People management has been evolving over the generations, paving the way for productive development conversations that benefit both the organisation and the employee, writes Michelle Halloran. There has been a gradual sea-change in the role of the people manager over the last few decades, but it has taken a global pandemic to catapult us into a new way of working. Now, as we optimistically enter the post-pandemic world, it is time for a radical break with the past, to ditch our outmoded perspectives on people management and take a hard look at the role of the 21st-century people manager. From the top down, organisations must stop pretending that managers with staff reporting to them can perform a fully loaded, 40-hour-a-week job, with a bit of ‘HR soft stuff’ thrown in on the side. Organisations need to start budgeting – in terms of time and money – for the investment required for their people to properly function and perform well in the new world of hybrid working. Old habits die hard Many of us have inherited a view of ‘people management’ involving uniform nine-to-five working hours, little flexibility, a strict dress code, and the expectation of often-unquestioning respect and compliance. Structured, objective performance management and review processes are a relatively new replacement for the once-a-year ‘quick chat’ to be told whether or not you were going to get the much longed-for pay rise. Your boss was typically a white male in his forties or fifties – benevolent when you did well; strict and disciplinarian when you did not. This model of people management has its roots in the traditionalism of the generation born from 1928 to 1944, at a time of economic hardship, when the old class system was still prevalent, and you respected authority unquestioningly. Evolving workforce generations The ‘Baby-Boomer’ generation (born 1945 to 1964) wanted much more from their working lives. They had learned from the experiences of the previous generation, seeing them gain very little in terms of improved quality of work and life in the post-war years, despite their sacrifices. However, while they may have done some hell-raising in their youth, and instigated the beginnings of a more equitable society, by the time they hit their mid-twenties, most were settled down and working even harder than their parents in evolving white-collar roles – you didn’t have to be American to buy into the American Dream. While their style and tone were less formal, and there was a shift in the gender balance at work, they (male and female) continued the patriarchal style of people management. Generation X (born 1965 to 1979) threw down the gauntlet in the area of gender equality, and achieved some real change in terms of family-friendly working hours. They also introduced and implemented performance management in the workforce, a concept driven by increased global business competition, where pay was linked to the achievement of targets, and an employee review was conducted once a year at which an employee’s rating was discussed and explained. Then came Generation Y, or the ‘Millennials’, (born 1980 to 1994). Since 2016, ‘Gen Y’ has comprised the majority of the workforce; therefore, knowing how to lead and motivate them is vital to the success of any people manager. The first ‘digital natives’, with access to vast resources of information and opinion, they do not unquestioningly accept what their boss tells them. With businesses driven hard to compete by rapidly advancing technology and globalisation, Gen Y has to work smarter, harder and faster than any previous generation. To maintain this level of productivity – adapting to unprecedented levels and speed of change – today’s employees need a lot of time, emotional sustenance and practical support from their managers, without which they will feel let down and move on to another employer. The early indications for Generation Z, born after 1994, are that they view being an employee and having their own professional ‘gigs’ on the side as not being mutually exclusive. Understanding how precarious job security can be, they are emerging as self-reliant and flexible but needing at least as much emotional support at work as Gen Y. The 21st-century people manager As a 21st-century people manager, your language and approach needs to move away from performance reviews towards ‘development conversations’, or even, simply, ‘check-ins’. These should be planned and scheduled. The more frequently you, the manager, make these calls, the shorter they will be, as they become part of a running conversation between you and your team member. This is especially important in a hybrid work environment where we cannot avail of ad hoc, informal conversations as we could pre-pandemic.  Allocate roughly a day a week into your schedule to have these employee check-ins. These should be strategic, not tactical conversations, with the emphasis on how the team member feels they are performing and coping with their work. This discussion must sit outside other routine discussions and communications about what needs to get done. In Table 1, I set out a suggested plan for managing development conversations with each of your team members (reporting to you as their line manager), outlining the frequency and purpose of each conversation, and useful questions to ask. (Quarterly and monthly meetings can encompass weekly check-ins as they fall due.) The business case So, you may be asking, if I am going to spend all this time talking to my team members, helping them to perform, how do I get my own job done? I can’t afford to spend a day a week on employee development conversations! Well, you can’t afford not to. There is extensive research on the positive impact of