Performance systems experience growing pains

U.S. and Canadian government execs identify similar problems with pay for performance

When it comes to pay-for-performance systems, government executives often find the devil is in the details.

Two recent surveys of government executives in the United States and Canada showed that although managers in both countries generally support the idea of performance-based pay, they had problems with the systems once they were put in place. For example, in the Canadian survey, fewer than half believe that methods of assessing an employee’s performance were fair and accurate. U.S. executives expressed a similar view in a separate, earlier survey.

A recent survey conducted by the Association of Professional Executives of the Public Service of Canada (APEX) found that Canadian managers agree in principle that performance-based pay systems are a useful tool for monitoring, assessing and rewarding individual work performance. However, only slightly more than half of the executives surveyed said they believe the benefits of Canada’s four-year-old Performance Management Program outweigh the costs.

“That’s not a ringing endorsement,” said Dal Hines, a visiting APEX executive who spoke at a recent Washington, D.C., luncheon sponsored by the Senior Executives Association (SEA), a U.S. organization of career federal executives comparable to APEX. Officials released the Canadian survey results, including comparisons with an SEA study published in September 2006. The SEA survey asked members about the Senior Executive Service’s performance management system. The SES system, in effect since January 2004, has been held as a model for a governmentwide performance-based pay system.

Assessed together, the surveys indicated that U.S. and Canadian government executives have remarkably similar views of pay-for-performance systems. The SEA survey revealed, for instance, that U.S. senior executives support effective performance management and believe they should be held accountable for agency performance. But only 17 percent believe that performance ratings are fair and accurate.

About a quarter said assessments are fair and accurate “to a degree.”

Carol Bonosaro, SEA’s president, described the correlative results of the surveys as troubling for the future of pay-for-performance systems governmentwide.

“It doesn’t bode well for cascading these systems down through the civil service,” she said.

Bonosaro said the survey results could be analyzed in two ways, one positive and one negative. “The most positive way is to say when these systems are implemented, they need a lot of thought, care and planning to make sure that they are implemented as well as possible to avoid these kinds of problems,” she said. “The more negative way to look at it is to say that there are serious questions about the viability of such systems.”

As pay-for-performance systems are deployed in government, one challenge is developing workable performance measures. Linda Rix, co-chief executive officer of Avue Technologies, which helped SEA conduct its survey, said one State Department executive in the SEA study said, “We’re responsible for world peace. How do you evaluate that?”

U.S. and Canadian executives, for the most part, reported only a slight connection between performance-based pay and motivation. In the APEX study, 61 percent of the respondents agreed that the Canadian performance management system had no effect on the quality of their work because it was already at an appropriate level, they said. In the SEA survey, a striking 86 percent of executives said the new system had no effect on their job performance.

Government “executives are intrinsically motivated,” Rix said. “You don’t get to the SES because you’re thinking you’re going to be right in the power curve. You get there because you have a very strong altruistic motive.”
Dissatisfaction at the topIn recent surveys of senior government executives in the United States and Canada about their respective pay-for-performance systems, five common themes emerged. Executives said they:

  • Support performance management principles, but they perceive ratings distributions to be the result of forced quotas rather than merit.
  • Are concerned about a lack of transparency and communication when the government implements performance-based systems.
  • Believe the systems fail to make meaningful distinctions in measuring performance.
  • Are dissatisfied with the way pay is linked to performance.
  • Believe performance-based pay has little effect on motivation, quality of work or innovation in the workplace.
-- Richard W. Walker

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