New South Wales Department of Premier and

Cabinet

Leading Well: The role of leadership in improving the

prevention and management of

psychological injury

For distribution to all Government agencies

October 2007

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

DIRECTOR GENERAL’S FOREWORD

The New South Wales Government is committed to a responsive and flexible public sector that supports safe and secure workplaces and ensures that all workers are treated with dignity and respect.

Improved leadership is one of the approaches that will support the New South Wales Working Together strategy to enhance occupational health and safety, injury management and return to work in the public sector.

Central to the effective prevention and management of workplace illness and injury is the successful application of the broad range of human resource management tools available to public sector managers.

Australian and international research shows that effective management of the human resources issues that often give rise to psychological injuries can prevent those injuries occurring. The prevention and better management of psychological injury in public sector workplaces will improve the health and morale of staff, improve the delivery of services and reduce workers compensation premiums, freeing up public funds for service delivery.

Leading Well: The role of leadership in improving the prevention and management of psychological injury provides guidance to public sector agencies seeking to make improvements in leadership performance. It builds on the approach established by the NSW Department of Premier and Cabinet in the Occupational Stress – Hazard Identification and Risk Management Strategy, whose supporting research recommends the adoption of an approach that recognises “stress” as a significant challenge requiring a strategic organisational intervention. Leading Well is consistent with a number of existing NSW public sector directions including Working Together and the NSW State Plan’s focus on building capability to provide effective service delivery.

To ensure the effective implementation of the key objectives of this statement Chief Executives need to promote a set of positive values ensuring that staff have a common understanding of the role of the agency and are able to see how the work they do contributes to the agency’s objectives.

Agencies need to ensure that leadership training and coaching is adopted and promoted to support the development of effective skills in present and future managers and supervisors. Agencies also need to review and monitor improvements in leadership and its expected flow on effects on agency performance.

Leading Well provides a list of resources that will help agencies develop strategies to reduce the incidence of psychological injury. The strategy is supported by an Action Plan that outlines strategic and operational activities to be undertaken by key stakeholders including WorkCover NSW, SICorp/TMF, claims providers, Suncorp, the Department of Premier and Cabinet and agencies.

I look forward to the Chief Executives, managers and staff of New South Wales Government agencies working together to promote positive and productive workplaces, and the continued delivery of high quality public services.

(signed)

Robyn KrukDirector General NSW Department of Premier and Cabinet

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

INTRODUCTION

Framework of this document

This document outlines the New South Wales Government’s vision for leadership in public sector agencies that will support improvements in the prevention and management of psychological and other injuries. It identifies the actions required for agencies to improve leadership practices and organisational performance, and outlines the support and resources that are available to agencies.

The NSW public sector

The New South Wales public sector employs approximately ten percent of the NSW labour force. As major employers and providers of services Government agencies are in a unique position to improve leadership within the state’s workforce. Agencies can set a standard that not only supports the State Plan but also serves as a model to business across New South Wales.

Scope and application

Leading Well applies to all NSW public sector agencies including agencies outside of the Treasury Managed Fund (TMF) workers compensation scheme. It is also recommended for State Owned Corporations.

The NSW Department of Premier and Cabinet believes that Leading Well is fundamental to achieving improvements in safety and service provision in NSW government agencies and supports the goals and objectives of the State Plan, Working Together and the NSW Workplace Health and Safety Strategy 2005-08.

Objective

Improved leadership programs are essential to improve claims management, improve return to work outcomes and reduce the costs of workplace injury.

The objective of Leading Well is to reduce the incidence of psychological injury through improved leadership within the New South Wales public sector.

This objective can be achieved by:

promoting a set of positive values that focus on improving performance and respect for people as individuals

ensuring that all staff understand the role and key strategies of their organisation, including workplace health and safety and injury management strategies

helping staff recognise how they can personally contribute to the higher-level objectives of the organisation

implementing effective change management processes that plan for and manage emerging challenges

making the relevant information available to assess the performance of the organisation

identifying risk factors for psychological injury and developing and implementing strategies to eliminate or reduce those risks

recognising the interdependence of proactive human resource management and best practice approaches to prevent injuries related to psychological factors and assisting employees experiencing difficulties.

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

WHERE ARE WE NOW?

NSW State Plan

The New South Wales Government’s State Plan, A New Direction for NSW sets clear priorities for action with challenging targets to guide decision-making and resource allocation.

The State Plan clearly states that the public sector should operate to deliver the highest quality services. Health, education, transport, disability support, aged care, housing, child protection and other services rely on experienced, skilled and committed staff who understand their role and its importance in contributing to the State Plan. The public sector’s ability to deliver relies on the productivity and efficiency of its workforce which cannot be compromised by absenteeism from work or the loss of knowledgeable and skilled staff through workplace injury or illness.

Safe and Sound

Safe and Sound: A discussion paper on safety leadership in government workplaces, was developed by the Australian Safety and Compensation Council (ASCC), and outlines a framework for strengthening safety leadership in government workplaces that has been endorsed by the Workplace Relations Ministers Council.

