Opening Statement to the Standing Committee on Public Accounts

Reform of Classification and Job Evaluation in the Federal Public Service
(Chapter 6 - 2003 Status Report of the Auditor General of Canada)

9 June, 2003

Sheila Fraser, FCA
Auditor General of Canada

Thank you, Madame Chair, for the opportunity to discuss Chapter 6 of the May 2003 Status Report, Reform of Classification and Job Evaluation in the Federal Public Service. With me today is Kathryn Elliott, Principal, of the Human Resources Management audit team who has conducted two of the three audits on this topic.

Madame Chair, 13 years ago, the government wanted to renew its public service by simplifying employment and human resource management in order to redirect resources toward service to the public. The reform of classification and job evaluation systems in the public service was one of the key projects under the PS 2000 initiative, launched in 1990.

The government has been attempting to introduce a new universal classification system since 1991. During the three-year period from 1998 to 2001, the government estimates that it incurred over $200 million in incremental costs. This did not include the ongoing costs of the classification divisions in departments, nor the cost of time invested by managers and employees in writing work descriptions and evaluating them against the proposed new standard. Despite our recommendations that costs be tracked, there are no overall cost figures on the full project to date and we are concerned that costs for the third attempt are not being captured.

During this whole period of reform, departments have had no choice but to continue using the old outdated classification standards, which do not reflect the work of the 21^st century. For example, in the Program Management classification standard (the PM group, now part of the PA (group) over 50 percent of the benchmarks for positions represent work no longer done in the core public service, and the remaining benchmarks are seriously out of date. Emerging jobs, such as knowledge manager, call centre manager, and intelligence analyst are not reflected in the standards. Indeed those involved in policy development are difficult to place under the existing system, because the positions may be assessed under a variety of standards. Although the knowledge and use of computers and various software have revolutionized the way everyone's work is done, this element is absent from most standards.

In Chapter 6, we reiterated the problems of the system: too complex, too costly to operate, and too time consuming. As well, many of the classification standards were obsolete, cumbersome, and not responsive to pay equity concerns. Moreover, since 1999, as a result of reducing the 72 occupational groups to 29, some of these groups have no single classification standard applicable to the occupational group. As long as the government continues with the existing system and standards, these problems, and their associated risks, must be managed.

Over the last 12 years, because the Treasury Board Secretariat was planning to implement the Universal Classification Standard, it exercised minimal oversight in the way departments were classifying positions. Audits were stopped in 1992. Today, nobody knows how many of the 28,000 positions that were reclassified from 1993-99 may have been misclassified.

Madame Chair, I am very concerned about this situation since classification and job evaluation systems serve as the main basis for establishing the pay of some 168,000 employees, which represents a payroll of about $9 billion.

Classification and job evaluation do not exist in a vacuum. They are directly linked with compensation and, in the federal public service, with the collective bargaining system, as negotiations are carried out on the basis of occupational groups. These three areas—classification and job evaluation, compensation, and the collective bargaining system—must be managed in an integrated manner.

It is urgent for the government to restore the integrity of the classification of positions in the public service and to manage the existing system while it finds a sustainable solution for modern and robust classification and job evaluation systems for the 21^st century. At a time when the government has launched an initiative to modernize the way it manages its people, a lack of fundamental reform of this basic function could have an impact on the breadth of reform achieved.

Classification is integral to the management of people and is the foundation of compensation in the public service. At a broader level, recognizing and valuing the work being done by today's public servants is key to maintaining a competent and effective workforce for delivering services and programs to Canadians.

We recommended that the government should put in place a compensation policy that will help it balance the competing demands of internal equity, market forces, and affordability. Until new standards are in place, the government needs to take all the necessary steps to restore and sustain the integrity of the classification of positions, including conducting timely audits. The risks inherent in the existing system, including pay equity risks, need to be managed. Finally, we want to see a clearer plan for the government's proposed new approach.

Madame Chair, that concludes my opening statement. We would be pleased to answer your Committee's questions.