ARCHIVED - Evaluation of the Treasury Board Incentive Award Plan - Number 17

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Number 17 - Evaluation of the Treasury Board Incentive Award Plan

This series of evaluations, audit guides, reviews and studies is designed to improve Treasury Board policies and programs. Titles in this series already published: 1. Review of Operating Budgets - Delegation Framework 2. Review of Business Planning in the Government of Canada 3. Review of the Cost Recovery and User Fee Approval Process 4. Evaluation of the Policy for the Provision of Services for Employees with Disabilities 5. Audit of Service to the Public in Official Languages - Phase I - Regions of Toronto and Halifax 6. Audit on the Use of Translation Services 7. Review of the Costs Associated with the Administration of the ATIP Legislation 8. Evaluation of Telework Pilot Policy - Highlights 9. Evaluation of Telework Pilot Policy - Findings 10. Audit of Adherence to Treasury Board Information Technology Standards 11. Evaluation Framework for Early Departure Programs 12. Validation Review - Audit Guide and Departmental Monitoring Framework 13. Measuring Costs Associated With The Security Policy 14. Regulatory Reform Through Regulatory Impact Analysis: The Canadian Experience 15. 1996 Survey on the Use of the Official Languages at Work in Federal Institutions in New Brunswick 16. Performance Framework for the Assessment of Regulatory Reform

Executive Summary

The evaluation of the Treasury Board Incentive Award Plan (IAP) was undertaken to provide information that would be helpful in the rewrite of the present policy on which this programme rests. Four lines of enquiry were used in the evaluation: preliminary interviews with key stakeholders, discussion group meetings, telephone interviews and a literature review. The major findings and suggested improvements to the IAP are presented below.

Findings

All of the departments in the study are participating in the IAP.

Many employees do not associate the recognition and award activities in their organizations with the Treasury Board Incentive Award Plan (IAP). Most see the Departmental Award Programmes as creations of their own departments. Some departments are tailoring these awards to suit their particular needs and circumstances. The Corporate Award Programmes, however, tend to be identified with the Treasury Board.

The majority of respondents believe the IAP is still relevant today.

The respondents want to see all core award programmes, both Departmental and Corporate,retained and improved upon.

The practice of recognition varies greatly across the departments, and in some cases even within the same department.

The extent to which recognition has taken hold and is being used as an effective management tool depends largely on the proactive support it receives from senior management and down through all levels of management.

The Suggestion Award Programme is being used by the larger departments who are able to demonstrate that it saves money, but even these departments consider it to be an inefficient way to economize.

The Suggestion Award Programme is criticized for the fact that it often takesvery long to process suggestions.

Some of the smaller departments have had to suspend or limit the use of the Suggestion Award Programme because of budgetary cutbacks or because they find the criteria too difficult to satisfy.

The Suggestion Award Programme will not be sustainable over time for most departments unless steps are taken to correct its shortcomings.

The Instant Award Programme is cheap, easy to administer and can be adapted to recognize an impressive range of behaviours.

The monetary component of the Instant Award Programme limits the extent to which it can be used as a group award.

The resources allocated to recognition programmes have been reduced in all of the departments in the study. Award Coordinators do not have time to meet among themselves to exchange information and experiences that might save time and effort in administering award programmes.

Non-monetary awards, particularly the Instant Award, are now being used more extensively and award managers are adopting new measures to reduce administrative workloads.

Suggested Improvements

Respondents concur that the IAP and the policy on which it rests, need to be re-vamped and brought into line with current budget realities and changes in employee preferences for frequent and more individualized recognition.

The administration of the large monetary award programmes under the Departmental Awards need to be streamlined and simplified.

With respect to the Suggestion Award Programme, Managers and Incentive Award Committees could provide more guidance as to which operations of the department are to be given priority for improvement in a given year.

The monetary component of the Instant Award Programme could be increased to allow it to be used more extensively to support team building.

The Corporate Awards could be better publicized and receive higher profile attention.

