Workplace innovation in the public sector

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Innovative organisational practices in the workplace, which aim to make best use of human capital, are traditionally associated with the private sector. The nature of the public sector activities makes it more difficult to identify these types of internal innovation in publicly funded organisations.

It is widely thought that public sector organisations are neither dynamic nor creative and are typified by a high degree of inertia. Yet the necessity of innovation ought not to be dismissed. The public sector represents a quarter of total EU employment, and it is of critical importance as a provider and regulator of services. Improving how it performs has a knock-on effect not only for private sector growth but also for citizens’ satisfaction. Ultimately, this improves governance itself.

So how can innovative organisation practices help in dealing with the challenges faced by the public sector? Eurofound, as part of a project on workplace innovation in European companies, carried out case studies of both private and public sector organisations. The findings show a number of interesting practices and processes used.

Employee participation

The case studies from the public sector, some of which are described below, demonstrate the central role of employee participation in the implementation of workplace innovation and its impacts on organisation and employees. They indicate that innovative practices have resulted in enhanced organisational performance and quality of working life.

It is widely thought that changes in the public sector are initiated as a response to government policies. This is often true, but workplace innovation may also be introduced as a result of well-designed initiatives driven by external pressures (such as the need for a more competitive public service) or internal pressures (such as a need to update the skills map to better serve the public).

Case study findings

The state-owned Lithuanian energy company Lietuvos Energijos Gamyba (140 KB PDF) encourages employee participation by providing a structured framework for all employees to propose improvements. This has required a change in managerial approach and has spread a sense of ownership horizontally and vertically in the company. The Polish public transport company Jarosław City Transport (191 KB PDF), when faced with serious financial stability challenges, as well as implementing operational changes, set up ways for employees’ voices to be heard, which enabled a contributory dialogue and strengthened partnerships. Consultation, development of mutual trust, and common involvement ensured an effective combination of top-down and bottom-up initiatives.

The Lithuanian Post, AB Lietuvos Pastas (136 KB PDF) experienced a major organisation transformation in 2010 to improve efficiency and quality of service. Through a programme of ‘Loyalty day’ monthly visits, both top and middle management of the central administration visit any part of the company and work with colleagues in other units. Under budgetary pressure to ‘earn their money’, the Danish Vej and Park Bornholm (142 KB PDF) construction services in roads, parks and forests had to find innovative solutions to deal with a merger and privatisation. Their intervention had the characteristics of workplace partnership with a new set of organisational values set from the bottom up. Self-managing teams are essential for the operation of the company.

The world of education has provided new structures that provide better outcomes for students. The South West University of Bulgaria (214 KB PDF) also operates small self-managing teams responsible for employee scheduling. Weekly round-tables encourage participation in collectively finding solutions, creating a more effective environment in which to respond to the competitive demands of education provision.

In Poland, an initiative by the Pomeranian Library (185 KB PDF) improved employee–management dialogue and communication through increased participation. The initiative is a response to the new frameworks for open access to knowledge for users, with the library mirroring the user experience through its own work practices.

Through new dialogue, government advisory bodies have also developed employee-led improvement. Breaking away from a traditional hierarchy is considered important in achieving a more flexible work organisation. Under considerable pressure, the top-heavy management of the British Geological Survey (89 KB PDF) now operates a flexible matrix that promotes innovative and entrepreneurial ways of working. And in Germany, Niersverband (138 KB PDF), a publicly owned water-management company innovated through training, learning, reflection partnerships and workplace partnerships. New occupational profiles were developed to meet external demands. Based on dialogue concerning workplace experiences and competences, employees acquired new qualifications that allowed the company to be more competitive.

In the Funen Village Museum in Odense, Denmark, (143 KB PDF) innovation came about at the request of staff looking for more flexibility in how they work. Formerly most of their work was maintenance tasks, but now they can now engage more with visitors. Control of schedules has moved to the team rather than being the responsibility of a single manager. As a result, museum employees are now hosts as well as craftspeople. They no longer feel ‘forgotten’ and are happier in their work.

Timely innovation and less hierarchy

Evidence from the case studies is that workplace innovation can and does take place in the public sector. Often old hierarchical systems were reformulated in a participative manner where dialogue became central. Public-owned services also made an effort to engage with end-users in an integrative way. Certainly, where essential services were concerned – water, transport and power – these enterprises were likely to have ceased trading were it not for timely innovation. Staff involvement was of critical importance across all of the case studies, as were flatter, less hierarchical management structures. Publicly owned companies of any size may benefit from such changes.

Can social dialogue facilitate the process?  The research identified common features and levels of involvement of the social partners in finding and introducing solutions for both external and internal difficulties. Changes in these organisations all demonstrated the importance of dialogue and employee involvement. More often than not, the word ‘trust’ was shared by many of the participants in these case studies.

Further reading

The report Workplace innovation in European companies provides a full analysis of the case studies.

 The 51 case studies and the  list of companies (PDF 119 KB) the case studies are based on are available for download.

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