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									Audit & Consulting Services

Review of OSFI’s Training and
Development Framework (T&D)
Training and Development Review Report
    Index                                   Page

• Background                                  3
• Review objectives                           4
• Scope of the review                         5
• Key lines of inquiry                        7
• Outline of the T&D framework                8
• Review methodology                          9
• Structure of this report                   11
• Overall assessment of the T&D framework    12
• Results & recommendations
  by framework element                       13
• Management response & action plan          26

•   In view of the complexity of the financial industry and the
    evolving regulatory environment, OSFI staff must remain
    abreast of current knowledge and must be equipped with
    effective tools and techniques to review, among other
    things, the operations of financial institutions.

•   OFSI has committed in its Report on Plans and Priorities
    (2005/06 –2007/08) to enhance training options in key
    areas and to enhance its succession planning process,
    which is linked closely to some of its training and
    development needs.

•   OSFI has in place a variety of training and development
    frameworks, programs and activities designed to help
    support staff in the achievement of their objectives.

In recognition of the importance of staff competency to the successful
discharge of OSFI‟s mandate, Audit and Consulting Services (A&CS) has
identified the need for a review of OSFI‟s Training and Development (T&D)
framework and underlying approach for developing human resources
capacity within OSFI.
Review objectives

• To assess the adequacy of OSFI‟s current
  T&D framework and processes; and

• To assess the degree to which the T&D
  framework and processes support an
  alignment between T&D programs and
  OSFI‟s strategic & operational requirements.

Scope of the review

•   The work focused on OSFI‟s Training and Development
    framework and related processes. Due to the nature of
    the review, the work was high-level in nature

•   The scope of this review encompassed the following:

     – The activities of the Professional Development and Training
       (PD&T) group
     – Sectoral and Divisional responsibilities for T&D programs
     – Corporate planning processes

•   Items considered out of scope included:

     – The effectiveness of OSFI‟s training and development
       programs and delivery of them is out of scope of this review.

        This review provides the foundation for such a review or

Scope of the review:

• This review covered the period from April / 05 through
  November / 05.

• We also took a forward-looking view to consider
  improvements that are being made to the training and
  development (T&D) framework and related processes as
  well corporate planning processes with respect to T&D

Key lines of inquiry

• Accountability Framework:

   – Is accountability for training and development (T&D)
     within OSFI clearly articulated and understood?

• Planning for Training and Development:

   – How effectively are OSFI‟s corporate needs identified,
     planned for and translated into meaningful T&D

   – How effectively are individuals‟ (staff) needs identified,
     planned for and translated into meaningful T&D

• Outcomes Monitoring:

   – How effectively is OSFI monitoring its T&D framework for
     relevance and performance?

Outline of the Training and Development framework
and criteria for the review

 Framework Elements      Component Areas /

 Accountability          a.   Roles and responsibilities
 Framework               b.   Decision-making structure
                         c.   Individuals’ understanding and commitment
                         d.   Adequacy and appropriateness of corporate policies

 Planning for Training   a.   Link between strategic & business priorities and learning
 and Development         b.   Link to external environmental developments
 Needs                   c.   Link between training programs and individuals’ needs
                         d.   Budgeting for T&D Needs

 Monitoring of           a. Monitoring for relevance & performance

Review methodology
•   The review was conducted in compliance with the Institute of Internal Auditors‟
    International Standards for the Professional Practice of Internal Auditing,
    consistent with the Treasury Board Policy on Internal Audit

•   Review Planning:
     – Review criteria were formulated based on a review of best HR training and
        development practices and established standards and were agreed to by
        the Senior Director, Human Resources.

•   Review Conduct:
     – Interviews were held with representatives from the following groups:

           • Corporate Services Sector: HR Senior Director, Professional
             Development & Training (PD&T) Group, Project Management Group,
             Office Management and Technical Services Division, Finance and
             Informatics Division
           • Regulation Sector: Legislation and Approvals Division, Capital
             Accounting and Research Division, Private Pension Plans (Pensions)
           • Supervision Sector: Financial Conglomerate Group, Financial
             Institutions Group, Regulatory and Supervisory Practices Division,
             Strategic Initiatives
           • Strategic Planning and Performance Measurement

     –   Review of material and documents provided by representatives of the
         above groups

     –   The A&CS Reporting Protocol was followed in planning, conducting and
         reporting on the review.

