# Presentation: 922583

## Performance ManagementUpdate

- Barbara W. Colchao
- Performance Management and Incentive Awards Division

## New Developments in Performance Management

- Setting the Stage
- Competencies and Performance
- Balanced Measures
- In the Spotlight
- Recent OPM Studies
- Reminders
- Updates

**Notes:**
Topics we’d like to cover today
Share information
Popular themes and latest statistics

## Setting the Stage

- Looking at the concept of “strategic rewards”
- It’s not just money any more
- Employees want to feel valued and that they make a difference
- Need to balance work/life issues
- Desire for career development
- Making options available -- one size does not fit all
- Performance management processes help provide the tools managers need

## Competencies and Performance The yin and yang of getting the job done

- The performance “formula”
- Performance = Capacity **x** Commitment
- Performance is the accomplishment of work assignments or responsibilities
- Capacity is the ability to do something
- Commitment is the willingness and promise to do something

**Notes:**
Lots of folks talking about competencies
Explain their role when talking performance
Don’t want to imply performance is formulaic, but trying to identify some major components to help supervisors identify parts they can affect
Note equation views performance as product of the two--either one missing and performance doesn’t happen

## What are the dimensions of performance?

- Level of proficiency
- Entry level
- Developmental level
- Journey level
- Master level

- Level of accomplishment
- Marginal
- Fully Successful
- Outstanding
- Level of aggregation
- Individual
- Team or group
- Organization

**Notes:**
Performance can be viewed from several dimensions
Must be clear which ones we’re talking about at any given time--too easy to confuse the issue
Proficiency describes ability to perform and usually applies to individuals--class standards, PDs, career paths--often described in levels of expertise employee brings to job
Accomplishment describes achievements, what employee actually gets done--usually described in terms of how well something was done
Aggregation describes how many people were involved, individual or groups within the organization

## Capacity—the ability to do something

- Capacity = Competencies **x** Resources **x** Opportunity
- Competencies are sets of measurable skills, knowledge, behaviors, and personal attributes critical to successful performance
- Resources are the physical tools and environment needed to do the job
- Opportunity is giving the employee the chance to do it

**Notes:**
Capacity itself is the product of various components
Competencies--it’s important to put the right person in the right job; make effective work assignments that capitalize on employee’s strengths and abilities; establish IDPs to help employees develop
Resource--make sure employees have the equipment they need to do thejob; also maintain a safe and efficient work environment: physically and emotionally
Opportunity--make sure employees get the chance to do things right and well, give them the chance to practice newly acquired skills in an encouraging environment

## Commitment—the willingness and promise to do something

- Employee agreement to complete assigned work at a specific standard of
- Quality
- Quantity
- Timeliness
- Cost-effectiveness

- Means of gaining commitment include:
- Setting clear goals
- Using credible measures
- Involvement
- Open communication
- Climate where employees feel valued
- Recognizing and rewarding employees

**Notes:**
Getting employee commitment is often the most challenging factor of the formula
Good performance management techniques can help
Employees want to feel valued and that they make a difference-- this helps them identify with the organization and its goals

## Linking the Formula to Performance Management

**Notes:**
Can’t leave out the lozenges -- PM processes
Good communication and good management is often the key--balancing these processes helps get you there

## Performance ManagementWhat do we really manage?

- Employees
- Performance — what they do and how well they do it
- Discretionary effort
- Level of commitment

- Supervisors
- Antecedents — setting the stage
- Planning
- Monitoring
- Developing
- Consequences
- Monitoring
- Rating
- Rewarding

**Notes:**
How it plays out
It’s a partnership between employee and supervisor--each has a part to play
Antecedents: have needed resources and competencies; communicated organizational goals; realistic, achievable, measurable individual goals that are understood and accepted
Consequences: recognize and reward; coach for improvement; give feedback often; identify and help correct poor performance, taking action when necessary
True at organizational level also--antecedents: vision and direction, short & long-term goals, work cultures and environments that encourage balance between family and work needs, efficient & effective work processes; manage consequences also

## Performance Management Processes

- Capacity
- Planning for competencies, resources, and opportunities
- Monitoring to provide feedback on competencies
- Developing competencies and work processes

- Commitment
- Planning by setting goals
- Monitoring by feedback and performance measurement
- Rating that reflects results and a form of feedback and recognition
- Rewarding good performance