The Treasury Board could play a leadership role in supporting and encouraging the further development of a strong and effective recognition behaviour in departments and agencies.

The Treasury Board might consider replacing the current IAP policy with a new policy that would link recognition behaviours with effective management practice and provide maximum flexibility to departments in the use of formal and informal recognition models.

Management's Response

This action plan takes into account the findings and recommendations as contained in the evaluation report entitled the "Evaluation of the Treasury Board Incentive Award Plan"; however, the recommended actions as detailed below are also based on the experiences gained by TBS and departmental officials in the administration of the current Incentive Award Plan.

The following activities will be undertaken:

Re-write of the Incentive Awards Plan (IAP). This re-write will take into account the many findings of the evaluation and the experience of TBS and departmental officials. It will ensure that the IAP is more responsive to the needs of departments. In particular, attention will be paid to:

• Examining the use of the Instant Award Program as a tool to support team building. This includes examining the monetary component of the IAP in support of team building; and,
• Reviewing the current process for the Suggestion Award Program. Given that the current program is seen as expensive and inefficient to administer, we will look into making the program more responsive to the needs of departments.
• Review/resolve the issue of administration of the Corporate Awards Programs. This will ensure that the Corporate Awards Programs, e.g. the Outstanding Achievement Award; the Senior Officers Retirement Certificate; and the Awards of Excellence continue to provide the opportunity to celebrate exceptional service in the Federal Public Service.

Provide leadership through supporting and encouraging the further development of a strong and effective recognition behaviour. This will be accomplished through re-writing of the IAP in an enabling fashion that encourages departments to take responsibility for their own Incentive Awards Plans. As well, departments will be encouraged to share their experiences and innovations within the incentives community. The revised policy will emphasize that the development of a strong and effective recognition behaviour is a component of sound management practice.

These activities should be completed by the end of November 1997. As a central resource will be minimal, departmental co-operation and sharing will be essential.

1. Introduction

1.1 Background

The 1987 Treasury Board policy on employee recognition, which is still in effect, states:

"It is the policy of the government, in the area of personnel management, to provide recognition to persons employed in the public service for outstanding performance of their duties, for other meritorious contributions in relation to their duties, for practical suggestions for improvements and for long service."

The Incentive Award Plan (IAP), introduced at that time, was seen as being the principal means of providing that recognition. The Plan was composed of the following programmes:

• Suggestion Award;
• Merit Award;
• Long Service Award;
• Outstanding Achievement Award;
• Award of Excellence; and
• Senior Officer Retirement Certificates.

The TB Administrative Policy Manual which carried the announcement of the recognition policy contained detailed descriptions of the purpose of each award, eligibility requirements and operating procedures. Participating departments were required to report annually on the operation of their award programmes for inclusion in the Treasury Board Secretariat's report to Treasury Board Ministers.

The Incentive Award Plan was amended in 1990 to provide greater flexibility to Deputy Ministers in delegating authority to departmental managers for the granting of awards. The amendment also increased the maximum amounts that could be paid under the Suggestion and Merit Awards and the expenses that could be claimed to allow recipients of Outstanding Achievement Awards and their spouses to attend the award ceremonies.

The 1990 amendment to the IAP also approved the use of Special Awards to enable the departments to develop non-monetary recognition vehicles tailored to their specific needs.

Since that time most federal departments and agencies have moved to introduce recognition and award programmes. The range and diversity of such programmes across the public service is impressive. Some are effectively clones of the original IAP programs. Others incorporate elements of the original IAP into broader and more spontaneous departmental schemes. And still others have moved away entirely from the IAP model to create new, innovative recognition and award activities.

The evolution of recognition and reward programmes and behaviours in this period has seen a marked shift from monetary to non-monetary awards, increased preference for instant and informal recognition at the peer level and the adoption of flexible management practices and accountability regimes in delivering these programmes.

