Scottish Government

MG(06)12th Conclusions

MANAGEMENT GROUP

MINUTES OF MEETING HELD IN ST ANDREW'S HOUSE, EDINBURGH

AT 8.30AM ON THURSDAY, 30 MARCH 2006

Agenda Item 1: Minutes of Previous Meeting and Matters Arising

1. The minutes of the meeting held on 23 March (MG(06)11th Conclusions) were approved. The Permanent Secretary noted that this was Mrs Lewis' last MG meeting as head of the Ministerial Support Group. He thanked Mrs Lewis for her significant contribution to supporting Cabinet and Management Group over the past four years and wished her success in her new post as head of schools group.

Agenda Item 2: Current Issues

Report from PS/First Minister and Alan Johnston

2. Mr Naysmith said that the First Minister had been grateful for the timely and helpful briefing on the UK Budget the previous week. He had been pleased with the smooth introduction of the smoking ban on Sunday 26 March and congratulated officials for their contribution to the introduction of this significant policy. The First Minister was engaged in preparation for the launch of the concessionary fares scheme for older and disabled people on 31 March; and the Tartan Week celebrations at the beginning of April.

3. Mr Johnston said that the Deputy First Minister had been engaged in a number of portfolio issues and preparation for a Parliamentary statement on Scottish Enterprise. The Deputy First Minister had noted the importance of ensuring consistency of approach in discussing financial issues with UK departments. MG agreed that the Finance Director and Dr Goudie should consider necessary actions to ensure that Finance Group was aware of, and engaged as appropriate in discussions with UK departments (Action: Finance Director and Dr Goudie, Finance and Central Services Department).

Events Planning Grid

4. MG noted the Events Planning Grid.

First Minister's Questions

5. MG agreed the draft answers and material for FMQs later that day, 30 March.

Agenda Item 3: Cabinet Business (Paper MG(06)41)

6. The Permanent Secretary gave a brief report from the Cabinet meeting held on Wednesday, 29 March. The Cabinet had discussed a range of issues, including consequentials from the UK Budget; the launch of the Scottish Climate Change programme; and had congratulated the Scottish team on its success at the Commonwealth Games. MG noted progress in preparing papers for Cabinet meetings scheduled for 19 and 26 April.

[Mrs Lewis left the meeting at this point]

Agenda Item 4: Performance Management: 06-07 reporting cycle (Paper MG(06)42)

7. Mr Gordon, as chair of the Corporate Issues Sub Group, set the context for discussion. Mr Gordon said that following agreement with the trade unions to a 3 year pay offer which included a commitment to reaching agreement on a revised pay and performance management system for the organisation, it would be important to ensure that the present system was operated properly in the current appraisal round. The issue had been originally scheduled for discussion at the sub group; however other business meant that MG was being invited to consider the issue now in order to inform the current appraisal round.

8. Mrs Beevers introduced paper MG(06)42 which provided a breakdown of 2004/05 performance appraisal markings; and suggested three potential courses of action to ensure greater consistency across departments in operating the performance appraisal system. The options were:

¨ DMBs should consider and agree all proposals to award exceptional markings to ensure consistency of approach within departments;

¨ Existing advice and guidance for staff and managers should be updated to make clearer the criteria to be applied when assessing performance and the responsibilities of line managers to operate the system;

¨ That a move was made towards the introduction of a forced distribution curve, where departments commit to a limit on percentage splits between performance management ratings.

9. In discussion the following points were made:

(a) The distribution of performance markings in previous years highlighted inconsistency between departments. Departments which had applied the guidance effectively had found it a useful tool to support the assessment process, and were clear that while forced distribution was not desirable, departments needed to work towards achieving greater consistency;

(b) Previous distribution of exceptional markings was weighted towards the higher pay bands. It would be important to ensure fairness in rewarding performance and departments should look critically at the distribution of exceptional performance markings between grades

(c) The disadvantage presented by the adoption of a forced distribution curve was significant. However, in agreeing not to develop that approach it would be important to ensure a disciplined approach to achieving consistency and fairness between departments and across grades;

(d) The staff survey had highlighted concern that poor performance was not always effectively addressed within the organisation. Staff had also highlighted the need for action to ensure that line managers were supported in allocating a 'developing marking' to staff where that was appropriate. A fourth appraisal marking of 'partially effective', had been introduced at the beginning of the 2005-06 reporting year to help managers effectively assess performance;

(e) Existing guidance should be updated to support the assessment of staff in the current performance round. It would be helpful for the guidance to include practical examples of how managers could apply each performance marking. It would be important in agreeing a revised performance management system for 2006-07 to reduce the bureaucracy attached to performance appraisal generally, and in particular to the developing marking;

(f) In working towards greater consistency and fairness in the operation of the performance appraisal system, departments should recognise that it would take time for new practice to become embedded, and line managers should be offered continued support to implement the guidance.

10. MG agreed that:

(a) Heads of Department should ensure the effective operation of the performance management system to ensure consistency of approach across departments (Action: Heads of Department);

(b) Revised guidance should be circulated reminding managers and staff of the criteria for assessing individual performance, offering examples of exceptional and developing performance. The guidance should also remind managers that a 'partly effective' marking had been introduced at the beginning of the 2005-06 reporting year, and should make clear the support and advice available to managers. The draft guidance should be cleared by Mr Gordon as chair of CISG (Action: Mrs Beevers, HR, Change and Corporate Services Group, Mr Gordon);

(c) Departmental Management Boards should, on the basis of the updated guidance, moderate the award of exceptional markings and look critically at the distribution of exceptional markings across pay bands (Action: Heads of Department);

(d) Heads of Division should ensure that managers apply the guidance appropriately and in particular ensure that they are aware of the criteria for awarding individual markings including the 'partially effective' marking.

Agenda Item 5: Finance: Outlook for 2006-07

11. Ms Stafford updated MG on the financial outlook for 2006-07. MG noted the update and agreed the importance of managing capital and resource expenditure rigorously over the financial year.

Agenda Item 6: Follow-up to the Away Day

12. The record of the discussion of this agenda item is considered exempt under sections 29(1)(a), 30(b)(i) and (ii), and 30(c) of the Freedom of Information Act.

Agenda Item 7: Any Other Business

Administration Budget

13. The Permanent Secretary noted that it would be helpful for MG to consider how best to ensure that administration budget savings generated by departments which were subsequently recycled into departmental budgets, were properly quantified and recorded. It would be useful for Heads of Department to consider this in advance of discussion at a future meeting. (Action: Heads of Department, Cabinet Secretariat)

Cabinet/MG Secretariat

April 2006