Audit of Staffing and Recruitment

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Audit Report

October 2010

Recommended for Approval to the Deputy Minister by Departmental Audit Committee on October 19, 2010

Approved by the Deputy Minister on October 21, 2010

Table of Contents

1.0 Executive Summary

1.1 Introduction

Whereas the primary accountability for human resources (HR) rests with all members of Industry Canada management, the Human Resources Branch (HRB) provides strategic information and advice to the department. The Branch consists of the Director General's HR Directorate and six service-oriented directorates: Strategic Human Resources Management, Operations and Programs, Administrative Services, Executive (EX) Group Services and Developmental Programs, Labour Relations and Compensation, and Conflict Prevention and Early Resolution.

HRB also provides technical expertise to the department's regional offices, which are responsible and accountable for the delivery of HR activities and services within their respective offices. Although HRB does not hold authority over the regional offices, it does provide them with technical expertise as per a Memorandum of Understanding.

This audit was conducted in accordance with the Audit and Evaluation Branch's 2009–2010 Risk-Based Audit Plan based on a department-wide preliminary survey of HR functions conducted in 2009. In addition, the Public Service Commission notified Industry Canada (IC) that the department would be subject to an audit of staffing in 2012. In early 2010, a review of Human Resource Management risk areas in IC resulted in this audit being reprioritized to the 2009–2010 Risk-Based Audit Plan.

The objective of this audit is to assess the level of compliance, efficiency and effectiveness of staffing and recruitment processes and practices to help ensure that the person appointed is the right fit for the job so that the business and human resource needs of the department are met.

The scope of the audit covered fiscal years 2008–2009 and 2009–2010 and focused on the following areas of staffing and recruitment:

  • Governance
  • HR Planning
  • Monitoring and reporting
  • Staffing tools and HR advice
  • Training
  • Staffing values—Public Service Employment Act (PSEA)
  • Information

1.2 Audit results

Governance: Strengths include: a subdelegation instrument that is well controlled by HRB and operates as expected; and an integrated planning process, consistent with the Public Service Employment Act (PSEA), that considers both current and future needs of the organization. In addition, all appointments in the audit sample were appropriately signed by subdelegated managers with required training. Areas for improvement include:

  1. Most Industry Canada sector HR plans did not document progress or how staffing processes selected aligned with plans.
  2. HR advisors are not sufficiently involved with subdelegated managers in sector HR planning.
  3. Expectations of HR advisors and subdelegated managers differ.
  4. Staffing activities are not always conducted by individuals who have completed the required training on staffing.

Internal Controls: Strengths include: documented staffing advice provided by HRB that is consistent with Public Service Commission (PSC) and IC policies; subdelegated managers having access to timely and relevant information, from multiple sources, on staffing and recruitment; proactive steps taken by HRB to improve the reliability of information stored in the PeopleSoft Human Resources Management System, and used for reporting to PSC; and consideration of overall PSC and IC priority requirements. Areas for improvement include:

  1. Over half of the written rationales for selecting a non-advertised process in the audit sample did not provide sufficient evidence of consideration of the guiding values.
  2. Assessment tools and methods insufficiently or incompletely assessed essential qualifications and other identified merit criteria.
  3. Over half of the staffing files in the audit sample did not contain sufficient key information on academic credentials and evidence of an HR challenge function.

Risk Management: Strengths include: evidence of monitoring was found in staffing files and is reported; and IC has recently updated its monitoring practices to mitigate risks and to determine whether appointment processes are in accordance with legislative requirements. Looking forward:

  1. The updated staffing monitoring system needs to be sustained.

1.3 Conclusion

Overall, Industry Canada's staffing and recruitment processes and practices are performed with efficiency and effectiveness. However, improvements in certain areas would help ensure greater compliance with governing legislation and policies in appointing persons with the right fit for the job to meet the business and human resource needs of the department.

1.4 Recommendations

It is recommended that:

  1. The Director General (DG) of HRB should monitor progress on sector HR plans to support the reporting of variances between HR plans and actual staffing activities, as required by IC and the Public Service Commission.
  2. The DG of HRB should ensure that the integrated planning process involves HR professionals who are responsible to support the sectors in implementing staffing strategies.
  3. The DG of HRB should ensure that roles, responsibilities and accountabilities of HR advisors and subdelegated managers are clearly defined throughout the staffing process for non-EX appointments.
  4. The DG of HRB should ensure that all employees involved in staffing and recruitment processes have access to and pursue adequate training to demonstrate knowledge of staffing requirements.
  5. The DG of HRB should ensure that subdelegated managers demonstrate how the use of a non-advertised appointment process meets the department's established criteria and the appointment values.
  6. The DG of HRB should review the appointments in the audit sample where there were deficiencies in the assessment of candidates and ensure that assessment tools and methods fully and fairly assess essential qualifications and other identified merit criteria.
  7. The DG of HRB should ensure that appointments and appointment-related decisions, as well as advice provided to subdelegated managers at key decision points (i.e. link of staffing action to HR plan, choice of appointment process, assessment), are fully documented.
  8. The DG of HRB should ensure that the Staffing Policy and Monitoring Section monitoring system now in place is fully implemented and sustained.

1.5 Statement of Assurance

In my professional judgment as Chief Audit Executive, sufficient and appropriate audit procedures have been conducted and evidence gathered to support the accuracy of the opinion provided and contained in this report. The opinion is based on a comparison of the conditions, as they existed at the time, against pre-established audit criteria that were agreed on with management. The opinion is applicable only to the entities examined and within the scope described herein. This audit was conducted in accordance with the Internal Auditing Standards for the Government of Canada.

1.6 Audit Opinion

In my opinion, the Audit of Staffing and Recruitment revealed there are risk exposures related to internal controls and governance relative to staffing and recruitment that require management attention.

