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Good Decision Making Model

The objective of all decisions regarding employees in the ATO is to achieve outcomes
consistent with governing legislation, HR policies, and APS and ATO values.

The ATO approach to decision-making is empower decision-makers who have


responsibilities for managing people.

It is important to keep in mind that when making a decision, decision-makers are


using their discretionary powers to make a choice among possible courses of action.
In the exercise of choice, judgement is required as to which course of action is the
most appropriate.

ATO principles assist decision-makers use to their judgement to reach sound


decisions. All decisions should satisfy each of the principles:

þ Legal
þ Ethical
þ Equitable
þ Overt
þ Sensible
þ Timely
þ Natural Justice
These elements may not guarantee that you will make technically correct
decisions, but they can help quite significantly. Where there is no "right"
answer, others are more likely to accept your decision if they can see that it is
well reasoned. Where, despite your best efforts you make an incorrect
decision, people may not think less of you for it if you have covered all these
elements.

The consequences of bad decisions

Many of us will have personal experience of a decision which we believe has been
badly made. Some common examples would be a job application which was knocked
back, or poor grade on a school assignment. The feeling of being unfairly treated is a
bad feeling made worse if we are helpless to change the decision.

As well as the personal consequences for those on the receiving end of a bad
decision there are also negative consequence for the organisation which
allows those decisions to occur.

Some of the possible consequences of a bad decision are:


• feelings of resentment and unfair treatment among those affected
may build up leading to a non-cooperative work environment
• time may be wasted in dealing with complaints, grievances and
appeals
• decisions may not stand up against grievance or appeal processes,
forcing decision processes to be done again, or requiring the
payment of compensation
• the reputation of the decision maker and the organisation as a
whole may be damaged
• there may be a loss of faith in the process used leading to the need
to set up supplementary processes
• decisions which affect staff could lead to morale and efficiency
problems in the workplace
• you probably thought of some other consequences as well. As you
can see there are some quite compelling reasons to ensure that the
decisions you make are well founded and can stand up to the
scrutiny of others.

Key elements of a good decision

To assist your understanding of the key elements of a good decision, a more detailed
explanation of each of the elements follows:

Legal

For a decision to be legal you must have considered (and complied with) all the
relevant legislation, regulations, determinations, awards, registered agreements and
contractual obligations.

Unfortunately the legal aspect is often the beginning and end of decision
making. This is possibly because much of the legislation we deal with and are
subject to is both complicated and complex. It is easy to feel that once we
have found the legally correct answer the job is finished. People experienced
in the law know, however, that there is no decision so obviously correct that
the contrary view cannot be well supported with strong arguments. Many now
well established principles of Taxation and Administrative law were once hotly
disputed before the highest tribunals as parties appealed unfavourable
decisions.

There are essentially three questions you must answer to determine if your decision is
legal.

To the best of my knowledge and having taken advice if necessary does


the law authorise the making of this decision?
This simply means making prudent enquiries to ensure that you are fully informed
about what the law requires of you in making the decision. This may be a relatively
simple exercise or may require exhaustive research and you may wish to refer the
matter to other more expert staff for advice. You will have to judge what research is
necessary consistent with the circumstances surrounding the decision. There is usually
a point at which you can see that little more is likely to be achieved by further
research.

Am I a proper person to make this decision?


In the ATO environment most power to make decisions flows from legislation that
gives these powers to the Commissioner of Taxation. Powers to do with staffing,
finances, employment and the ATO's internal processes are usually delegated to the
permanent head of a department. These powers may be delegated to you in which
case you are responsible for the decisions you make using the delegated power.
Delegates cannot be directed to reach a particular decision, even by their superiors.
However your decisions may be reversed by your superiors provided they hold an
identical delegation. Naturally they then assume all responsibility for the decision.

As an alternative to delegating powers, staff may be formally authorised to decide


certain matters. Authorisations substitute you for the person holding the power. They
remain responsible for your decision ( a further incentive to make good decisions).
Because they are responsible for your decisions they are allowed to direct you to
come to a specific decision.

Have all procedures required by the relevant law been observed?


If a tribunal or review process finds that procedures have not been properly observed
they will usually order the decision making process to be carried out again using the
correct procedures.

Of course the consequences of the poor application of procedures may be much worse
than simply having to do the work again. The ATO's rights or options may be
severely compromised. Further action may be effectively prevented by your original
failure to observe correct procedure. (in debt collection work, incorrect service of
process when we had the chance may prevent us obtaining judgement because, by the
time the defect is brought to our attention, we cannot readily obtain good service on
the defendant.)

Ethical
The Macquarie dictionary defines the term ethical as:
• a system of moral principles by which human actions and proposals
may be judged good or bad, right or wrong.
• the rules of conduct recognised in respect of a particular class of
human actions.
• moral principles, as of an individual.