Recognition and reward programmes in the federal public service are now not only diverse across the departments, but very much in flux, as organizations endeavour to adjust their operations and employee recognition behaviours to cope with downsizing, greatly diminished budgets, new workplace patterns and more frequent job and career changes.

Early in 1996, the Treasury Board Secretariat called for an evaluation of the Incentive Award Plan to feed into other public service renewal initiatives in which it is currently involved.

1.2 Scope of the Evaluation

The evaluation examined all award programmes under the Incentive Award Plan in terms of:

• Their continued relevance and sustainability in today's circumstances and in light of the government's current priorities;
• The appropriateness of the delegation of authority to departments and within departments for the effective management of award programmes;
• Their accessibility to employees and the fairness with which they are managed;
• Their effectiveness in raising the morale of employees and motivating them in their work;
• Suggested improvements to the Incentive Award Plan; and
• The future role of the Treasury Board Secretariat with respect to recognition and award programmes.

1.3 Definition of Terms

The following are brief descriptions of the award programmes (IAP) and the Incentive Award Board.

Departmental Awards - are awards that are managed, granted and financed by the departments. They include:

Suggestion Award - recognizes employees who have proposed ideas that have resulted in improvement in the efficiency and effectiveness of government operations.

Merit Award - recognizes individuals or groups of employees for performance at an unusually high level over an extended period of time with respect to the management of personnel, financial or material resources.

Long Service Award - extends formal recognition to employees for long and faithful service.

Special or Instant Awards - provide for recognition of employees with minimum formality and ceremony. The manner of recognition is at the discretion of the individual manager or employee.

Corporate Awards - These are public service-wide awards, managed by the Treasury Board with input, in the form of nominations, from the departments. These awards include:

Outstanding Achievement Award - recognizes performance of duties in a most outstanding manner over a long period.

Award of Excellence - recognizes the best, most exemplary contributions to the public service resulting from employees' suggestions or the meritorious performance of duties as defined for departmental programs.

Senior Officer Retirement Certificates - recognizes senior officers at retirement for their contributions to the public service.

Incentive Award Board - an interdepartmental body of Assistant Deputy Minister-level officials drawn from participating federal departments and federal public service unions to advise the Chair of the Incentive Award Board on nominations for Corporate Awards and the departments on other incentive award matters.

1.4 Structure of the Report

The remaining sections of this report are organized as follows:

Chapter 2 outlines the overall approach adopted for the study and the methodologies applied in carrying out the principal tasks that were undertaken.

Chapter 3 details the study findings with respect to the issue of the continued relevance of the IAP.

Chapter 4 contains the study findings concerning the issue of the achievement of objectives under the IAP.

Chapter 5 suggest improvements to the IAP and reports respondents' views on the future role of the Treasury Board Secretariat with respect to the IAP.

2. Methodology

2.1 Overview

The study was designed to gather information and informed views on recognition and award activities from public servants at all levels and in as many departments and agencies as time and resources would permit. To achieve this, representative sampling techniques were adopted in selecting both the departments and the public servants to be included in the study.

Twelve departments and agencies, representing a cross-section of the federal government were identified by the TBS, in consultation with the Advisory Committee and requested to participate in the study.

2.2 Lines of Enquiry

The following four lines of enquiry were used in addressing all key evaluation questions and issues:

• Preliminary round of interviews with key stakeholders;
• Discussion group meetings;
• Telephone interviews with regional office staff; and
• Literature review.

The activities involved in each are described below.

1. Preliminary Interviews

At the outset of the study, interviews were conducted with senior policy officers in the Treasury Board Secretariat, members of the Incentive Award Board and officials in other federal departments and agencies engaged in public service renewal exercises, including the Chair of the Human Resources Task Group and the Chair of the Science and Technology Task Group.

These interviews, 26 in all, were undertaken to clarify for the evaluation team the nature and extent of these concomitant exercises so as to ensure that the evaluation study would complement and feed into their endeavours. Several of the interviewees were interviewed on more than one occasion.

