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Public sector organisations are increasingly aware of the importance of the client experience. Profitable organisations in the private sector ensure they provide superior customer service, easy access to information and are responsive to their client needs. Successful private organisations know that satisfied customers lead to higher sales and therefore, increased profitability. Satisfaction is important because it determines the customer’s potential for repeat purchasing behaviour regardless of alternatives.

However, little is known about how individual experience translates into better public sector service delivery. The government holds the public captive with a monopoly of services with which they must interact to meet their obligations, for example in respect of interactions with the Australian Tax Office (ATO). Therefore, there is a view that a poor citizen experience should not impact compliance. Indeed, in this context, does citizen satisfaction even matter, as traditional deterrence thinking posits that fear drives obedience (Casey & Scholz, 1991)? However, we also know that there is a precarious balance between fear and duty and the subsequent effect on trust and compliance (Hoelzl, Kirchler, & Wahl, 2008).

We have carried out research into tax compliance behaviour (Langham, Paulsen, & Härtel, 2012) that uncovered a fundamental relationship between a citizen’s intention to comply and actual compliance. Generally, we find that if individuals want to comply, and there are no obstacles to performance, then compliance is the most likely outcome (Langham, 2012).

However, poorly designed systems which create obscurity and complexity, make ineffective administration the highest predictor of non-compliance, regardless of actual intention. Individuals who are determined to meet their obligations and expend considerable effort to overcome problems, can still fail to comply. Worse still, these people are often punished for non-compliance.

Importantly, administrative hindrances do not deter those who wish to evade. Administrative complexity may actually conceal deliberate non-compliance. It is clear from our research that improving citizen compliance requires removing the obstacles to compliance. In terms of the client experience, it means making services and interactions easy, obvious and clear. A goal of this magnitude requires significant will to change the direction and culture of a large public sector organisation such as the ATO.

The ATO has attempted to improve the often strained relationship between taxpayers and the tax system by, in recent years, undertaking a massive change program known as Reinventing the ATO. The objectives for this transformation have included upgrading systems, improving staff culture and most importantly, developing a greater understanding of the taxpayer experience. However, despite the change in direction, there remains a considerable disconnect between the change and the desired outcomes of a more customer-focused organisation. This is largely due to deficient or inappropriate performance measures.

The role of performance measures

Performance measures for staff are a means to enable organisational transformation. Employees work to deliver results based on targets set by the organisation. Targets are developed to meet key performance indicators, sometimes known as ‘KPIs’. These indicators are the focus of employees. Items that are measured are often what is also valued by the organisation (Ariely, 2010). Therefore, we suggest that KPIs are an essential control for organisational management and to bring about change.

Many of the existing KPIs for the ATO are related to fiscal performance and are not necessarily compatible with the outcomes of increased voluntary compliance and positive citizen experiences. Some may even be counter-productive to improved citizen experiences. For example, the number of audits and liabilities for direct revenue does not equate to an increase in taxpayer compliance. Audit numbers drive the behaviour of ATO employees to increase audits and scrutinize each record for potential revenue. They do not support a change in employee behaviour to assist and prevent taxpayer error. In fact, higher levels of compliance would mean there would be less need for audits. Therefore, audit numbers and direct revenue are poor indicators of effective organisational performance if the outcome you are evaluating is improved taxpayer compliance.

Consequently, the ATO has attempted to include measures that evaluate the quality of the client experience to support compliance. These new measures rely on thinking from the services marketing literature. The use of satisfaction measures (SERVQUAL) and Net Promoter Scores are inadequate proxies for understanding the performance of a system that is to improve compliance rather than increase customer purchasing behaviour. There is also insufficient sensitivity in the measurement approach to truly understand the weaknesses in the experience and subsequently provide direction for improvements. For example, the ATO received an overall satisfaction rating of 55% for the website in 2015 (Australian Taxation Office, 2016). The rating showed a clear service weakness in comparison to other areas such as the call centre (75%) and the shopfront (85%). The measurement approach does not show whether the result is due to poor usability, complex content, poor search engine design or a variety of other possible issues. The measures do not examine comprehension and interpretation of the content or whether the information sought facilitated compliance.

