For discussion
on 14 June 1996
EC(96-97)24
ITEM FOR ESTABLISHMENT SUBCOMMITTEE
OF FINANCE COMMITTEE
HEAD 46 - GENERAL EXPENSES OF THE CIVIL SERVICE
Subhead 082 Recoverable salaries and allowances
(Post Office Trading Fund)
Members are invited to recommend to Finance Committee -
(a) the creation of the following permanent posts in the Post Office -
1 Assistant Postmaster General
(D2) ($95,550 - $101,450)
1 Chief Controller of Posts
(D1) ($80,450 - $85,400)
1 Chief Treasury Accountant
(D1) ($80,450 - $85,400)
offset by the deletion of the following permanent post -
1 Senior Controller of Posts
(MPS45-49) ($62,665 - $72,195) ; and
(b) the redeployment of the following permanent post upon restructuring the directorate -
1 Chief Controller of Posts
(D1) ($80,450 - $85,400)
There is inadequate capacity at the directorate level to cope effectively with the demands arising from the growth of postal business and the new demands of the Post Office Trading Fund.
2. We propose to restructure the directorate and create one permanent post of Assistant Postmaster General (APMG) (D2) as Business Manager and one permanent post of Chief Controller of Posts (CCP) (D1) to formulate strategies on providing premium services, as well as one permanent post of Chief Treasury Accountant (D1) to undertake the complex accounting and management information functions required under the trading fund operation.
3. We also propose to redeploy the CCP formerly heading the Accounts and Finance Division to assist in overseeing postal operations and counter services.
4. In the ten years from 1986-87 to 1995-96, the volume of mail traffic increased from 630 million items to 1 171 million items, an increase of 86%. During the same period, the establishment of the Post Office grew from 4367 (excluding telecommunications staff) to 5690, an increase of 30%. The Post Office needs to develop new postal services to meet local demand, to tackle increased level of international postal activities, and to keep up with technological advancement in the postal world. This has all added to the complexity and volume of work of the directorate staff.
5. The Post Office has moved to trading fund status since 1 August 1995. Under this new mode of operation, it needs to adopt a more commercial and customer-oriented approach to expand its services to meet the needs of the market. We therefore propose to create one permanent post of APMG as Business Manager to formulate business strategies and plans to enable the Post Office to meet its financial and service targets set out in the Corporate and Business Plans.
He will have purview over the Stamps and Philately Division and Postal Marketing Division (subsumed under the Product Development Division upon restructuring), formerly under the Administration Branch. He will need to identify and analyse external and internal factors that would affect the postal business and formulate measures to counter unfavourable factors. He will also need to identify new business opportunities, formulate proposals, and draw up plans for their implementation. On the marketing front, he will need to identify potential markets, formulate marketing strategies and negotiate business deals. He will also arrange research and data collection activities to provide the necessary information for business planning and marketing activities.
6. In formulating the business strategy for the Post Office, the Business Manager needs to have a profound understanding of its operations and costing structure, strengths and weaknesses of individual products in comparison to its competitors, capacity of expanding into new businesses, the impact of telecommunications and computer technologies on the postal service, etc.. He has a major role to play in the department's formulation of pricing policy, setting and monitoring of service standards and resource allocation in order to ensure the effective implementation of the business strategy. Externally, the Business Manager has to deal with senior level of business community in identifying new business opportunities and identifying and responding to their business needs. In the competitive environment in which the Post Office operates, such external business activities require prompt, sometimes on-the-spot decision. Having regard to the importance and complexity of the duties, we therefore propose to rank it at D2 level. The job description of the post is at Enclosure 1.
7. We also propose to create one permanent post of CCP to provide support to the Business Manager in the formulation of marketing strategy and plans, service standards, and pricing strategy. He will have to conduct market research and monitor the level of customer satisfaction. He will also have to respond to specific customers' needs, changing market requirements, competitors' activities, and technological advances by adapting existing services and developing new services. In addition, he will have to maintain and motivate a sales force for effective account management for major customers. These activities all require a high level of knowledge, experience and insight of the postal service, as well as decision making ability at directorate level. The job description of the post is at Enclosure 2. The Post Office requires this post as well as that of the Business Manager urgently as the success of trading fund operation depends to a large extent on the soundness of the business and marketing strategies. Upon the creation of the D1 post, we will delete the existing post of Senior Controller of Posts (SCP) (MPS 45-49) which assists in marketing the Speedpost service.