2. Discussion Group Meetings

Discussion group meetings were held to gather the views and ideas of six different groups of employees on the IAP and other recognition programmes in their respective departments. The discussion groups were representative of a cross section of public servants involved in or affected by recognition and award activities in the 12 departments. The six groups, and consequently, the six discussion group meetings involved:

• Incentive award coordinators;
• Human resources specialists;
• Award recipients;
• Employees (general);
• Middle managers (PM6); and
• Senior managers (PM6 and above).

It was planned to have 12 participants for each discussion group meeting. This could not be achieved in some instances, however, because of conflicting engagements and other pressures of work. The average number of participants for all six discussion groups was 11, involving a total of 66 different individuals, which allowed for an excellent exchange of views on key evaluation issues from a range of different perspectives. To ensure this outcome, participants were provided beforehand with background information on the Treasury Board Incentive Award Plan, the reasons for the evaluation and a list of key issues and questions to be addressed in the meetings.

3. Telephone Interviews

Telephone interviews were used to gather information and informed views from a regional perspective on recognition and award activities and issues in four regions across Canada, namely:

• Atlantic;
• Quebec;
• Ontario and Prairies; and
• British Columbia

Three departments involved in the study, Department of National Defence (DND), Natural Resources Canada (NRCan) and Revenue Canada (RC) with a strong regional presence were requested to identify regional participants. The latter were drawn from the same six groupings used for the discussion groups, except that the two manager groups were collapsed to include only one manager at any level. All interviewees were provided beforehand with the same background information and interview guides used in the discussion group meetings.

In all, 28 individual telephone interviews were conducted with regional staff of the three departments involved.

4. Literature Review and Private Sector Contacts

A limited literature review examined public and private sector experience with recognition programmes and assessed the extent to which their experience could be applied to improve incentive award and other recognition programmes in the federal public service. Much of this literature was brought to the attention of the evaluation team in the course of the discussion group meetings and the on-site and telephone interviews.

5. Evaluation Participants

Award coordinators in the selected departments in Ottawa and in the four regions acted as key points of contact for the identification of prospective participants for the discussion group meetings and the telephone interviews.

6. Data Gathering Tools

Interview guides were the principal data gathering tool used in the study. These were designed to elicit information from each of the six groups of participants involved in the study. A list of the tools used in the study can be found in Appendix D.

7. Evaluation Advisory Committee

An ad hoc Advisory Committee, established by the Evaluation, Audit and Review Group and the Human Resources Branch in the Treasury Board Secretariat, was consulted at critical junctures in the evaluation and their assistance sought in identifying contacts in the designated departments, in vetting interview guides and tentative findings.

3. Continued Relevance of the Incentive Award Plan and Policy

In this chapter, we present the study findings gathered from all lines of enquiry with respect to the issue of the continued relevance of the Incentive Award Plan and policy.

The assessment of this issue entailed the determination of whether the circumstances surrounding the introduction of the current IAP and policy in 1987 remain substantially unchanged today and are likely to do so for the foreseeable future. The meaning of the term "circumstances" as it is used here, was broadly defined to include:

• The priorities of the government, especially its spending priorities, then and now;
• Support for recognition behaviours in the public service then and now;
• Interest in the IAP by the departments, then and now;
• Availability of financial and human resources required to sustain programmes under the IAP.

The inference here is that if the circumstances that originally obtained continue to apply today, then the IAP and its policy are likely to be seen as still relevant. Conversely, if circumstances today are found to be significantly different from those that launched the IAP almost ten years ago, then the relevancy of the programme and its policy may well be in doubt. This question is explored in the sections that follow.

3.1 Historical versus Current Context

The literature review, the preliminary interviews and the ensuing discussion group meetings with senior officials were used to reconstruct, for the evaluation team, the historical context in which the Incentive Awards Plan was introduced and to identify significant developments since that time that bear upon the issue of the programme's continued relevance today. This information was elicited from the participants through a broadly worded question:

"Is the Incentive Award Plan, its provisions and administrative requirements still relevant today in light of events that have occurred over the past five to ten years?"

