# Presentation: 110854

**Emerging Benefits From Selected Agencies’****Use of Performance Agreements**
- Briefing based on GAO Report:
- GAO-01-115, Oct. 30, 2000

**Managing for Results:**

## Overview

- Agencies need to continue to make progress connecting individual employee performance with agency success
- VHA, DOT, and SFA used performance agreements to
- define accountability for results-oriented goals
- monitor progress
- contribute to evaluations
- Agencies tailored agreements to reflect unique organizational priorities, structures, and cultures
- Yet five common benefits emerged from VHA, DOT, and SFA early use of executive performance agreements

- Emerging Benefits from Performance Agreements

## Veterans Health Administration (VHA) Performance Agreements

- Implemented its first performance agreements in 1996 as part of broader reforms
- Agreements are between Under Secretary for Health and the 22 Veterans Integrated Service Network (VISN) Directors
- Agreements for 2000 included three, weighted sections

- Emerging Benefits from Performance Agreements

## VHA Agreements Consist of Weighted Sections

- _Part A:_  Outlines “core competencies,” such as interpersonal effectiveness, adaptability, or technical competency (20%)
- _Part B:_  Outlines “areas of special interest,” such as patient safety (30%)
- _Part C:_  Sets measurable goals to gauge progress towards VHA mission (50%)
- Covers domains of health care, such as quality, access, and satisfaction
- Defines “fully successful” and “exceptional” performance levels.

- Emerging Benefits from Performance Agreements

## Department of Transportation (DOT) Agreements 

- Implemented its first performance agreement in 1994 in response to the National Performance Review
- Agreements are between the Secretary of Transportation and “modal administrators,” Assistant Secretaries, and Office Directors
- Agreements assign accountability for activities that are intended to contribute to DOT’s annual performance goals

- Emerging Benefits from Performance Agreements

## Office of Student Financial Assistance (SFA) Required to Use Agreements

- Legislation to convert SFA into a Performance-Based Organization (PBO) requires use of performance agreements between
- Chief Operating Officer (COO) and Secretary of Education
- COO and senior managers
- For 2000, SFA’s performance plan served as the agreements for the COO and senior managers
- Agreement sets three goals to lower its unit cost, and improve customer and employee satisfaction

- Emerging Benefits from Performance Agreements

## Emerging Benefits From VHA’s, DOT’s, and SFA’s Implementation of Performance Agreements

**1**.  Strengthened alignment of results-oriented goals with daily operations
**2**.  Fostered collaboration across organizational boundaries
**3**.  Enhanced opportunities to discuss and routinely use performance information to make program improvements
**4**.  Provided results-oriented basis for individual accountability
**5**.  Maintained continuity of program goals during leadership transitions

- Emerging Benefits from Performance Agreements

## Benefit 1:  Strengthened alignment 

- Helped align daily operations and executive goals with programmatic and strategic goals
- VISN director goal to increase Prevention Index score is intended to contribute to VA strategic goal to improve health care to veterans
- FAA executive goal to develop software is intended to contribute to FAA goal to reduce fatal aviation accidents and ultimately to DOT strategic goal to promote safety
- Ongoing implementation challenge is to understanding how daily operations contribute to results

- Emerging Benefits from Performance Agreements

## Translating DOT Strategic Goals into FAA Programmatic and Executive Goals

**Translating DOT Strategic Goals into FAA Programmatic and Executive Goals**

- Emerging Benefits from Performance Agreements

## Benefit 2: Fostered collaboration

- Results-oriented goals required executives to work across organization boundaries
- VISN focuses on patient services, such as mental health, geriatrics, or rehabilitation
- DOT “flagship” initiatives designate lead to achieve goal and work across modal administrations
- SFA plan to review executive performance based on organizational and individual performance

- Emerging Benefits from Performance Agreements

## Benefit 3: Enhanced opportunities to discuss and         routinely use performance information

- Data on progress in meeting goals were examined in light of external and internal factors
- Provided opportunities to identify performance gaps and strategies to mitigate or leverage factors to improve performance
- Challenge to provide the right performance information, at the right time, in the right format, to the right people

- Emerging Benefits from Performance Agreements

## Excerpt of Follow-up Care After Hospitalization for Mental Illness from VHA Quarterly Report and VISN 5 Biweekly Report 

**Excerpt of Follow-up Care After Hospitalization for Mental Illness from VHA Quarterly Report and VISN 5 Biweekly Report**

- Emerging Benefits from Performance Agreements

## Benefit 4: Provided results-oriented basis for individual accountability

- Served as basis for executive performance evaluations and bonuses
- VHA and SFA used progress towards the goals in performance agreements
- DOT’s modal administrators are political appointees, thus not eligible for cash awards

- Emerging Benefits from Performance Agreements

## Benefit 5: Maintained continuity

- Provides tested mechanism for new leaders to communicate priorities throughout organization
- Plans to cascade agreements beyond senior political and career levels
- VISNs: to facility directors, chiefs of staff
- DOT: to modal administrators’ direct reports
- SFA PBO legislation requires performance management system to employee, group, or organization

- Emerging Benefits from Performance Agreements

## Recent initiatives to connect individual performance with agency success

- GAO identified strategic human capital management as a government-wide high-risk area
- New OPM regulations for SES performance management
- A-11 FY02 guidance specified agencies should include performance goals covering human capital management in areas such as linking appraisals to program performance

- Emerging Benefits from Performance Agreements

## Observations

- Agencies continually refining how they develop and use agreements
- They are exploring how far, how best to cascade agreements to appropriate levels
- Based on these emerging benefits, performance agreements can become a vital part of overall efforts to improve performance and better achieve results

- Emerging Benefits from Performance Agreements

## For more information:

- Report is entitled “Managing for Results:  Emerging Benefits From Selected Agencies’ Use of Performance Agreements” (GAO-01-115)
- Available on the web at www.gao.gov
- Contact Lisa Shames (shamesl@gao.gov)

- Emerging Benefits from Performance Agreements