proper employee engagement on profitability and productivity. For example, a comprehensive report published by Gallup in 2017, involving meta-analysis of 339 research studies across 230 organisations in 49 industries and 73 countries, found that business or work units in the top quartile of employee engagement outperformed bottom-quartile units by 10% on customer ratings, 17% in productivity and 21% in profitability. Work units in the top quartile also saw significantly lower staff turnover, theft, absenteeism, and fewer safety incidents and quality defects. Taking as the baseline Gallup’s 21% increase in profitability as a result of higher employee engagement, if one day per week is allocated for people managers to have development conversations with their team members, costing 20% of the organisation’s people managers’ time, the impact on profit will be positive. Further gains and savings are available from increased productivity and customer satisfaction, lower staff turnover and absenteeism, reduced wastage, higher quality adherence, and so on. The business case for allowing people managers time to manage their people is clear. Human nature being what it is, however, such change will be resisted, despite the pressures from the generational transition outlined and the recent acceleration towards complex, individually tailored working arrangements. An organisation could introduce such change through a pilot scheme, evaluating results after 12 months using metrics like internal and external customer satisfaction, team productivity, absentee rates, staff turnover and quality of output. Budgeting time for people management is a change in approach that is long overdue. We have the motive – a more profitable business and a happier place to work – and with the shift towards hybrid working, we now have the opportunity. Michelle Halloran is an independent HR and people management consultant.

Prof. Ciaran Connolly FCA and Dr Elaine Stewart draw on their recent research for an Institute report to examine the public sector’s proposed accruals-based accounting framework, which represents a significant shift for the Irish Government. Under the current system of Irish central government financial reporting, budget documents and financial reports are typically prepared on a traditional cash-accounting basis, with their institutional coverage mainly limited to central government. However, Ireland is one of the few remaining OECD countries to account and budget in government on a cash basis. While considered robust and reliable, it is argued that cash accounting alone does not enable the planning and asset management that an accruals-based system allows. Motivated by the 2008 global financial crisis and the OECD’s 2019 recommendations following its evaluation of Ireland’s fiscal reporting, forecasting and budgeting systems, the Irish Government sought to modernise its public sector accounting practices. On 27 May 2021, Michael McGrath TD, Minister for Public Expenditure and Reform launched Chartered Accountants Ireland’s position paper on plans by the Irish Government to reform public sector accounting in Ireland. Researched by the authors of this article and drawing on the views of key stakeholders in the process, The Reform of Ireland’s Public Sector Accounting examines the proposed new accruals-based accounting framework, which represents a significant change to the way the Irish Government accounts. Recommendations to modernise public accounting systems are not confined to Ireland. Over the last 25 years, there has been a global shift towards accrual accounting in the public sector. While several governments (e.g. Australia, Switzerland and the UK) have adopted full accrual accounting, others (e.g. Italy, Philippines, South Africa and Spain) use a modified form. Some, such as Germany, have no immediate plans to do either. Regardless, the use of accruals in the public sector is growing. Of the 165 countries included in the International Public Sector Financial Accountability Index 2021 Status Report, published by IFAC and CIPFA, 49 (30%) use accrual accounting, with approximately half of these applying International Public Sector Accounting Standards (IPSAS) either directly or as a reference point. By 2025, it is estimated that 83 (50%) of the 165 countries will operate accrual accounting, with around 73% using IPSAS to some extent. Governments across the globe, including those in Latin America, the Caribbean, the Middle East and Africa, are instigating IPSAS implementation projects. Meanwhile, in Europe, the European Commission is working with member states to develop European Public Sector Accounting Standards, with IPSAS used as the baseline. Moreover, a small number of countries have implemented consolidated accounts (e.g. Australia, New Zealand and the UK), something that is also included as part of the Irish Government’s proposed reforms (see Figure 1 above). The proposed reforms While acknowledging that cash accounting provides strong control over departmental expenditure, a number of reports, including the OECD’s 2019 report, have advocated significant reform to the current process of financial reporting in Ireland on the basis that: cash-based information alone is insufficient for understanding the public sector financial position; as audited Appropriation Accounts are required to be published within nine months after the period to which they relate, Ireland is among the slowest of OECD countries in making such reports available; and reports from central government, commercial and non-commercial state bodies are not consolidated. This presents difficulties, particularly where reports are prepared for EU bodies such as Eurostat. On 15 October 2019, the