Review methodology
Current practices were assessed using the following scale:

 Weak                  Management attention is needed to address deficiencies
                       within the framework, practices and / or processes. .

 Needs                 Some areas of the framework, practices, and / or
 Improvement           processes are working as intended but significant
                       problems exist

 Satisfactory          Many areas of the framework, practices and / or
                       processes are working as intended but improvements
                       are needed in certain areas

 Good                  Most areas of the framework, practices and / or processes
                       are working as intended but there are opportunities for

 Strong                All areas of the framework, practices and / or processes
                       are working well as intended. No areas for
                       improvement were identified.

Structure of this report

 • An overall assessment of the training and
   development framework and related
   processes is provided

 • This assessment is supported by a review
   of each framework element including:
    – Assessment by component area / criteria
    – Overall findings & observations
    – Recommendations

Overall assessment of the T&D framework

 Framework             Overall Assessment:         SATISFACTORY

 Accountability        OSFI‟s practices in this area are considered STRONG.

 Planning for          Overall, OSFI‟s practices in this area is SATISFACTORY
 Training and
 Development Needs

 Monitoring of         Overall, OSFI‟s practices are SATISFACTORY in this regard.
 (relevance &

 Note: The effectiveness of OSFI’s training and development programs and delivery of them
 was out of scope of this review. However, those interviewed in this review expressed
 satisfaction with the training and development programs and PD&T group’s services and

Results & Recommendations
by framework element
  1. Accountability Framework
  2. Planning for T&D Needs
  3. Monitoring of Outcomes

1.        Accountability Framework:
          Review criteria & assessments

 Overall, the Accountability Framework related to T&D is considered to be ‘STRONG’.

     Component Area       Description of Criteria                                         Assessment
                          against which the T&D Framework was assessed
     a. Roles and         Responsibilities surrounding all facets of OSFI‟s T&D           STRONG
     Responsibilities     framework are established, defined and assigned (both within
                          the function and within Sectors)

     b. Decision-Making   A functional decision-making and governance structure           STRONG
     Structure            related to T&D (including committees) exists and works

     c. Individuals‟      Individuals understand and are committed to their roles and     STRONG
     understanding and    responsibilities as they relate to T&D.

     d. Adequacy and      Corporate policies, procedures and guidelines in support of     STRONG
     appropriateness of   these roles and responsibilities are clear, well communicated
     corporate policies   and up to date.
                          Policies/guidelines/methods employed are appropriate given
                          organizational size, resource capabilities and risk profile.

1.        Accountability Framework
          Overall findings

     Observations / Assessment

     1.   In examining the policy framework related to training and development, we have concluded
          that policies are comprehensive and address all required accountabilities. Interview results
          suggest that the accountabilities as described in the policies are well understood by key
          stakeholders involved in the planning and delivery of T&D programs – both within HR and
          within individual Sectors.

     2.   We examined the degree to which a functional decision-making structure related to training
          and development exists and works effectively. We understand that senior management, as
          part of their existing strategic and business planning processes, discuss issues pertaining to
          HR and T&D programs.

     3.   Interview results suggest that there is a strong understanding and commitment to
          professional development at OSFI which should be considered a strength in this area.

1.    Accountability Framework


      No recommendations have been identified.

      However, recommendations under “Planning for Training &
      Development Needs” has implications from an accountability

2. Planning for T&D Needs:
   Review criteria & assessments

   Overall, planning for T&D needs is considered to be ‘SATISFACTORY’.