These are the standards or principles by which each of us personally decides what is
right or wrong. Words such as integrity, standards, values, honesty, fairness, courage
etc, also help to describe ethics.

Ethical beliefs will differ from individual to individual, and occasionally personal
ethics and behaviour outside the workplace may not align with organisational ethics
and behaviour expected of employees. The APS Values and Code of Conduct, and
ATO Values describe the ethical standards which are to be applied consistently to
yourself and those for whom you are responsible.

Above all a "one law for them and another for us" situation should never be allowed
to arise. The specific details of a particular code of ethics are usually of little
consequence as long as they are consistent and predictable in their application. That
is, we should practise what we preach.

Equitable

Equity within the ATO has come to mean that you apply the rules which govern your
decisions equally to all people. That is, you don't unjustly discriminate against or add
bias in favour of any person on grounds of race, colour, sex, religion, political
opinion, age, marital status, criminal record, medical record, sexual preference,
disability, nationality, trade union activities, or personal attributes.

Overt

The Macquarie dictionary provides the following definitions:


Overt adj. 1. open to view or knowledge; not concealed or secret.
Covert adj. 1. covered; sheltered. concealed; secret; disguised.
Sums it up really! What it means is that you should not pretend to make a decision
for one reason if you are really making them for a another reason.

If you believe your real reason justifies your decision state it openly, if not, do not
make the decision. It is often tempting to use convenient rationalisations to avoid
controversy. But beware that most people have a nose for such situations and will
detect or, worse, assume your ulterior motives. Being detected in such a situation will
hardly do your good name or reputation any credit, quite apart from any formal
sanctions that may apply.

Sensible

Commonsense is sometimes an important aspect that we overlook in making a


decision. Some good examples where decisions seem not to be sensible are: the
different dates for starting and finishing daylight savings in some states, the different
rail gauges used in each state. It will always be hard to justify a decision if it doesn't
make sense to ordinary people.

Timely
People affected by a decision have a right to know the outcome of a decision as soon
as possible after the decision is made, and a right to expect that decisions are made
within an appropriate timeframe.

Natural Justice

Natural justice exists when a sound decision has been made and the decision-maker
has acted fairly, in good faith, and without bias. There are three key elements:

The hearing rule requires that people whose interests may be affected by
a decision are given the opportunity to be heard. A
reasonable opportunity to present a case should include
a reasonable opportunity to prepare a case.

The 'no bias' rule requires that the decision maker does not have a
personal interest in the outcome.

The underlying rationale of this rule is that justice


should not only be done, but should be seen to be done.

The 'no evidence' rule requires that a decision be based upon reasonable
evidence which is relevant to the matter being
determined.

The Validity of Decisions

There are a number of circumstances which can cause a decision to be invalid. A


decision may be invalid where the decision-maker:

• is not empowered through an Act or delegation


• fails to conform to a procedure in the relevant legislation
• acts for a wrong purpose
• takes into account irrelevant considerations
• fails to take into account relevant considerations
• acts unreasonably
• acts on the basis of insufficient evidence, or
• acts at the dictation of another person

Decisions can have a direct and often powerful effect on people. It is important that
decision-makers are aware that often people's circumstances and the consequences of
decision may differ widely. Decision-makers should ensure that those affected by
their decisions understand the basis of the decisions.
Equally, people affected by a decision should ensure that they understand the basis of
the decision and, where decision-making processes were sound, accept that decision.

People who are dissatisfied with decisions have the right to review in accordance with
community standards as reflected in ATO review processes.

Communicating the decision


So you've come to a decision which you believe is good, well reasoned, fair etc. All
of that work can be wasted if you do not take the time to communicate your decision
appropriately.

Negative reactions to decisions can be avoided or minimised by putting some thought


and care into the way a decision is communicated. Some points to consider are:

Mode of delivery
There is nothing worse than receiving bad news from a cold and impersonal letter.
Whenever the decision you make is likely to have a major impact on someone else's
life, it is always best to try and talk to them face to face or over the phone before they
receive the news in writing.

However, it is also important that you should put your reasons in writing so that each
party has a precise record of the decision and reasons for it.

Depth of explanation
Decisions which are likely to have a small impact on people will need little
explanation to be accepted by others. However, decisions which have a major impact
on others may need to have the reasoning clearly explained in some depth before
people will accept them.

Where there is a lot of detail required to an explanation it may be wise to choose


several forms of communication in order to ensure that your reasoning is well
understood. For example, you might initially inform a person of your decision and
briefly discuss your reasons over the phone, you might then follow up with the full
detail of your decision set out in writing, lastly you might arrange a face to face
meeting with the people affected to clarify any points they still don't understand.

Summary

If you put a little extra work into ensuring that your decision includes all the elements
of a good decision and your reasons have been clearly communicated to affected
people, then you are much less likely to have your decisions questioned or contested.