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---

### Preamble and Introduction to HRM
- VITARA reference guides are based on VITARA online modules; readers are encouraged to enroll in the online modules.
- The reference guide introduces human resource management (HRM) in tax administrations, covering strategic and operational roles of HR managers, organization of HRM, key HRM areas, and learning and development (L&D).
- Good practices included are intended to support effective management of human resources in tax administrations.
- Acknowledgement: tax administrations vary (e.g., part of a ministry, merged tax and customs authorities) and these differences significantly affect HRM autonomy and organization.
- HRM definition: the design, implementation, and maintenance of strategies to manage and lead people for optimum business performance.
- HRM function focuses on effective recruitment and management of staff and manages issues including:
  - Learning and Development, Including Training
  - HR Policy Development and Administration
  - Staff Integrity
  - Employee Engagement and Well-Being
  - Performance Management
  - Recruitment
- Good HRM is strategic and comprehensive, recognizing human capital (intellectual, social, and organizational capital) as an asset to be invested in rather than a cost to be minimized.
- HRM is often managed by headquarters (HQ) and led by senior management; HRM functions are also performed by line managers.

### Why HRM Matters in Tax Administrations
- Most tax administrations spend over 70 percent of their budget on staff salaries.
- Key contributions of effective HRM:
  - Recognizes and values people; supports a positive, diverse, and safe work environment; supports employee engagement and building capability and continuous learning.
  - Ensures the right people, with the right skills, are placed in the right jobs, at the right time, at the right cost.
  - Manages human capital risks effectively.
- Implications of ineffective HRM:
  - Inadequate recruitment, diversity, career development, compensation, and training policies; outdated HR procedures and systems.
  - Low staff satisfaction and engagement; poor code of conduct and noncompliance with ethical norms; high staff attrition.
  - Poor taxpayer and customer experience; obstacles to change management, reforms, and modernization.

### Roles and Responsibilities
- HR managers (plan, direct, coordinate HRM functions):
  - Operational roles (examples): assist line managers in filling vacancies, attendance management, individual performance management, skills gap assessments, training; handle employment law matters; establish HR procedures and systems; manage administrative HR tasks.
  - Strategic roles (senior HR leaders): innovation; act as change agents; lead professionalization via policies/programs on career development, recruitment, diversity, inclusion, compensation, performance management, training; support leadership to build organization, culture, work environment, staff engagement.
  - Contextual factors affecting the role: size of the tax administration; organizational structure; extent of HRM autonomy or flexibility; legal and economic environment.
- Line managers:
  - Definition: has direct managerial responsibility for another staff member; responsible for engagement, contribution, and performance of their team.
  - People-centered responsibilities: clarifying roles and expectations; reviewing performance; coaching; identifying L&D needs.
  - Constraints: prioritization of operational issues over HR issues and insufficient HR-related competencies.
  - Ways to improve contribution: management and leadership training; select managers with required behavioral competencies; provide HR professional support; provide time to carry out HR responsibilities.

### Organization of the HRM Function
- Objective: provide advice and services that support the organization and its managers to get things done through people.
- Common placement and roles:
  - Good practice: HRM as an HQ function engaged in strategic activities such as business planning, strategy creation, HRM policy development, and oversight.
  - Often part of a corporate support division, with the head of corporate services reporting directly to the head of the tax administration.
  - Typical HRM staffing model: Head of HRM supported by specialist managers responsible for specific areas or functions, supported by junior HR officers and assistants; local HRM functions in larger, decentralized organizations support operational HRM tasks and often report to HQ HRM.
- Core HRM roles commonly present:
  - Recruitment; Performance management; Employee engagement and well-being; Staff integrity; HR policy development and administration; Learning and development (L&D).
- Alternative arrangements: roles may be located elsewhere (another government agency) or provided by an outsourced shared services entity.
- Structure considerations:
  - Reflect organizational structure and centralization/decentralization level and HRM autonomy.
  - Prioritize requirements and allocate limited staff resources to contribute to strategic plan and HRM strategy.
  - Decide which functions to staff internally versus externally; internal HR functions require leaders and designated staff, possibly retraining and hiring additional expertise.
- Conceptual model:
  - “Three-legged stool” model: separate operations, centers of expertise, and business partners; roles may be combined or expanded depending on administration size.

### HRM Autonomy
- Definition: Degree to which the tax administration has discretion to decide on HR matters, including staff numbers, skills requirements, recruitment criteria, promotion of existing staff, staff deployment, training and development, remuneration, disciplinary sanctions, termination, and retirement.
- General observation: Most tax administrations have a significant degree of autonomy across HR matters, though extent varies by jurisdiction.
- Table 3.1 (Human Resource Autonomy, 2017) — Percent of Administrations: Degree of Autonomy (as presented in source):
  - Determine work requirements 79%19%2%
  - Make appointments of new staff 79%9%12%
  - Decide on promotion of existing staff 71%24%22%5%
  - Decide skills and qualifications required for appointment or promotion 73%5%17%66%17%59%12%26%29%69%5%14%82%4%
  - Determine whether work is carried out by permanent staff or contractually
  - Place staff within a salary range
  - Terminate employment
  - Apply disciplinary sanctions
  - Percent of Administrations: Degree of Autonomy — Autonomy for All Staff; Autonomy for Some Staff; No Autonomy
  - (Table text preserves formatting and numeric values as presented in the source.)
- Benefits of autonomy:
  - Operational: flexibility in recruitment, discipline, staff development, and remuneration; autonomy over recruitment enables decisions on timing, volume, skills, and salary.
  - Strategic: important to attract and recruit scarce specialist skills (examples cited: international taxation, digital technologies, advanced analytics, behavioral scientists).
- Constraints on autonomy:
  - Budgetary limits and legislation affecting civil servants; constrained to operate within authorized budgetary limits for appointments and remuneration adjustments.
  - Subject to national legislation, regulations, or internal rules regarding recruitment, salary levels, and promotion processes for civil servants.
- Accountability balance:
  - Ministry of Finance (or other relevant Ministry) should exercise oversight, policy, and budgetary control without imposing burdensome, unnecessary, arbitrary, or outdated rules and approval mechanisms.
- Operational impacts of limited autonomy:
  - Restrictions on moving people to the work or moving work to the people; barriers to recruitment of specialist skills.
- Mitigating limited autonomy:
  - Even where HRM autonomy is limited, tax administrations should still have scope and flexibility to influence key areas (for example, recruitment and internal promotion of staff with specialist skills).
  - Engage with the Ministry of Finance and central civil service policy divisions to influence modernization.