**Notes:**
Where the performance management processes fit in
Some processes play dual roles--planning and monitoring

## Balanced Measures

- Started with Kaplan and Norton in the Harvard Business Review in 1993
- Redirect from single focus on finances to multiple perspectives
- Financial
- Customer
- Internal business process
- Learning and growth
- Research shows direct link between employee satisfaction and the “bottom line”

**Notes:**
Another popular topic we hear lots about
The service-profit chain (also first seen in the Harvard Business Review in 1994)--satisfied employees deliver superior service creating satisfied clients who create growth in revenue and earning and increased shareholder value
Part that’s often overlooked is employee satisfaction
Often based on leadership, communication, reward and recognition, and career development

## Government Approach

- Vice-President Gore’s National Partnership  for Reinventing Government promotes using balanced measures
- Three perspectives identified
- Agency mission and goals
- Customer needs and satisfaction
- Employee involvement, development, and satisfaction with working conditions

**Notes:**
All three legs of the supporting stool seen here
Part of new SES regulations
Need to be incorporated into everyday management
Where and how does it fit in best?

##  A Performance-Measurement Pyramid

**Notes:**
Most effective at organizational and executive levels
Some aspects can be brought down to individual employee level, but usually addresses manner of performance rather than actual results
Final results generally rely on multiple efforts
Executive level, and some managers and supervisors might, reasonably be held accountable but most staff employees do not have sole ownership
Most employees limited to what they personally do and how well they do it, thus contributing effectively to the final output/outcome

## In the Spotlight

- The President’s Management Council (PMC) Report and Workplace Goals
- The OPM Director’s PILLAR Award

- (***P****erformance, ****I****ncentives, and ****L****eadership ****L****inked to ****A****chieve ****R****esults*)

**Notes:**
Two recent initiatives that focus on our program area
Both indicate high visibility for performance management--high-level commitment and high-level recognition

## PMC Report

- Focus on Performance
- Three basic themes
- Expect Excellence
- Establish Accountability
- Take Timely Action
- Agency innovation and resources
- Available online at www.opm.gov

**Notes:**
Issued February 2000
Product of working group commissioned by PMC
Bringing cabinet-level focus on performance issues
Identifies what executives feel needs to be done to become high-performing organizations, who’s making progress, and how they are doing it
Recognizes that cultural change may be needed in some places before outcomes can be achieved and provides some premises and principles to explain the desired cultural environment
Three agency goals: more accountable, performance-based, and results-oriented
Management’s informal actions (at all levels) are true foundation to effective performance management

## PMC Workforce Improvement Goals

- Communicate expectations
- Departmental commitment
- Refining and linking reward programs
- Partnership
- Workforce analysis
- Establish accountability
- Executive performance agreements
- SES performance agreements
- Effectively dealing with underperformers
- Adopting a hiring and retention action plan
- Take timely action
- Base internal bonuses on balanced measures
- Base Presidential ranks on high GPRA performance
- Include score improvement commitment in GPRA 2001 plans
- Working for passage of CS legislation

**Notes:**
10 agencies on workgroup adopted these goals
Publicized so others could adopt also
Making the commitment to institutionalize the concepts so high performance becomes the cultural norm
Blueprint for success

## OPM Director’s PILLAR AwardPerformance, Incentives, and Leadership Linked to Achieve Results

- Recognizes an effective performance management program, practice, or process
- Presented for the first time at this year’s conference
- 35 nominations
- 5 recipients
- 2 Awards
- 3 Honorable Mention

**Notes:**
New award to recognize and celebrate agency successes
Looking for what works right for you--program, practice, or process
Criteria focus on results orientation, alignment with strategic goals, customer satisfaction, effective communication and measurement
Short deadline, shorter processing time
Spread the word, encourage participation

## Recent OPM Studies

- Awards Study Follow-up Report
- Review of Pass-Fail Appraisal Programs
- Supervisors in the Federal Government: A Wake-up Call

**Notes:**
Special studies conducted by OPM’s Office of Merit Systems Oversight and Effectiveness
Special studies look at agency practices, not part of oversight review
Provide additional information on how things are working and what makes them work well or not

## Incentive AwardsThe Changing Face of Performance Recognition

- Follow up to 1998 *Report of a Special Study on Incentive Awards*
- Same 15 agencies from the earlier study
- Focus on progress of awards program redesign efforts

## Findings

- Agencies looking at program redesign
- Many delinking from appraisals
- Automated information growing
- Timely recognition a common goal
- Regulatory flexibility helps
- Accountability (self-evaluation) still weak