The following were identified as significant events or developments that have occurred since the current IAP was introduced in 1987:

• The priorities of the federal government have shifted significantly in the intervening years. While expenditure restraint was unquestionably a major priority of the government even in 1987, this term has taken on an entirely new meaning since that time. The current priorities of the government are sharply focused on deficit and debt reduction, involving downsizing of the public service on an unprecedented scale and the privatization of many federal government programmes.
• The intervening period has also seen a significant delegation of ministerial and managerial authority and responsibility from the Treasury Board to the departments to allow them maximum flexibility in managing greatly diminished budgets. In light of this, the exercise of close financial control by the Treasury Board over the management of the Departmental Award Programme, as reflected in the 1987 Guidelines appears inconsistent with the government's previous delegation decisions.
• Increasingly, recognition of employees is seen as being a continuous requirement of sound management practice rather than a behaviour or activity that takes place only occasionally. The structure of recognition and incentive award programmes should reflect this need. The current IAP does not satisfy this requirement in all respects.
• Recent years have witnessed the equivalent of a paradigm shift in the way in which many employees wish to be recognized for their work. The shift is from formal to less formal modes of recognition and is related in part to cut-backs in financial and human resource levels in the departments and in part to a strong preference on the part of employees for more timely recognition by peers.

These changes, which clearly challenge at least some of the assumptions on which the IAP is based, were explored at length with the participants in assessing whether there is, in fact, any longer a place for this programme in the public service of today.

3.2 Continuing Need for Recognition

The starting point for this examination was a discussion with the participants on the question of whether today's public servants want to be and expect to be recognized for their efforts as much as their predecessors of the late 1980s. Participants in the study were asked:

"Do employees today want to be recognized and rewarded?."

The majority of the participants in all six discussion groups and in the telephone interviews strongly supported the continuing need on the part of employees for recognition and for mechanisms or programmes that respond appropriately to this need. Many participants stated time and time again in the discussion group meetings that employees at all levels and in all areas of the public service want to be recognized for work well done. These respondents saw recognition as being an on-going, indeed, a fundamental human need that begs to be acknowledged and met. The following comment by a participant in one of the telephone interviews was heard frequently throughout the study whenever this questions was discussed:

"People want recognition. Its human nature to want to be appreciated."

This conviction however, is not shared by all public servants. Several respondents in all of the groups involved in the study reported that they knew of or had encountered individuals in their departments, including some managers, who maintain that recognition is unnecessary. The argument used most often by those who hold this position is that public servants are paid to do a job and to do it well, so that recognition, including the IAP, is superfluous. The participants who commented on this matter, however, suggested that these reservations about the need for recognition relate primarily to monetary awards rather than to non-monetary awards.

It was not possible for the evaluation team to gauge the percentage of people in the public service as a whole who would hold this opinion, but the indications suggest that they are a minority.

The majority of respondents in all groups also generally acknowledged that the current IAP, and the policy on which it rests, were intended to reflect, in a tangible way, the government's belief that recognition and reward behaviours can contribute to organizational effectiveness and the quality of life in the workplace. Respondents mentioned, however, that salary freezes over the past number of years and downsizing have caused some employees to doubt the government's and management's continuing commitment to recognition. Many respondents were of the view, therefore, that in these circumstances, awards and recognition become more important than ever as means of conveying to employees at all levels that their efforts are truly valued by their organizations. The following comment by one participant is typical of the views often expressed by respondents on this point:

"The awards (recognition) are all that's left for us after all the cutting and hacking. They mean more today than they ever did".

Respondents, however, held widely varying views on how well the IAP can satisfy this need.

