Public Value and the Governance Agenda

A route out of this conundrum may be offered by what has been called the "new public governance" (NPG), which may overcome the limitations of NPM while building upon its advantages in terms of devolution of authority. Whereas NPM focused principally on outputs as a means to enhance productivity in the public sector, the new public governance model also emphasises processes and outcomes. It emphasises the ownership of and participation in the decision-making process, by including multiple stakeholders - citizens, the voluntary sector, unions, business and different levels of government.

Linking workplace partnerships to governance arrangements devolving more authority to participatory processes of direct democracy may lead to a breakthrough both in defining public sector productivity and developing understanding about how to increase it through partnership. The emphasis in the NPG approach is on improving quality of life - both in terms of quality of service outcomes for users and quality of working life for staff - by developing strategic management systems. Accountability is provided by a "balanced scorecard" (BSC) approach, based on combining measures of output, outcome and capacity to drive future performance, evaluated through feedback processes that give voice to the experience of both employees and citizens.

Productivity Measurement and Partnership Effectiveness

Analysis of the literature suggests that the more partnership is an on-going systemic process embedded in organisational culture, the more likely it is to produce sustainable improvements in performance. If workplace partnership is to contribute to productivity improvement, it follows that public sector organisations must have the capacity to develop and sustain it. Therefore, an evaluation framework ought to focus on progress in the development of the organisation's partnership capacity, as well as the two other major elements of public sector productivity: service efficiency (outputs in relation to inputs) and service effectiveness (outcomes).

The report proposes a list of points for evaluation in line with this suggestion:

• Neither the decision to adopt partnership, nor the interpretation of what it means in practice, should be left to management alone.
• Partnership requires substantive guarantees with respect to (at a minimum) employment security, wages and conditions of work.
• Partnership requires procedural guarantees that ensure that there is clarity about who has the right to decide what, when and how.
• Management must have the power to provide the required guarantees and to ensure that they are respected under all circumstances.
• Partnership should be focused not on particular substantive goals, but on increasing individual employee autonomy and discretion and on constructing systems of representative participation that articulate and transmit employees' knowledge, experience, interests and opinions within collective decision-making processes.
• The scope of partnership should be defined but subject to negotiated redefinition through the partnership process itself.
• The "safety net" of collective bargaining and managerial prerogative should be used only after non-adversarial dispute resolution has repeatedly failed and when unions, management and employees agree that consensus is not possible.

Towards a Partnership Model of Public Sector Reform

The approach outlined above is founded upon the provision of appropriate procedural and substantive guarantees to enable workplace partnerships to improve public sector productivity. Together, these protect the collective and individual interests of employees, removing the risk of exploitation that is otherwise attached to cooperation in circumstances where it is not clear that shared interests exist. . Cooperation becomes a rational and successful experience if it leads to mutual trust, legitimacy and organisational commitment. These, in turn, reinforce the rationality of cooperation. The procedural guarantee of direct participation increases employees' autonomy and control over their work, permitting them to apply their knowledge and experience to the solution of operational problems, and increasing their capacity to respond to the needs of citizen-users.

This corresponds to an approach to public sector productivity that is based on defining the mission of the public sector in terms of creation of public value, and ensures that an appropriate balance between organisational priorities and employee interests is maintained. The application of employee knowledge and experience means that decision-making is more effective. The articulation of employee interests in decision-making processes means that decisions are more legitimate, even (perhaps, especially) if compromises have to be negotiated. Together with the flexibility that arises from mutual trust and cooperation, this legitimacy ensures that implementation of decisions proceeds more smoothly. Thus, both the organisation's capacity for change and the effectiveness of that change are improved, leading to improvements in service quality and public value.

It follows that detailed definitions of productivity criteria and measures should be based on public value creation and improvements, rather than being imposed from outside the organisation or from the top down. Evaluation criteria and measures 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 priority 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, which is lack of political leadership commitment. This is because, by transparently devolving more accountable authority to participatory democratic processes involving both citizens and employees, the political risks associated with the different timescales of organisational transformation and the national political cycle would be reduced.

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