Irish Government announced a series of reforms to Ireland’s public sector accounting which, while retaining core elements of the existing cash-based system, include: introducing accrual accounting in central government departments and offices, applying IPSAS as the underlying framework; preparing central government consolidated financial statements; and harmonising accounting practices and standards across the wider public sector to enable the consolidation of all public sector entities into a ‘whole of government’ account. When implemented, it is expected that the reforms will underpin confidence in Ireland’s public finances and unlock value from the State’s assets while realising the benefits of professional financial management, timelier financial reporting, and a general improvement in economic and fiscal performance. Large-scale reforms, like those proposed, are rarely introduced in a single stage but are typically rolled out over many years, often in conjunction with new IT systems. The Department of Public Expenditure and Reform (DPER) is leading the reform process and has developed an action plan to introduce the reforms with a phased approach (see Figure 1). This begins with the application of IPSAS as the underlying framework to introduce accrual accounting in central government departments and offices (Part 1, 2019–2025). Next, the intention is to prepare central government consolidated financial statements (Part 2, 2025–2027), followed by the harmonisation of accounting practices and standards across the wider public sector (Part 3, 2027–2029), and finally, the consolidation of all public sector entities into a ‘whole of government’ account (Part 4, from 2030). The feasibility of this latter part depends on the degree of integration of accounting systems, especially outside central government, where many entities currently use different accounting standards (e.g. FRS 102) and operate separate IT systems. While factors such as the COVID-19 pandemic and complications in developing the Financial Management Shared Services (FMSS) system have impacted the original timelines, progress has accelerated more recently. Purpose, approach and stakeholders’ views Drawing on the experience, progress and lessons learned from other countries and governments that have introduced similar reforms, together with the views of representatives from government departments, agencies and advisory organisations/individuals, the Institute’s position paper examines the driving forces, benefits, challenges and appropriateness of the reforms. The views expressed by interviewees are summarised in Figure 2. The consensus was that the reforms have been mainly driven externally by the OECD, as Ireland is one of the few OECD countries that continue to report on a cash basis. Internal motivations included the potential benefits arising from access to better information on public sector assets and liabilities, including pension obligations. Interviewees highlighted potential staffing, training and IT-related challenges associated with reform implementation, acknowledging that while the process has been slow to start, there is evidence that its pace is growing. However, despite this positivity, it was recognised that the timetable had slipped in a similar manner to that for the FMSS, with the successful introduction of the new system being considered integrally linked with the reform of Ireland’s public sector accounting (e.g. to facilitate the preparation of IPSAS-based departmental and ultimately ‘whole of government’ consolidated accounts). Other anticipated challenges included implementing the necessary legislative changes, with some questioning the logic of introducing accruals-based accounting while maintaining a cash-based budgeting system. While accepting the challenges, the vast majority of interviewees viewed the reforms positively. The consensus was that they could standardise how departments present their financial information, making them more professional and user-friendly. They could also facilitate the closing of accounts in a timelier manner so that the information is more relevant and provides better information for departments’ public representatives. The way forward Experience indicates that political support and leadership at the highest levels is critical if public sector accounting reforms are to succeed. Furthermore, research suggests that their success (however this is defined) is influenced by the extent to which they are shaped by private sector ideas, with the excessive use of private sector consultants often impacting negatively on the receptiveness to change. Thus, while the public sector is entwined with the private sector through outsourcing and privatisation, it remains distinct in terms of its stakeholders, objectives and outcome measures. Therefore, while the reforms have clear implications for departmental accounting functions, their success depends upon input and support from key stakeholders across the public sector so that they fit ‘the Irish public sector context’. Hence, engaging with, for example, departmental managers, statisticians, ministers and public representatives will help to identify the risks, gain political support, and secure buy-in. Relatedly, good project management and governance arrangements are critical to ensure the timely implementation of the accounting reforms (and FMSS) and that the delivery of government services is not unduly disrupted. This might involve piloting aspects of the reforms in some departments or agencies, including having dry-run or dummy years before the changes ‘go live’ to help identify needs and potential pitfalls. For example, training and developing the knowledge of preparers and users