**Notes:**
Follow-up study to an earlier report
Looking at changes since deregulation in 1995
Took another look at same agencies that had been reviewed earlier to see how their plans were working--most had undergone some kind of program change, a few still in planning stages

## Special Study on Pass-Fail 

- Final report being written
- Six volunteer agencies participated
- Department of Education
- Fish and Wildlife Service (USDA)
- General Services Administration
- Health Care Finance Administration (HHS)
- National Agricultural Statistics Service (USDA)
- National Oceanic and Atmospheric Administration (Commerce)

## Final Results Still Out

- Study Goals
- Determine how effective the systems are
- Identify the characteristics of an effective system
- Examine the impact on other HR programs
- Good response rate: 34% - 67%

## Survey Questions

- My performance standards accurately measure my performance.
- There appear to be more opportunities for awards since the institution of the pass/fail system.
- Since the inception of pass/fail, communication with my supervisor has increased.
- Since the inception of pass/fail, the manner in which I perform my job is:
- The pass/fail system encourages supervisors and employees to focus more on performance and developmental opportunities.
- The feedback from the performance appraisal process has been valuable in helping me improve or maintain my performance.
- The feedback I receive is useful in identifying the training I need to improve my performance.

## Agency Survey Responses

## Early Impressions

- No magic bullet
- Any program is only as good as its users
- Good managers make the difference
- Revamping rewards can be challenging

## Supervisors in the Federal Government: A Wake-up Call

- Special Study conducted by OPM’ s Office of Merit Systems Oversight & Effectiveness
- Draft Report out for comment May 2000
- Information gathered from
- Agency headquarters  HR staff surveys
- USDA grad school course student surveys
- First-line supervisor and second-level manager surveys
- Corporate Leadership Council studies review

## Identification and Selection

- Leadership potential is critical
- Most supervisors selected based on technical expertise
- People skills often neglected in selection rating process
- Some agencies starting to include leadership competencies in selection procedures

## Training and Development

- Most agencies have training policies in place but vary widely on requirements
- Communication of policies often weak
- Training focusing on leadership competencies via standardized courses
- Supervisors feel need for more tailored training, specially in softer, people skills
- Funding for training causes concerns
- Few agencies using distance learning technologies and PC-based training

## Evaluating Performance

- Leadership competencies are not primary measures
- Evaluations focus on technical work or employee complaints
- Little informal feedback and rarely addresses leadership competencies
- Probationary period not well used
- Few agencies have special awards to recognize good supervisory skills

## Conclusions

- Things have not changed
- There is reason for concern
- Leadership competencies must be emphasized
- Supervisors are dissatisfied

## Reminders

- Presidential Election Period Award Restrictions
- New Awards Nature of Action Codes (NOACs) in Effect October 2000

## Presidential Election Period Award Restrictions

- June 1, 2000 to January 20, 2001
- No cash awards, bonuses, or time-off awards to
- Non-career Senior Executive Service
- Schedule C in confidential or policy-determining positions
- No cash ***at any time*** to Executive Schedule employees appointed by the President with the advice and consent of the Senate

## New Awards Nature of Action Codes

- Effective October 1, 2000
- General divisions
- Cash or time off
- Individual or group achievement
- Special categories
- Suggestions and inventions (individual/group)
- Foreign language
- Travel savings incentive

## Updates

- Latest Statistics
- Performance Management Clearinghouse

## Cash Awards Data

- Other Awards include Special Act or Service, Suggestion, Gainsharing, and other Awards
- Source:  *Workforce Compensation and Performance Service, Incentive Awards Program databases, and Annual Reports.  FY1999 data compiled from the Central Personnel Data File.*

## Time Off Awards Data

- Source: W*orkforce Compensation and Performance Service, Incentive Awards Program databases, and Annual Reports.  For 1999, awards data compiled from the Central Personnel Data File.*

## Employee Ratings of Record Reported to CPDF for FY97-99

## Employee Rating DistributionGS 1-12 (Pattern A) - FY97-99

- As of October 1, 1999, edits are in place that will not permit levels to be reported unless they are correctly associated with their pattern

## Performance Management Clearinghouse

- Undergoing final clearance process
- Web-based information source
- Seeking programs, practices, or processes in performance management, including awards
- Requires point of contact and HQ clearance
- Looking for initial entries
- Lessons learned are welcome