Chapter 5

Culture and ethics

Cultural change is crucial to the performance of the NSW public sector, but has rarely been a focus of past reforms.

This is perhaps because workforce culture is not directly visible, nor is it under the direct control of any single person. It exists in every organisation as an interlocking set of organisational values, goals, roles, work practices, standards of conduct, attitudes and assumptions, all of which require time and effort to change.

The Schott Commission of Audit noted that "High-performing workplaces are characterised by a set of values and shared beliefs where people welcome and seek to introduce change and innovation, where leaders care for their employees and foster collaboration, and where there is an ambition to deliver results and a focus on achieving goals".19

The traditional view of workforce management in the NSW public sector focuses on selecting or developing technical skills and knowledge to help agencies meet their business objectives.

A shift in thinking is required if the sector wants to develop an organisational culture that yields more benefit from its skills base. Agencies need to recognise the significance of a good workplace culture, including for the following reasons:

  • Culture is a critical element of productive and innovative organisations. Leadership and the tone from the top help mould workplace culture, and a capable and diverse workforce helps build productive and innovative cultures.
  • A culture that supports collaboration will allow employees to work across internal and external boundaries to deliver better results for customers in a more innovative way.
  • A culture of ethical behaviour allows people with existing skills to work within a framework of values to deliver sustainable outcomes developed in a rigorous manner. The same skills produce even better outcomes when combined with the right culture and conditions.

The 2015 Agency survey shows that since 2014, more agencies have implemented and developed the government sector's four core values of integrity, trust, service and accountability. The Reform review echoed this finding, and agency participants gave positive feedback regarding their incorporation of values and ethics into the workplace. Interviews conducted as part of the review indicate that it is now time to build a deeper understanding of what these reforms mean.

PSC is aware that many departments have worked hard to diagnose, understand and develop healthy workplace cultures guided by sector-wide values and frameworks. The following sections focus on three areas that have sector-wide impacts, are relatively recent initiatives, and/or reflect trends and concerns revealed by the research data: work that relates to values, ethics and bullying. When applied effectively, these efforts can significantly impact other areas of workplace management, such as employee engagement and improved organisational performance.

Values and ethics

Agencies are well on the way to embedding the government sector's four core values of integrity, trust, service and accountability. The 2015 Agency survey found almost half (44%) of the 105 agencies surveyed had aligned their workforce management practices with the core values, and the remaining 56% of agencies were maintaining alignment with their internal values.

Figure 20 shows the extent to which agencies have aligned their communication, leadership and monitoring practices with the core values. Good progress has been made since the 2014 survey, with an increase in the levels of development for most initiatives. The most developed approaches included induction and training programs, executive performance management systems and KPIs, and agency objectives and management policies. The least developed were monitoring and assessment practices.

Ethics and leadership conference

In 2015, 200 senior executives and public sector scholars attended NSW's first conference on ethics and leadership in the public sector. The attendees heard from public sector leaders in NSW and other states on best-practice approaches to everyday ethical issues.

Dr Kerry Schott talked about the need for long-term persistence in building a culture of openness so that all employees view problems in the context of preventing or managing them when they occur. She also touched on the importance of leaders 'walking the talk' when it comes to ethical practice, and how workforce diversity can be a powerful tool for improving workplace culture.

Professor Joanne Ciulla addressed the need for leaders to demonstrate courage when making ethical decisions, and to establish and be informed by good decision-making processes.

A group discussion on building ethical cultures stressed the dangers of leaders becoming isolated from the day-to-day business of their agencies, and how to prevent this by regularly gathering and reviewing customer feedback about their experiences accessing public services.

Presentations by the NSW Ombudsman, the NSW Auditor-General and the ICAC Commissioner stressed the value of building resilient, ethical cultures as a way to prevent unethical behaviour in the workforce.

Conference transcripts are available on the PSC website.