___________________________________ 
Susan Hart 
Chief Audit Executive, Industry Canada

____________________ 
Date

2.0 About the Audit

2.1 Background

Industry Canada works on a broad range of matters related to industry and technology, trade and commerce, science, consumer affairs, corporations and corporate securities, competition and restraint of trade, weights and measures, bankruptcy and insolvency, patents and copyrights, investment, small business and tourism.

IC Human Resources

Within Industry Canada, the management of human resources is the responsibility of all members of management. The direction and support for human resource activities are primarily the responsibility of the Human Resources Branch. The Branch's objectives are to ensure that the department:

  • attracts and hires the best individuals available
  • develops and nurtures that talent
  • creates a sustaining, productive work environment, and
  • continually builds and monitors its people assets.

In 2008, the HR Branch was restructured into seven directorates: the Director General's HR Directorate and six service-oriented directorates: Strategic Human Resources Management, Operations and Programs, Administrative Services, Executive (EX) Group Services and Developmental Programs, Labour Relations and Compensation, and Conflict Prevention and Early Resolution.

The department's regional offices are responsible and accountable for the delivery of HR activities and services within their respective regional offices. The HRB does not hold authority over the regional offices, but does provide them with technical expertise as outlined through a Memorandum of Understanding.

HR legislation, regulations and policies relevant to staffing include the PSEA, the Public Service Employment Regulations and the Appointment Policy, which is composed of a number of policies on specific subjects that correspond to key decision points in an appointment process. As per PSC requirements, there are also organizational policies related to staffing established by IC's deputy head, such as the Policy on Area of Selection and the Policy on Corrective Action and Revocation.

Audit Background

As part of the Audit and Evaluation Branch's (AEB) 2008–2009 Risk-Based Audit Plan, a department-wide preliminary survey of HR functions was undertaken to determine the extent of HR processes, systems, controls and organizational structure in place to provide assurance to management. This exercise resulted in the creation of a risk-based multi-year audit plan schedule for the period of 2008–2009 to 2011–2012, addressing risks that had been identified as priority, including staffing, integrated planning, capacity to drive HR Modernization, management of HR information, recruitment, and performance management and development. However, with the implementation of Budget 2009, AEB's internal audit plan was reprioritized to include higher risk activities. As a result, some audits were postponed, including those of HR.

In July 2009, the Public Service Commission notified IC that the department would be subject to an audit of staffing in 2011 1, as per the PSC's 2009–2011 audit plan. In October 2009, AEB reintroduced HR audit work at the Mid-Year Review of the 2009–2010 to 2011–2012 Multi-Year, Risk-Based Internal Audit Plan. Initially, the audit objectives were to determine:

  • whether the department has an appropriate HR framework, systems and practices in place to manage its appointment activities; and
  • whether its appointments and appointment processes are compliant with the Public Service Employment Act and related departmental policies.

An AEB internal audit team then reviewed and reprioritized Human Resource Management risk areas against relevant control frameworks. As a result, and upon consultation with subject matter experts, it was decided that the department would benefit more from an audit with the revised objective described below.

2.2 Objective

The objective of this audit is to assess the level of compliance, efficiency and effectiveness of staffing and recruitment processes and practices to help ensure that the person appointed is the right fit for the job so that the business and human resource needs of the department are met.

2.3 Scope

The scope of the audit covered fiscal years 2008–2009 and 2009–2010, including staffing actions completed by January 31st, 2010, EX resourcing and other activities, and strategic practices and processes planned for implementation in 2010–2011.

This audit scope encompassed all areas associated with the appointment process, including the human resources management framework for governance, planning, staffing policy, communications, and controls used for monitoring results. The audit also covered all areas related to key decision points during the course of the appointment process and related matters that occur following an appointment (for example, HRB staffing monitoring). Appendix A shows the key decision points of the appointment process.

2.4 Methodology

This internal audit of staffing and recruitment was conducted in accordance with Treasury Board's Policy on Internal Audit and its Internal Auditing Standards for the Government of Canada. Audit fieldwork was conducted between March and June 2010.

The approach to the audit consisted of a detailed Management Control Framework assessment, cross-referenced with the IC Staffing Management Accountability Framework (SMAF) which sets out key areas for a well-managed appointment system. Along with the Core Management Controls, the SMAF criteria are an additional source used in this audit to measure IC's staffing performance and to provide feedback to delegated HRB stakeholders.

Over 100 documents were examined to gain an understanding of HRB's internal control framework, staffing processes and procedures for both HR professionals and subdelegated managers, and supporting analysis, documentation and reporting by HRB.

We examined 49 appointments (internal, external, advertised and non-advertised) made under the current Public Service Employment Act. We placed more emphasis on non-advertised processes as they are considered to be of higher risk, especially those involving acting appointments over four months and external non-advertised processes. The selection also covered the most common classification groups in Industry Canada as well as various IC regional offices. The audit sample did not include staffing activities that are not subject to the PSEA, such as casual appointments or deployments.

Our non-statistical staffing file sample was selected as follows:

  • 30 appointments from fiscal year 2008–2009
  • 19 appointments from fiscal year 2009–2010.

These appointments included acting appointments for periods of four months or more and appointments resulting from advertised, non-advertised, internal and external appointment processes. The audit team randomly selected appointments based on type of process, type of advertisement, sector/branch appointments (including headquarters and regions) and in proportion of volume of activity. Details of the audit sample are presented in Appendix B.

A total of 25 interviews with stakeholders, management and staff of HRB corporate/ Management and Operations, sector HR managers (National Capital Region and regions) and hiring managers were conducted for inquiry and corroboration. In addition, two focus groups were conducted, one with HR advisors and another with hiring managers.

The information gathered through the above procedures was analyzed against the audit criteria contained in Appendix C. The audit criteria selected for this audit were based on the Treasury Board Core Management Controls and SMAF criteria, in combination with 'risk-based' controls that were specific to HRB and subdelegated managers. The audit criteria were designed to enable an assessment of key practices, procedures and controls in place for IC staffing and recruitment.

HRB management accepted the audit objective and criteria in February 2010. Audit field work was conducted by AEB internal audit staff and two external consultants with subject matter expertise.


