Crown Entities "The Good Employer" - A Status Report

Foreword

It is a year since Crown entities were obliged under the Crown Entities Act 2004 to be ‘good employers’. This status report identifies progress to date by analysing the inclusion of ‘good employer’ intentions and plans in high level strategic documents.

The report provides a measure of Crown entities’ awareness of their ‘good employer’ obligations, and their identification of their plans and strategies to be a ‘good employer’. It benchmarks the communication by Crown entities of their ‘good employer’ intentions and plans. The measurement of these public intentions is one way of ensuring that good employment practice and equal employment opportunities are ‘on the agenda’ and are transparent.

The report also provides some key indicators that Crown entities and their portfolio departments can use in order to measure performance over time. Lastly, the report reproduces and reinforces ‘good employer’ guidance that has previously been distributed to Crown entities.

Description and commentary in the Statement of Intent/Statement of Corporate Intent (SOI/SCI) is not on its own an indication of how well an employer is doing with regard to being a ‘good employer’. A number of Crown entities have excellent plans and initiatives in place and these are not necessarily identified in the SOI/SCI. Moreover, descriptive reference is only one indicator of Crown entity progress. It will take a longer period of time, and additional benchmarking through the collection of qualitative and quantitative material, before ‘good employer’ performance can be analysed.

This report is an important first step. The Human Rights Commission would like to thank all Crown entity managers and staff who have helped with verification and advice for this report.

DR JUDY MCGREGOR
EQUAL EMPLOYMENT OPPORTUNITIES COMMISSIONER

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CONTENTS

1. Introduction

2. Crown Entities – legislation and profile

3. Methodology

4. Findings

5. Next Steps
a. Recommendations for Crown entities
b. Performance Indicators

6. Appendices
a. 7 Employment Elements
b. ‘Good Employer’ Plan - a change model

1. Introduction
The Human Rights Commission has been providing guidance to Crown entities on the requirement to be a ‘good employer’ since the introduction of the Crown Entities Act in 2005. It is timely to review how aware Crown entities are of their obligations. It is also important to understand how Crown entities describe their plans, and how many refer to being a ‘good employer’ in their highest level documents, because what gets counted gets done.

Being a ‘good employer’ is vital to ensuring that an organisation can deliver on its stated outcomes and can manage for results. Organisations need plans and strategies to ensure that this happens. Good employment policies and practices cannot just be left to chance. This is particularly the case for those groups who have been marginalised and disadvantaged, and continues to be. People with disabilities, newly-arrived migrants and older people are three such groups. The Act also specifically mentions Māori, women and ethnic minorities. Many employers have put in place strategies that recognise the disadvantages that these groups can face, and are working actively towards ensuring that there is a level playing field through the provision of equal employment opportunities.

Even though it is not a legislative requirement, the EEO Commissioner suggests that Crown entities do refer to their ‘good employer’ intentions in their highest level document – their SOI or SCI. This is because 'the SOI provides a high-level, succinct, strategically-oriented description and explanation of an entity's operating intentions and performance expectations’.

The process of writing the SOI provides an opportunity to plan and declare what the entity will do over the next 12 months, and the next three to five years, to ensure it has the capability to perform and deliver results. Being a ‘good employer’ is a critical part of ensuring that the organisation has the capability it needs. Some organisations go into detail. Others, in particular the District Health Boards (DHBs) and the Crown Research Institutes (CRIs), simply refer to other high level documents such as their Workforce Development Strategies and Strategic Plans, which set out more comprehensive comments and initiatives.

One of the requirements of the Act is that the employer’s programme and plans be made available to staff. ‘The tabling and publication of the SOI provides a valuable opportunity to communicate the entity's strategy with Parliament, stakeholders and staff.’

The Act requires a Crown entity to include in its Annual Report ‘information on compliance with its obligation to be a good employer (including its equal opportunities programme) (s151 1(g))’. The SOI ‘provides the base against which the entity will later report in its Annual Report (s150 and s151)’.