8. In order to operate the Post Office Trading Fund along commercial lines, the Post Office has to assume a substantially wider scope of financial, treasury functions and accounting responsibilities than it hitherto had to as a vote-funded government department. These require the establishment and maintenance of a commercial accounting and management information system to replace the current manual and cash-based accounting system, as well as a financial planning, control, reporting and monitoring model to ensure that the financial performance of the Post Office meets the targets. Moreover, the Post Office has to produce annual accounts and balance sheets in much the same manner as public companies. Departmental officers who do not possess the qualifications of a professional accountant can no longer effectively take up the expanded financial, accounting and treasury duties and responsibilities. We therefore propose to create one permanent post of Chief Treasury Accountant to replace the CCP as head of the Accounts and Finance Division. The job description of the post is at Enclosure 3.
9. The Post Office currently has two permanent APMGs. One APMG heads the Postal Services Branch and is responsible for all operational matters, day-to-day management of the provision of postal services and international postal affairs. The second APMG heads the Administration Branch and is responsible for administration, planning and development, management services, public relations, training, and information technology development. Since the creation of the APMG(Postal Services) post in 1979-80, the establishment of the Postal Services Branch has expanded by 82% (from 3 126 to 5 690 staff), the number of branch post offices increased by 68% (from 75 offices to 126 offices), and the volume of mail items handled grew by 215% (from 372 million items to 1 171 million items).
10. These developments, coupled with the impact of the new towns on the postal system, the increasingly keen competition in the postal market, and the increase in customer expectation necessitate greater attention to the deployment of resources, improved communications with staff, and enhanced co-ordination of different work units in order to maintain a high quality and cost effective service. On the operations support front, APMG(Postal Services) also has to develop new policies and operational procedures on postal matters, conduct studies and reviews on operational procedures to improve efficiency and effectiveness, monitor mail circulation, and implement agreements reached at international fora. That apart, the work of APMG(Postal Services) has also increased in complexity : with the Post Office moving onto trading fund operation, it has to plan postal operations to ensure cost-effectiveness in order to achieve the financial objectives and performance targets laid down in the Corporate and Annual Business Plans; more active participation in international meetings and mail circulation network study workshops and seminars require more constant review of operational systems and conditions of service; and the establishment of the new Air Mail Centre and the possible plan of reprovisioning of the General Post Office and International Mail Centre have necessitated an overall review of postal network and operational system. To strengthen operational control of the Postal Services Branch and to relieve APMG(Postal Services) of the heavy workload, we therefore propose to redeploy the CCP formerly heading the Accounts and Finance Division to provide support to APMG(Postal Services) so that the latter could concentrate on policy matters and implementation of international agreements relating to postal operations.
11. The CCP, re-designated as CCP(Operations) will supervise the work of the four area SCPs to ensure the efficient provision of postal and counter services throughout the territory. He will be responsible for the consistent application of policies in the four operational divisions and the implementation of agreements reached at international fora. He will liaise with overseas postal administration to maintain a comprehensive network of international mail services and to deal with service disruptions such as industrial actions in an overseas administration. He will initiate proposals for improvement in procedures and policies. In view of the increasing aspiration of the community, there is a need for the department to enhance its professionalism in the management of complaints from the public. While the area SCPs will continue to deal with complaints from the public concerning their respective areas of work, the CCP(Operations) will assume the responsibility of overseeing the management of complaints in the Operations Division, such as developing a more comprehensive complaint handling system. He will also review the complaint cases so as to identify problem areas on the operations front with a view to seeking improvement in the overall operations of the Post Office. He will assume the chairmanship of the Customer Liaison Group and the responsibilities of co-ordinating representation at District Board meetings for discussion of matters relating to quality and scope of postal service. The CCP(Operations) will also assist APMG(Postal Services) in the formulation of strategies on international affairs on postal matters and in attending international conferences as and when appropriate. All these activities will require an officer with experience, knowledge, management and communication skill, and analytical and decision making ability at directorate level. The revised job description of the CCP post is at Enclosure 4.
