Management Framework for State and Local Government, National Performance Management Advisory Commission – USA.

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Key Enablers Leadership

Information Technology

Legislation

Engagement & Communication

Public sector leaders should take the lead in implementing Key Performance Indicators that are directly linked to productivity and innovation, and be held accountable for these outcomes through effective performance review processes. They should ensure an effective performance management framework and technology platform are put in place to drive general employee performance, and should set the example in its adoption. Public sector management must become synonymous with performance management. Thus, leaders must ensure a common, government-wide performance management system is implemented as a shared service, which includes performance framework, performance monitoring and performance reports and accountability, so as to ensure that the various government agencies are efficient, effective and accountable to their stakeholders. Public sector leaders need to expand the scope of the Corporate Governance Framework, established by the Ministry of Finance under the Public Sector Bodies and Accountability Act, to include all MDAs and not just Corporate Bodies and Executive Agencies. New Performance Management policies and practices need to be communicated to public sector leadership and employees, along with the associated awards for compliance, and the consequences of non-compliance. They should also be designed with the engagement of leaders and staff, at relevant points and as appropriate. Implementation of new policies, and their associated IT systems, need to be supported with effective change management and communication plans.

Making it Happen Step 1. 2. 3. 4. 6.

Description

Accountable

Identify key government wide processes that need to be aligned to a performance management framework. Develop KPIs for each area of operation, creating the ability to measure Develop and implement a formal evaluation strategy for all MDAs with annual reporting being part of the Budget/Annual Return Establish data collection mechanisms to assess performance against targets Conduct efficiency audits and report on an ongoing basis

MOFP CEO/Manager/PS/MOFP Cabinet / MOFP CEO/Manager/PS Auditor General

The economic benefits of adoption

The risks of not

Performance Management is an essential tool in driving out Public Sector efficiency. It serves to:

The absence of performance management will lead to:

 Clarify purpose, goals and accountability of public sector employees  Effective use of public funds  Encourage synergy between MDA’s  Ensure transparency  Drive outcomes and growth

     

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Misalignment between MDA activity and strategic goals Continued bureaucracy and inefficiency Poor use of public sector funds Lack of accountability for outcomes Poor productivity from public sector workers and low staff motivation Slow or failed public sector transformation

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Section 4 Assessment of Impact

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Assessment of Impact

(To be completed in the second draft of this document)

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Section 5 Appendices

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Appendices Appendix 1 - additional Research and Literature Review 5.1.1

Recommendation #1 – Knowledge & Data Review of Knowledge Management in the Irish Civil Service: http://www.ipa.ie/pdf/cpmr/CPMR_DP_30_Review_of_Knowledge_Management_inthe_CS.pdf A Guide to Knowledge management https://publicsector.wa.gov.au/sites/default/files/documents/a_guide_to_managing_knowledge.pdf Butler, T. C. (2007). IMPLEMENTING KNOWLEDGE MANAGEMENT SYSTEMS IN PUBLIC SECTOR ORGANISATIONS: A CASE STUDY. Cork City, Ireland: Business Information Systems, University College Cork, . Pandya, X. C. (2003). Issues of Knowledge Management in the Public Sector. Electronic Journal of Knowledge Management Volume 1 Issue 2 , 25-33. Yuen, Y. H. (2007). OVERVIEW OF KNOWLEDGE MANAGEMENT IN THE PUBLIC SECTOR. 7th Global Forum on Reinventing Government: Workshop on Managing Knowledge to Build Trust in Government, (pp. 1-16). Rutherford A, Tait J A, (2004) Knowledge Management implementing trends, INLECOM Ltd page 1-8 McNabb, D. E. (2006). Knowledge management in the public sector: A blueprint for innovation in government. ME Sharpe.

5.1.2

Recommendation #2 – Transform Processes http://www.finance.gov.au/sites/default/files/Business_Process_Interoeprabiltiy_Framework.pdf Process improvement in the public sector An In-depth white paper by Improvement Skills Consulting Ltd. file:///C:/Users/eyremerv/Downloads/MCG_Transforming_through_lean_management%20(1).pdf http://www1.worldbank.org/prem/PREMNotes/premnote91.pdf

5.1.3

Recommendation #3 – Collaboration Public Service Commission (2014). Doing Things Differently. Raising Productivity, Improving Service and Enhancing Collaboration across the NSW Public Sector. Retrieved from http://www.psc.nsw.gov.au/reports---data/other-publications/doing-things-differently-report PWC (2014). Productivity in the public sector What makes a good job?. Retrieved from https://www.pwc.se/sv/offentlig-sektor/assets/productivity-in-the-public-sector-what-makes-a-goodjob.pdf Canada’s Public Policy Forum (2014). Flat, flexible and forward-thinking: Public Service Next. Retrieved from http://www.ppforum.ca/sites/default/files/Flat%20Forward%20Flexible%20Final%20Report.pdf

