Innovation in public sector reward

Gordon McFarlane provides his reflections on how the public sector has innovated in the last 18 months and whether the Covid pandemic has changed our attitudes to innovation

It feels appropriate to begin an article on innovation by reflecting briefly on the last year and a half. Looking in the main from a local government perspective, the sector (along with many others) adjusted overnight at the start of the pandemic and became less bureaucratic and more agile by necessity. I saw many examples of people stepping up, coming up with ideas and developing innovative solutions to problems. Whilst it was a ‘needs must’ situation, there is a real challenge, but also a great opportunity as we move through the phases of recovery, in relation to how we capture and retain the best of this more modern and fleeter of foot approach, and also how we encourage ongoing innovation.

What we’ve seen is faster, slicker decision making during Covid, colleagues showing a real willingness to flex, we have at times created policy ‘on the hoof’, and we’ve worked around what are arguably traditional, sometimes elongated and often bureaucratic processes. This has certainly happened within councils, and is also true for the extensive partnership working around the Covid response. It’s worth noting that there have been no greater examples of innovation within local authorities than from our public health colleagues.

Looking more broadly at innovation, it’s worth briefly exploring what some of the drivers are. People have to have an open mind and a willingness to change. Organisational and individual attitudes to risk (financial, resource need / allocation, risk of failing, reputational risk) are also relevant to consider, because a risk of taking a truly innovative approach is that there may be failure, and then failing fast and learning becomes important. This links to the challenge that in some organisations, people may feel that they need permission to innovate, and if this is the case, what does this say about an organisation’s culture?

Digital innovation has been with us for some time and is increasing in pace and importance. An example for me of the need for culture change and also where attitude to risk is important to consider, is where a process has been digitised or automated and made simpler for the customer. However, it can then sometimes take much more time and effort to shift the mindset of change resistant colleagues who may cling on to tried and tested manual processes, with extensive checks and balances in place.

Work with external consultants can also be double edged too – by their nature, they may be more innovative, and we can either embrace this and learn from it, or perhaps feel threatened and discouraged.

Turning to how we reward innovative work, this is an interesting challenge for the public sector. Within formal pay and grading structures and (in general) national pay deals, we have limited ability to reward staff financially. Performance related pay models are not widely used. The government announcement earlier in the year about a public sector pay freeze, and the initial offer made to nurses, exemplified the damage that can be done in relation to motivation and commitment of getting it wrong around pay and financial reward, despite people’s broad understanding of the difficult economic climate. Pay itself tends also to be a short-term motivator. However, organisations have found other ways in which to reward and recognise contribution and innovation.

Thinking again about the pandemic response, so many people have stepped up, willingly worked extra hours, moved quickly out of day jobs, or just kept business as usual going in very difficult circumstances, that acknowledgement and genuine thanks is crucial. Within this context, there’s been much innovative work to reward effort in different ways. I know of a small number of councils who decided to give staff an extra day’s leave, and others who have awarded some staff a small one off payment. However, in Leicestershire, we chose to work with departments to find different ways to thank people, whether this has been a personal letter from the Director, or a wider service or team event to just take some time out and to acknowledge the huge efforts, discretionary effort and innovative work.

Arguably, with the absence of additional pay related reward in any meaningful sense, the public sector needs to be more innovative (and the results will probably feel genuine and meaningful than they would as a result of additional pay) about acknowledging and rewarding extra effort, finding better ways of doing things and being more agile. It’s worth teasing out the benefits that come from innovating and then being able to answer the question ‘what’s in it for me?’. Reward could, for example, take the form of more meaningful and interesting work when routine transactional work is automated. Focused learning and development opportunities for those willing and able to innovate can be another way of rewarding colleagues.

Smarter working (planned, not enforced) also gives a great opportunity to innovate, to manage by outputs and outcomes. and I’ve noticed a change in the narrative from some staff, from ‘why do we have to do this’ to ‘how do we / how can we’, and we can tease out and exploit the many benefits of smarter and hybrid working, and frame them in the context of reward.

In conclusion, we are all at different stages of approaching and managing similar challenges – to recruit and retain the best people who want to work for progressive modern organisations, to modernise and automate processes where we can, and to create a more effective customer experience at the lowest possible cost. Encouraging and rewarding innovative ideas and work are important underpinning factors.

The public sector should be proud of its recent achievements, and the pandemic challenges have proved that we can respond in an agile way, cutting through and cutting out bureaucracy, and also finding ways to recognise and reward innovative practice and decision making. This has arguably never been such an important part of our employment deal, and we need to continue to foster innovation, flexibility and the change in culture that it brings. It’s not quite a perfect storm, but it’s a great opportunity for us to continue this journey positively.

Gordon McFarlane is Vice President of the Public Services People Managers Association and Assistant Director (Corporate Services) at Leicestershire County Council.

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