1 In September 2010, the Public Service Commission revised the timing of the audit to 2012. (Return to reference 1.)

3.0 Findings and Recommendations

3.1 Introduction

This section presents detailed findings from the Audit of Staffing and Recruitment. Findings are based on our initial risk analysis and the evidence from the audit conducted. Where criteria are met, no recommendations are provided.

In addition to the findings presented below, observations of conditions that were non-systemic and of low materiality and risk have been communicated to management for their consideration.

3.2 Governance

Staffing delegation instrument

Industry Canada's subdelegation instrument is well controlled by HRB and operates as expected.

The Public Service Commission delegates to deputy heads all the appointment and appointment-related authorities they require to fully assume their management responsibilities and execute their human resources plans.

IC has an official subdelegation instrument, effective April 2009, which is posted on IC's intranet site for subdelegated managers' access. HRB is responsible for granting departmental managers their subdelegated authorities and maintains a database that identifies all IC subdelegated managers as well as those exercising acting authorities. Hiring managers are first introduced to the instrument via IC's mandatory staffing delegation training. Hiring managers are subdelegated following their training and upon receipt of their Knowledge Assessment certification.

Overall, the subdelegation instrument is well controlled by HRB and operates according to IC policy and standards.

Integrated human resources planning

An integrated planning process that considers both current and future needs of the organization is in place, consistent with the PSEA.

In accordance with the PSC and departmental Staffing Management Accountability Frameworks and core management controls, it was expected that integrated planning processes are in place at IC to ensure that staffing and recruitment strategies are linked to business requirements and are based on proper demographic analysis.

At Industry Canada, the Strategic Human Resources Management (SHRM) Directorate has partnered with the Comptrollership and Administration Sector to support Integrated Planning processes for the department, which include the preparation of HR plans by individual sectors. A Human Resources Planning Framework, people management strategy, demographic analyses, and common templates have been developed. The People Management Strategy for Renewal and Results, assembled from an eight-month consultation process, is linked to IC business priorities and the Clerk's Renewal priorities.

The department and the individual sectors within it are able to plan staffing in relation to a detailed workforce profile, which is updated quarterly and shared with sectors. Demographic analyses support the identification of staffing needs and risks, and the development of staffing strategies in a multi-year format. In addition, the department documents key trends to support the HR planning process, in a document called Human Resources Plans – Key trends – Reflections on planning for the year ahead.

In 2009, IC prepared a strategic Human Resources Planning Framework, including a template to help sectors identify staffing needs and gaps in relation to business goals/operational requirements. This is consistent with the five-step HR Planning methodology proposed by Treasury Board Secretariat.

The department has implemented an approach to HR planning that is consistent with the PSEA, in that it considers both current and future needs of the organization. This is reflected in the IC and HRB HR plans. Department-wide staffing strategies such as collective staffing for AS and CR positions have been implemented to meet common needs across sectors.

Finding 1.0: Progress against HR plans not sufficiently documented

Most Industry Canada sector HR plans did not document progress or how staffing processes selected aligned with plans.

The PSC expects organizational staffing strategies to set out measurable expected results and performance indicators, so that the organization is able to determine whether the strategy has been achieved. Deputy heads are expected to assess the variance between planned staffing results and actual results achieved, and make adjustments as required.

One way of assessing the variance between actual staffing activities and HR plans is to monitor progress on plans. In both 2008 and 2009, HRB identified that monitoring activities such as a mid-year review would take place at the sector level to assess progress on plans. A comparative analysis of IC sector HR plans for 2007–2008 and 2008–2009 (available on the ICWeb) found that most 2009–2010 plans did not report the extent to which expected results for staffing had been achieved the previous year, to support the reporting of variances required by the PSC and IC.

The PSC indicated in the Departmental Staffing Accountability Report (2008–2009 and 2009–2010) that IC was not sufficiently explaining variances against HR plans. In the audit, it was expected that staffing files for non-advertised processes would show in the rationale how the choice of process was consistent with the HR plan.

There were 41 non-advertised processes in the sample, and 28 rationales (68%) made reference to the HR plan. The audit concluded that while progress on HR plans is not sufficiently documented at the sector level, most managers document whether their staffing activities fit with their HR plans in the rationales for non-advertised processes that are kept in staffing files.

In September 2009, HRB documented a Human Resources Planning cycle for the following year, and made a formal request of sectors to assess progress on 2009–2010 plans.

Recommendation 1.0:

The DG of HRB should monitor progress on sector HR plans to support the reporting of variances between HR plans and actual staffing activities, as required by IC and the Public Service Commission.

Finding 2.0: HR advisor involvement in HR planning

HR advisors are not sufficiently involved with subdelegated managers in sector HR planning.

We expected roles and responsibilities for staffing and recruitment and related planning to be clear within HRB and among subdelegated managers.

HR advisors are responsible to assist managers in implementing their staffing processes. HR managers and advisors said the HR planning process helps them to identify and anticipate staffing needs. However, some HR advisors report that they are not always active participants in the process of developing clients' HR plans. HR advisors and managers who say the HR planning process does help them to identify staffing needs, and provides the greatest ability to rely on their plans to manage their workloads, are those who invest heavily in relationship management with their clients.

The limited involvement of HR advisors in the development of plans may impact the efficiency and responsiveness of services to subdelegated managers.

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Recommendation 2.0

The DG of HRB should ensure that the integrated planning process involves HR professionals who are responsible to support the sectors in implementing staffing processes.

Finding 3.0: Roles and responsibilities unclear

Expectations of HR advisors and subdelegated managers differ.

We also expected that roles and responsibilities of hiring managers and HR advisors (and within HRB), as they relate to staffing and recruitment, are clearly documented and communicated. We found that roles and responsibilities of stakeholders are defined differently in different locations.