12. With the creation of the post of Business Manager who will be in charge of the Stamps and Philately and Product Development Divisions as set out in paragraph 5 above, the capacity freed from the APMG(Administration) can relieve some of the burden of APMG(Postal Services). We therefore propose to split the International Affairs and Operations Support Division, which currently comes under APMG(Postal Services), into two, with the external affairs function transferred to APMG(Administration). The new External Affairs Division will serve to co-ordinate the department's international role and serve as a contact point with the Universal Postal Union, Asia-Pacific Postal Union, and various overseas postal administrations. It is vital that we argue and represent Hong Kong's interests adequately in such fora which reach important decisions which may affect Hong Kong. Recent discussions have included a review of the formulae for terminal dues which postal administrations pay their counterparts for the carriage of their mails (Hong Kong paid $457 million in 1994-95) and the establishment of a task force to monitor Speedpost contractors. The revised job descriptions of APMG(Postal Services) and APMG(Administration) are at Enclosure 5 and 6. The revised organisation chart of the Post Office is at Enclosure 7.
13. The additional notional annual mid-point salary cost is -
|
$
|
No. of Posts
|
|---|
|
New permanent posts -
|
|
Assistant Postmaster General (D2)
|
1,182,600
|
1
|
|
Chief Controller of Posts (D1)
|
994,200
|
1
|
|
Chief Treasury Accountant (D1)
|
994,200
|
1
|
|
|
3,171,000
|
3
|
|
Less old permanent post to be deleted -
|
|
Senior Controller of Posts (MPS45-49)
|
807,240
|
1
|
|
Total
|
2,363,760
|
2
|
The full annual staff cost of the proposal, including salaries and staff on-costs is $4,215,312.
14. In addition, this proposal will necessitate the creation of three non-directorate posts (one Personal Secretary I and two Personal Secretaries II). The notional annual mid-point salary cost is $538,920 and the full annual average staff cost is $906,132. There is sufficient provision under the 1996-97 Post Office Trading Fund Business Plan to cover the additional costs of these proposals.
15. On 19 July 1995 the Legislative Council passed a Resolution to establish the Post Office Trading Fund on 1 August 1995. Under the trading fund operation, the Post Office may -
(a) plough back profits into the business, thereby allowing the Post Office to meet currently unsatisfied market demands;
(b) adopt more flexible business, marketing, procurement and staffing policies in response to changes in customer demands in existing services;
(c) meet demand for introduction of new services; and
(d) improve productivity and customer service standards.
16. The Post Office has recently appointed a consultant firm to advise on business development of the department. The consultant commenced work on 29 April 1996. In order to capitalise on the service of the consultancy firm and tap its experience and at the same time to provide supervision of its work, we have created under delegated authority a supernumerary post of APMG entitled Business Manager on 2 May 1996 pending the creation of a permanent post as proposed in this paper.
17. Following the establishment of the Post Office as a trading fund, it needs to operate a new commercial accounting and management information system. Since there is no such accounting expertise and experience within departmental officers in the Post Office, we have created under delegated authority a supernumerary post of Chief Treasury Accountant on 18 January 1996 pending the creation of a permanent post as proposed in this paper.
18. Having regard to the expanded volume of work and increased public expectations on the services provided by the Post Office, and the fact that it now operates under trading fund environment, Civil Service Branch agrees that there is a need to strengthen staffing at the directorate level. The grading of the posts proposed for creation are appropriate, as are the realignment of the duties of the directorate posts.
19. The Standing Committee on Directorate Salaries and Conditions of Service considers that the grading proposed for the permanent posts would be appropriate if the posts were to be created.
Economic Services Branch
June 1996
(E4706/WIN78)
Enclosure 1 to EC(96-97)24
Responsible to : Deputy Postmaster General
Duties and Responsibilities -
1. To formulate business strategies and plans that will enable the Post Office to meet its financial as well as service targets.
2. To monitor and analyse all external and internal factors of relevance to the postal business and to formulate measures to counter the unfavourable factors.
3. To identify new business opportunities, formulate proposals, plan and prepare for implementation.
4. To be responsible for drafting the annual Business and Corporate Plans.
5. To identify potential markets, formulate marketing strategies and negotiate business deals.
6. To plan and conduct sales and promotional activities.
7. Any other duties assigned by the supervising officers.
Enclosure 2 to EC(96-97)24
Responsible to : Assistant Postmaster General (Business Development)
Duties and Responsibilities -
1. To assist in the formulation of business strategies and plans for premium services.
2. To assist in formulating service standards, pricing and marketing plans of premium products and to co-ordinate implementation of the marketing plans.
3. To promote premium services and to adapt the range of products and services in response to specific customer needs, changing market requirements, competitors' activities and opportunities offered by technological advances.
