Case Study on 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 cooperation 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 that the budget
allocation for the Department of Public Works was "adequate" and recommended that the
department receive a 1.5 per cent 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 3.5 per cent
annually.
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 present, 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 equipment, supplies, and operating budget. Also, 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, any employee transfer will rarely be
approved.
In 2012, the Department of Public Works underwent a considerable downsizing and 4 per
cent of its permanent positions were cut. In addition, the department stopped its practice of hiring
summer students from local high schools and universities to cut costs. Before this, students were
employed over the summer to help with special projects and to cover vacation periods for full-
time employees. In 2015, a smaller cutback of 2 per cent of the workforce took place.
In 2016, 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.
From 2012 to 2015, 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 has the
right to determine the vacation schedule of unionized employees.
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 the early 2000s, 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 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
(1 = very low; 5 =very high). 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).
Questions
1. Outline the issues that Kathleen should consider prior to designing a restructuring strategy.
2. Design a strategy to restructure the Department of Public Works. Be sure to provide support
for the decisions/recommendations you propose.
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 the
government?