We found that, in one location, the Instrument of Delegation of Human Resources Authorities (June 2009), some of the responsibilities of subdelegated managers are not fully documented. In contrast, the EX Appointment Policy (June 2008) describes these responsibilities, as well as the corresponding responsibilities of HR advisors in the staffing process. Some of the responsibilities of subdelegated managers documented in the EX Appointment Policy, but not in the Instrument of Delegation of Human Resources Authorities, are:

  • develop the Human Resources Plan for their organization, including skills that will be required, training and development needs for their staff
  • determine the sequence that merit criteria will be applied; and carry out the assessment
  • develop appropriate assessment tools.

These are areas where more issues were noted in the staffing files for non-EX compared to EX appointments.

In addition, the following authority is mentioned in the instrument of delegation only for EX appointments, not for non-EX staffing authorities, even though it applies to both: Establishment of statement of merit criteria (SOMC).

A lack of clear roles and responsibilities has resulted in different expectations between HR advisors and subdelegated managers. HR advisors expressed conflict between client service and their challenge function. Subdelegated managers expressed a need for more strategic advice and for HR advisors to better understand client operations. This difference in expectations may be attributed to the inconsistent and incomplete definition of operational roles and responsibilities of each group in a single, easily referenced document.

Recommendation 3.0

The DG of HRB should ensure that roles, responsibilities and accountabilities of HR advisors and subdelegated managers are clearly defined throughout the staffing process for non-EX appointments.

Staffing and recruitment training

All appointments in the audit sample were appropriately signed by subdelegated managers with required training.

In accordance with the Appointment Delegation and Accountability Instrument, IC's deputy head must ensure that those who have subdelegated staffing authorities are and remain competent to exercise their appointment and appointment-related authorities, and must have access to necessary training. In particular, we expected that departmental managers and HR advisors receive training on staffing and recruiting processes and procedures, and mandatory requirements to meet employment equity, cultural diversity and linguistic duality targets.

In order to be subdelegated to do staffing at IC, hiring managers must complete either the Canada School of Public Service three-day course that provides participants with the knowledge and skills necessary to manage staffing or the IC in-house one-and-a-half-day training session. The in-house training is about IC staffing policies and guidelines and IC's instrument of delegation, and includes a review of the new PSEA.

Upon completion of their training, hiring managers must then demonstrate that they have the necessary knowledge to effectively exercise their delegated staffing authorities by successfully completing the Authority Delegation Online Assessment. Only then can they exercise the delegated signing authorities associated with their management level. This knowledge assessment is valid for a period of five years. All 49 appointments reviewed in the audit were appropriately authorized by a subdelegated manager who had successfully completed the online assessment.

Lastly, we found that IC has successfully implemented practices to support continuous learning by subdelegated managers and HRB staff in the areas of employment equity, cultural diversity and official language requirements. For example, a module on employment equity groups and accommodation measures was recently added to the initial in-house staffing course provided to all managers who are to be subdelegated staffing authority. It was reported that HRB gave sessions on systemic barriers and accommodation measures for HR advisors in the fall of 2009.

Finding 4.0: Additional staffing training required

Staffing activities are not always conducted by individuals who have completed the required training on staffing.

Although mandatory and non-mandatory staffing training is available to Industry Canada subdelegated managers, HR advisors interviewed stated that one of their major challenges is hiring managers' lack of staffing knowledge even after they have taken the required training. Some subdelegated managers require more training in order to gain a consistent understanding of staffing, especially those who only do a few staffing actions a year. When interviewing subdelegated managers, we indicated that HR advisors could provide more value-added advice, which could facilitate hiring manager decision making.

Although staffing is subdelegated to the EX minus 2 level, HR advisors stated that some steps in the process are being conducted by non-delegated staff with the subdelegated manager only signing off at key decision points (i.e., SOMC, selection, letter of offer).

As for HR advisors, their learning activities include formal and informal training through courses, workshops, PSC SmartShops, briefing sessions, self-learning tools and on-the-job coaching. All junior advisors have a tutor/coach for their training and development. New HR advisors receive a three-day course on human resources and on the PeopleSoft Human Resources Management System (HRMS). In order to ensure that valid staffing advice is given, human resources advisors are also required to take the PSC's Appointment Framework Knowledge Test (AFKT) in order to validate their expertise. It was reported that 79% percent of HRB's staffing advisors have taken the AFKT.

The Human Resources Branch HR Plan for 2009–2012 notes that the PE (HR advisors) occupational group is one of the Branch's most at-risk as an average of 25 PEs leave HRB each year, either through retirement or for a position in another organization. Although HRB has managed to successfully fill the void created by these departures, a somewhat higher ratio of junior PEs to senior PEs has occurred, resulting in a greater number of resources required to train, develop and build capacity within HRB. A PE Professional Development Program has been implemented, and additional PE positions have also been added to HRB to focus on corporate people management strategies including renewal.

Without adequate training of those who are doing the staffing, there is a greater risk of non-compliance with staffing legislation and policies.

Recommendation 4.0

The DG of HRB should ensure that all employees involved in staffing and recruitment processes have access to and pursue adequate training to demonstrate knowledge of staffing requirements.

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3.3 Internal Controls

Staffing advice

Documented staffing advice provided by HRB is consistent with PSC and IC policies.

We expected the HR Branch, as well as regional and other HR personnel, to provide appropriate tools and quality advice, aligned with IC policies and the PSC Appointment Framework, on staffing strategies to subdelegated managers.

When we found HR advisor advice documented in staffing files, it was consistent with IC policies and the PSC Appointment Framework. We also found instances of documenting ongoing communication between HRB and managers throughout staffing processes. In interviews, subdelegated managers expressed appreciation for some of the tools that are provided, such as the Statement of Merit Criteria Library, as they are very useful and save time. Managers also value advice on established staffing processes such as collective staffing, hiring or bridging students.

HRB has developed a variety of staffing tools and templates to assist subdelegated managers, including staffing checklists with a step-by-step guide to conduct internal or external, advertised or non-advertised processes. These are updated and available on IC's intranet and Wiki.

Timeliness and relevancy of information on staffing

Subdelegated managers have access to timely and relevant information from multiple sources on staffing and recruitment.

