Senior Executives: A Community of Individuals

Recruiting able and motivated senior managers is one of the most important responsibilities of the chief executive, especially in the large, diversified departments. Many senior managers are civil servants who have moved up the ranks; others are persons brought into government from the private sector in mid career. New Zealand has an interesting blend of both types: those who bring institutional memory to public management, and those who bring business management practices into government. Thus far, departments have had little difficulty recruiting skilled managers, but high unemployment during the early years of reform, a large pool of experienced managers trained in the old system, and the excitement of working in a new regime have ensured an ample supply of qualified candidates. Whether they will be as successful under other conditions remains to be seen.

There is good reason to expect that public employment will increasingly resemble the structure of the private work force, with more temporary, part-time and seasonal employees, and with more persons moving in and out of government. This trend is being driven by the Employment Contracts Act 1991 (which terminated most differences in the conditions of public and private employment), the fragmentation of the Public Service, and State sector reforms that have put government operations on a more commercial basis. It certainly is easier than in the past to make mid career moves between the public and private sectors. This mobility has a number of consequences, one of which is that government departments may sense less need to develop their own managers from within and more opportunity to purchase personal services in the marketplace. If this attitude spreads, the services provided by employees may come to be regarded as a commodity that can be purchased as needed.

This attitude may have been a contributing factor in the unsuccessful effort to launch a Senior Executive Service (SES). The State Sector Act envisioned the SES as a pool of management talent, an incentive for developing management careers in the Public Service, and as "a unifying force at the most senior levels of the Public Service." In fact, however, senior managers saw SES as a constraint on their pay and work opportunities. Many believed they could get a better deal in individual employment contracts than would have been possible under SES.

Despite the failure, the objectives of SES are as valid today as when the State Sector Act was written. The SES can be an effective means of signalling to selected managers that they can expect to advance in the Public Service, perhaps to the very top of departments. A viable SES would also encourage mobility among departments, enhance training opportunities, and provide recognition among peers. It would be worthwhile for SSC to reopen the SES question and to consider more flexible arrangements than those devised in the past.

Regardless of the disposition of SES, consideration should be given to the overall supply of senior managers. These managers typically are employed under individual contracts that run for up to five years. The contracts can be renewed, but in view of the turnover of chief executives and the age of many senior managers, these often function as terminal appointments. In meeting with senior executives, I encountered considerable anxiety over their future in the Public Service. As they near the end of term appointments, senior managers must decide whether to continue (if the option were open) under a new chief executive or to start a new career outside government. Many have moved into consultancies where their skills can still be made available to departments on a contract basis. I am not sure that this has been a passing phenomenon. A career manager above the age of forty-five or fifty may see more rewards and fewer unknowns outside government.

Reviving SES might facilitate a solution to this predicament, for it would enable senior managers to return to an SES pool at the expiration of term contracts. Within the pool, these managers could seek new employment in the public sector or serve as short-term consultants to departments and Crown entities. The period of time in this status might be limited to two to three years, after which managers would either retire or obtain new term contracts. Alternatively, upon reaching a certain age, senior managers might be given the option of continuing in their post under indefinite term contracts until retirement.

In reconsidering SES and terms of appointment, the vital objective must be to ensure a continuing supply of trained and public-spirited managers. It is not enough to rely on the market, though recruitment from the private sector is a healthy development that should be encouraged. Government departments invest in their future capability by "raising" their own managerial talent; this should continue to be their objective now that reform has given them additional means of recruiting from outside the Public Service.

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