3.3 Interest in the IAP

As indicated earlier, the majority of the senior officials contacted in the preliminary interviews felt that the events of the past five to ten years cause departments to be concerned about certain aspects of the IAP and that these concerns are reflected in the manner in which the programme is being used today. The concerns most frequently mentioned by this group were:

• The prescriptive nature of the Treasury Board guidelines and procedures which accompanied the introduction of the current IAP are at odds with the government's oft-repeated commitment to the principle of "let the managers manage" and limit the ability of the departments to adjust the awards to suit their particular needs.
• The heavy administrative workload and dollar costs associated with some of the Departmental Awards are straining the resources and general ability of the departments to offer all programmes authorized under the IAP. Some departments are now limiting the use of certain of these programmes.
• Employees are less willing to wait lengthy periods of time to be recognized for deserving accomplishments. Control from the centre, whether it be the Treasury Board or the headquarters of the departments, makes this preference difficult to satisfy when using some of the awards.
• The Long Service Award encourages employees to expect recognition for many years of service in a period marked by downsizing and privatization. Some departments believe this award sends the wrong message.

With respect to the first of these points, the senior officials acknowledged the need for appropriate administrative procedures to ensure that public funds are used wisely and are properly accounted for. They also concurred that departments need guidelines to refer to when exploring the use of new and innovative award and recognition models. They simply feel, however, that the procedures, rules and regulations now prescribed under the IAP need to be loosened up, modernized, made less bureaucratic and more responsive to the individual needs of departments.

The participants in all six discussion groups and the telephone interviews were questioned on the use currently being made of each of the awards in their departments. This was done to gain an appreciation of the "workability" of the awards and how strongly the departments feel about retaining some or all of them. Their responses, which are presented below, reveal that the extent and nature of participation in the IAP vary considerably from department to department and, in some cases, even within the same department.

1. Use of IAP - Overview

An early finding of the study was that large numbers of employees in the selected departments do not associate the recognition and award activities in their organizations with the Treasury Board Incentive Award Plan. Very few have ever heard of or read the 1987 Treasury Board policy and the Amending Memo of 1990 which effectively authorizes the granting of awards. Most employees see the award programmes as creations of their own departments.

One of the departments in the study has eliminated monetary awards altogether, because they were thought to be a divisive rather than a unifying force among employees. Non-monetary awards are favoured and used extensively in that department.

Generally speaking, departments are using non-monetary awards much more extensively than monetary awards, partly as a cost saving measure, but just as much because of their versatility and ability to deliver recognition quickly.

One respondent reported that whereas departmental award programmes used to be very oriented to the TB Plan, the department has now decreased the number and types of awards. and is limiting the number of formal awards that can be granted annually.

Several other departments in the study are also limiting the number of individuals that can be recognized in group awards, primarily for reasons of cost. The issue of cost is explored further in the section on sustainability, below.

2. Suggestion Award Programme

All but one of the departments in the study participate in this programme. However, it is not used extensively in the smaller departments because of the administrative workload involved, the length of time required to process suggestions and the difficulty of meeting the criteria that have been laid down for its use. The latter problem is highlighted in the following comment by one of the participants:

"We used to receive about 40 suggestions per year, but all were refused because the evaluation criteria are very strict. As a result, employees have stopped trying to make suggestions."

The programme is used more frequently and successfully in large departments with extensive technical, scientific, mechanical and clerical operations that offer wide scope for innovation.

Also mentioned as a problem with the Suggestion Award Programme were delays encountered in evaluating or validating suggestions. Even in the largest departments, evaluators carry other responsibilities as well, with the result that suggestions often tend to be assigned lower priority. Several examples were cited where evaluators were transferred to other duties before the evaluation could be completed. When a second evaluator is assigned there is often a catch-up period involved, which in turn, adds to the delay.

Several examples were cited by respondents in the discussion groups and in the telephone interviews where decisions on suggestions have been pending since 1991.

Some respondents pointed out that while decentralizing this programme to the regions helps to reduce the time required to validate suggestions, this measure may also introduce unwanted inconsistency in the way the programme is handled across the department.

Two of the participants who were managers stated that they did not feel there was any need to overhaul the TB guidelines for this programme. In other words, they were satisfied with the programme the way it is.

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