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A Framework for Harmonization and Access to Public Sector Data in Jamaica – By: Garfield Giff, Dave Coleman, Valrie Grant-Harry, Earl Edwards, March 2009, for the Public Sector Modernisation Unit, Cabinet Office, Jamaica. A Cost Benefit Analysis for an Economic Analysis indicating the Benefits and Costs of a Data Sharing Policy Across all Government of Jamaica Ministries Department and Agencies: By Kevin St. Croix Morrison, 2011, for the Public Sector Modernisation Unit, Cabinet Office, Jamaica. Accenture(2015). Delivering Public Service for the Future: Navigating the Shifts. Accenture Report Corrigan, M.B., Hambene, J., Hudnut III, W., Levitt R.L., Stainback, J., Ward, R., Witenstein, N (2005). Ten Principles for Successful Public/Private Partnerships, Urban Land Institute Smith(2016). Saint John council signs $216M water treatment deal, CBC News Fountain, D (2013) Implementing Cross-Agency Collaboration: A Guide for Federal Managers, IBM Center for the Business of Government http://www.vital.gov.sg/Aboutus.html http://www.govdelivery.com/pdfs/Infograph_collab.pdf http://www.govtech.com/e-government/Infographic-Employees-Want-Better-Collaboration.htm https://www.ctg.albany.edu/publications/online/new_models/overview/overview.pdf

5.1.4

Recommendation #4 – Change Procurement Policies Kaspar, L., and Puddephatt, A (2012). Benefits of transparency in public procurement for SMEs General lessons for Egypt. Global Partners and Associates OECD (2012). Public Procurement for sustainable growth and inclusive growth. Enabling reforms through evidence and and peer reviews. Retrieved from http://www.oecd.org/gov/ethics/PublicProcurementRev9.pdf Salmon, B (2015). New procurement policy: sustainable skills development through major construction and infrastructure projects. Retrieved from http://www.lexology.com/library/detail.aspx?g=63fac5eea66c-48dd-aca3-ae7338ef81fd Asian Development Bank (2012). SME Development Government Procurement and Inclusive Growth Kang, H (2012). e-Procurement Experience in Korea : Implementation and Impact , Public Procurement Service (PPS), the Republic of Korea WorldBank (2004). Korea’s move to e-procurement, Development economics vice presidency and poverty reduction and economic management network, Volume 90

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5.1.5

Recommendation #5 – HR Policies and Practices Innovation Imperative in the Public Sector: Setting an Agenda for Action; OECD 2015

5.1.6

Recommendation #6 – Performance Management Framework KPMG New Zealand http://www.kpmg.com/NZ/en/IssuesAndInsights/ArticlesPublications/Pages/Performance-managementin-public-sector.aspx Innovation Imperative in the Public Sector: Setting an Agenda for Action; OECD 2015 New Public Management, New Mellinium, New Zealand - Author: Grant Duncan and Jeff Chapman, Postgraduate Public Policy Programme, Massey University Albany http://www.conferenz.co.nz/whitepapers/new-public-management-new-millennium-new-zealand Transforming HR to Drive Organizational Success – Lessons learned through Project Home Run at the New York City Department of Education - http://broadeducation.org/asset/1128mercertranshrdriveorgsuccess.pdf KPMG New Zealand http://www.kpmg.com/NZ/en/IssuesAndInsights/ArticlesPublications/Pages/Performance-managementin-public-sector.aspx Public Servants as Partners for Growth; Towards a Stronger, Leaner, More Equitable Work Force – OECD Publication - http://www.oecd-ilibrary.org/governance/public-servants-as-partners-for-growth/executivesummary_9789264166707-2-en;jsessionid=4u4u1k1fm6k9.x-oecd-live-03 Improving Public Sector Efficiencies Challenges and Opportunities by Teresa Curristine, Zsuzsanna Lonti and Isabelle Joumard– OECD - http://www.oecd.org/gov/budgeting/43412680.pdf Public Sector Performance: The Critical Role of Evaluation http://web.worldbank.org/archive/website00955A/WEB/PDF/PUBLICSE.PDF

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Outputs from Working Sessions 5.2.1

Whiteboard of Observations and Recommendations

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5.2.2

Interim Top 3 Recommendations report

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5.2.3

Key Areas and Change and Associated Enablers

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Glossary of Terms AG Cabinet CEO CIO CPO e-Gov ICT ILO JPC KILM LRMC MDAs MESTT MOFP NCC OCG OECD PPP PS PSP PSPWG SME TIP WEF

Attorney General Office of the Cabinet Chief Operating Officer Chief Information Officer Chief Personnel Officer EGov Jamaica Ltd. Information, communication & Technology International Labour Organisation Jamaica Productivity Centre Key Indicators of the Labour Market Labour Market Reform Commission Ministries, Departments and Agencies Ministry of Energy, Science, Technology & Telecommunication Ministry of Finance and the Public Service National Contracts Commission Office of the Contractor General Organization of Economic Cooperation & Development Private Public Sector Partnership Permanent Secretary Public Sector Performance Public Sector Productivity Working Group Small & Micro Enterprises Technology, Information & Productivity Committee World Economic Forum

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