### Key Areas of Effective HRM (Integrity, Discipline, Performance, Engagement)
- Values and Ethics/Integrity:
  - Tax officials must establish reputation for honesty, integrity, and high professional conduct.
  - Comprehensive integrity assurance framework should: Define, Communicate and Promote, Monitor and Enforce, Evaluate and Report; overarching CULTURE OF INTEGRITY.
  - Typical code behaviors: act with integrity; avoid conflicts of interest; comply with policies; treat taxpayers and colleagues with professionalism; report serious contraventions; maintain confidentiality; do not accept money, gifts, or hospitality.
  - Implementation: publish code, integrate into onboarding, require annual acknowledgment in some administrations, proactive monitoring by dedicated unit, independent external complaint bodies, breaches dealt with under disciplinary procedures.
- Discipline, Including Termination:
  - Disciplinary procedures required and must follow jurisdiction’s employment laws; employer must show reasonable action.
  - Principles: proportional sanctions; decisions based on sufficient evidence; warn employees of consequences; opportunity to improve; inform employee of concerns; opportunity to explain.
  - Termination considerations: voluntary (leave or retire) or involuntary; example minimum notice: the pay period (for example, one month for monthly paid staff).
  - Staged disciplinary process: Informal Discussion → First Written Warning → Final Written Warning → Dismissal, If the Behavior Has Not Changed Following the Warnings.
  - In gross misconduct, suspension may be necessary; all written warnings and final actions should be approved by higher authority (e.g., head of HR); maintain records for appeals or legal review.
- Individual Performance Management and Appraisal:
  - Continuous process: setting goals aligned to strategic objectives; planning performance; developing capabilities; reviewing progress.
  - Cycle: Setting Objectives/Planning → Review and Discuss Performance (Appraisal) → Feedback → Development–on–the–Job → Follow-Up.
  - Best practices: regular dialogue and constructive feedback; fair appraisals; supervisors follow consistent guidelines; linkage to promotion and/or performance-related pay.
  - Innovations: continuous coaching, employee involvement in design, 360-degree assessments, real-time feedback.
  - Underperformance management steps: identify underperformance; identify causes; agree performance improvement action (performance improvement plan); provide support; monitor progress; consider disciplinary action if measures fail.
  - Reference: sample PIP at Appendix 4; sample performance and development review form at Appendix 3.
- Staff Engagement and Working Environment:
  - Engagement drivers: purpose; job challenge; autonomy; variety; feedback; opportunities for development; fit; involvement; senior management leadership.
  - Organizational measures: Two–way Communication; Events/Forums; Engagement Charters; Responses to Engagement Surveys; Performance and Reward Systems; Opportunities for Personal Development; Improved Job Design; Safer and Better Work Environment; Staff Well-Being; Flexible Working; Task Delegation.
  - Use engagement surveys to develop strategies, benchmark, share results, and stimulate consultation.
  - Well-being and safety: employee assistance programs, health and safety programs, duty of care set by statute; health and safety risk prevention action plan illustrated in Appendix 5.
  - Outcomes: higher engagement yields higher productivity, lower turnover, and better attendance.

### HR Records, People Analytics, and HRIS
- HR records and responsibilities:
  - Maintain accurate and up-to-date records; strict confidentiality and data protection; provide HR data to ELT, HRM, and line managers.
  - Records include job position, employment history, pay, hours worked, and absences; stored in line with laws on records management and data protection.
- Systems:
  - Good practice: store HR records electronically in a human resource information system (HRIS).
  - HRIS functions include: Store HR Records; Recruitment and Selection; Career Path; Remuneration; Performance Management; Learning and Development; Absence Management; Workforce Planning and Demographics, Including Diversity; Legal Reporting Requirements.
- People Analytics:
  - Purpose: measure and report on workforce concepts, including individual performance, engagement, skills, and strategic alignment.
  - Benefits: supports evidence-based decisions; evaluate impact of HR policies; improve HR and organizational efficiency; assist payroll forecasting, budgeting, and control.
  - Prerequisite: good HR data on people is essential.

### Learning and Development (L&D) and Knowledge Management (KM)
- L&D objectives and functions:
  - Enhance capability to meet current and future needs via a learning culture and organizational/individual learning strategies.
  - Emphasize employee responsibility for learning, supported by organizational programs.
  - Provide onboarding, ongoing skills improvement, leadership and management training, and support attraction/retention.
- Main elements:
  - Organizational learning: processes to encourage learning and knowledge management (experience, social networking, coaching, mentoring, self-managed learning, formal training).
  - Individual learning: blended learning, computer-based training, online courses; many administrations have training schools, including degree qualifications.
  - Coaching (one-to-one, performance-focused) and mentoring (guidance by senior/experienced managers).
- Assessing L&D needs:
  - Learning needs arise from changes in jobs, careers, external environment, and internal organization.
  - Example policy: some administrations require staff to undertake at least five days of training per year.
  - Learning needs analysis led by L&D at organizational, function, and individual levels; sources include interviews/surveys, job/role profiles, performance appraisals, competency frameworks, HR and workforce plans, strategic plans.
  - Analysis identifies training needed by business area, career level/function, workstream, missing skills, workforce gaps, and specific areas (e.g., transfer pricing auditors).
- Developing and implementing L&D strategy:
  - Purpose: outline capabilities needed, align with tax administration strategy, regularly review.
  - Development led by L&D with input from ELT, HRM, operational divisions; be a sub-strategy of HRM strategy; engage staff representatives.
  - Translate into programs clarifying responsibilities, linkage to personal development plans, delivery methods (formal/informal, blended learning), internal/external providers, resource allocation, and evaluation.
  - Roles: L&D specialists design/implement training; individual staff responsible for personal development; line managers promote learning culture, provide on-the-job training.
  - L&D and diversity: ensure equitable access; use self-managed learning and e-learning to accommodate commitments.
  - Evaluation should cover planning, conduct, reaction, and outcome.
- Knowledge Management (KM):
  - Definition: identification, collection, storing, and sharing of “know-how,” wisdom, understanding, and expertise.
  - Purpose: transfer knowledge to those who need it; prevent institutional memory loss; codify best practices.
  - KM approaches: Person–to–Person Knowledge Sharing; Codification and Documentation of Knowledge in Databases.
  - Codification (predominant good practice): record solutions, document knowledge with KM specialist help, supported by person-to-person sharing and practice communities.
  - Technology for codification: IT system like a library with categorization and search, ranging from intranet to data warehouse to KM systems.
  - Governance and culture: assign ownership for KM system; ensure departmental inclusion and engagement; require an open culture that encourages sharing.