There are also broad performance measures such as “People surveyed agreed that the ATO provides information that can be relied on and understood – 78%” (Australian Taxation Office, 2016), which is an average of individuals’ perceptions of the interactions with call centre operators, shop front staff, or communications via letter or the website. Additionally, many of the measures are targeted at the delivery channel or tax product. Such broad performance measures disguise major flaws in the service interactions as well as the connections between services.

It is often the citizen who must bridge the gap in services and make sense of poorly integrated processes, products and systems. Citizen obligations often involve multiple connections with different systems and may require data from different jurisdictions, levels of government or even different Commonwealth departments. To persist through an elaborate web of requirements requires the citizen to have stamina and dogged determination. Citizens are also expected to think and behave like bureaucrats to meet their obligations. They are required to keep records, follow process steps and instigate controls that may hinder the productivity of their business, often with little personal benefit. There are no evaluation processes that determine the effectiveness of the entire experience, whilst also identifying weaknesses in the services, products or processes that can be monitored and improved.

Holistic evaluation of public sector client experience

The current study involves the development of a holistic client experience measurement scale and an evaluation methodology known as Experience Effectiveness (XE). The scale has been developed out of an extensive literature review from the diverse domains of: services design; public administration; human factors and ergonomics; information technology; user-centered design; systems thinking and complex social programs; and effectiveness evaluation.

The framework provides a multi-perspective evaluation from not only the citizen viewpoint, but also the service delivery employees and third-party intermediaries. The framework also uses three categories of measures relating to processes, products and services. Using this scale an experience can be rated at both macro and micro levels.

Measuring the experience of small business with the ATO

The case study in our research focused on the experience of starting a small business. We observed the entire process including field studies, interviews, and quantitative data gathering from the full range of actors in that experience (small business owners, tax designers, tax agents, external scrutineers, and tax service staff). We also piloted the measurement instrument in the form of a survey.

The activity-focused measurement approach we adopted has identified significant issues that would not be apparent in traditional measurement approaches. The areas rated lowest for starting a small business were ‘set-up registrations’ and ‘set-up business fundamentals’. Within each area, products and processes were rated significantly lower than services. The lowest rated process variables were: lack of short-cuts; inflexibility of process; inability to use existing tools; large amount of effort; and the large number of steps to complete the process. The lowest rated product variables were: amount of focused attention required; a heavy reliance on memory; and use of specialist jargon.

A number of weaknesses were demonstrated in the touchpoints for the business start-up experience. The lowest rated sub-experience was the registration process for businesses. Businesses were aware of basic requirements but were unaware of industry specific registrations until they were in urgent need of a particular registration or permit.

Many owners described the experience as “walking through the dark and bumping into objects that you didn’t know existed”. Clear issues included lack of connection between government services and a lack of responsibility across levels and parts of government for assistance. The fragmented service created reverse workflows, duplication of information as well as general confusion for small businesses.

Further studies are underway to apply the XE framework to other public services both in Australia and abroad. The aim of this research is to provide a meaningful measurement approach that enables public sector organisations to successfully align services with citizen outcomes and ultimately assist citizens to meet their obligations.


Current research publications related to this article:

Langham, Jo’Anne and Paulsen, Neil. Invisible taxation: Fantasy or just good service design? [online]. Australian Tax Forum, Vol. 32, No. 1, 2017: 129-174.

Langham, Jo’Anne and Paulsen, Neil. Measuring good design in the public service. [online] Conference paper Design Management Institute – Academic Design Management Conference “Inflection Point” – Boston July 2016
Also located at Researchgate

This article has 1 comment

  1. Excellent article.

    Changing the enforcement culture of some ATO staff will require more than a name change from Compliance Group to Client Engagement Group, but it is a start.

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