Case Study: A Downsizing Decision at the Department of Public Works

Kathleen Pool is a human resources officer with a municipal government in a town of just over 25,000 people. A well-known consulting firm, in co-operation with senior government officials, recently completed a detailed audit of government operations. As a result of the audit, selected government departments (including the Department of Public Works) were targeted for restructuring. The consultants made it clear in their report that they believed the budget allocation for the Department of Public Works was "adequate" and recommended that the department receive a 2.5 percent annual increase in funding for the next two years. Note that operating costs for the department are projected to increase at a rate of about 4.5 percent annually (due, in part, to the high rate of inflation).

Kathleen has been given the responsibility of managing the restructuring at the Department of Public Works. Rather than directing the department to cut a specific number of jobs, Kathleen has been asked to develop a restructuring strategy that will meet the town's mission of "providing quality service to its residents in a cost-effective manner." She is currently reviewing the operating policies at the Department of Public Works.

The Department of Public Works is responsible for tasks such as garbage collection, basic sidewalk and road maintenance, city parks and arenas, installation of street signs and parking meters, and snow removal. At the present time, employees work in one of three subunits: garbage collection, parks and recreation, or city maintenance. Each of the subunits is housed in a separate building and has its own equipment, supplies, and operating budget. As well, while employees can formally apply to transfer to a different subunit, the managers of the subunits involved and the director of Public Works (who is responsible for the overall operation of the department) must all agree. Unless a vacancy at one of the subunits arises, it is rare that any employee transfer will be approved.

In 2017, the Department of Public Works underwent a considerable downsizing and 4 percent of its permanent positions were cut. In addition, the department stopped its practice of hiring summer students from local high schools and universities in an effort to cut costs. Prior to this, students were employed over the summer to help with special projects and to cover vacation periods for full-time employees.

In 2018, the municipality brought back the practice of hiring summer students. This decision was welcomed by the full-time employees at the Department of Public Works, in particular because it allows the employees much more flexibility in selecting their vacation time. However, this practice ended in 2020 due largely to the COVID-19 pandemic. Management put considerable restrictions on when employees could go on vacation; employees with 10 or more years of service could have a maximum of one week's vacation in July or August, while employees with less than 10 years of service were not permitted to go on vacation during these two months. Under the collective agreement, management had the right to determine the vacation schedule of unionized employees.

On October 1, 2021, the municipality announced a policy requiring all employees to be fully vaccinated against COVID-19, and any employee not meeting this requirement would be placed on unpaid administrative leave beginning December 1, 2021 (unless the employee had an employer-approved exemption). Four employees were subsequently placed on unpaid leave. However, with the relaxation of COVID-19 restrictions in 2022, the four employees returned to work and the practice of hiring summer students was reinstated.

In reviewing turnover data for the Department of Public Works, Kathleen found that very few full-time employees quit their jobs to pursue other employment opportunities. In addition, dismissals for cause were rare; over the past 10 years, only two employees were terminated for cause. In both cases, the union lost the discharge grievance at an arbitration hearing.

Since 2010, the municipality has had a local consulting firm conduct surveys of both municipal employees and the users of government services. A summary of the findings from the employee survey for the years 2016 to 2022 (for Department of Public Works employees only) is contained in Table 10.1. Note that each of the items (such as employee morale) is measured on a 5-point scale. Similarly, Table 10.2 contains summary information from the survey of municipal residents concerning the performance of the Department of Public Works. Again, respondents were asked to reply using a 5-point scale (1 = very low; 5 = very high). Note that on both the employee survey and the users of government services survey, there were only minor differences in the results when the data were broken down by subunit (garbage collection, parks and recreation, or city maintenance).

Year	Employee Morale	Employee Commitment to Department	Overall Employee Job Satisfaction	Intention to Stay with the Municipality
2016	3.89	3.72	3.97	4.77
2017	2.21	1.99	2.34	4.11
2018	2.89	3.02	3.10	4.32
2019	3.56	3.59	3.71	4.71
2020	2.38	2.33	2.66	4.44
2021	2.31	2.26	2.39	4.51
2022	2.84	2.91	3.14	4.66

Year	Level of Satisfaction with the Board of Public Works	Quality of Service Provided by the Board of Public Works
2016	3.95	3.88
2017	3.22	3.01
2018	3.48	3.55
2019	3.86	3.79
2020	3.18	3.23
2021	3.47	3.41
2022	3.78	3.74

Case Study Question 10.1

Outline the issues that Kathleen should consider prior to designing a restructuring strategy.

Case Study Question 10.2

Design a strategy to restructure the Department of Public Works. Be sure to provide support for the deci-sions/recommendations you propose.

Case Study Question 10.3

A recent newspaper editorial suggested that the town contract out the collection of garbage. What are the advantages/disadvantages of contracting out services that had been provided by government?