The audit expectation was that relevant, timely and reliable information on staffing is provided by HRB and others.

The audit found that managers access staffing information from multiple sources, starting with mandatory training, and including emails, HR advisors, management meetings, IC intranet and PSC internet. Managers say that colleagues are their best source of staffing information. They also rely on consultants for information on best practices and different ways of using staffing tools.

Workforce profiles updated quarterly, and monthly for Executive Services group, make staffing information timely for managers. On the other hand, HR advisors and subdelegated managers identified that updates to tools and procedures are not always timely. Information is relevant in that it supports all key staffing decision points.

The audit concluded that subdelegated managers have access to timely and relevant information to facilitate staffing actions and decisions.

Reliability of information on staffing

HRB has taken proactive steps to improve the reliability of information stored in the HRMS/PeopleSoft, and used for reporting to PSC.

Most information provided to the PSC comes from the HRMS/PeopleSoft database, for instance for the Departmental Staffing Accountability Report. HRB uses the HRMS to produce the HR Annual Performance Report and quarterly workforce profiles.

Divergent opinions were expressed by managers about the accuracy and usefulness of information coming from the HRMS/PeopleSoft. Many managers maintain their own databases and reports in parallel with the corporate HRMS to track items like staffing activities and comments, and acting appointments.

The SHRM Workforce Analysis team is responsible for ensuring HRMS data integrity. Procedures have been set up to verify areas that represent error risks, such as reorganizations. The HRMS team creates and analyses error reports and follows up monthly with HRMS coordinators in the different sector teams to obtain corrections. Another step to improve data integrity is to request system users to upload specific data on the same dates, so that employee populations are all defined for the same period.

Staffing values

This section reports our findings from the staffing files we audited for compliance to the staffing values and policies identified by the PSC and in the PSEA. We expected that when reviewing these staffing appointments, we would find that IC's staffing and recruitment practices are based on merit, are free from political influence and are fair, accessible, transparent and representative. These criteria are based on the PSEA, which establishes that appointments must be made on the basis of merit.

As per the PSC, one of the intentions of the PSEA is to modernize staffing in the public service by giving a new meaning to merit that moves away from the rules-based concept of "best-qualified" to a values-based approach that allows managers to hire qualified and competent individuals more quickly.

The PSC's Appointment Policy framework, established in accordance with the PSEA, is composed of a number of policies on specific subjects that correspond to key decision points in appointment processes.

PSC and IC priority requirements

Overall PSC and IC priority requirements were considered.

One of the first key decision points is selecting the appointment process, which includes considering priority persons. Among the provisions of the PSEA and Public Service Employment Regulations, certain individuals have a right to be considered for an appointment ahead of all other potential candidates, for example, surplus employees or employees who become disabled.

The PSC is responsible for administering and overseeing priority entitlements. Therefore, departments must initiate the clearance process by submitting a Request for Priority Clearance through the PSC. We found that all appointments in the audit sample had requests for priority clearance and all identified priority persons had been assessed against the essential qualifications for the position.

Organizations may also establish their own list of employees entitled to referral consideration. We found two appointments, out of the 39 applicable files, where there was no evidence that IC affected employees were considered. Referral entitlements help persons cope with career transitions due to various life and employment events; therefore, every opportunity to be considered is necessary.

Finding 5.0: Written rationales for non-advertised processes need improvement

Over half of the written rationales for selecting a non-advertised process in the audit sample did not provide sufficient evidence of consideration of the guiding values.

The PSEA provides greater flexibility for deputy heads to customize the appointment process to meet the needs of their organization. Correspondingly, the Appointment Policy framework includes a policy on Choice of Appointment Process. One of the objectives of this policy is to ensure that the appointment process is chosen in a manner that respects the core and guiding values and helps organizations meet their business and human resources needs.

In advertised processes, the job opportunity is advertised to potential applicants. Non-advertised processes allow subdelegated managers to make appointments without soliciting potential candidates. Therefore, adherence to the guiding values is central to non-advertised processes.

Insufficient demonstration of respect for PSEA guiding values

The PSC's Choice of Appointment Process Policy requires a demonstration of how the choice of a non-advertised process respects the values of fairness, access, transparency and representativeness. The requirement for a written rationale ensures the manager's choice of a non-advertised process is well-documented and is consistent with the appointment values. Hiring managers must also demonstrate how using a non-advertised process is compliant with pre-established criteria set out by IC's deputy head.

In our audit sample, 56% (23 of 41) of written rationales for selecting a non-advertised process insufficiently addressed some or all of the above mentioned values. In many cases, managers described characteristics of the individual applicants, whereas they are required to explain how the choice of appointment process adheres to the staffing values.

A written rationale should also provide documented support for the decision made, and may also be used to assist in explaining the decision to persons eliminated from consideration. We found in our audit sample evidence of HR advisors notifying subdelegated managers that their rationale for a non-advertised process did not comply with PSC and IC policy requirements, particularly when addressing the PSEA values. In several instances, when this advice was noted, we found the final versions of rationales on file did not reflect the advice given.

Lastly, one of the grounds for complaint to the Public Service Staffing Tribunal is abuse of authority in the choice of an advertised or non-advertised internal appointment process; therefore, a well documented decision will assist in supporting the decision. This requirement is also an element for which IC's deputy head is accountable to the Public Service Commission.

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Recommendation 5.0:

The DG of HRB should ensure that subdelegated managers demonstrate how the use of a non-advertised appointment process meets the department's established criteria and the appointment values.

Finding 6.0: Deficiencies found in the assessment of candidates

Assessment tools and methods insufficiently or incompletely assessed essential qualifications and other identified merit criteria.

The meaning of merit, as per Section 30(2)(a) of the PSEA, is when the person to be appointed meets the essential qualifications for the work to be performed, as established in the statement of merit criteria and, if relevant, any other asset qualifications, operational requirements and organizational needs identified in the Statement of Merit Criteria.

The audit found that most Industry Canada appointments respect the merit principle.