  Component Area        Description of Criteria                                       Assessment
                        against which the T&D Framework was assessed
  a. Link between       Training and development strategies are linked to OSFI‟s      SATISFACTORY
  strategic &           overall business strategies. To this end, senior              See observations
  business priorities   management translates business objectives into learning,      #1 & 6
  and learning          development and re-skilling goals and continuous learning
                        results that contribute to both OSFI and the individual.

  b. Link to external   Training and development strategies reflect upon and are      STRONG
  environmental         aligned with the broader industry or environmental
  developments          developments.

  c. Link between       An effective training and development planning process        SATISFACTORY
  training programs     (formal and/or informal) exists, considers individual needs   See observations
  and individuals‟      and results in the existence of effective needs-based         # 2,3,4, 5 & 6
  needs                 training programs that have sector-wide or OSFI-wide

  d. Budgeting for      Training and development needs are planned for,               SATISFACTORY
  Training and          budgeted and expensed as planned.                             See observations
  Development                                                                         # 1,2, 4, 5 & 6

2. Planning for T&D Needs:
   Overall findings
 Observations / Assessment

 1.   To assess OSFI‟s overall training and development planning, we examined strategic and
      business planning processes to determine if OSFI‟s training and development planning is
      integrated with those processes. Planning at the strategic, operational and project levels is
      being done in a systematic manner. However, while HR and related training and
      development issues are discussed in these fora, the corporate / sector / project plans do not
      always incorporate these training and development strategies.

      The notable exception to this are project plans for major initiatives such as EDMS and BSII
      which have specific training strategies and plans.

      As training and development is a key enabler to the achievement of corporate / sector
      objectives, we would expect to see training and development impacts more formally
      incorporated into strategic and business planning processes and into sector and divisional
      business plans.

      It is our understanding that some effort has been made to integrate HR Planning into the
      2007/08 year‟s planning exercise. Further, we understand that some consideration is being
      given to formally documenting training and development needs into priority projects for
      2007/08 planning year.

 2.   Staff development needs are also identified informally but the results are not always
      incorporated into the annual performance appraisal process. Goal commitment documents
      outline the objectives and priorities of the individual for the coming year, but specific
      development plans are not always prepared.

      In practice, we understand that managers and employees discuss what types of development
      might be needed, but the results are often not formally documented, nor are these
      discussions necessarily translated into specific commitments.
2. Planning for T&D Needs:
   Overall findings, cont’d.

 Observations / Assessment

 3.   In most cases, the alignment of corporate and staff learning needs is accomplished informally
      via the individual manager who works with employees in setting their development objectives
      for the coming year. The process is informal and relies heavily on the willingness and effort of
      the manager. As a result, the process is not always consistently followed.

 4.   Some notable exceptions exist within Pensions and FCG. Pensions has a very well
      established approach for training and development planning that links its training and
      development program to corporate priorities as well as individual needs. In both Pensions and
      FCG, one individual is assigned responsibility for analyzing training and development needs
      within the group (as identified in performance reviews). The identified training needs are
      communicated to the PD&T group for consideration for their planning purposes.

      It should also be noted that Supervision has a well established training program for staff.
      These practices are considered strengths in training and development planning, however, they
      are not present OSFI-wide.

 5.   With the exception of the examples noted in Observation 4 above, there is no formal process
      for the documentation and consolidation of staff learning needs and plans. Without this
      information, an assessment of OSFI‟s overall learning needs may not be complete resulting in
      misalignment of training programs and budgets.

 6.   It is our understanding that the PD&T group has undertaken some initiatives to enhance the
      documentation of OSFI‟s overall training needs and is integrating these needs into the
      planning process.

2. Planning for T&D Needs:


  1.   OSFI should continue to examine ways by which staff learning needs are brought together
       for an overall analysis of them and to identify training which would be best provided
       centrally through the PD&T group.

       We encourage HR to build upon the successful approaches that are already in place in
       Pensions and FCG in this regard.

  2.   The assessment of learning needs at the corporate, sector and project levels should be
       formalized in OSFI‟s business planning processes.

       We understand that some consideration has been given to explicitly identifying training and
       development needs and documenting these needs for priority projects.

       We strongly encourage the Director of Strategic Planning and Performance Measurement
       and the Senior Director of HR to continue with these efforts.

