PARTNERSHIP AND PRODUCTIVITY IN THE PUBLIC SECTOR

Introductory Summary

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This is the report of a literature review carried out for the New Zealand Department of Labour's Partnership Resource Centre by Brendan Martin and Conor Cradden, of Public World in London, with additional research by Public World associate, Christof Schiller.

The review's terms of reference were to analyse information from literature across the following themes:

• causal linkages between union-employer (workplace) partnership and productivity
• the rationale for how workplace partnership enhances productivity and improved service delivery in the public sector
• the extent to which workplace partnership has been successful as a driver for enhanced productivity in the public sector environment
• the necessary features of workplace partnership for contributing to productivity enhancements in the public sector
• the range of quantitative and qualitative factors that might be taken into account in the design of a framework through which public sector productivity can be measured
• lessons for practical application in the New Zealand public sector.

The research was carried out during 2006 and the literature reviewed included books, academic journals, specialist journals, official documents and publications by governments, unions and public sector organisations, in three languages, English, French and German. A full bibliography of all literature reviewed, including works not referenced in the text, is appended.

After this introductory section, we begin in Section 2 with an exploration of the meaning of productivity in the public sector and how the way in which it is constituted and measured depends, both conceptually and historically, on prevailing models of public management. The issue of the impact that measurement itself has on public management practices and productivity is also considered, and we argue that the purposes and use made of productivity measurement and productivity improvement efforts are closely related to political objectives for public sector reform.

Section 3 looks at the forms taken by workplace partnerships and we discuss how the attitudes of participants are as important a defining feature as their organisational arrangements. The influences upon them, and in particular the impact of changing public sector reform models, is critically considered, and the variety of their processes and purposes is explored. We argue that the nature of the public sector reform agenda, and its bearing on how productivity is defined and measured, is a significant variable factor affecting the behaviour of participants on both management and union sides.

In Section 4, we consider the impact of workplace partnership on productivity in two ways. First, we look at the empirical evidence linking the two, and then discuss what the literature suggests is likely to be the causal relationship between them. We do this by categorising the reasons as organisational, relational and psychological and conclude that "procedural and substantive guarantees" provided through workplace partnership can contribute to productivity improvement at both organisational and individual levels.

Section 5 goes on to consider the conditions for effective partnership, beginning with an exploration of the required nature of procedural and substantive guarantees. We go on to analyse the spectrum of partnership types, from those in which they are managerial tools without significant devolution of operational authority, to those which represent a significant transformation towards workplace democracy. We conclude that "mutual gains" are essential, but that the degree to which such an approach leads to workplace transformation varies. This section further develops discussion in earlier sections about the relationship between public sector reform models, productivity and partnership, with particular focus on the extent to which New Public Management (NPM) presents obstacles to productivity-enhancing partnership.

In Section 6, we draw the argument together and suggest that the weaknesses of NPM, in terms of enabling genuine productivity-enhancing partnership, can be overcome, and its strengths in other respects preserved through a new public governance agenda. We link the notion of "public value" to productivity definition and measurement, and argue that participatory relationships linking public sector organisations to both citizen-users of public services and their employees can be triangulated by enabling employees to respond directly to changes in demands from citizens and users. We consider the institutional arrangements required.

Section 6 continues by considering the benchmarks through which partnership effectiveness and productivity can be evaluated and we argue that these should themselves by subject to workplace partnership arrangements. We go on to propose the organisational and attitudinal conditions for enabling mutual trust and organisational commitment to be built through workplace partnership and conclude:

"It follows that detailed definitions of productivity criteria and measures should be based on public value creation and improvements, and not imposed from outside the organisation or from the top down. Rather, they should be developed through participatory processes involving new governance arrangements in respect of relationships between public sector organisations and citizens and service users, and workplace partnership processes in respect of internal relationships. Moreover, institutional design should seek to link these processes without undermining either the democratic precedence of citizens in the determination of public value or the prerogatives of employees and their unions in collective bargaining. It might be that such devolution of authority would also lower one of the key obstacles to the development of genuine workplace partnerships in the public sector in that the risks associated with the different timescales of organisational transformation and the national political cycle would be reduced."

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