But we found that in 12 of 49 appointments audited, the assessment tools and methods insufficiently assessed essential qualifications and other identified merit criteria. We considered assessments insufficient when not all essential qualifications were assessed or when all essential qualifications were not fully evaluated. For example, it could not be determined if the candidate met each qualification when the assessment tool did not evaluate all of the knowledge requirements for the position. We also found instances in which the subdelegated manager's assessment of the candidate's qualifications was weak as it did not include behavioural examples to demonstrate how the criteria were met. Instead, the assessment contained a limited explanation, such as with the word "meets".

In two appointments, there were no tools or methods on file to demonstrate that the assessment of the candidate had been made against the essential qualifications and other identified merit criteria for the position.

Among the 49 appointment processes reviewed, one file contained evidence that the results of the assessment indicated the person appointed did not meet all the qualifications for the position. When this particular file was brought to the attention of HRB management, it immediately underwent a special review. HRB found that the subdelegated manager's initial assessment was reevaluated and determined the candidate met merit; however, the subdelegated manager had not updated the assessment documentation to reflect this.

To address assessment issues, the department has developed a guide called How to Assess Merit Criteria in Appointment Processes. The guide is posted on the HRB intranet for subdelegated managers' reference.

The IC Talent Management Framework and 2009–2012 Human Resources Plan forecast increased use of non-advertised processes in the department, for example by promoting people who graduate from professional development programs. HRB reports that professional development programs have not fully incorporated the structured assessment tools that would enable them to meet the stricter documentation requirements of appointment processes, as per the PSC. As a result, there is a risk that non-advertised processes in future will continue to lack sufficient documentation of merit in staffing files. All of the appointments in this audit sample with insufficient assessment of candidates (15 files) were non-advertised processes.

Recommendation 6.0:

The DG of HRB should review the appointments in the audit sample where there were deficiencies in the assessment of candidates and ensure that assessment tools and methods fully and fairly assess essential qualifications and other identified merit criteria.

Finding 7.0: Appointment and appointment-related decisions were not fully documented

Over half of the staffing files in the audit sample did not contain sufficient key information on academic credentials and evidence of an HR challenge function.

The PSC requires IC's deputy head to ensure that all decisions involving appointment-related authorities are fully documented and accessible for five years from the last administrative action. Organizations are to ensure staffing files contain sufficient information to support key decision points and activities.

The audit found that some staffing files did not contain sufficient evidence:

  • of academic credentials in 26 of 49 files;
  • of an HR challenge function;
Insufficient evidence of academic credentials

The PSC has published a document listing the minimum documentation requirements for staffing files to ensure sufficient information is available to support decisions. The following documents are listed: application forms, résumés, covering letters, evidence of academic credentials, citizenship (where applicable), etc.

Of the 49 staffing files reviewed, 26 did not contain proof of education (some proofs were provided later upon HRB fact validation). In one of these cases, education was lowered in the assessment compared to the SOMC requirement, and no proof of the candidate's education (CV or diploma) was on file but was provided after the fact as part of the HRB findings' validation.

HR challenge function

Human resources advisors are responsible for providing expert and strategic advice to client managers on appointment and appointment-related decisions as well as a challenge role with regard to potential outcomes.

We found that the challenge role played by IC HR advisors in support of management decision making is not consistently documented. HR managers and advisors comment that most of this advice is provided orally. Notes to file do not seem to reflect the extent of discussions requesting managers to provide adequate validation for staffing decisions. Twelve files (24%) showed no evidence of an HR challenge function. This was mostly evident in relation to non-advertised rationales not addressing PSEA values.

On the other hand, the file review showed evidence of good practice where the HR advisor provided feedback concerning the need to reflect PSEA values in non-advertised rationales even though the manager may not have followed this guidance. HRB responded to this audit finding by stating: "We have discussed the requirement on several occasions such as the PE Forum and Regional Teleconferences but unfortunately it is not being documented because it is being provided by phone or at a meeting."

Two of the files reviewed presented good practice by providing additional notes on communications that had taken place between the HR advisor and the manager, including dates.

Recommendation 7.0

The DG of HRB should ensure that appointments and appointment-related decisions, as well as advice provided to subdelegated managers at key decision points (i.e. link of staffing action to HR plan, choice of appointment process, assessment), are fully documented.

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3.4 Risk Management

IC Staffing Monitoring System

IC has recently updated its monitoring practices to mitigate risks and to determine whether appointment processes are in accordance with legislative requirements.

The PSC established the Staffing Management Accountability Framework (SMAF) that includes indicators used to determine how a department is carrying out its appointment authority. The PSC requires each department's deputy head to demonstrate that their organization's staffing system meets the mandatory indicators set out in the SMAF, while respecting the legislative requirements and PSEA values.

One of the key elements of the SMAF is Organizational Accountability for Results, where deputy heads are expected to establish their own monitoring practices and make improvements where deficiencies are identified. In this audit, we expected that progress against staffing and recruitment targets, including staffing service standards, would be measured and reported on.

We found that IC does have a monitoring mechanism in place to mitigate risks and to determine whether appointment processes and decisions are in accordance with legislative requirements, mandatory policies and IC policies. The Staffing Policy and Monitoring Section (SPMS), HRB, is the centre of expertise on staffing, recruitment issues and workforce adjustment. It provides support, interpretation and advice to managers and HR advisors. Its activities include policy development, monitoring and training.

IC has two monitoring processes in place, one for executives and one for non-EX staffing operations. Since implementation of the new PSEA, monitoring has been conducted for EX and non-EX staffing actions. We found evidence of these monitoring exercises in the files we reviewed. Results from monitoring are used to identify patterns and trends that are then communicated as part of the continuous learning of HR advisors and managers, in the National Capital Region (NCR) and the regions. SPMS reports regularly on trends through individual presentations and the HRB Annual Report, and to the PSC.

