# Presentation: 252900

##      DOC DEMONSTRATION PROJECT PERFORMANCE MANAGEMENT 

- WORKSHOP FOR EMPLOYEES

## Pay for Performance System

- Key Questions
- What is a pay for performance system?
- What are the key drivers for a pay for performance system?
- What are the benefits of a pay for performance system?
- What can 	employees do to make the pay for performance system a success?

## Definition of a Pay for Performance System

- Pay for performance systems are systems in which pay decisions are based on defined performance levels rather than entitlement, tenure, or other non-performance related factors
- Pay decisions include:
- Merit-based pay increases
- Lump sum bonuses

## Drivers of Pay for Performance Systems

- Pay for performance systems emphasize achieving greater individual and organizational performance results
- Need for more flexible compensation practices to Agency specific needs

## Benefits of a Pay for Performance System

- Rewards high level performers
- Provides greater incentive
- Provides opportunities to encourage higher performance
- Increases employee motivation
- Contributes to employee retention
- Deals more effectively with marginal performers

## Pay for Performance Implementation Lessons Learned

- Failing to make the pay for performance process transparent
- Managers/supervisors can ensure that employees are informed about the pay for performance system, understand how the system will impact them, and what employee and management roles and responsibilities are under the new system

##  Pay for Performance Implementation Lessons Learned, cont.

- Providing inadequate training for supervisors/employees
- While managers/supervisors cannot necessarily control the extent to which training is adequate, you can actively pursue information about the new system to make sure that you have the resources, tools, and skills needed to be successful

##  Pay for Performance Implementation Lessons Learned, cont.

- Managers/supervisors failing to truly distinguish employee performance
- Ensure success of this system by providing honest, accurate assessments of employee performance based on articulated performance objectives
- Managers/supervisors failing to evaluate employees solely on performance elements
- Managers/supervisors have a responsibility to clearly articulate performance expectations to employees and to only evaluate them on those expectations

## Understanding the Demo Project   Performance Appraisal Process 

- Key Questions
- What is the Demonstration Project performance appraisal process?
- What are the responsibilities of Rating Officials, Pay Pool Managers, and Employees?
- What other pay-related interventions (other than performance-based pay) are available to managers/supervisors to reward employees for good performance?

## Intent of Demo Project’s Performance Appraisal System

- Encourage high performance
- Encourage continuous dialogue between between supervisors and employees
- Provide a basis for performance-related decisions (e.g. pay increases, bonuses, PIPs)

## Performance Management

**1.  Planning**
- Set goals and measures
- Establish and communicate
- elements and standards

** ****2.  Monitoring**
-  Measure performance
- Provide feedback
- Conduct progress review

** ****3.  Developing**
-  Address poor
- performance
- Improve good
- performance

** ****5.  Rewarding**
-  Recognize and reward
- good performance

** ****4.  Rating**
-  Summarize performance
- Assign the rating of
- record

**Five Key Components**

## Components of the Demo Project’s Performance Appraisal System

- Performance ratings
- “E” for Eligible,  “N” for Not Eligible  “P” for  Pending
-  or “U” for Unsatisfactory
- Performance plans
- Prepared by rating official with employee input
- Approved by Pay Pool Manager
- Critical elements only – minimum of two/maximum of six
- Performance Standards
- Benchmark standards
- Supplemental standards
- Performance Scores
- 100-point scale using benchmark standards

## Responsibilities of Rating Officials

- Develop performance plan with employees
- Conduct progress reviews with 		       employees
- Modify performance plan with employees
- Conduct performance review meetings to discuss accomplishments
- Recommend ratings, scores, payouts, and bonuses to Pay Pool Manager through any intervening higher level supervisor(s)
- Conduct evaluation feedback meeting with employees

## Responsibilities of Pay Pool Managers

- Approve performance plan/plan modification
- Manage the pay pool
- Ensure consistency across rating officials
- Discuss with rating officials any discrepancies and/or the need for score adjustments
- Render final decision on ratings, scores, payouts, and bonuses

*Pay Pool:  **A grouping of employees who are combined together for performance-based pay decisions*

## Responsibilities of Employees

- Create performance plan with Rating Official
- Modify performance plan with Rating Official
- Clearly, concisely, and accurately document  accomplishments over past year
- Seek out performance feedback throughout year
- Respond to performance feedback

## Pay for Performance Flexibility

- Pay increases upon promotion
- Managers/supervisors can set employee’s salary anywhere within the band when promoted
- Performance bonuses
- Rewards high performers, with intent to motivate performance
- Supervisory performance pay
- Managers/supervisors at band’s pay ceiling max can receive up to six percent higher

## Comparability Increases

**All employees will receive the annual comparability increases except**:
- Employees with an “Unsatisfactory” rating
- Employees on a PIP at time of comparability increase
- Employees on a PIP will receive comparability increase at the time they successfully complete a PIP
- Payment of ACI, not retroactive.

