The Netherlands has twenty regions where the population is declining or is expected to do so in the future. According to the Dutch government's coalition agreement, the municipalities in these regions need to collaborate more at regional level by clustering key provisions. Dr Jeroen Meijerink from the University of Twente (UT): “A shared service centre could provide the kind of effective provision that municipalities of this kind need. Providing that – at least according to my research – the correct approach is adopted to the use of service level agreements (SLAs).”
The UT's Dr Jeroen Meijerink and his colleague Dr Marco Maatman recently published an article in the leading academic journal ‘Personnel Review’ outlining recommendations for working with shared service centres. Meijerink: “Their main conclusion is that SLAs, often used as a contract between central departments and internal clients, should not be deployed as a sanction, but as a means of identifying issues.”
Shared Service Centre
In a shared service centre, several organizations opt to offer services such as staff and payroll records, staff recruitment and training from a central organizational division. At the same time, the process is managed at local level: local organizational divisions determine which services the shared service centre offers and decide on the specifications. This enables the divisions to maintain their autonomy.
Role of control mechanisms in shared service centres
Jeroen Meijerink investigated the role of control mechanisms, such as SLAs, in 19 organizations in the Netherlands, including central government and three large municipalities. SLAs are contracts agreed between the shared service centre and internal customers. They cover such issues as the period within which requests for leave must be processed or how long it should take for customers to receive an answer to questions about payroll records. They might also stipulate a certain percentage for correctly-paid salaries.
Sanction or early-warning system
The idea behind shared service centres is to reduce costs whilst also maintaining high-quality services. Meijerink: “All kinds of different things can be agreed in SLAs. If it emerges that the agreements are not being met, the finger of guilt is often soon pointed at the shared service centre. In fact, it can often be the client that is failing to manage the work process properly. SLAs should not be used as a sanction, but as an early-warning system to start the discussion on where in the process the problem actually lies. Sometimes the issue may lie with the manager or staff member or somewhere else in the organization.”
More information
Meijerink conducted research at 19 organizations and 91 company divisions, including AHOLD, KLM, NS and Rabobank, as well as central government. Meijerink obtained a doctoral degree at the University of Twente in 2013 and has since worked as assistant professor on the IBA and health sciences programmes. His research is under the auspices of the Institute for Innovation and Governance Studies (IGS), in the Faculty of Behavioural, Management and Social Sciences, Human Resource Management department