### Selected Appendices — Operational Tools and Examples
- Appendix 2 — Types of Pay Progression (nature and impact):
  - Increment/step advancement: normally determined based on length of service and adequate performance; mostly automatic; usually does not lead to change of function or geographic location; progression within the range (e.g., Junior Auditor).
  - Promotion within the same grade level: recognizes experience and technical competences; normally granted based on merit and/or success in a competition; can lead to change in function but not necessarily geographic mobility.
  - Promotion to a higher-grade level: reflects ability to perform duties of a higher grade; normally sanctioned following success at a merit-based competition and suitability checks; generally leads to functional and sometimes geographic mobility (e.g., Junior Auditor → Auditor).
- Appendix 3 — Sample Performance and Development Review:
  - Objectives and targets include agreed targets for work items, at least 95 percent work items dealt with correctly first time, customer service standards, compliance interventions, team contribution, and on-the-job training/coaching provided to others.
  - Competencies: management and delivery of results; team leadership; judgment, analysis, and decision-making; interpersonal and communication skills.
  - Development needs metrics: number of advanced tax technical training days completed; number of agreed Continuous Professional Development training days completed; number of leadership and management training/coaching days completed.
- Appendix 4 — Sample Performance Improvement Plan (PIP):
  - Core fields: Name; Job Title; Date of Meeting; Manager’s Name; Timeline for Plan.
  - Duties and Performance Concerns / Expected Outcome / Support: list concerns and consequences; detail expectations and actions; list support measures.
  - Review schedule and outcomes: Review Date 1 — Met/Not Met/Partially Met; Review Date 2 — Met/Not Met/Partially Met; Review Date 3 — Met/Not Met/Partially Met.
  - Timeline and disciplinary implications: PIP effective immediately; failure to improve may lead to formal warnings and potential dismissal.
- Appendix 5 — Health and Safety Risk Prevention Action Plan steps:
  - Identify and assess hazards; define risk appetite; assess severity and likelihood.
  - Prevention and mitigation planning: holistic view of work organization, conditions, technology, social relationships; eliminate hazards through design; include preventative training in induction.
  - Steps (action sequence): 1. Identify the risks. 2. Assess the risks. 3. Select the control measures. 4. Eliminate risk through work design. 5. Carry out regular risk assessments and audits and take action to eliminate risks. 6. Conduct a continuous program of training and awareness of safe working habits.
- Appendix 6 — Examples of Strategic Priorities for HRM Strategy:
  - Employer of choice: improve engagement; staff well-being; invest in L&D; improve communications; active sourcing; student internships; build employer brand.
  - Build workforce of the future: strategic workforce planning; recruitment and selection; champion inclusion; promote diversity.
  - Build, support, and value line managers: organize centers of expertise; introduce business partners.
  - Position HRM as strategic driver: develop HRM roles; implement HRM policies and procedure; introduce HRM technology.
- Appendix 7 — Common HR Operational Models:
  - “Three-legged stool” / HR Business Partner model elements: HRM shared service centers; Centers of expertise; Business partners.
  - Shared service centers: payroll, recruitment administration, absence monitoring, personnel record maintenance, routine advice.
  - Centers of expertise: high-level advice on L&D, recruitment of specialist skills, serious disciplinary action, employee relations.
  - Business partners: experienced HRM professionals working with ELT and line managers to support strategic HR implementation.
  - Variants and hybrids exist depending on organizational context.

*Source: VIRTUAL TRAINING TO ADVANCE REVENUE ADMINISTRATION: Reference Guide (Appendixes), ISBN 9798400275449.*

### CHAPTER 1.

### CHAPTER 1.

### Preamble
- VITARA reference guides are based on VITARA online modules; readers are encouraged to enroll in the online modules.
- The reference guide introduces human resource management (HRM) in tax administrations, covering strategic and operational roles of HR managers, organization of HRM, key HRM areas, and learning and development (L&D).
- Good practices included are intended to support effective management of human resources in tax administrations.
- Acknowledgement: tax administrations vary (e.g., part of a ministry, merged tax and customs authorities) and these differences significantly affect HRM autonomy and organization.

### Introduction to HRM
- HRM definition: the design, implementation, and maintenance of strategies to manage and lead people for optimum business performance.
- The HRM function focuses on effective recruitment and management of staff to achieve desired results and manages issues such as:
  - Learning and Development, Including Training
  - HR Policy Development and Administration
  - Staff Integrity
  - Employee Engagement and Well-Being
  - Performance Management
  - Recruitment
- Good HRM is strategic and comprehensive, recognizing human capital (intellectual, social, and organizational capital) as an asset to be invested in rather than a cost to be minimized.
- HRM is often managed by headquarters (HQ) and led by senior management; HRM functions are also performed by line managers.