## Acclimating Employees to the Performance Appraisal Process

- Employees must have a clear understanding of performance expectations
- Employees will do well if they understand how performance is linked to success
- Feedback provides employees with an understanding of level of performance
- Employees want to understand if their performance is meeting management expectations

## Managing and EvaluatingEmployee Performance

- Key Questions
- How can employees identify the linkage between organizational goals and work unit/team goals and individual performance?
- How can employees help establish performance elements that are linked to organizational goals?
- How are performance plans created?
- How do managers/supervisors effectively evaluate performance?

## Establishing Employee Performance Elements that are Linked to Organizational Goals

- Identify overall organizational goals and discuss how they are linked to the work/team objectives
- Discuss the work unit/team objectives and/or specific products or services and how they are linked to performance plan critical elements
- Discuss the rationale of how each critical element is weighted; the activities under each element; and the relationship of the elements to the work unit/team objectives

## Components Of A Performance Plan

- ELEMENTS
- OBJECTIVES
- ACTIVITIES
- STANDARDS

## Choose Measurements

** ****Quality**
** ****Quantity**
** ****Timeliness**
** ****Resource/Cost**
** **

## Effectively Evaluating and Documenting Employee Performance

- Employees need to provide good accomplishment statements
- Keep records of accomplishments during rating cycle
- Summarize all accomplishments for the year by Critical Element
- Do not understate or overstate accomplishments
- Discuss with your rating official the desired format

## Rating Eligibility

**An Employee is Ratable if:**
- Occupies a covered position as of Sept 30 AND
- Has worked at least 120 days in one or more covered positions

**An Employee is NOT Ratable if:**
- Does not meet conditions stated as Ratable
- Employee has been placed on a Performance Improvement Plan (PIP)

## Concept of Intervals

- Each pay band is divided into 3 intervals for non-supervisory positions, and 5 intervals for supervisory positions.
- Pay progression potential is faster at lower pay bands and lower intervals in pay bands.
- Based on OPM statistical study of Federal employee occupational salary histories.

##  Intervals and Potential Pay Increases

| ZA - ADMINISTRATIVE |  |  |
| --- | --- | --- |
| Band | Interval | Increase |
| V
(GS 15) | 4 – 5 | 0% – 4% |
|  | 3 | 0% – 4% |
|  | 2 | 0% – 5% |
|  | 1 | 0% – 6% |
| IV
(GS 13–14) | 4 – 5 | 0% – 6% |
|  | 3 | 0% – 6% |
|  | 2 | 0% – 8% |
|  | 1 | 0% – 10% |
| III
(GS 11–12) | 4 – 5 | 0% – 7% |
|  | 3 | 0% – 7% |
|  | 2 | 0% – 12% |
|  | 1 | 0% – 15% |

**ILLUSTRATIVE**

| ZA – ADMINISTRATIVE (CONT.) |  |  |
| --- | --- | --- |
| Band | Interval | Increase |
| II
(GS 7–10) | 4 – 5 | 0% – 8% |
|  | 3 | 0% – 8% |
|  | 2 | 0% – 16% |
|  | 1 | 0% – 20% |
| I
(GS 1–6) | 4 – 5 | 0% – 7% |
|  | 3 | 0% – 7% |
|  | 2 | 0% – 12% |
|  | 1 | 0% – 14% |

## Payout Rules

- Highest scored employee receives highest relative percentage payout
- Lower scored employees cannot receive a greater relative percentage payout
- Tied scores might not receive same relative percentage payout

## Providing Effective Performance Feedback

- Key Questions
- How can feedback improve employee performance?
- What strategies should managers/supervisors use to provide effective feedback?
- What communication barriers may arise and what can employees do to overcome them?

## Performance Feedback Is An Ongoing Process

- Reviewing Work
- Conducting Progress Reviews and Annual Appraisals
- Addressing Performance Issues
- Maintaining open lines of communications

## Performance Feedback Strategies

- Encourage continuous constructive feedback
- Prepare for the discussion in advance
- Be clear on the purpose of the meeting
- Be specific

## Performance Feedback Strategies, cont.

- Focus on accomplishments
- Respect the supervisor
- Leave communication lines open

## Consequences of Ineffective Feedback

- Employees may not focus on performance goals and expectations.
- Employees may lose motivation
- Employees may become disgruntled
- Low employee morale
- Unexpected turnover

## Communication Barriers

- Communication styles
- Use of verbal and non-verbal language
- Lack of  trust

## Overcoming Communication Barriers

- Familiarize yourself with communication styles of your supervisors
- Keep an open dialogue with your supervisor
- Become aware of your communication style and modify as necessary to be effective

##  Grievance Procedures	

- 15 calendar days to file a request for reconsideration (informal grievance)
- 15 calendar days for management to formally respond to informal grievance
- 10 calendar days for employee to file formal grievance
- 90 calendar days for management to respond to formal grievance
***  ****Bargaining Unit Employees may use either the DOC Grievance Procedures or the Negotiated Grievance Procedures to grieve a score, rating or pay increase**

## Grievance Rights

**Grievable **
- 		- Performance Score
- 		- Rating
- 		-- Pay Increase
- 		  **Not Grievable**
**	****	****	****- **Performance Plan
- 			- Bonus decisions

##       DEMONSTRATION PROJECT WEB SITE

- http://ohrm.os.doc.gov/Demo