Working Together

Working Together: Public Sector OHS and Injury Management Strategy 2005-2008 is a three-year strategy developed as a joint project between WorkCover, the Department of Premier and Cabinet and Treasury in consultation with the NSW Public Sector Chief Executives Committee and the CEO Network. It aims to secure improvements in the public sector’s health and safety performance with a specific focus on injury management. Its key action areas are based on the principles of:

building stronger commitment by all levels of management

promoting participation of public sector workers in improvement strategies

enhancing the capability of agencies to better manage OHS and the care of injured workers, and

greater focus on measuring performance and ensuring better outcomes.

NSW Workplace Safety Summit

The NSW Workplace Safety Summit was held in Orange in August 2005. Delegates participated in nine industry-specific working groups one of which represented the NSW public sector. The public sector working group agreed on two industry priorities, manual handling and psychological injury, and recommended that WorkCover, the Department of Premier and Cabinet and TMF undertake a number of activities to help address them. The resulting Industry Action Plan is published in the NSW Workplace Health and Safety Strategy 2005-2008.

Leading Well

One of the most significant barriers to high performance in organisations is the frequency and cost of psychological injury. Australian research1 shows that most of the problems presenting as occupational stress were primarily associated with human resource management, rather than illness or injury. While most public sector organisations provide clear guidelines for grievance handling, promotion, transfer, performance management and disciplinary processes these are the areas most associated with reports of conflict.

1 Toohey, J. (1995), ‘Managing the stress phenomenon at work’, in P. Cotton (ed.), Psychological Health in theWorkplace, Melbourne: The Australian Psychological Society.

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

The manner in which supervisory and managerial tasks are performed and perceived by employees can lead to potential conflict with a resulting increase in absenteeism, staff turnover and workers compensation claims. British research2 shows a correlation between investment in stress prevention activities and reduction in sickness absence levels.

As a result of the escalating number of psychological injury claims and the rising costs of these claims in the New South Wales public sector, the NSW Self Insurance Corporation (SICorp) gave approval to its contracted risk manager, Suncorp Risk Services, to undertake research into the causes and remedies for stress claims.

The TMF Stress Strategy: a Risk Management Strategy for Improved Management of Psychological Injury researched, reviewed and piloted key initiatives with the NSW Department of Education and Training and the Northern Sydney Central Coast Area Health Service in 2005. The strategy included the identification and proactive management of organisational factors that give rise to psychological injuries, and the post-incident support, claims management and return to work of claimants.

The TMF Stress Strategy has been developed to become Leading Well to emphasise good leadership practice as the major means to progress effective organisational management of stress.

It is recognised that the organisational approach will be most effective when incorporated into the core values and directions of public sector agencies and championed by their leaders.

WHERE DO WE WANT TO BE?

The NSW State Plan clearly states that our goal is to shift the way the public sector operates in order to deliver services at the highest quality. To achieve this, agencies must be high-performing. So what drives excellence in workplaces?

In 2001, a study was undertaken with the support of the Business Council of Australia to identify a number of excellent workplaces in Australia. The study team visited and analysed a number of outstanding workplaces in order to draw conclusions about the nature of excellence at work. The resulting working paper3 identified that the key to excellent workplaces was quality relationships, noting that “in all our excellent workplaces the atmosphere of mutual trust and respect was overwhelming”. This research also revealed a pattern of connections between quality working relationships and other factors such as ”good workplace leadership, clear values, having a say and being safe”.

2 Tasho, W., Jordan J. & Robertson, I. (2005), Case study: Establishing the business case for investing in stress prevention activities and evaluating their impact on sickness absence levels, Health and Safety Executive. 3 Hull, D. & Read V. (2003), Simply the Best – Workplaces in Australia acirrt working paper 88, Australian Centre for Industrial Relations Research and Training (now the Workplace Research Centre).

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

HOW WILL WE MAKE THE CHANGE?

Agencies are expected to establish sound leadership practices that will help prevent psychological injury and manage its impact should it occur.

Chief Executives will ensure that agencies:

clearly define the agency’s role, values and management culture by:

o establishing a set of positive values, centred on the achievement of a high level of performance and respect for people as individuals

o ensuring that staff at all levels have a common understanding of the role and key strategies of the agency

o ensuring that staff can see how the work they do contributes to the higher level objectives of the organisation

identify and address opportunities for leadership improvement by:

o training and coaching staff to support the development of effective leadership skills

o integrating leadership improvement initiatives into the agency’s normal planning cycle

implement effective change management processes to plan for, and manage, emerging challenges

regularly review risk factors that lead to psychological injury and the strategies being implemented to ensure they are effective and reducing incidence of psychological injury within the agency

measure the impact of agency activities to improve organisational leadership and reduce psychological injury by:

o collecting and monitoring data, including absenteeism, staff turnover, claims frequency and costs

o developing and reviewing performance indicators to monitor the improvement in leadership and its flow-on effects on agency performance

o reporting on agency progress

engage with claims managers to improve strategies for the management of psychological injury claims, and

implement a return to work awareness program for supervisors and managers in partnership with providers.

Agencies will be supported in their efforts to lower absenteeism, staff turnover and workers compensation claims through guidance, advice and assistance from the following central agencies and key service providers.