### Why HRM Is Important for a Tax Administration
- Most tax administrations spend over 70 percent of their budget on staff salaries.
- Tax administrations require a professional workforce that is motivated, has the right skills, and is well organized to provide efficient and effective tax collection.
- Importance of effective HRM (key contributions):
  - Recognizes and values people
  - Understands people bring ideas and skills
  - Contributes to the tax administration’s mission, values, and goals
  - Supports a positive, diverse, and safe work environment
  - Supports employee engagement
  - Supports building capability and continuous learning
  - Ensures the right people, with the right skills, are placed in the right jobs, at the right time, at the right cost
  - Manages human capital risks effectively
- Implications of ineffective HRM:
  - Inadequate recruitment, diversity, career development, compensation, and training policies
  - Outdated HR procedures and systems
  - Low level of staff satisfaction and engagement
  - Poor code of conduct and noncompliance with ethical norms, or a high level of corruption
  - High staff attrition
  - An environment that does not support or encourage high performance
  - Poor taxpayer and customer experience
  - Obstacles to change management, reforms, and modernization

### The Role of HR Managers in a Tax Administration
- HR managers’ scope: plan, direct, and coordinate HRM functions, covering operational and strategic aspects.

- Operational roles (examples):
  - Assist line managers in filling vacancies, attendance management, individual performance management, skills gap assessments, and training
  - Help line managers deal with people problems, including employment law matters such as equality and discrimination
  - Establish adequate HR procedures and systems
  - Manage administrative HR tasks

- Strategic roles (typical for senior HR leaders such as head of HRM, heads of HRM centers of expertise, heads of specific HRM functions, HRM business partners):
  - Innovation: support introduction of new processes and procedures to increase organizational effectiveness
  - Act as a change agent: provide support and advice on change management
  - Lead professionalization of the workforce: formulate HRM policies and programs on career development, recruitment, diversity, inclusion, compensation, performance management, and training
  - Support leadership in building an effective organization, a strong culture of professionalism, a healthy and stable work environment, and high staff engagement and satisfaction

- Contextual factors affecting HR managers’ role:
  - Size of the tax administration
  - Organizational structure of the tax administration
  - Extent of HRM autonomy or flexibility (e.g., recruitment and remuneration)
  - Legal and economic environment

### The Role of Line Managers in HRM
- Definition: a line manager has direct managerial responsibility for another staff member and is responsible for engagement, contribution, and performance of their team.
- People-centered responsibilities of line managers:
  - Clarifying roles and expectations
  - Reviewing performance
  - Coaching
  - Identifying L&D needs
- Line managers should receive guidance and support from HRM teams.
- Factors limiting line managers’ HRM quality:
  - Prioritization of operational issues over HR issues and insufficient time
  - Insufficient HR-related competencies
- Ways to improve line managers’ contribution to HRM (Figure 1.2):
  - Ensuring they receive adequate management and leadership training
  - Selecting line managers with the required behavioral competencies
  - Providing them with the support of HR professionals
  - Providing them with the time to carry out their HR and leadership responsibilities

*Source: CHAPTER 1.*

### CHAPTER 3.

### CHAPTER 3. Organization of HRM

### Position of the HRM Function within the Organization
- Basic objective: provide advice and services that support the organization and its managers to get things done through people.
- Common placement and roles:
  - Good practice: HRM as an HQ function engaged in strategic activities such as business planning, strategy creation, HRM policy development, and oversight.
  - Often part of a corporate support division, with the head of corporate services reporting directly to the head of the tax administration.
  - Figure 3.1 example senior management structure components: Corporate Services; Support Functions (HRM, IT, Legal); Regional and District Operations; Planning, Program Design, and Reform; Office of Strategic Management (OSM); Internal Audit; Head of Tax Administration.
  - Note: HRM = human resource management; IT = information technology.
- Typical HRM staffing model:
  - Head of HRM supported by specialist managers responsible for specific areas or functions (e.g., recruitment, employee relations).
  - Supported by junior HR officers and assistants.
  - In larger, decentralized organizations, local HRM functions support operational HRM tasks based on standard operating procedures or HRM instructions and often report to HQ HRM to ensure consistency and quality.

### How Is the HRM Function Organized?
- Core HRM roles commonly present:
  - Recruitment
  - Performance management
  - Employee engagement and well-being
  - Staff integrity
  - HR policy development and administration
  - Learning and development (L&D)
- Alternative arrangements:
  - In some organizations (e.g., tax administration as a unit within the Ministry of Finance), these roles may be located elsewhere (another government agency) or provided by an outsourced shared services entity.
- Structure considerations:
  - HRM structure should reflect organizational structure and centralization/decentralization level and HRM autonomy.
  - Organization must prioritize requirements and allocate limited staff resources to contribute to the strategic plan and HRM strategy.
  - Decide which functions to staff internally versus externally (e.g., shared service center).
  - Internal HR functions require leaders and designated staff to effectively undertake strategic HRM, possibly necessitating retraining and hiring additional expertise.
- Figure 3.2 example HRM structure components:
  - Learning and Development
  - HR Business Partnership
  - HR Centers of Expertise
  - HR Strategy
  - HR Operations
  - Head of HR; Head of Tax Administration
- Conceptual model:
  - “Three-legged stool” model: separate operations, centers of expertise, and business partners; roles may be combined or expanded depending on administration size.
- Reference:
  - For more information on common HR operational models, see Appendix 7.

### HRM Autonomy
- Definition: Degree to which the tax administration has discretion to decide on HR matters, including staff numbers, skills requirements, recruitment criteria, promotion of existing staff, staff deployment, training and development, remuneration, disciplinary sanctions, termination, and retirement.
- General observation: Most tax administrations have a significant degree of autonomy across HR matters, though extent varies by jurisdiction.
- Table 3.1 (Human Resource Autonomy, 2017) — Percent of Administrations: Degree of Autonomy (as presented in source):
  - Determine work requirements 79%19%2%
  - Make appointments of new staff 79%9%12%
  - Decide on promotion of existing staff 71%24%22%5%
  - Decide skills and qualifications required for appointment or promotion 73%5%17%66%17%59%12%26%29%69%5%14%82%4%
  - Determine whether work is carried out by permanent staff or contractually
  - Place staff within a salary range
  - Terminate employment
  - Apply disciplinary sanctions
  - Percent of Administrations: Degree of Autonomy — Autonomy for All Staff; Autonomy for Some Staff; No Autonomy
  - (Table text preserves formatting and numeric values as presented in the source.)

### Benefits of Autonomy
- Operational advantages:
  - Enables efficient and effective operation of the tax system through flexibility in recruitment, discipline, staff development, and remuneration.
  - Autonomy over recruitment allows decisions on when to recruit, how many to recruit, specific skills and qualifications required, and appropriate salary for successful candidates.
- Strategic advantages:
  - Important to attract and recruit scarce specialist skills (examples cited: international taxation, digital technologies, advanced analytics, behavioral scientists).