Snapshot – HealthShare NSW

HealthShare NSW has developed a constructive culture leadership program focused on a safe and healthy workplace and positive interaction with customers.

The program, called Our People Our Culture, was introduced in 2014 and includes leadership development strategies such as the Manager Capability program to develop core leadership skills. A senior leadership program pilot commenced in October 2015.

HealthShare has also introduced a series of formal recognition programs such as the annual Service Recognition program, the Staff Excellence Awards and the Annual HealthShare Expo Awards. These formal programs are complemented by informal Recognition In the Moment initiatives. The Our People Our Culture program actively promotes the behaviours associated with the NSW Health CORE values of collaboration, openness, respect and empowerment).

Figure 20: Agency initiatives to embed core values in policies and practice

Diagram of 'Figure 20: Agency initiatives to embed core values in policies and practice'

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  % Highly developed % Developed % Basic % Recognised % Not recognised
Broad-based communications 19 43 22 13 2
Leadership-based approaches 15 41 28 15 0
Monitoring and assessment 4 19 32 34 11

Source: Agency survey 2015

The results of next year's People Matter survey will show whether this increased implementation and development has improved workplace culture across the sector, or whether further effort is needed to enhance leadership-based approaches, and monitoring and assessment.

Work is already underway to help the sector enhance these areas for improvement. In 2014–15, the Public Service Commissioner led a suite of initiatives to help agencies develop workplace cultures and practices consistent with the core values of the Ethical Framework.20 This included issuing the first sector-wide Code of Ethics and Conduct for NSW public sector employees. The code identifies the standards of ethical conduct expected of all employees, and requires all senior executives to make a written declaration of any private interests and relationships that could influence – or be perceived to influence – decisions they make or advice they give.

Throughout 2015, 50 senior executives participated in workshops that explored ethical dilemmas affecting leaders. The workshops provided useful insights aimed at strengthening leaders' capacity to identify ethical issues and address them in an innovative way when they do occur – especially when there is no obvious 'right' solution; to make difficult decisions while balancing high costs and high benefits; and to act in the public interest when challenged by short-term pressure and constraints.

Given that key ethics initiatives for PSC and NSW agencies only began in 2014–15, it is too early to pinpoint a measurable impact; however, the Reform review found that values and ethics are well understood and clusters are performing reasonably well in this area, with some opportunities for improvement. While there is common understanding that having a strong sense of values and ethics is an implicit part of working for the public sector, most respondents demonstrated only a basic understanding of the deeper meaning of this reform. Overall, employees and people managers reported more positive experiences as a result of the values-based reforms than did secretaries and business leaders.

Creating respectful workplaces

As well as promoting ethical conduct within workplaces, PSC is working to prevent unethical conduct. Key indicators used to diagnose whether a workplace has an ethical culture and uses ethical practices include whether it has:

  • a supportive leadership team that can respond to staff needs and contribute to an environment that fosters employee engagement, development and support
  • high workplace morale, since the emotions staff experience while at work underpin their motivation and commitment
  • role clarity, provides staff members with a sense of purpose and clearly explains what is expected of them. Clear policies should communicate how employees are expected to interact with each other and contribute to the organisation.

If these factors are not in place, not only is a workplace unlikely to be based on a strong ethical foundation, but there is also a much greater likelihood that issues such as bullying will arise.

PSC is in the final stages of developing a Bullying Dashboard, an innovative management tool that monitors risk areas associated with bullying. The dashboard helps agencies reduce the incidence and severity of workplace bullying by regularly monitoring workplace and culture data. By displaying relevant information, the dashboard helps managers and leaders understand why bullying might have occurred and the broader ramifications. As such, the dashboard will enhance awareness of bullying when it occurs, and also increase understanding about the organisational costs of operating in an environment where bullying exists.

Figure 21: Bullying Dashboard

Diagram of 'Figure 21: Bullying Dashboard'

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What can be done to prevent bullying?



What kind of damage may result from bullying?