The most appropriate part of the SOI in which to outline the ‘good employer’ obligations is set out in s141(1)(e) of the Act. This covers how the entity proposes to manage its organisational health and capability. Crown entities need to provide a straightforward description and discussion of their organisational health and the management of key elements of their capability (now and in the future) within the available resources, including plans to develop or change any specific type of capability.

The SOI guidance for Crown entities states that 'capability is what an organisation needs in terms of access to leadership, people, culture, relationships, processes and technology, physical assets, and structures to efficiently deliver the outputs required to achieve the Government's goals’. It also provides examples, which include ‘trends in recruitment, retention of key staff, and the ‘good employer’ policy’.

The two core planks of the ‘good employer’ guidance are reproduced as appendices. Briefly they are the 7 Employment Elements and the Change Model. The employment elements are listed in the table below.

The Change Model refers to a six step process for developing an equal employment opportunities programme. The six steps are:
1. Establish and review the workplace profile
2. Analyse the workplace profile and each employment element
3. Prioritise the issues and develop a plan of action
4. Take action to address priority issues
5. Evaluate the effectiveness of those actions and outcomes achieved
6. Plan actions for the future.

This Report:

outlines the methodology used for this review;
reproduces the relevant parts of the Crown Entities 2004 Act and provides a brief profile of the Crown entities that are obliged to comply with this legislation;
provides data on which Crown entities have mentioned their ‘good employer’ obligations in their SOI/SCI - either using the terminology ‘good employer’, or referring to one or more of the 7 Employment Elements;
makes a qualitative assessment on whether the discussion in the SOI/SCI is comprehensive or cursory;
identifies other key high-level documents where Crown entities have outlined their ‘good employer’ intentions;
provides some key indicators that Crown entities and their portfolio departments can use in order to measure improvements over time; and
reproduces the 7 Employment Elements and the Development of EEO Change Model cycle recommended by the EEO Commissioner.

The EEO Commissioner will be reviewing Crown entities 2007 annual reports to ensure adherence to the legislation to ‘report in its annual report on the extent of its compliance’ with the ‘good employer’ principles.
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2. Crown Entities

2.1 Legislation

There are 94 Crown entities, representing 80,177 staff, which are required to meet the obligations outlined in s.118 of the Crown Entities Act 2004.

Section 118 states that ‘A Crown entity must if it employs employees operate a personnel policy that complies with the principle of being a “good employer”; and make that policy (including the equal employment opportunities programme) available to its employees; and ensure its compliance with that policy (including its equal employment opportunities programme) and report in its annual report on the extent of its compliance.’

The legislation defines a ‘good employer’ as ‘an employer who operates a personnel policy containing provisions generally accepted as necessary for the fair and proper treatment of employees in all aspects of their employment, including provisions requiring:

good and safe working conditions;
an equal employment opportunities programme;
the impartial selection of suitably qualified persons for appointment;
recognition of
a. the aims and aspirations of Māori; and
b. the employment requirements of Māori; and
c. the need for greater involvement of Māori as employees of the entity;
opportunities for the enhancement of the abilities of individual employees;
recognition of the aims and aspirations and employment requirements, and the cultural differences, of ethnic or minority groups;
recognition of the employment requirements of women; and
recognition of the employment requirements of persons with disabilities’.

The legislation defines an equal employment opportunities programme as ‘a programme that is aimed at the identification and elimination of all aspects of policies, procedures, and other institutional barriers that cause or perpetuate, or tend to cause or perpetuate, inequality in respect of the employment of any persons or group of persons’.

2.2 Profile

2.2.1 Size

Of the 94 Crown entities:

twenty have 20 or fewer staff
twenty-two have more than 20 and fewer than 100 staff
twenty have more than 100 and fewer than 500 staff
eleven have more than 500 and fewer than 1000 staff
twenty-one have more than 1000 staff.

2.2.2 Groups

Crown Research Institutes

The Crown Company Monitoring Advisory Unit (CCMAU) monitors nine Crown Research Institutes (CRIs):

AgResearch Ltd
Industrial Research Ltd
Institute of Environmental Science & Research Ltd
Institute of Geological & Nuclear Sciences Ltd
Landcare Research New Zealand Ltd
National Institute of Water & Atmospheric Research Ltd
New Zealand Forest Research Institute Ltd - trading as
New Zealand Institute for Crop & Food Research Ltd
The Horticulture & Food Research Institute of New Zealand Ltd.

