(Uncorrected OCR) An Evaluatiye Study on the New Performance Appraisal System for Inspectorate Grade Officer in the Hong Kong Customs & Excise Department Mak Hoi Wan Walter Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Public Administration University of Hong Kong June 2004 Chapter One Introduction 1.1 Introduction Over the years, performance management has been one of the most important developments and researched topics in the sphere of public and private management. It is an integral part of the comprehensive human resource management and many academics in their res~arch studies have been attempting to give performance management a more specific definition under different dimensions. In the context of human resource management, performance management can be broadly defined as a means of getting better results from the organisation and individuals by understanding and managing performance within an agreed framework of planned goals, standards and attribute or competence requirements (Michael Armstrong, 1995). It is also for establishing a shared understanding about what is to be achieved in an organisation, how it is to be achieved, and an approach to managing people which increases the probability of achieving job-related success (Franklin Hartle, 1997). The ideal type of performance management should be targets-oriented, able to motivate individual employee and respond creatively to the challenges ahead. According to the Civil Service Bureau (CSB), the objective of performance management in Hong Kong civil service is to ’improve overall productivity and effectiveness by maximising individual performance and potential’l. In modernising the human resource management (HRM) in civil service, the HKSAR I Civil Service Bureau. The ’Performance Management Guide’. (Hong Kong Government Printer 1999). 1 government is finding itself having to constantly implement strategic human resource management policy to cater for the changing political pressures. Over the years, civil service has been targeted for endless criticisms for being inefficient especially during economic bad times. With the Chief Executive’s initiative to implement the ’Principal Official Accountability System’ on 2 July 20022 that aims to promote better accountability in the delivery of government services, public demands are becoming a rising challenge which compel civil service to operate in a more efficient and accountable manner. Pressures on the government to enhance efficiency and greater accountability reached its peaks when disappointing policy blunders recurred one after the other under the Chief Executive’s governance. To survive from the growing trend for better accountability and improvement on government performance, the HKSAR government in recent years has been endeavouring to enhance its performance management system across the civil service3. Far early in March 1999, the CSB initiated a performance management review aiming to enhance efficiency of the civil service and to strengthen the government’s capability in meeting the increasing challenges of the community4, With the Chief Executive’s proposal to promote a ’people~based governance’ in his 2004 Policy Address5, public aspirations over the performance of civil service are expected to be much higher and demanding. The continued 2 The ’Chief Executive Policy Address 2001’, HKSAR Government. (Hong Kong Government Printer 2001). 3 Civil Service Bureau. Civil Service Bureau Circular 10/2000. 4 Civil Service Bureau. Civil Service Reform consultation document ’Civil Service into the 215t Century’. (Hong Kong Government Printer 1999). 5 The ’Chief Executive Policy Address 2004’, HKSAR Government. (Hong Kong Government Printer 2004). 2 expenditure cuts for government departments coupled with the policy commitment of the Chief Executive would definitely add pressure on Heads of Departments to critically develop their specific human resources through implementing an effective performance management system. Conventionally, the Hong Kong civil service is characterised as a highly bureaucratic structure modeled on the Max Weber’s ’Bureaucracy’. Its administration and operation are therefore infested with forest of rigid rules and regulations. An effective performance management system is therefore necessary to ensure that civil servants are able to raise its capacity in the delivery of public services. Nowadays, given that promotion opportunity is becoming slim due to the continued downsizing policy in the civil service6, senior managers in government departments have been facing increasing challenges when dealing with the problem of disincentive staff and their declining performance. This is one of the main reasons explaining why the HKSAR government is keen on identifying an effective performance management system for developing its human resources. Assessment of employee performance requires a process of accurate evaluation and reliable tool. Over the years, annual performance appraisal on individual civil servant is the conventional tool in the HKSAR government to implement human resource development plan. Because of the civil service reform, government departments are becoming more dependent upon performance appraisal for making various sorts of personnel and managerial decisions. As succinctly propounded by Gary P. Latham (1982), ’ Performance appraisals are crucial to the 6 Speech delivered by the Secretary for Civil Service at the Special Finance Committee Meeting on 29 March 2004. Website: http://www.info.gov.hk/csb. 3 effective .management of an organisation’s human resources, and the proper management of human resources is a critical variable affecting an organisation’s productivity.’ Inefficient performance of civil service has been a focus of criticism I , for years by the local legislature and many oversight bodies who find it irresistible to gain popularity by simply being critic against the bureaucrats. Therefore, the impetus for changing the performance management system in civil service basically arises from the increasing demands for an efficient public service and accountability of public officials, the persistent adversity in global economic depression. as well as the government’s commitment to balancing the deficit budget by downsizing the civil service7. As these external factors interact with each other, they become the cumulative force contributing to the momentum for reforming the civil service performance management system. Having experienced pressure for improvement and in the wake of the continued expenditure cut for government departments, the central administration recognised the need to raise the capacity of civil service. As one of the four main areas in the civil service reform initiatives, the CSB issued a comprehensive guidance in 1999 that encourages Heads of Departments to improve their departments’ performance management system. The ’Performance Management Guide’ published by the CSB8 essentially forms the policy guidelines for reference by all Heads of 7 ’Balanced budget deadline is delayed’ headlined in the South China Morning Post dated 23 October 2003. 8 Civil Service Bureau. The ’Performance Management Guide’. (Hong Kong Government Printer 1999) 4 Departments to formulate an effective performance management system with due regard to the particular circumstances in their departments. To respond to the central administration’s move to promote awareness of performance management in the civil service, the Customs and Excise Department has recently reformed its performance appraisal system for the Inspectorate grade officer in 2003. In light of this reform, the objective of this dissertation seeks to evaluate the effectiveness of this new performance appraisal system for the Inspectorate grade officers with a view to ascertaining whether it can help bringing a new concept of performance management to the Customs and Excise Department. 1.2 New Performance Appraisal System for Inspectorate Ranks in C&ED In line with the central government initiative to promote civil service reform on staff performance management9, the Customs and Excise Department (C&ED) IS one of the first departments committed to improving productivity of its employees through the channel of performance management reform. Amongst many other things, the reform has brought substantial change to the performance appraisal system for the Inspectorate grade officerslO. Performance appraisal as an integral part of the performance management cycle in the C&ED has 9 Civil Service Bureau. Memo from the Secretary for the Civil Service to all Bureau Secretaries and Heads of Departments on ’Civil Service Reform - Performance Management and Performance-Based Reward System’ dated 26 April 2000. 10 ’Inspectorate grade officer’ in C&ED consists of Senior Inspector and Inspector. Schedule 1, Customs and Excise Service Ordinance, Cap.342. Laws of Hong Kong. 5