Canadian Payroll Reporter

2 Canadian HR Reporter, a Thomson Reuters business 2017 News December 2017 | CPR For months, thousands of pub- lic-sector workers were overpaid, underpaid or not paid at all. To deal with the problems, the government had to open satellite pay centres, hire additional staff, do more training, and imple- ment further system changes. Even with these adjustments, it is still having difficulty process- ing pay requests on time. The government said it hired Goss Gilroy to review how it managed and implemented the TPA in order to identify les- sons that it could apply to future projects involving large-scale changes. The report examines the issues surrounding the TPA from its start in 2008 to April 2016 when the Phoenix system went fully live. The TPA involved two main projects to address payroll and software issues. One was to con- solidate the government's pay- roll services, spread out over its department and agencies, in a single location at a new pay cen- tre in Miramichi, N.B. The second was to replace the government's 40-year-old pay- roll system with a commercial off-the-shelf product that would be integrated with its HR man- agement systems. Overall, the government estimated the TPA would save about $78 million a year through staff reductions and technological efficiencies. "Transforming the pay system of the public service is no small task," the report said. When the government began the TPA, the Department of Public Works and Government Services Canada (now called Public Services and Procurement Canada (PSPC)) administered pay for 300,000 employees in 100 departments and Crown corporations. "In 2009, it was estimated that the Government of Canada pay system carried out close to 8.9 million annual transactions, valued at approximately $17 bil- lion," the report said. "In all, the public service was comprised of 22 different employers (such as for the core public adminis- tration and for separate agen- cies) negotiating over 80 collec- tive agreements totaling over 80,000 business rules," it said. Under the TPA, government departments and agencies would move to the Phoenix system, with compensation advisors in Miramichi administering pay- roll for almost half of them. The remaining organizations would continue to have their own com- pensation advisors within the department or agency. Through interviews and workshops with stakeholders, as well as a review of documen- tation, the consulting firm de- veloped a list of 17 lessons to be learned from the TPA initiative. They include the importance of defining what is changing and who is affected by it when carrying out a major initiative, implementing change manage- ment strategies, and making one entity responsible for overseeing the change. "No one individual or gov- ernance body was assigned the authority to ensure the necessary steps were being taken to ensure the overall success of the initia- tive," the report said on the TPA. "The TPA Initiative was com- plex, broad, and highly depen- dent on the ability of a wide range of users to prepare for the transi- tion, and adapt and change the way they carried out their HR and pay activities," it said. "The change required that pay and compensa- tion personnel, HR personnel, supervisors and managers per- form HR and pay operations on- line and in real time." "This meant, for example, that managers had to approve hours worked before or right at the end of the pay period rather than after the end of the pay period, which removed the previous flexibility to adjust data after the fact. Delays in entering and ap- proving information in the sys- tem could have a direct impact on the accuracy of employees' pay," it said. The study found that although the government had a change management plan, it did not fully implement it. In addition, although TPA documents referred to how complex the government's pay processes were "most of those consulted for the study admitted that very few people (other than compensation advisors) under- stood the degree of complexity associated with the day-to-day requirements to ensure accurate pay." The report stated that the lack of broad-based understanding of the complexities was com- pounded by the fact that most departmental deputy heads did not realize the full scope of the TPA and the leadership did not identify the project as being more crucial than any other. Another lesson cited in the report was the importance of assigning a person or a group to a "challenge" role. The report stated that this function, which requires asking tough questions and raising issues, is critical for effectively monitoring the over- all project, including risks, bud- get, schedule, and outcomes. The report said the lack of a challenge role was made worse by the fact that the workplace culture did not foster "speaking truth to power" or hearing bad news, which may have discour- aged employees from asking pointed questions or making critical comments. In addition, the report said the government did not use effective communication strategies to ex- plain TPA changes. "The study team heard that the content of the messages communicated by PSPC often lacked context; hence, the tar- get audience did not have a full understanding of what was re- quired of them and they did not have the background needed to help guide them when making important decisions about their own activities," it said. Another lesson highlighted was the importance of fully checking technology systems be- fore going live with them, some- thing the government did not do. "The study heard that only some types of pay were tested by departments and agencies, usu- ally not the most complex types of pay (such as seasonal, part- time and acting)," the report said. "(We) warned the govern- ment repeatedly that Phoenix should have been rolled out one department at a time until no bugs were reported in the system," said Public Service Al- liance of Canada, which repre- sents federal civil servants, in response to the report. Another lesson cited in the re- port was the importance of hav- ing enough workers with the nec- essary expertise to see the project through from beginning to end. "Many compensation advisors had to adapt to moving from be- ing embedded in a department or agency to working within PSPC," the report said. "This pressure was compounded with the loss of over 700 positions and a move to Miramichi. As a result, many compensation advisors with ex- perience and expertise in payroll were either lost to attrition or chose not to move to Miramichi." The report also noted that many new compensation advi- sors hired for Miramichi did not have the expertise needed to ad- minister the payroll. In addition, the report said the government's training efforts were insufficient. Not only did compensation advisors not learn how to effectively use Phoenix before it was launched, but line managers either did not attend training sessions or were not ad- equately trained on it. Other lessons included not to expect savings until well after implementing a change and the importance of properly funding and equipping departments af- fected by a major transformation. The lessons not only illustrate what can happen when an orga- nization does not appreciate the complexity of changes, but also the need to value employees — in this case, payroll staff. "While staff cuts may have been motivated by urgency in achieving planned initiative sav- ings, in hindsight there was over- confidence in the abilities of the new pay IT solution, and a seri- ous underestimation of the nec- essary role of the compensation advisors in ensuring employees are paid accurately and on time," the report said. Change management plan not fully implemented from PHOENIX on page 1 The federal government did not use effective communication strategies to explain TPA changes.

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