These CRIs are subject to the Crown Entities Act 2004, the Crown Research Institutes Act 1992 and the Companies Act 1993.

The CCMAU website reports that the nine CRIs employ 4,166 staff members, of whom 3,360 are engaged in research and research support.

The organisations ‘exhibit a stronger and more pervasive strategic focus and have greater performance expectations than the departments from which they were formed. They are also broadening their revenue base and are becoming much more market-focused’.

Rather than a Statement of Intent (SOI), these Institutes have a Statement of Corporate Intent (SCI). Like SOIs, the SCIs are high-level, succinct documents, whereas the strategic plan documents that accompany each SCI are much more comprehensive (some are over 100 pages), and include detailed plans concerning finances, technology transfer, collaborations, human resources, and so on. One of the CRIs, Industrial Research Ltd, has an extended deadline for their SCI until January 2007.

District Health Boards

The Ministry of Health monitors the 21 DHBs which have existed since 2001, when the New Zealand Public Health and Disability Act 2000 came into force. These DHBs employ a combined total of 61,744 staff. The smallest DHB employs 600 people and the largest 8,600.

District Health Boards New Zealand (DHBNZ) is a body set up to assist District Health Boards with meeting their objectives and accountabilities to the Crown. The Workforce Development Group, which is part of DHBNZ, oversees the Future Workforce strategy plan. This key initiative is ‘the result of consultation with a wide range of service development and workforce experts’. It is ‘a strategic framework and plan to guide collaborative workforce activity to the year 2010’. It ‘explores future service delivery models and demand to determine what workforce is required to deliver to the population's need’. It also outlines ‘high impact, achievable actions’. ‘The implementation and timing of identified actions will be based on an annual plan signed off by CEOs.’

Six Workforce Strategy Groups, aligned to occupational professional groups, have been established to assist with achieving Future Workforce outputs and objectives. Each Workforce Strategy Group needs workforce information to underpin their work. Groups will consider their workforce needs in relation to three areas, one of which is ‘Key Workforces - a coherent response to development of key workforces inclusive of employment relations strategy and aligned to DHB service direction’.

Future Workforce identifies eight priorities for the development of the health and disability workforce:

1. Fostering Supportive Environments and Positive Cultures
2. Enhancing People Strategies
3. Education and Training
4. Models of Care
5. Primary Care
6. Māori Health and Disability Workforce
7. Pacific Workforce
8. Non-regulated Health and Disability Workforce.

Other key relevant documents to which the DHBs subscribe are the DHB Workforce Priorities for District Annual Plans (DAPs); DHBs and Health Workforce Development - Context and Strategic Directions for DHBs; Terms of Reference Workforce Group; Terms of Reference Workforce Strategy Groups; Workforce Action Plan (WAP); and the Workforce Development Toolkit.

Other Crown Entities

There are a total of 64 other Crown entities – including Autonomous Crown Entities, Independent Crown Entities, and Crown Agents that are required to subscribe to the ‘good employer’ clause in the Crown Entities Act. They range in size from 4 to 2,400 staff. A combined total of 14 public sector departments monitor these Crown entities.
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3. Methodology

3.1 What data was sought?

In September 2006, information was sought about Crown entities to establish what references to their ‘good employer’ intentions they had made in high level documents during the 2005/06 financial year. The data gathered included whether:

the term ‘good employer’ was referred to in the SOI/SCI
the reference to ‘good employer’ was comprehensive or just a brief comment
there was reference to any of the Employment Elements
this reference to any of the Employment Elements was comprehensive or brief.