4. To establish and maintain a comprehensive system to collect information to monitor the market position of premium services, the level of customer satisfaction, changing customer needs and marketing activities of the competitors, and to analyse the information.
5. To maintain and motivate a sales force for account management for major customers and marketing.
6. To explore scope for optimising the use of resources.
7. Any other duties assigned by supervising officers.
Enclosure 3 to EC(96-97)24
Responsible to : Deputy Postmaster General
Duties and Responsibilities -
1. To head the Accounts and Finance Division of the Post Office Trading Fund and to function as financial adviser to the General Manager of the Trading Fund and other senior managers on all financial and accounting related issues.
2. To assist the General Manager of the Trading Fund in the formulation of financial, accounting and investment policies.
3. To ensure that a proper financial responsibility, accountability and reporting structure is in operation at all times and that all staff are fully aware of their financial role and responsibilities vis-à-vis their operational duties.
4. To design and develop appropriate financial and accounting systems for the Trading Fund and to ensure that all such systems are operated efficiently and effectively and they comply with the relevant regulations.
5. To initiate action for the regular review of all postal charges, and where appropriate, represent the General Manager of the Trading Fund in the discussions with the Policy Branch and Finance Branch.
6. To co-ordinate and collate the preparation of all financial plans and projections i.e. annual Business Plan and Medium range Corporate Plan.
7. To supervise the revenue collection, treasury functions and payment functions within the Trading Fund and initiate action for the review or improvement to the existing collection and payment systems.
8. To initiate action to carry out ad hoc financial evaluations and review of the operations of the Trading Fund with a view to ensuring that the financial objectives are met and that services are provided in cost-effective manner.
9. To maintain a full set of auditable accounts in accordance with general and Government accounting standards and production of the annual statutory financial statements within the prescribed timescales.
Enclosure 4 to EC(96-97)24
Responsible to : Assistant Postmaster General (Postal Services)
Duties and Responsibilities -
1. To coordinate and to ensure a consistent application of policies in the operations of all postal and counter services throughout Hong Kong, Kowloon and the NT and supervise the work of 4 SCPs.
2. To monitor the satisfactory level of productivity throughout the four Regional Operations Divisions.
3. To oversee implementation of agreements reached in international fora concerning postal matters.
4. To assist APMG(P) in formulation of strategies on international affairs on postal matters.
5. To liaise with overseas postal administration to maintain a comprehensive network of international mail services by air, sea and land.
6. To initiate proposals for improvement in postal policies and procedures.
7. To oversee the achievement of performance pledges and to chair Customer Liaison Group meetings.
8. To deal with postal matters relating to election activities and to co-ordinate representation at District Board meetings for discussion of matters relating to quality and scope of postal service.
9. To oversee the management of complaints with a view to identifying areas for improvements.
10. Any other duties assigned by the supervising officers.
Enclosure 5 to EC(96-97)24
Responsible to : Deputy Postmaster General
Duties and responsibilities -
1. To set policies to ensure that all postal and counter services are provided in a cost-effective manner throughout Hong Kong, Kowloon and the New Territories.
2. To establish policies and international affairs on postal matters to ensure that Hong Kong fulfil its international postal obligation and to safe-guard Hong Kong's interest in the international scene.
3. To formulate operational policies and strategies to meet the increasing demands generated by new business of the Post Office and the development of the territory.
4. To plan and oversee reviews and studies of operational policies, procedures and systems with a view to increasing efficiency and productivity, e.g. overall review of postal network studies.
5. To formulate policies to cope with the expansion of postal network between Hong Kong and China.
6. Any other duties assigned by the supervising officers.
Enclosure 6 to EC(96-97)24
Responsible to : Deputy Postmaster General
Duties and Responsibilities -
1. To manage the Branch and direct the work of the Administrative Services, External Affairs, Information Technology, Management Services and Planning and Development Divisions.
2. To ensure that there is adequate provision of personnel and welfare resources to the Department.
3. To ensure the availability of effective management information statistics.
4. To monitor the productivity, efficiency and service performance of the Post Office.
5. To formulate office accommodation planning policies and ensure that adequate office accommodation is provided to meet the operational requirements.
6. To direct research on new technologies and formulate proposals for the introduction of new technologies to improve productivity and service standards.
7. To deal with the Universal Postal Union, Asian Pacific Post Union and overseas postal administrations.
8. Any other duties assigned by the supervising officers.
Enclosure 7 to EC(96-97)24
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Last Updated on 3 December 1998