of the systems and information is essential. Knowledge transfer is also important to avoid ‘consultant dependency’ while capacity building (e.g. recruitment and training) is critical to project success. As noted above, DPER has developed a plan to implement the reforms in a phased manner over the next decade. Not unexpectedly, a number of issues will need to be considered further, if not resolved, during this period. For example, Ireland’s current constitutional arrangements require the preparation of cash-based Appropriation Accounts. However, there is evidence that ‘full’ accruals-based accounts can be advantageous, including the better management of assets and a greater awareness of obligations, which can facilitate more accurate planning and effective risk management. In addition, although few countries have adopted full accrual budgeting, with many applying a modified version, continuing to operate cash budgeting in tandem with accruals-based notes to the cash-based Appropriation Accounts may cause confusion and limit the potential benefits of the reforms. Although, evidence from the Northern Ireland experience suggests that accrual budgeting creates its own problems. Conclusion Ireland’s planned public sector accounting reforms are ambitious but appropriate and timely. They represent a significant statement of intent by the Irish Government to modernise the State’s public sector accounting practices and must remain a priority. While obstacles and redirections can be expected along the implementation journey, these should be viewed as opportunities to design a system that is fit for purpose and appropriate for the Irish context. For example, while the FMSS system implementation has been delayed, this presents an opportunity to ensure that it will support the preparation of IPSAS-based accounts and assist with the preparation of consolidated accounts, together with the information needed for the EU and Eurostat. Prof. Ciaran Connolly FCA and Dr Elaine Stewart, Queen’s University Belfast, are authors of The Reform of Ireland’s Public Sector Accounting, published by Chartered Accountants Ireland.

The experience of working remotely, of having our contact with colleagues and customers mediated through technology, has highlighted the need to think about the positive role humour can play in closing the gap between people, in creating a feeling of togetherness and inclusion, where people can bring their whole selves to work. In their book Humour, Seriously: Why Humour is a Superpower at Work and in Life, Jennifer Aaker and Naomi Bagdonas argue that organisations and teams perform better if they allow room for laughter.  Teams that can laugh together demonstrate better communication and problem-solving skills. And laughter, if used appropriately, is a valuable tool for leaders.  Aaker and Bagdonas report their research finding that employees who regard their bosses as having any sense of humour rate them as 23% more motivating.  This kind of edge can make a big difference, given the influence this relationship can have on people’s happiness.  According to Tera Allas and Bill Schaninger, writing in the McKinsey Quarterly, relationships with immediate management is the top factor in employees’ job satisfaction, which in turn is the second most important determinant of employees’ overall satisfaction with their lives.  Having a boss with a positive, inclusive sense of humour can be a life-changer. As any good salesperson will tell you, humour can be a highly effective way of defusing tension in a high-stakes situation, when pitching for business or presenting to a client.  If it lands well and works, humour can break down barriers, connecting people and building relationships. But, of course, there are risks: the joke may fall flat, the story fail.  Humour by its very nature is a gamble. It involves risk, a leap of faith (particularly when attempted on a Zoom call!). Cultures of countries and organisations differ, and some people may be uncomfortable with the use of humour in serious situations, including work.  Humour may even be seen as subversive, out of place, gauche, unprofessional. Clearly, to be effective, the use of humour should not be offensive or hurtful in any way and it should accommodate diversity.  While a sense of humour can be quite a personal taste, at work its flavour should always be appropriate, conscious of difference, tapping into things that are universally funny, starting with shared experience. For leaders of teams and organisations, though there are definite benefits to the use of humour, there are also heightened risks.  All managers will want to avoid being seen as another David Brent, the frustrated all-round entertainer of The Office.  Aaker and Bagdonas point to the importance of leaders being aware of their own style of humour, which can range from the edgy to the self-deprecating.  One leader can tease without offending, another can reveal vulnerability without losing respect. It’s a fine balance, but humour at work is worth the risk, and the risk can be mitigated. Self-awareness is the key: balancing the natural spontaneity of laughter with a sense of its appropriateness and effect on others, observing rules such as ‘never punch down’ or ‘carry a bag of good stories’.  Be aware of your style, be sensitive, inclusive and recognise difference. Humour is one thing that AI and the robots will never replace.  For the individual, laughter is a tonic, a stress buster.  For teams of people, shared laugher is a powerfully inclusive experience.  It engenders trust, collaboration and creativity.  And the world knows we could all do with a laugh. Michael Diviney is Executive Head of Thought Leadership, Chartered Accountants Ireland