3.2 How was the data sought?

a. Crown entities’ Statements of Intent (SOI) and Statements of Corporate Intent (for Crown Research Institutes) were searched for references to the ‘good employer’ and any of the 7 Employment Elements.
b. Those Crown entities that did not have an SOI/SCI online were contacted and asked to send this document to the Human Rights Commission.
c. The information collected as a result of this data gathering exercise was combined with existing data already collected on Crown entities, such as numbers of staff, and type and amount of previous contact if any with the Human Rights Commission.
d. A table was then distributed to Crown entities by email asking for comments on the accuracy or otherwise of the information.
e. A relatively small percentage of Crown entities verified the data and alerted the researchers to other high level strategic documents that contained reference to their ‘good employer’ obligations and plans.

f. As not all Crown entities responded, the EEO Commissioner then sent a letter to each Chief Executive asking for verification. Included in the letter was an attachment stating the specific findings that had been made for the organisation. The Chief Executive was asked to verify that these findings were correct, and if not, to correct the information. He/she was also asked to list ‘other strategic documents that refer to your obligations and plans to be a “good employer” and/or provide EEO’. Sixty-four of the 94 Crown entities (68%) replied to this invitation.
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4. Findings

The vast majority of Crown entities either mentioned their good employer intentions or referred to their intentions with regard to at least one of the 7 Employment Elements.

85 (90%) Crown entities referred to their ‘good employer’ obligations or at least one of the 7 Employment Elements in their SOI or SCI;
Only 7 (7%) did not refer to the ‘good employer’ OR any of the 7 Employment Elements;
For 2 (2%), no SOI was available.

Judgements were made about whether the comments about being a ‘good employer’ were ‘comprehensive’ or ‘passing’ with reference to the employer’s obligations or intentions. ‘Passing’ comments are defined as references to the 7 Employment Elements of being a ‘good employer’ without in-depth discussion. ‘Comprehensive’ comments are defined as references to the 7 Employment Elements in a paragraph, or elaboration with further strategies to implement any of the Elements.

43 (46%) made comprehensive comments about their obligations and intentions to be a ‘good employer’, mentioning on average 4.5 of the 7 Employment Elements;
A further 10 (11%) made comprehensive comments on at least 1 of the Employment Elements without specifically referring to being a ‘good employer’ (3.6 Elements on average were mentioned)
17 (18%) made a passing comment about their obligations to be a ‘good employer’ and 12 of these mentioned at least one of the Employment Elements (2.5 Elements on average were mentioned)
A further 15 (16%) made a passing comment about at least one of the Employment Elements without reference to being a ‘good employer’ (2.4 Elements on average were mentioned).

The fact that the majority of Crown entities outline their intentions in their highest level document to be a ‘good employer’ may mean these organisations are more likely to ensure that their ‘good employer’ plans are implemented. Organisations are held accountable for what they say in their SOIs.

However, some Crown entities that did not mention their ‘good employer’ plans in their SOIs do in fact have comprehensive strategies in place. So SOI reference is only one measure of strategic intention and likelihood of compliance.

4.1 Size of Crown Entities

Not surprisingly, given their more limited resources, smaller Crown entities are much more likely to omit any reference to ‘good employer’ intentions and any of the Employment Elements. Those organisations with no references at all have fewer than 80 staff.

Of the 21 Crown entities with more than 1000 staff, only 3 did not include comprehensive comments in their SOIs about their ‘good employer’ intentions (86% did).
Thirty one (72%) of the 43 Crown entities with between 100 and 1000 staff included comprehensive comments.
Sixteen (38%) of the 42 Crown entities with under 100 staff included comprehensive comments.

4.2 Other strategic documents

The Statement of Intent (or Corporate Intent) is only one of a number of high level documents where Crown entities may outline and describe their ‘good employer’ intentions and plans. Other documents are:

DHB District Area Plans
DHB Future Workforce and Workforce Action Plans
DHB Workforce Development Strategies
DHB Māori Health Strategic Plans
CRI Strategic Plans
Organisational Development Plans, Strategic Plans, or Business Plans
HR Strategic Plans, Resources Framework, or Employment Policy Manuals
Annual Reports 2005-2006
Collective Agreements
Good Employer Plans, EEO Plans, or Diversity and Fairness Plans
Codes of Conduct
NZ Disability Strategy Implementation Work Plans

Where the SOI or SCI may only have a passing reference to ‘good employer’ obligations, these other documents are more likely to have detailed and comprehensive plans and actions recorded.