Monitoring information has also been rolled up in the HRB Annual Report. Some of the areas identified in the monitoring report of March 2009 as needing improvement were the same as those we identified from our file review. Specifically, these were the justifications for non-advertised processes and the candidate assessments against SOMC. SPMS also identified a weakness in documentation to support appointments and appointment-related decisions, in particular Proof of Education, which we also found in our audit of files.

In 2008, HRB established staffing service standards. Service standards are also monitored using an automated feedback tool.

Finding 8.0: Improvements made to staffing monitoring system

The updated staffing monitoring system needs to be sustained.

In 2010, SPMS improved their monitoring process whereby monitored files have a report placed on them that identifies issues and states corrective action required. Some issues that were identified through monitoring and investigations have resulted in additional tools and guidance to hiring managers and HR advisors. These include: Statement of Merit Criteria (SOMC) – A Step-by-Step Guide, a directive called How to Assess Merit Criteria in Appointment Processes, and guidance on the calculation of casual days.

Although this audit is reporting areas of non-compliance in staffing, our findings are based on activities that took place prior to the implementation of the above-mentioned monitoring process. We are unable to come to a conclusion regarding the effectiveness of HRB's newly improved SPMS monitoring system as its evaluation was outside the scope of this audit. The sustained implementation of this system will enable concerns to be communicated as soon as they are discovered so that decisions can be made and action taken, as required.

Recommendation 8.0

The DG of HRB should ensure that the SPMS monitoring system now in place is fully implemented and sustained.

4.0 Appendices

Appendix A—Appointment process decision points

Figure 1: Appointment process decision points
Figure 1: Appointment process decision points

[Description of Figure 1]
Source: Public Service Commission – Appointment Process: Suggested Activities at the Different Decision Points
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Appendix B—Audit sample

Audit sample
Type of Appointment Type of Process Audited Total
Advertised Non-Advertised
Indeterminate 6 23 29
Term 0 11 11
Acting  1 0 1
Acting – 4 to 12 months 1 5 6
Acting > 12 months 0 2 2
Total 8 41 49
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Appendix C—Audit Criteria

Management of HRB agreed with the following audit criteria:

Audit Criteria
Objective: To assess the level of compliance, efficiency and effectiveness of staffing and recruitment processes and practices to help ensure that the person appointed is the right fit for the job so that the business and human resource needs of the department are met.
Criteria Link to Accepted Source
1) Roles and responsibilities of HRB and non-HRB personnel as they relate to staffing and recruitment are clearly defined and communicated. This includes clear responsibilities for staffing within HRB, in regions, across sectors and agencies.
  • CMC:
  • AC-1, AC-4, PP-IC, AC-2, ST-13
  • SMAF:
  • POL-2, GOV-1, GOV-2
2) Integrated planning processes are in place to ensure that staffing and recruitment strategies are linked to business requirements and are based on proper demographic analysis.
  • CMC:
  • GSD3, GSD5, PPL1, PPL2, ST4, CFS2, RM2, RM4, GSD4, ST16, ST17, LICM4, RP3
  • SMAF:
  • PLN-1,PLN-2, PLN-3
3) Relevant, timely and reliable information on staffing is provided by HRB and others.
  • CMC:
  • AC1, PPL4
  • SMAF:
  • COM-1, CTL-1, CTL-4
4) Appropriate tools and quality advice on staffing strategies are provided by HRB, regional HR personnel, and others in HR to subdelegated managers, and these are in line with IC policies, and the PSC Appointment Framework. This would include use of new flexibilities provided by PSEA 2005. (COM-1)
  • CMC:
  • PPL4, AC1, RP2, PP-IC, LICM 2, 3
  • PPL7
  • SMAF:
  • POL-1, POL-2, GOV-3
5) Departmental managers and HR advisors have received training on staffing and recruiting, processes and procedures, and mandatory requirements to meet employment equity, cultural diversity and linguistic duality targets.
  • CMC coverage:
  • PPL4
  • SMAF:
  • GOV-3, CTL-1
6) Progress against staffing and recruitment targets, including staffing service standards, is measured and reported on.
  • CMC:
  • RP2, EP3, PPL1, PPL2, ST4, RM4, RM5, LICM-1, PPL7, PP-IC, RM6, ST 16, RP3
  • SMAF:
  • CTL-1, CTL-2, CTL-3, CTL-4
7) Staffing and recruitment practices are based on merit, are free from political influence and are fair, accessible, transparent and representative.
  • CMC:
  • PPL3
  • SMAF:
  • PLN-1, POL-1, POL-2, POL-3
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Appendix D—Management Action Plan

Project Name / Number:
Audit of Staffing and Recruitment
Updated As At:
September 10, 2010
Management Action Plan
Recommendation (Page/Section) Planned Action or Justification for no action on the Recommendation Responsible Official Target Completion Date Revised Completion Date Current Status
1.
The DG of HRB should monitor progress on sector HR plans to support the reporting of variances between HR plans and actual staffing activities, as required by IC and the Public Service Commission.
(Page 11)
  • Agreed.
  • HRB has included a new requirement in the launch of the integrated planning process for 2011–2012; sectors will now be asked to report on progress against their prior year HR plans and, specifically, their staffing strategies. HRB will use this information to report to the PSC in the 2011–2012 Departmental Staffing Accountability Report.
DG of HRB February 2012    
2.
The DG of HRB should ensure that the integrated planning process involves HR professionals who are responsible to support the sectors in implementing staffing processes.
(Page 11)
  • Agreed.
  • HRB's staffing community was provided with Part 1 of a 2-part information session on the integrated planning process earlier this year. HRB will ensure Part 2 is held in a timely manner.
  • For those sectors where PE-05 sector team leaders do not currently attend regular senior management meetings or sector planning processes, a written offer will be made to attend these meetings.
DG of HRB
  • Offer Part 2 of integrated planning info session to HR staffing community by September 30, 2010
  • Communication to sector heads regarding PE-05 participation in senior management committees and/or in integrated planning process: September 30, 2010
   