### Constraints on Autonomy
- Common constraints:
  - Budgetary limits and legislation affecting civil servants.
  - Autonomy often constrained to operate within an authorized budgetary limit for appointments and remuneration adjustments.
  - Subject to national legislation, regulations, or internal rules regarding recruitment, salary levels, and promotion processes for civil servants.
- Accountability balance:
  - Need to balance autonomy with accountability; Ministry of Finance (or other relevant Ministry) should exercise oversight, policy, and budgetary control without imposing burdensome, unnecessary, arbitrary, or outdated rules and approval mechanisms.
- Operational impacts of limited autonomy:
  - Potential negative impacts on delivering objectives, especially during organizational reform, including:
    - Restrictions on moving people to the work (e.g., transferring staff to priority locations).
    - Restrictions on moving work to the people (e.g., reallocating priority tax cases to where staff are available).
    - Barriers to recruitment of specialist skills.
- Mitigating limited autonomy:
  - Even where HRM autonomy is limited, tax administrations should still have scope and flexibility to influence key areas (for example, recruitment and internal promotion of staff with specialist skills).
  - As one of the largest civil service employers, tax administrations can engage with the Ministry of Finance and central civil service policy divisions to influence modernization of HRM within the civil service.

_Italic: Source: CHAPTER 3, HUMAN RESOURCE MANAGEMENT: Organization of HRM, VIRTUAL TRAINING TO ADVANCE REVENUE ADMINISTRATION: Reference Guide._

### CHAPTER 5.

### CHAPTER 5. Key Areas of Effective HRM

### Values and Ethics/Integrity
- Tax officials need to establish a reputation for honesty, integrity, and maintaining the highest standards of professional conduct.
- Tax administrations should have a comprehensive integrity assurance framework that:
  - Defines, communicates, and promotes standards of professional behavior
  - Monitors and enforces those standards
  - Corrects lapses
  - Evaluates and reports on outcomes
- Example elements of an integrity framework (Figure 5.1):
  - Define: Establish standards of conduct for dealing with external and internal stakeholders
  - Communicate and Promote: Publish guidelines; Training; Instructions
  - Monitor and Enforce: Monitor; Control; Respond to lapses
  - Evaluate and Report: Oversight mechanism; Regular reports
  - Overarching: CULTURE OF INTEGRITY
- Typical code of ethics / code of conduct behaviors required of staff:
  - Act with integrity, honesty, and within the law.
  - Ensure that there is no conflict of interest between official duties and external interests.
  - Comply with all tax administration policies and procedures.
  - Treat taxpayers and colleagues with professionalism, equality, impartiality, and respect.
  - Report any serious contraventions of the law, tax administration procedures, or matters that might damage reputation.
  - Maintain appropriate confidentiality, protect data, and act with discretion.
  - Do not accept money, gifts, or hospitality.
- Implementation practices:
  - Publish the code of ethics and integrate into staff onboarding and training.
  - Some administrations require an annual acknowledgment by staff of the code of conduct contents.
  - Behavior should be proactively monitored by a dedicated unit (for example, an internal affairs unit), often independent of HR.
  - An independent external body (for example, an ombudsman) may receive complaints about tax officials.
  - Any breaches of integrity should be dealt with under the disciplinary procedures (see Part 2).
- Rationale:
  - Integrity breaches undermine trust and confidence in tax administration and affect voluntary compliance.

### Discipline, Including Termination
- HRM roles:
  - Handling disciplinary problems directly or providing advice and guidance to line managers.
- Disciplinary issues arise from lapses in code of conduct and breaches of standards, policies, or procedures, ranging from minor misconduct (e.g., poor timekeeping) to gross misconduct (e.g., fraud or corruption).
- Requirements for disciplinary procedures:
  - Have a defined disciplinary procedure and ensure it is followed.
  - Managers and staff need to know the procedure.
  - Procedures must follow the jurisdiction’s employment laws.
  - The administration must show it acted in a reasonable manner and in accordance with the law.
- Principles of reasonable behavior in disciplinary processes (Figure 5.2):
  - The disciplinary sanction should be proportionate to the behavior.
  - The employer’s decision should be based on sufficient evidence, taking account of any mitigating circumstances.
  - The employee should be warned of the consequences, including dismissal, if specified improvements are not made.
  - The employee should be given an opportunity to improve, except in serious cases.
  - The employee should be given an opportunity to explain.
  - The employee should be informed of the nature of the concern or complaint.
- Termination policy considerations:
  - Termination can be voluntary (leave or retire) or involuntary (changes in business needs or serious disciplinary issues) and will depend on employment legislation.
  - For voluntary termination, the administration needs a clear process on adequate notice of intent to leave; example minimum: the pay period (for example, one month for monthly paid staff).
  - Administrative matters on termination include final remuneration, return of tax administration property, and vacancy management.
  - The code of ethics may require approval of any future employment relationship to reduce potential conflicts of interest.
- Dismissal and suspension:
  - Except in cases of gross misconduct, the individual should be given an opportunity to improve before dismissal.
  - Disciplinary procedures should follow reasonable stages (Figure 5.3): An Informal Discussion on the Problem → A First Written Warning → A Final Written Warning → Dismissal, If the Behavior Has Not Changed Following the Warnings.
  - In alleged gross misconduct, suspension may be necessary to allow investigation or to prevent interference with evidence.
  - All written warnings and any final action or suspension should be approved by a higher authority, such as the head of HR.
  - Maintain records required for any subsequent appeal or legal review.

