In the late 1970s, when I was first employed as a university tutor, my employment contract was a one-page letter containing three paragraphs. The first welcomed me to the university. The second told me my pay grade. The third told me to refer any questions to my head of department. It was signed by the vice-chancellor.

This contract posed the following deal: ¡°You pretend to work and we will pretend to pay you.¡± This defined the aspirations of the institution and the staff. My colleagues and I fulfilled our part of the deal. We enjoyed our lives and the university remained largely anonymous outside its region. What we were paid for and what was expected of us determined the quality of the university.

My second contract was much different. It was from a newly formed independent business school in one of Australia¡¯s best universities. The contract was two pages long and signed by the dean. The school¡¯s approach was to pay people well for what they do well and not to pay them for what they couldn¡¯t or didn¡¯t do. This meant that the normal balanced teaching/research/service contract was jettisoned for a customised one. The dean was an ex management consultant and this contract was more like one offered by a professional services firm. The staff union was uncertain about the wisdom of such a contract, but it was not consulted.

This new contract fashioned a demanding work culture. It was accompanied by bi-annual formal development and performance reviews. Every two years, salaries were adjusted to reflect performance. The people who excelled received a very handsome remuneration. Those that could not cope moved to a less demanding part of the university. But, most importantly, these contracts drove success. The school was the first in Australia to be consistently ranked in the top 50 business schools in the FT rankings.

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Fast forward to 2022. The university I am currently associated with is negotiating with the national staff union about the terms and conditions of its formal enterprise agreement, the periodically renegotiated legal document that regulates terms of employment in Australia. The previous agreement was 65 pages long. Unsurprisingly, the negotiations have been going for months.

The essential nature of the contract is a balanced workload within a ¡°woke¡± culture. Less politely put, the contract is work-to-rule. Creating personal and institutional excellence is expected but so is abiding by various tedious protocols. As any person who works in a bureaucracy will attest, following such procedures tends to crowd out the creation of excellence.

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Let me propose that the essential nature of an organisation¡¯s employment contracts shapes its internal culture and performance. The contrast between the performance-based contracts of the best professional service firms and the work-to-rule-style contracts in many bureaucracies is profound. Institutional quality differences are also obvious. Focus on and reward quality and you tend to get quality. Focus on organisational hygiene and you get a nice place to work. Quality and high performance may or may not follow.

From a strategic point of view, an agreement about organisational hygiene is worthwhile when it meets legislative requirements and social expectations. When formalised, this becomes a document of record rather than an agreement about how employees will be instrumental in advancing the core strategic aims of their institution. For universities, those aims are excellence in the creation (research) and dissemination (education) of knowledge. But with the employment lever of institutional quality firmly in the hands of university administrators and union representatives, negotiation becomes a game of give and take over a few more hours or dollars. Nothing much changes from agreement to agreement. Both parties parade their local importance and strategic impotence.

Here lies the opportunity that academics and their union representatives routinely squander. By focusing on matters of hygiene, such as workloads, leave entitlements, redundancy arrangements, dispute resolution, flexibility, diversity, equity and so on, the big strategic picture is pushed into the background.

If academics truly believe that they know best what quality means for a university, they are not acting to ensure its integrity. The senior professoriate needs to take an active part in designing a better workplace agreement. At present, most are notable in this process by their absence.

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No wonder many public universities are looking more like their public-service counterparts. In time, their reputations will adjust to reflect this peer group. And it will not be to their advantage.

Grahame R Dowling is professor emeritus at?UNSW Sydney and honorary professor at UTS Business School, University of Technology Sydney.