3. Monitoring of outcomes:
   Review criteria and assessment
 The practices in place to monitor training and development outcomes
 are considered to be ‘SATISFACTORY’

 Component Area      Description of Criteria                                Assessment
                     against which the T&D Framework was assessed
 a. Monitoring for   The relevance of policy and programs is assured        SATISFACTORY
 relevance &         through continued monitoring, annual reporting and     See observations
 performance         adjustments to meet organizational and clients‟        # 2, 3 & 4

                     Performance of the training and development
                     framework is monitored against policy objectives,
                     goals, plans and continuous improvement is ensured
                     through periodic process reviews and best practice
                     reviews including:
                     • Monitoring of actual vs. budget resources /
                     • Processes in place to assess cost and benefits and
                     alternative ways of meeting needs
                     • Use of client / employee satisfaction surveys

3. Monitoring of outcomes:
   Overall findings

  Observations / Assessment

  1.   To ensure the relevancy of training and development policy and programs, OSFI
       informally monitors training and development needs, annually reports on training and
       development activities and budgets, and make adjustments to the program to meet
       business and staff needs.

       Performance of the training and development program is assessed by monitoring the
       PD&T group‟s objectives, goals, plans. Continuous improvement is ensured through
       periodic process reviews and best practice reviews including:
        –    Use of client / employee satisfaction surveys
        –    Monitoring of actual versus budget resources /expenditures
        –    Processes to assess costs and benefits and alternative ways of meeting needs

3. Monitoring of outcomes:
   Overall findings

  Observations / Assessment

  2.   Useful mechanisms are in place to monitor the effectiveness and relevance of OSFI‟s
       training and development program. Examples include the following:
         –    Employee surveys are analyzed by the PD&T group and by management to
              determine any global gaps in competencies.

        –    The Performance Management Guide is reviewed annually based on feedback in
             the bi-annual employee surveys and annual reviews that the PD&T group
             conducts on performance appraisals.

        –    The PD&T group conducts a post-training survey on some courses to determine
             the overall usefulness and applicability of the courses to daily operations. This
             survey is generally conducted some 6 months after the course to get a better
             assessment of the applicability of the training. It is not administered in all cases,
             for feasibility reasons; however, for major training initiatives, it is applied.

3. Monitoring of outcomes
   Overall findings, cont’d.

 Observations / Assessment

 3.   The areas of improvement noted in Section 2, Planning for Training and Development
      Needs, surrounding the identification of staff learning needs, also relate to this framework
      element. While some groups (e.g., Pensions and FCG), systematically review their
      group‟s collective learning gaps to identify development priorities, other groups do not.

 4.   An analysis of corporate, sector and staff learning needs is not being done in a
      consolidated fashion. In some cases, such as FCG and Pensions, collective learning
      gaps are consolidated and passed along to PD&T for their consideration, but this is not
      done OSFI-wide. Without such a review, OSFI‟s assessment of overall corporate, sector
      and staff T&D needs may not be complete and fully represent learning needs.

3. Monitoring of outcomes:


 1.   OSFI should enhance its assessment of learning needs to facilitate a review of overall staff
      learning needs, emerging trends, and the need for further training and development

      We understand that a process currently exists in Pensions and FCG whereby collective
      needs are identified and discussed with the PD&T group. This process is considered a
      strength and we encourage the HR and the Executive to build upon this process OSFI-

      This recommendation depends in part on the implementation of recommendation 2 under
      „Planning for Training and Development Needs„ section of this report.

Management response and action plan
to the T&D review recommendations

     Currently learning needs are surfaced through a variety of means (ongoing
meetings with Directors and Senior Directors or key points of contact where
identified (Pensions, FCG), surveys, focus groups, 360-degree feedback
summaries, exit interviews, union-management meetings, project & special
initiative planning). Based on this input, PD&T assesses the best means of
bridging identified learning gaps including recommending that we develop,
coordinate or deliver training centrally. We believe that this captures the majority
of ongoing operational learning needs but will work with line management to seek
other opportunities to leverage the „single point of contact approach‟ to identify
common learning needs where appropriate (i.e. organizational change).

     In order to ensure that an assessment of potentially broad learning needs be
formalized in the business planning process, mechanisms to capture such needs
in a documented way (for priority projects) will be introduced into this year‟s
business planning process (2007/08). Such mechanisms will surface potential
learning requirements early so that PD&T can meet with appropriate line
management during the planning process to help them better assess the need
and plan for its delivery in a managed way. We will report on the impact of this
change at the end of the 2007/08 business planning process.


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