### Individual Performance Management and Appraisal
- Definition: Continuous process of improving performance of individuals and teams by:
  - Setting individual, team, and unit goals that align to the strategic objectives of the tax administration
  - Planning performance to achieve these goals
  - Developing the capabilities of people
  - Reviewing and assessing progress
- Benefits and linkages:
  - Helps ensure a performance culture when linked to staff assignment, career planning, employee engagement, and L&D.
  - Provides a structured basis for a professional dialogue between employee and management.
  - Identifies skill gaps and needs.
- Individual performance management cycle (Figure 5.4):
  - Setting Objectives / Planning → Review and Discuss Performance (Appraisal: Identify Strengths, Areas for Improvement and Agree upon Action Plan) → Feedback → Development–on–the–Job (Training, Formal Training, Coaching, and Other L&D Activities) → Follow-Up
  - Note: L&D = learning and development.
- Best practices:
  - Regular dialogue and constructive, honest feedback are essential.
  - Appraisals should be fair and consider external factors affecting performance.
  - Supervisors should follow consistent guidelines to ensure consistency across staff.
  - Appraisal system should be consistent with other evaluation systems, such as for promotion and/or performance-related pay.
- Trends and innovations:
  - Focus on continuous coaching and development rather than a single stressful review.
  - Employee involvement in designing the process.
  - 360-degree assessments (involving managers, peers, and subordinates).
  - Real-time feedback.
- Quality assurance:
  - Regular quality assurance helps ensure system effectiveness and addresses implementation issues.
- Underperformance management:
  - Underperformance may stem from individual issues or problems with work arrangements.
  - Steps to address underperformance (Figure 5.5):
    - Identify the areas of underperformance.
    - Identify the cause(s) of the underperformance. (Does the employee know what is expected, and have the knowledge, skills, and ability?)
    - Agree upon the performance improvement action required, in the form of a performance improvement plan.
    - Provide any necessary support.
    - Monitor progress, with regular feedback.
    - Consider disciplinary action if these measures fail.
  - A sample Performance Improvement Plan is available at Appendix 4.
  - A sample performance and development review form is attached at Appendix 3.

### Staff Engagement and Working Environment
- Definition: Staff engagement happens when people are committed to their work and organization and are motivated to achieve high levels of performance.
- Main contributors to positive engagement:
  - Purpose: Clear understanding of why the job is required; tax officials tend to have a strong sense of purpose.
  - Job challenge: Broad scope and high responsibility enabling achievement and personal growth.
  - Autonomy: Freedom, independence, and discretion to schedule work and how it is carried out (may be restricted by legal requirements or standard procedures).
  - Variety: Ability to perform many different tasks or use different skills.
  - Feedback: Direct and clear information on performance effectiveness.
  - Opportunities for development: Clear pathways for employee growth and fulfillment.
  - Fit: Compatibility between individual and work environment.
  - Involvement: Employees encouraged to suggest ideas and have input.
  - Senior management leadership: Managers provide clear vision and communication.
- Organizational measures to support engagement (Figure 5.6):
  - Two–way Communication; Events/Forums; Developing Engagement Charters; Responses to Engagement Surveys; Performance and Reward Management Systems; Opportunities for Personal Development; Improved Job Design; Providing a Safer and Better Work Environment; Staff Well-Being; Flexible Working; Task Delegation
- Strategic approach:
  - Use engagement surveys to develop and implement engagement strategies, benchmark with other agencies, share results with staff, and stimulate consultation.
- Well-being and safety:
  - Take measures to protect staff well-being and provide a safe working environment.
  - Employee assistance programs can reduce absenteeism, assist workers’ compensation claims, provide health advice, and address grievances, safety, and security issues.
  - Health and safety programs protect employees and others against accidents and risks of ill-health; duty of care and obligations are normally set by statute.
  - Responsibility for health and safety may be assigned to a separate, independent unit.
  - A health and safety risk prevention action plan, developed in consultation with staff representatives (such as union representatives), is good practice; Appendix 5 presents an example of steps in such a plan.
- Outcomes:
  - Higher levels of engagement produce higher productivity, lower staff turnover, and better attendance.

### HR Records and Analytics
- HRM responsibilities for records:
  - Maintain accurate and up-to-date records on staff to satisfy legal requirements, including strict confidentiality and data protection rules.
  - Provide HR data to ELT, HRM, and line managers to enable decision making.
  - Record contract arrangements and provide documentation required in employee disputes or legal claims.
- HR records typically include:
  - Job position, employment history, pay, hours worked, and absences.
  - HR records are important personal data stored and maintained in line with the jurisdiction’s laws on records management and data protection.
- Systems:
  - Good practice is to store HR records electronically, usually in a computer-based human resource information system (HRIS).
  - HRIS functions (Figure 5.7) include: Store HR Records; Recruitment and Selection; Career Path; Remuneration; Performance Management; Learning and Development; Absence Management; Workforce Planning and Demographics, Including Diversity; Legal Reporting Requirements.
  - Note: HR = human resource; HRIS = human resource information system.

### People Analytics
- Purpose:
  - Enables a tax administration to measure and report on key workforce concepts, including individual performance, engagement, skills, and strategic alignment.
  - HR data from a skills database can report on skill levels versus requirements and indicate where steps must be taken to address gaps.
- Benefits:
  - Enables more effective evidence-based decisions by administration leadership on strategic business functions.
  - Allows HR to evaluate and show the impact HR policies and processes have on individual and organizational performance.
  - Helps improve HR and organizational efficiency and effectiveness.
  - Can assist with payroll forecasting, budgeting, and control.
- Prerequisite:
  - Good HR data on people is essential for people analytics.

*Source: CHAPTER 5. Key Areas of Effective HRM (VIRTUAL TRAINING TO ADVANCE REVENUE ADMINISTRATION: Reference Guide).*

### CHAPTER 6.

### CHAPTER 6. Learning and Development (L&D)

### What Is L&D, and Why Is It Important?
- Main objective: enhance the capability of people to meet current and future needs by implementing a clear framework for developing people through a learning culture and the development of organizational and individual learning strategies.
- Emphasizes employee responsibility for learning, supported by an organizational learning program.
- L&D functions:
  - Provide newly recruited staff with training and support for new roles.
  - Provide current staff opportunities to improve skills and prepare for future roles.
  - Include leadership and management training for all newly appointed managers.
  - Support attraction and retention of talent, motivation and engagement, and the creation of a professional culture.