4.3 Contact with the Human Rights Commission

The Human Rights Commission has engaged in a number of exercises to provide guidance to Crown entities on their ‘good employer’ obligations, for example:

A series of workshops around the country
Presentations to individual workplaces and groups of workplaces
A roundtable discussion on one of the Employment Elements
Meetings – in person and by phone
Policy and strategy reviews
EEO Practitioner meetings at the Human Rights Commission and the State Services Commission
EEO Commissioner meetings with individual Chief Executives
Publication distribution – hard copy and website www.neon.org.nz

Over half (53%) of the 94 Crown entities have been involved in a workshop, or in a face-to-face meeting with the Human Rights Commission. These organisations are slightly more likely than those not so involved to have made comprehensive comments about their ‘good employer’ obligations (60%, compared with 52%). They are also more likely to have included a ‘passing’ or ‘comprehensive’ reference to being a ‘good employer’ or to any of the Employment Elements (96% compared with 89%).

The website www.neon.org.nz is playing a significant role in delivering guidance in this area. Our website statistics show that between April and November 2006, there were 55,518 hits on the Crown Entities Advice page alone. A number of Crown entities that have not had face-to-face contact have had telephone contact with the Commission.

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5. Next Steps

5.1 Recommendations for Crown entities

a. Establish prior to writing your SOI/SCI what your ‘good employer’ intentions are. Take a paragraph in the SOI/SCI to refer to them, and describe what you intend to achieve in the year ahead. Read More
b. Outline in detail your ‘good employer’ plan. This could be in an existing strategic document, or in a document specifically for this purpose. http://www.neon.org.nz/crownentitiesadvice/goodemployerreport/
c. Publish your ‘good employer’ plan to all staff.
d. Monitor and evaluate your plan throughout the year. This would include measuring indicators to gauge success (see below).
e. At the end of the year, write a report on your ‘good employer’ and EEO results, and make it available to staff.
f. Write a paragraph in your Annual Report on your ‘good employer’ plan, and the outcomes the organisation has achieved. Read More

5.2 Performance Indicators

‘Good employer’ strategies need to lead to workplace improvements. A Crown entity should have indicators in place from which to measure whether there have in fact been improvements, and what these improvements are.

Below is a set of simple indicators that can be used by Crown entities in order to measure whether their ‘good employer’ policies and initiatives are working. They provide a basis for evaluating the programme, and reporting on ‘good employer’ progress to management, staff, unions, portfolio departments, and government. Clearly, not every one of these indicators will apply to each Crown entity; some will be more relevant than others. Depending on an entity’s size and priorities, it may wish to develop additional or alternative indicators to measure the impact of specific ‘good employer’ initiatives, policies and practices.

Some organisations may want to have indicators that are more short-term; for example, rather than ‘staff engagement levels are increased’, a shorter-term indicator might be, ‘an annual engagement survey is designed and implemented’.

Whatever indicators are decided on, it is most important that they:

are measurable and comparable
are important to the success of the ‘good employer’ programme
reflect ‘soft’ measures such as quality of relationships
reflect the goals of the business.

The following indicators are ideas only. Each Crown entity should consult with their employees to help identify key indicators relevant to them.

Being a ‘good employer’
Indicators to look for to establish if there have been positive improvements

1. Leadership, Accountability and Culture

Statement of Intent or other high level document sets out ‘good employer’ intentions.
Annual Report provides information about how the organisation met its ‘good employer’ obligations so that readers can assess the organisation’s performance in this area.
High-level documents, such as codes of conduct, collective agreements and business plans, include reference to the value of equal employment opportunities and a diverse workforce, and procedures to ensure diversity is encouraged and managed well.
‘Good employer’ strategies are included in corporate planning.
Level of agency awareness of importance of being a ‘good employer’.
Whether the Chief Executive, and what proportion of managers, have ‘good employer’ accountabilities in their performance agreements (may include assessment of leadership style and staff relationships).
Percentage of staff who are engaged and satisfied in their work and feel all staff are valued.
Percentage of staff who support business and service goals through te reo Māori capability.
Whether EEO statistical data is regularly collected, comprehensive, accurate, analysed and fed back into planning.
Whether qualitative information is collected through staff consultation and used in ‘good employer’ planning.
Whether the composition of high level decision-making bodies reflects the diversity of the organisation.
Percentage of EEO group members who perceive that they contribute to decision-making.