Psychosocial factors

  • Supportive leadership
  • Workplace morale
  • Staff engagement
  • Workplace ease
  • Development and growth
  • Role clarity
  • Performance management

Bullying incidence

  • Witnessing bullying
  • Experiencing bullying
  • Reporting bullying

Potential outcomes

  • Workers compensation claims
  • Turnover
  • Loss of tenure
  • Sick leave
  • Psychological damage

PSC designed the Bullying Dashboard using data collected through the NSW Workforce Profile and the People Matter survey. Drawing on these sources, it will track:

  • the incidence of bullying – measured by employee reports of witnessed and experienced incidents, and formal complaints made
  • psychosocial factors – the key workplace factors most related to bullying, including leadership support, team morale and performance feedback practices
  • potential outcomes – issues that may arise as a result of bullying, including sick leave, turnover, loss of tenure and workers compensation claims.

The People Matter survey tracks the incidence of workplace bullying, and the most recent results indicate that bullying decreased between 2012 and 2014. For those who did experience bullying:

  • the most common initiators were their immediate manager or supervisor (28%), a senior manager (23%) or a fellow worker at the same level (23%)
  • the most frequent forms of bullying – those that occurred more than five times – were directing negative body language, gestures or glances (44%); avoiding or ignoring (43%); mistreating one or more co-workers (41%); withholding important information (33%); and devaluing work efforts (32%)
  • the most common roles involved in bullying were direct service delivery (58%), administrative support (11%), other service delivery (8%) and corporate services (8%).

Bullying creates a range of negative consequences for individuals and their agencies. In 2014, the NSW Self Insurance Corporation (SICorp) received 467 claims purely due to work-related harassment and/or bullying, with a current total net incurred cost of $16.7 million.21 Of these claims, 43% were related to anxiety or stress. This is an improvement compared to the previous year, when SICorp received 500 such claims with a current total net incurred cost of $20.8 million.

The Public Service Commissioner has engaged unions and key sector leaders through a bullying roundtable, which started in 2014. The work of the roundtable has continued in 2015 and has led to the development of an action plan to address bullying.

Actions include developing principles‑based guidance on fostering and maintaining respectful workplace cultures, including on dealing with bullying, and a social marketing campaign to influence workplace behaviours. The campaign will feature leading practice resources including sector case studies and will be complemented by a data‑driven analytical dashboard to help managers and leaders recognise and address systemic factors associated with the risk of bullying.

To the next level

The 2014 People Matter survey and 2015 Agency survey results indicate that agencies have begun embedding the Ethical Framework core values in their cultures, systems, practices, workplaces and employee behaviours.

From 2016, the People Matter survey will be conducted annually, enabling more regular reporting and measurement of the sector's culture and practical commitment to ethical behaviour.

While there is strong sector-wide support for the Ethical Framework, some agencies and individuals are still confused as to what an ethical culture looks like in practice. In the next 12 months, PSC will seek to clarify this by providing advice and developing resources that illustrate ethical behaviour in the public sector, and by helping to further embed ethics into leadership programs.

Departments and agencies should continue developing respectful workplace environments that eschew harassment and bullying. This can be done by fostering cultures that encourage 'speaking up'; developing supportive leadership teams to prevent this type of conduct; and identifying and tracking the progress of specific management actions to ensure issues are quickly addressed when they do arise.

While there is common understanding that having a strong sense of values and ethics is an implicit part of working for the public sector, most respondents demonstrated only a basic understanding of the deeper meaning of this reform.

  1. NSW Commission of Audit (2012), Interim Report, p141. The Ethics Stocktake, research undertaken for PSC by The Ethics Centre, made similar findings
  2. Sections 25 and 30 of the GSE Act make agency heads responsible for conducting and managing their agencies in accordance with the core values listed in Part 2 of the GSE Act: integrity, trust, service and accountability
  3. Net incurred cost is likely to develop over time as a claim matures