### Main Elements of L&D
- Organizational learning: development and acquisition of knowledge, skills, and practices to improve organizational effectiveness; focused on processes to encourage learning and knowledge management (experience, social networking, coaching, mentoring, guidance, self-managed learning, formal training).
- Individual learning: acquisition and development of new knowledge, skills, capabilities, and behaviors; increasing opportunities for learner-driven learning with blended learning, computer-based training, and online courses.
- Blended learning: combination of planned experience, self-managed learning, e-learning, coaching, mentoring, workplace, and classroom training.
- Training: formal training can be face-to-face (workplace or classroom) or through digital learning; should be linked to on-the-job experience; many tax administrations have established training schools, including degree qualifications.
- Leadership and management development: blended approaches including planned experience, self-managed learning, coaching, mentoring, and training.
- Coaching and mentoring:
  - Coaching: usually one-to-one, focused on performance within the current job; emphasized development of the individual; mostly provided by the line manager or a colleague.
  - Mentoring: guidance and continuing support by a mentor to help the mentee learn and develop; normally provided by more senior or experienced managers, not necessarily the line manager.

### What Are the Administration’s L&D Needs?
- Learning needs arise from changes in jobs, careers, external environment, and internal organization.
- New employees require onboarding with induction, foundation tax, and IT systems training.
- Learning needs depend on educational background (high school graduates, university graduates, redeployed staff).
- Existing staff require career-long learning support, including management and leadership training.
- Example policy: some administrations require staff to undertake at least five days of training per year.
- Learning needs analysis:
  - Led by the L&D team to assess gaps between existing workforce skills/competencies and required skills/competencies.
  - Can be conducted at organizational, function, and individual levels.
  - Sources for organizational learning needs analysis (as illustrated): Interviews/Surveys with Managers, Staff, and Customers; Job/Role Profiles including Learning Specifications; Performance Appraisals including 360–Degree Feedback and Performance Gaps; Competency Framework (National Educational Framework); HR and Workforce Plans; Strategic, Reform, and Business Plans.
- Analysis should identify training and skills needed by:
  - Key business areas (e.g., priorities established by strategy such as compliance risk management or taxpayer service)
  - Career level/function (e.g., new entrant, succession planning, managerial incubation)
  - Workstream (e.g., where workload is big and existing staff cannot manage—tax return processing in certain periods)
  - Skills missing in the organization (e.g., technical tax, project management, leadership)
  - Workforce gaps (e.g., employee vacancies, lack of diversity)
  - Specific area (e.g., large taxpayers, transfer pricing auditors)
- For preparing an L&D strategy, priorities identified may include:
  - Key areas such as risk management
  - Reform agenda
  - Identified skill gaps, such as audit or team management

### How to Develop and Implement an L&D Strategy
- Purpose: outline workforce capabilities, skills, and competencies needed and how these can be developed; align with overall tax administration strategy; regularly review and update.
- Development led by L&D function with input from the ELT, the HRM function, and operational divisions; should be a sub-strategy of, and aligned with, the HRM strategy; engage staff representatives in development and implementation.
- Translation of strategy into programs requires clarifying:
  - Responsibilities of L&D
  - Linkage of personal development plans to the individual performance system
  - Methods and process used to deliver L&D, including:
    - Formal and informal training (training courses, learning on the job)
    - Self-managed learning (including personal development plans, e-learning)
    - Blended learning
  - How L&D is provided by internal and external providers
  - How L&D resources are allocated
  - How L&D activities are evaluated
- Main roles and responsibilities:
  - L&D or HRM specialists: design and implement formal training courses, often with external assistance; manage wider L&D opportunities; support line managers for workplace training.
  - Individual staff members: responsible for personal development; individual performance management and appraisal should identify personal development needs; require organizational support of time and resources.
  - Line managers: promote a learning culture through coaching and mentoring; provide opportunities to use and develop skills learned in formal programs; provide on-the-job instruction and experience.
- L&D and diversity: ensure all employees, irrespective of gender or other grounds, have access to L&D opportunities; delivery methods designed to avoid barriers to access; self-managed learning and e-learning help accommodate personal and family commitments.
- Resource considerations: adequate financial investments and staff resources are essential; may require prioritizing scarce expert staff to develop and deliver training courses.
- Evaluation of L&D activities should cover:
  - Planning: Were needs properly identified and objectives set?
  - Conduct: How was the program organized and managed; was it within budget?
  - Reaction: What did participants feel about the event?
  - Outcome: What was the impact on individual, departmental, and administration performance?

### What Is Knowledge Management (KM)?
- Definition: identification, collection, storing, and sharing of the “know-how,” wisdom, understanding, and expertise developed within an organization about its processes, procedures, and operations.
- Purpose: get knowledge from those who have it to those who need it to ensure organizational effectiveness by increasing staff awareness, capacity, and capability.
- KM covers: creating, managing, sharing, and using knowledge and information; capturing organization-wide experience; preventing institutional memory loss when employees leave; codifying existing best practices.
- KM centered on human resources: knowledge is created and shared by people while technology is used in creation and dissemination.
- HRM team contributions to KM:
  - Supporting an open learning culture that values knowledge sharing
  - Providing advice on culture management, organization design, and development
  - Establishing learning and communication programs and systems
- Tax administrations should have a KM strategy outlining how information, data, and knowledge are managed to improve effectiveness.
- Two main approaches to KM strategy:
  - Person–to–Person Knowledge Sharing
  - The Codification and Documentation of Knowledge in Databases
- Codification is the predominant good international practice:
  - Records solutions to similar problems, making it easier to retrieve and share correct treatments, including with taxpayers and their agents.
  - Involves getting the person with the knowledge to document it with KM team/specialist help and for others to reuse the captured knowledge.
  - Often supported by person-to-person knowledge sharing and professional practice communities.
- Technology requirements for codification:
  - IT system that operates like a library with understandable categorization and search functionality.
  - Options range from an intranet to a data warehouse and specific KM information systems.
- Governance and culture:
  - Assign a person or unit ownership and responsibility for the KM system; work with departments to ensure inclusion of important documents and engagement with the system.
  - Effective KM requires an open culture that encourages people to share ideas and knowledge.