2. Recruitment, Selection and Induction

Employment policies and procedures are non-discriminatory and contribute to EEO outcomes.
Advertisements and other recruitment material express the value of and desire for diversity, and are written in ways that attract diverse applicants.
Selection panels include diverse members.
Interview questions are standardised and relevant.
A range of merit recruitment strategies are used to attract a diverse field of applicants, e.g. job advertisements distributed through diverse networks and media outlets, awareness of job opportunities raised through local community networks, ‘lived experience’ of diversity included as a selection criteria.
Levels of diversity in applications, those short-listed, and those successful in obtaining positions. (Measuring these 3 areas separately may be useful and will require EEO data to be collected from all applicants.)
Whether the level of diversity in the workplace reflects the diversity in the community.
Representation of each EEO group in occupations where they are under-represented, e.g. women as mechanics.
Diversity in senior positions.

3. Employee Development, Promotion and Exit

Process to identify and remove structural barriers to career progression implemented, eg. new classification structures, competency-based career paths, multi-skilling of positions.
Whether the percentage of EEO group members promoted reflects at least their proportion within the organisation.
Whether percentage of EEO group members acting in higher duties reflects at least their proportion within the organisation.
Opportunities for EEO group members to access training and development, e.g. bridging programmes for EEO group members to overcome the effects of past disadvantage.
Opportunities for EEO group members to be coached and/or mentored.
Regular performance management provided to all staff in a fair and transparent way.
EEO issues are integrated into relevant training and development for all employees (may include interpersonal skills training specifically on diversity and equity but also all mainstream courses, e.g. customer service, people management, communication skills).
Employee turnover rates (might include specific targets, eg. lower turnover amongst Māori, Pasifika, migrants and people with disabilities).

4. Flexibility and Work Design

Range of flexible work arrangements offered, e.g. flexible hours, compressed work, job sharing, work from home, time in lieu, extended leave.
Percentage of staff accessing flexible work practices.
Percentage of managers accessing flexible work practices (may include specific emphasis on a particular type of flexibility, e.g. part time work).
Percentage of staff working unpaid overtime.
Percentage of staff returning from parental leave.
Whether Chief Executive and an increased proportion of managers have accountability for successful work and life balance in their performance agreements.
Whether services for families are provided, e.g. child care service, aged care assistance, breastfeeding/expressing room, paid parental leave.

5. Remuneration, Recognition and Conditions

Progress towards the distribution of each EEO group across salary levels, compared with that of all employees (may mean regular job evaluation exercises).
Completion of pay equity review or investigation.
Average weekly full-time gross earnings of each targeted group, as a percentage of the average weekly full-time gross earnings of all staff, (e.g. whether the gap between women and men’s earnings has reduced).
Regular feedback provided to all staff, e.g. recognition of a job well done, gifts, vouchers, ‘thank-yous’.
Staff satisfaction levels regarding conditions (may include assistance with study, child care or moving expenses, networking opportunities, attendance at conferences, sabbaticals, flight club membership, etc).
Staff satisfaction levels regarding retirement (may include the introduction of a superannuation scheme, financial seminars/planning, transition to retirement education, etc).

6. Harassment and Bullying Prevention

Dignity at Work policy and procedures in place (anti-harassment and anti-bullying policy).
Training or reminders on the anti-harassment and bullying policy and procedures at least every 2 years.
New staff informed of the organisation’s anti-harassment and bullying policy and procedures.
Percentage of harassment complaints.
Percentage of harassment cases.
Percentage of employees who perceive that the workplace is free of harassment.

7. Safe and Healthy Environment

Stress levels amongst staff.
Number of staff absences.
Number of accidents and mishaps.
Instances of reasonable accommodation made for staff with disabilties.
Percentage of complaints about race, sex and other unlawful discrimination.
Percentage of employees who perceive that the workplace is free of unlawful discrimination.
Percentage of staff who feel they have cultural and emotional safety.

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