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

NSW Department of Premier and Cabinet

The Public Sector Workforce Office (PSWO) in the Department of Premier and Cabinet supports the New South Wales public sector deliver the Government's objectives by leading and advising on reform and employee relations issues. The PSWO has developed a range of policies and practice documents that provide guidance and assistance to agencies to improve workplace performance and management.

A key role of the PSWO is the promotion and development of leadership capability within the public sector. The PSWO develops workplace policies and reforms that encourage and support agencies to improve overall performance and capability. The PSWO supports leadership development within agencies through sector-wide education and training such as the Public Sector Management Course, the Executive Development Program, Graduate Diploma in Public Administration and the Executive Master of Public Administration.

The Department of Premier and Cabinet is the sponsor of the Leading Well implementation plan with input and support provided by key stakeholders, SICorp, Suncorp Risk Services and WorkCover NSW. This is in line with the Department’s role to provide direction and leadership to the New South Wales public sector for policy development and service provision, as well as the effective management of resources. The Department promotes a leadership and management approach for agencies to manage people in a way that promotes a genuine performance culture, linked with the achievement of business objectives.

General guidance:

Alcohol and other Drugs - Policy and Guidelines Consultative Arrangements Dignity and Respect: Policy and Guidelines on Preventing and Managing Workplace Bullying Dignity and Respect in the Workplace Charter Employment Health Assessment Policy and Guidelines Flexible Work Practices   Managing and Supporting Attendance at Work Model Code of Conduct Occupational Stress - Hazard Identification and Risk Management Strategy Performance Management Policy and Guidelines Sickness Absence Policy A Health Workforce – Policy on improving the health and well being of public sector

employees

SES Guidance

Code of Conduct and Ethics for Public Sector Executives NSW Executive Capabilities

WorkCover NSW

WorkCover’s primary aim is to prevent workplace injuries and illnesses from occurring. The Occupational Health and Safety Act 2000 states that responsibility for preventing injury and illness rests with those whose activities create work-related risks to employees and others in the workplace. Accordingly, WorkCover’s principal focus is on building the awareness, knowledge and skills that enable employers and others to make workplaces safe.

WorkCover also aims to minimise the social and economic consequences when injuries or illnesses do occur, by promoting effective injury management and facilitating their return to work.

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

WorkCover is committed to the Working Together Strategy and improved performance of the public sector in the area of claims for psychological injury. WorkCover is incorporating material on the management of psychological injury into guidance materials developed for public sector.

Bullying prevention and management guide (under development) Stress, the workplace and the individual: a guide to finding solutions for workplace managers

to prevent and reduce stress Workers Compensation Dispute resolution – guidelines and resources

Working Together

Working Together: Public Sector OHS & Injury Management Strategy 2005-2008 is a three-year strategy to secure improvements in the public sector's health and safety performance with a specific focus on injury management. It builds on the progress made by public sector agencies in establishing workplace safety management systems since the Government first released Taking Safety Seriously, the Government's OHS and injury management policy and guidelines.

The Working Together website (www.workingtogether.nsw.gov.au) includes a range of resources to assist public sector agencies improve their occupational health and safety and injury management performance.

SICorp – Treasury Managed Fund Workers Compensation

SICorp, the branch of Treasury that manages the NSW Treasury Managed Fund, is a key supporter of Leading Well using existing avenues of engagement to promote and embed activities that support improved leadership and improved workers compensation performance within agencies.

As the strategic risk management services provider for the Treasury Managed Fund, Suncorp Risk Services (SRS) provides advice, information and assistance to support the implementation of the TMF Stress Strategy – A Risk Management Strategy for Improved Management of Psychological Injury and the Leadership Guideline. SRS has produced and presented reports and case studies to provide guidance and share learning on the prevention and management of psychological injury claims.

A range of resources are available on the SICorp website (www.sicorp.nsw.gov.au), including:

The TMF Stress Strategy – A Risk Management Strategy for Improved Management of Psychological Injury – July 2005

Department of Education and Training Risk Assessment of Causes and Factors Contributing to Claims for Psychological Injury -Case Study - August 2005

Northern Sydney Central Coast Health Service Review of Post-Injury Management of Psychological Injury Claims - March 2005

Australian Safety and Compensation Council (ASCC)

Safe and Sound: A discussion paper on safety leadership in government workplaces was developed by the Australian Safety and Compensation Council (ASCC) and endorsed by the Workplace Relations Minister’s Council. It outlines a framework for strengthening safety leadership in government workplaces. In alignment with Leading Well, the Safe and Sound framework emphasises that “addressing leaders’ information and training needs will contribute to improved understanding of OHS and injury management and alert them to emerging health, safety and injury management issues.” Comcare administers the Commonwealth’s workers’ scheme and workplace safety legislation. Comcare’s prevention and reference guides provide information to assist in the design and implementation of strategies to prevent work-related psychological injury these include:

Working Well: an organisational approach to preventing psychological injury Working Well: steps to prevent and manage psychological injury Working Well: strategies to prevent psychological injury at work

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Leading Well: the role of leadership in improving the prevention and management of psychological injury

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