A strong performance management system links employees’ results with that of the immediate organization and larger agency mission.
The Obama administration’s call for improving government performance and transparency is welcome encouragement to federal agencies that are trying to improve decades-old employee evaluation and pay practices.
Most of them intend to boost overall agency performance by creating evaluation procedures that more directly link an individual’s job goals and achievement to those of the organization. Others, such as the Defense Department, are adopting the approach to support a move to new pay-for-performance compensation programs.
But such plans often require significant changes to the way agencies handle employee reviews and manage workers’ performance throughout the year. Learning these new tricks is not always easy.
The traditional annual review, an ingrained yet sometimes uncomfortable meeting between supervisor and employee, is replaced in the new approach with ongoing and regular dialogue between the two. Performance objectives and progress are tracked in software management systems that provide constant transparency and accountability for the employee and supervisor, rather than on paper forms that appear for the annual review and then vanish for the rest of the year.
The new approach gives employees a clear line of sight on how they can influence the agency’s overall success, said Jon Desenberg, policy director at the Performance Institute.
Agencies that have already started down this road have learned the following lessons about making the transition.
Lesson No. 1: Make a connection between individual and agency performance goals
The foundation of the new breed of performance management systems is the idea that each employee’s individual performance is a building block for achieving the agency’s larger mission goals.
Employees need to understand job expectations, how those will serve as the basis for personal performance evaluations, and how they relate to the organization’s overall effectiveness.
“If we’re not holding employees accountable and measuring results, we’re not going to see program results that we need,” said Rochelle Granat, the Treasury Department’s chief human capital officer.
Agencies did not typically make those connections, or at least reinforce them enough, when evaluations were once-a-year affairs focused on an individual’s performance.
The notion of pairing individual and agency performance goals is also getting renewed high-level attention. The Obama administration has taken steps to start focusing on performance, said Jim McDermott, chief human capital officer at the Nuclear Regulatory Commission, who has been chairman of the Chief Human Capital Officers Council’s subcommittee on performance management.
These steps include creating the position of a governmentwide chief performance officer, still unfilled, and revamping measures to better determine agency performance with the Performance Assessment Rating Tool.
Meanwhile, the CHCO Council has joined forces with the Performance Improvement Council at the Office of Management and Budget on shared interests in this area. OMB wants to improve organizational performance, and the Office of Personnel Management and CHCO Council want to improve employee and executive performance.
”We have to marry them," McDermott said. "The altar in which we make the marriage is the specific goals, which should be stretch goals, and the measures that we use."
Lesson No. 2: Train managers to be better performance evaluators and coaches
One of the most difficult parts of performance management can be determining the measures by which to assess if an employee has met his or her goals, Granat said. A job with clearly quantifiable production goals is easy to measure, but others are not as straightforward.
“For example, those developing HR policies like enhancing recruitment efforts, how do you measure that — the number of employees hired, their retention rate or employee satisfaction?” she asked.
Agencies provide training to supervisors to understand how to develop those measures, but it varies. “It’s something that all agencies are struggling to improve,” Granat said.
Training programs also need to get better at teaching managers how to communicate more effectively with employees, Desenberg said.
“Many supervisors are good at the technical skills of their jobs, but they have little experience with giving constructive, well-informed feedback,” he said.
Inadequate manager training was behind some of the problems with the Defense Department’s pay-for-performance National Security Personnel System (NSPS), Desenberg said. DOD trained the trainers, who would train others in their organizations. But supervisors need ongoing training because determining performance is a difficult skill to learn.
Better management training is critical if agencies want to move to a pay-for-performance environment, but it is also a worthwhile investment for those continuing to use the General Schedule pay system.
Pay increases for grade promotions are generally automatic in the GS system, but increases within an employee’s pay grade are not supposed to be automatic. The supervisor is supposed to certify that the individual is performing at least at a successful level, an evaluation that managers could make more effectively if they were trained to use better performance metrics.
“Since there has been a lot of focus on improving the performance management system and making it more rigorous, it will be easier to use that vehicle to withhold within-grade increases,” Granat said.
Lesson No. 3: Increase communication and transparency about employee performance and expectations
Better communication is the linchpin of new performance management systems. Agencies can improve communication by promoting more regular interaction between managers and employees. They can also use tools like human resources information systems to share and document these conversations and track goals and performance.
Employees thrive in a performance management system when they can review communications with supervisors at the outset of the performance cycle to craft expectations and then throughout the cycle to report ongoing progress, Granat said.
“There shouldn’t be any surprise [at the evaluation] if it’s a good system that’s managed well,” she said.
Such communication and tracking systems also reinforce to employees how their individual goals and contributions line up with those of the organization’s overall mission, said Darlene Williams, deputy assistant secretary for administration at the Housing and Urban Development Department.
“I think employees perform even better when they have codified the expectations in a system,” she said.
HUD uses a performance management software program so the employee and supervisor can track the employee’s progress. The e-performance application can make it easier for the employee and supervisor to have a conversation, because the employee’s goals and plan for the year must be agreed on by both parties and entered and acknowledged in the system.
Employees can provide comments and feedback about their goals in the system or directly with the supervisor, and supervisors and employees can collaborate to change directions during the year.
“We want to make sure our employees are being developed and that we are capturing the essence of their work,” Williams said.
HUD’s e-performance application is part of Treasury’s HR Connect human resources system, which is based on PeopleSoft software.
Performance management software applications started as a way to automate the desk-to-desk paperwork shuffle associated with traditional annual performance reviews. Now the systems are evolving to better support a more interactive and transparent employee performance management approach, said Debra Vess, Treasury’s associate chief information officer for HR Connect.
The “system allows the employee and manager to be more focused on the employee’s performance as opposed to the mechanics of the paper process,” Vess said.
The increased communications and transparency of a new-style performance management system are valuable whether an agency goes to pay for performance or if the employees work under the traditional GS system, as they do at HUD, Williams said.
Lesson No. 4: Don’t force changes too fast
Agencies need to be careful about how they introduce new performance evaluation systems, especially if the changes relate to pay structures.
Under NSPS, DOD officials tried to change employees’ compensation plans and their performance standards at the same time, which created great resistance from employees, Desenberg said.
If agencies first implement performance standards and then change the pay system afterward, “people will be more accepting, and you get better results,” he said.
DOD earlier this month suspended converting more employees to the NSPS system until it and OPM review the program, said Deputy Secretary of Defense William Lynn.
“This administration is committed to operating fair, transparent and effective personnel systems, and we are undertaking this review to assess whether NSPS meets these objectives,” he said.
The system has to be “trusted by the workforce, and so far, this one isn’t,” said Max Stier, president of the Partnership for Public Service.
Agencies have to start with implementing a strong performance management system and getting that right before they can make progress toward a pay-for-performance system, he said. Pay is only a tool to help performance management work and show the value placed on it, he said.
“If you don’t have ownership from the employees, including employee organizations like unions, nothing’s going to work,” Stier said.
NRC’s McDermott recommended that agencies use the data from the Human Capital Survey to identify and understand employee concerns and perceptions.
“Figure out what’s broke and fix it,” he said. NRC led the rankings for three out of four categories in the survey and topped the Partnership for Public Service’s 2007 Best Places to Work in the Federal Government survey.
“You have to listen to them and show them you are listening by addressing the issues that they raise,” he said.