Councils are required to engage in a prescribed process of performance review of their CEOs under the amendments to the Local Government Act 1995 (WA) introduced in 2021.
The aim of the new framework was to introduce mandatory minimum standards for the recruitment, selection, performance review and termination of employment in relation to local government CEOs.
From our interactions with local governments in this area, there seem to be some continuing challenges with implementing this new process. In this article, we will explore some of the issues.
The Department of Local Government, Sports and Cultural Industries (DLGSC) Operational Guidelines “CEO recruitment and selection, performance review and termination” states:
“If a council lacks the resources and expertise to meet the expected standard of performance review, the council should engage an external facilitator to assist with the process of performance appraisal and the development of the performance agreement.”
Let’s have a look at some of the challenges that the external facilitator faces.
The local government environment
Firstly, the local government context is more complex than for the average performance review in a commercial setting. Managing employees is challenging. It becomes even more challenging when there is a public element as well as a regulatory element.
The employer in the local government context is the council. That group not only possesses a power distance between the CEO and itself as a body, but has some distance between each other as individuals. The council is also accountable to the public, and needs to fulfil their roles as public officers. Therefore, it is reasonable to expect a particularly high degree of transparency and fairness in the process.
Gathering evidence
There is another challenge for the external facilitator, as they need to be able to gather and use evidence in an appropriate way. They have to sift through it, and apply the concepts of relevance, weight, or credibility, determining what to let in, what to leave out and why, and if let in, how much attention to pay to it.
Having a forward-looking focus
It is important that the external facilitator, the panel and the elected members do not approach the CEO performance review process with too much of an audit mindset. Otherwise, it will end up with a backward-looking focus.
Rather, they should incorporate a forward-looking focus, highlighting constructive feedback that will help with the setting of performance criteria and a better or sustained good performance for the following year. This is the way any employer should approach a performance review with an employee.
Being impartial
We have come across external facilitation methods where the external facilitator appears to have assumed the role as the mouthpiece of the council, rather than of an independent facilitator. This can lead to an unfair process (or the perception of one) and bad feeling between the council and the CEO. Especially if the facilitator has not moderated any negative biases within the council.
The role of the elected members
The DLGSC guidelines state:
“It is recommended that the council delegates the CEO performance review to a panel (e.g. comprising certain council members and an independent observer). The panel has a duty to gather as much evidence as possible upon which to base their assessments.”
This means that the panel should not comprise all the elected members. Neither is the process intended to be seven or nine individual performance reviews by each elected member (depending on the size of the council).
Using surveys
In our work in this area, we have come across situations where elected members are being asked to complete a survey where they share their opinions on whether the CEO had achieved their performance criteria.
This is problematic for a couple of reasons. The performance criteria should be deliverable, measurable, specific and time-based. As such, they can be objectively assessed through reports and evidence, not through a survey which seeks opinions.
Sometimes we have found that certain elected members do not sympathise with the style or methods of the CEO or just do not have a good interpersonal relationship with them. This can result in them finding fault rather than acknowledging objective deliverables.
Regardless of their relationship with the CEO, some elected members can have an over-pedantic interpretation of the evidence. This can be distracting, especially if a pedantic approach is applied to minor or non-material matters.
Sometimes a hostile bias can be expressed as pedantry. This is the kind of bias that leads to unfairness. And the kind of unfairness intended to be removed by stringent compliance with the Guidelines.
Tackling unfairness can also be expressed in how a survey is designed and administered. Thus, if any surveys are to be administered to elected members (including those not on the panel), they need to be designed with some key principles in mind, including:
Giving feedback
Another misconception is that the CEO can be given performance criteria that exist separately from, and independently of, the Corporate Business Plan and the Community Strategic Plan.
Here, some elected members might misunderstand the council’s role. It is to set a direction for the local government in the plans, whereas it is the CEO’s role to implement the plans under that direction.
Anecdotal evidence suggests that elected members sometimes deliberately insist on performance criteria that have nothing to do with achieving goals under these plans.
There are at least two ways that a local government can better manage its CEO performance reviews. One is to invest more in training elected members who participate in that process; the other is to choose carefully the external consultants they bring in.
It can be easy to forget that in the end, the performance review process (and everything that passes before and after it) is ultimately a dynamic interaction between employer and employee.
In the world of human resource management, the performance review is intended to deal with past performance. However, it also sets the parties up for the healthy functioning of the employer-employee relationship in the future.
In the local government context, that has to be done with greater stringency and diligent attention to the regulatory framework.
Managing Principal
Mob: 0421 302 541
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