*Source: CHAPTER 6. Learning and Development (L&D) from the provided PDF content.*

### Appendix 2. Nature and Impact of Different

### Appendix 2. Nature and Impact of Different Types of Pay Progression

### Nature of progression: Increment/step advancement
- It is normally determined based on length of service and adequate performance
- It is mostly automatic
- It usually does not lead to change of function or geographic location
- This is the progression within the range (e.g., Junior Auditor)

### Nature of progression: Promotion within the same grade level
- It recognizes the achievement of experience and technical competences for the grade level
- It is normally granted based on merit and/or success in a competition
- It can lead to a change in function but not necessarily geographic mobility
- This could form part of the progression within the pay range (e.g., Junior Auditor)

### Nature of progression: Promotion to a higher-grade level
- It reflects the ability to perform duties of a higher grade
- It is normally sanctioned following success at a merit-based recruitment or promotion competition, subject to suitability for promotion based on performance and conduct
- It generally leads to functional and sometimes geographic mobility
- An example of this would be moving from Junior Auditor to Auditor

### Impact on mobility (summary)
- Increment/step advancement: mostly automatic, typically no functional or geographic move
- Promotion within same grade: merit/competition-based, may change function, not necessarily geographic mobility
- Promotion to higher grade: merit/competition-based with suitability checks, generally leads to functional and sometimes geographic mobility

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### Appendix 3. Sample Performance and Development Review

### Objectives and targets
- Agreed target number of work items/correspondence dealt with
- At least 95 percent work items dealt with correctly first time
- Customer Service standards met
- Agreed target number of compliance interventions completed
- Interventions reviewed met compliance code of practice and quality standards
- Agreed team contribution objectives met
- Agreed on-the-job training/coaching provided to others

### Competencies and development needs
- Competencies to assess:
  - Management and delivery of results
  - Team leadership
  - Judgment, analysis, and decision-making
  - Interpersonal and communication skills
- Development needs metrics:
  - Number of advanced tax technical training days completed
  - Number of agreed Continuous Professional Development training days completed
  - Number of leadership and management training/coaching days completed

### Review artifacts
- Comments by reviewer; Signed: Date:
- Comments by person reviewed; Signed: Date:

---

### Appendix 4. Sample Performance Improvement Plan (PIP)

### Core fields
- Name:
- Job Title:
- Date of Meeting:
- Manager’s Name:
- Timeline for Plan:

### Duties and Performance Concerns / Expected Outcome / Support
- List of specific concerns and consequences for team, organization
- Detail what is expected and outline what actions need to be taken to meet the standard
- List what support measures are to be provided to achieve the expected standard

### Review schedule and outcomes
- Review Date 1 — Met/Not Met/Partially Met
- Review Date 2 — Met/Not Met/Partially Met
- Review Date 3 — Met/Not Met/Partially Met

### Timeline and disciplinary implications
- This PIP is effective immediately, and it is expected that work performance will improve in line with the details set out above.
- The process is based on the expectation that the officer will achieve the specified improvements.
- Where satisfactory improvement is not achieved, the officer should be aware that formal verbal or written warnings may be issued at Progress Review Meeting 2 onward, which are warnings provided under the Disciplinary Code.
- Where satisfactory performance is not achieved by the conclusion of the PIP the officer will receive a final written warning and will be liable to further disciplinary sanction, up to and including dismissal.

---

### Appendix 5. Example of Steps and Actions in a Health and Safety Risk Prevention Action Plan

### Identify and assess hazards
- Identify the causes of accidents and other hazards such as falls, violence to staff, bullying, and harassment.
- Define the tax administration’s risk appetite and assess the severity and likelihood of risk occurrence.
- Identify, review, and advise on emerging risks.

### Prevention and mitigation planning
- Plan prevention, taking a holistic view of the tax administration’s organization of work, working conditions, technology progress, and social relationships, including risks of bullying and harassment.
- Eliminate hazards through design and process engineering and provide equipment to promote better protection or eliminate risks.
- Replace what is dangerous by what is safe or less dangerous.
- Include preventative training as part of induction, with special training where safety risks emerge.

### Steps (action sequence)
- 1. Identify the risks.
- 2. Assess the risks.
- 3. Select the control measures.
- 4. Eliminate risk through work design.
- 5. Carry out regular risk assessments and audits and take action to eliminate risks.
- 6. Conduct a continuous program of training and awareness of safe working habits.

---

### Appendix 6. Examples of Strategic Priorities and Implementation Actions for an HRM Strategy

### Priority: Be an employer of choice
- Improve employee engagement
- Implement staff well-being actions
- Invest in L&D
- Improve communications
- Conduct active sourcing
- Offer student internships for critical skills
- Build an employer brand

### Priority: Build the workforce of the future
- Conduct strategic workforce planning
- Recruitment and selection
- Champion inclusion
- Promote diversity

### Priority: Build, support, and value line managers as people developers
- Organize centers of expertise
- Introduce business partners

### Priority: Position HRM as a strategic organizational driver
- Develop HRM roles
- Implement HRM policies and procedure
- Introduce HRM technology

---

### Appendix 7. Common HR Operational Models

### The “three-legged stool” / HR Business Partner model
- Three main elements:
  - HRM shared service centers
  - Centers of expertise
  - Business partners

### Roles and functions
- HRM shared service centers:
  - Handle routine operational services (payroll, recruitment administration, absence monitoring, personnel record maintenance, routine advice on absenteeism)
  - Can be centralized or outsourced
  - Benefit from economies of scale
- Centers of expertise:
  - Provide high-level advice and services on key HRM activities to line managers (L&D, recruitment of specialist skills, serious disciplinary action, employee relations)
  - Small teams of HRM professionals focus on a particular area and provide specialist advice
- Business partners:
  - Experienced HRM professionals who work closely with the ELT and line managers to help them reach their goals
  - Support effective HR strategy implementation
  - Focus on strategic and business needs to ensure HRM activities support organizational goals

### Model variants and context
- Hybrid versions exist; some organizations implement only one or two elements.
- The operating model varies depending on organizational context, including size and extent of function delegation.

*Source: VIRTUAL TRAINING TO ADVANCE REVENUE ADMINISTRATION: Reference Guide (Appendixes), ISBN 9798400275449.*

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_Source: https://www.imf.org/-/media/files/publications/manuals-and-guides/2024/english/vitara005ea.pdf_