3.
The DG of HRB should ensure that roles, responsibilities and accountabilities of HR advisors and subdelegated managers are clearly defined throughout the staffing process for non-EX appointments.
(Page 12)
  • Agreed.
  • As part of service delivery improvement initiatives already under way, HRB is currently developing a document that outlines these responsibilities. The Branch will develop an accompanying communications strategy to ensure that HR advisors and subdelegated managers are fully aware of, and can easily refer to, the document outlining these responsibilities.
DG of HRB
  • Development of Roles and Responsibilities Document: by December 31, 2010
  • Development of communications strategy: by December 31, 2010
  • Implementation of communications strategy: January 2011 and ongoing
   
4.
The DG of HRB should ensure that all employees involved in staffing and recruitment processes have access to and pursue adequate training to demonstrate knowledge of staffing requirements.
(Page 14)
  • Agreed.
  • Adequate training is already provided to HRB staff providing staffing advice and support as part of the PE development program. HRB will engage regional HR directors to ensure that comparable training is being provided in the regions.
  • Subdelegated managers currently attend a 1.5 day customized training course provided by HRB (via contractor) on a cost recovery basis. The contract expires this fall. In keeping with the Clerk of the Privy Council's direction to departments to use the Canada School for Public Service (CSPS) whenever possible to meet learning needs, HRB will communicate the availability of standardized training (CSPS 3-day course –P901) to managers seeking subdelegation and will provide a 2-hour department-specific information session as per subdelegation criteria requirements. In addition, HRB will encourage sector staff working with subdelegated managers on staffing processes to attend CSPS training.
  • In order to supplement the standardized training, HRB will offer workshops on rating guides (assessment of merit criteria) including templates to the NCR and regions to assist subdelegated managers. HRB will also present the results of IC's 2009–2010 Departmental Staffing Accountability Report assessment to staffing advisors, Strategic HR Management Committee and Management Committee members.
  • Future monitoring exercises will assist the ongoing identification of training needs.
DG of HRB
  • Discussion with regional HR directors re training provided to regional staffing community: September 23, 2010
  • Communication of availability to CSPS training for managers seeking subdelegation and sector staff providing support to subdelegated managers: October 31, 2010 and ongoing
  • Rating guide workshops to be piloted November 2010
  • PE Forum and Regional teleconference October 2010
  • SHRMC
    November
  • MC
    December
   
5.
The DG of HRB should ensure that subdelegated managers demonstrate how the use of a non-advertised appointment process meets the department's established criteria and the appointment values.
(Page 17)
  • Agree that this needs to be demonstrated.
  • The requirement to demonstrate that the use of a non-advertised process meets the department's established criteria and the appointment values is inherent in the subdelegated authorities exercised by management. HRB will increase activity to ensure that this obligation is well understood, and will provide support and advice, including a documented challenge function, when improvements are required. Resolution of concerns will be pursued through discussion and elevated as required.
  • HRB will amend the "Writing a Rationale for a Non-Advertised Appointment" tool to further define, clarify and provide a separate example for the 'fairness' value.
DG of HRB
  • Ongoing
  • Review and update of tool by end of November 2010
   
6.
The DG of HRB should review the appointments in the audit sample where there were deficiencies in the assessment of candidates and ensure that assessment tools and methods fully and fairly assess essential qualifications and other identified merit criteria.
(Page 18)
  • Agreed.
  • HRB has initiated this review.
DG of HRB
  • December 31, 2010
   
7.
The DG of HRB should ensure that appointments and appointment-related decisions, as well as advice provided to subdelegated managers at key decision points (i.e. link of staffing action to HR plan, choice of appointment process, assessment),are fully documented.
(Page 19)
  • Agree that decisions and advice should be fully documented.
  • The responsibility for documenting a staffing file is shared between HR and management (for example, HR is directly responsible for ensuring priority clearance documentation and SLE results are on file, whereas management is responsible for reviewing and approving SOMCs, assessments, rationales, etc.).
  • HRB will implement the following improvements:
    • review the staffing file documentation checklists to ensure they are complete
    • communicate staffing file documentation requirements to IC's staffing community
    • ensure that a review of requirements forms part of training received by staffing advisors within the PE development program
    • clearly communicate requirements to subdelegated managers during training and ensure easy access to managers on the intranet.
DG of HRB
  • Review of staffing file documentation checklists by October 29, 2010
  • Communication to IC's staffing community by November 30, 2010
  • Incorporate review of requirements into PE development program – ongoing
  • Communication of requirements to subdelegated managers during training – ongoing.
  • Review of intranet to ensure easy access to information – November 30, 2010
   
8.
The DG of HRB should ensure that the SPMS monitoring system now in place is fully implemented and sustained.
(Page 21)
  • Agreed.
  • To ensure that the impact of recent monitoring and audit findings (and measures taken as a result) can be measured, the next monitoring exercise will take place beginning April 2011, covering the period from April 1, 2010 to March 31, 2011.
DG of HRB September 30, 2011    

Figure Descriptions

Figure 1: Appointment process decision points

HR – Appendix A shows the suggested activities that are taken at the different general decision points during the appointment process. The planning decision point suggests an activity such as to consider the business plan in conjunction with Human Resources and Employment Equity plans. At the decision point of establishing merit criteria, it is suggested to set essential qualifications, asset qualifications, operational requirements and organizational needs. During the choose process point, priorities need to be considered, choice of process either advertised or non-advertised, and set the area of selection. During the assessment, the activity is to choose and apply the appropriate assessment instruments. During the process of selection, the activity is to choose the "right fit" and that the recognized ranking is no long required. Activities such as respect waiting period and make appointment are included in the decision point of Notification. During the selection and notification points, assessment results can be communicated through informal discussions with the candidates. After following all essential steps in selection and notification, announce the appointment. After the appointment is made, the activity is to respond if there are any complaints to Public Service Staffing Tribunal (internal only), carry out investigations and take corrective action or revoke, if necessary. Lastly, it is important to recognize lessons learned from the appointment process to report on results and better plan for the future.

Back to Figure 1